Board passes 2 condo bills -- mayor to veto 1

Both measures to curb conversions written by Daly

By Charlie Goodyear, Chronicle Staff Writer
Wednesday, January 11, 2006

At its first meeting of the year, San Francisco 's Board of Supervisors gave initial approval to two pieces of legislation intended to put the brakes on the conversion of apartment buildings into condominiums -- and drew the promise of a mayoral veto of at least one of the measures if it is passed.

Passage of the two measures -- one requiring Planning Commission review of all condominium conversions and the other requiring early notification to potential buyers that previous inhabitants of buildings had been evicted -- could signal that the perennial tensions between the interests of renters and home buyers could be emerging as a major political divide between the mayor and the more liberal Board of Supervisors majority.

"We'll definitely veto this," said Matthew Franklin, director of the mayor's Office of Housing, of the ordinance requiring all condo conversions to receive Planning Commission review. He called the measure a "far-fetched piece of legislation" and a "perversion of the planning process."

Both housing measures passed by the supervisors were written by Supervisor Chris Daly. He said both are designed to curb market speculation that has led apartment building owners -- some holding units governed by the city's rent control law -- to empty their buildings and then put them on the market for sale to tenancy-in-common buyers.

Those buyers agree to acquire multiunit buildings together and then inhabit separate units, sharing a single mortgage and related financial and maintenance issues. Frequently, TIC buyers aspire to enter the city's annual condo conversion lottery that allows for 200 units a year to become subdivided and separately owned, increasing their value and giving their owners financial independence from their former TIC partners.

Under the ordinance the mayor's office pledged to veto, owners of two-unit buildings seeking to convert would have to go through a public hearing at the Planning Commission. Current law requires hearings only for buildings with five or more units.

"Ellis petitions are increasing, and they are affecting larger numbers of households in San Francisco each year," Daly said, referring to the state Ellis Act, which allows owners of rent-controlled apartments to empty their buildings of tenants if they are getting out of the rental business. "This legislation speaks directly to the crisis of evictions in San Francisco."

Daly said his bill would help preserve affordable housing in San Francisco, which he reminded his colleagues is a priority spelled out in the city's General Plan.

Property owners, who already must participate in the lottery that limits condo conversions to 200 per year, have fought Daly's legislation, saying it unfairly penalizes them and would likely create a logjam for applicants and months, if not years, of delay. Supervisor Bevan Dufty agreed, saying, "I'm not comfortable going in the direction this piece of legislation is taking."

At the ordinance's first reading on Tuesday, the measure passed 6-3, with Dufty along with Supervisors Sean Elsbernd and Fiona Ma voting against. Supervisor Ross Mirkarimi was recused from the vote because he owns an interest in a TIC. Supervisor Michela Alioto-Pier was absent. If the measure receives final board approval next week and is subsequently rejected by Newsom as promised, Daly would need to find two more votes on the board for the eight needed to overcome a mayoral veto.

Franklin, of the mayor's Office of Housing, said that while he and Newsom "share concerns about evictions," requiring the Planning Commission to approve the majority of condo conversions is the wrong idea.

In arguing for his ordinance, Daly cited a section in the city code that he says requires the Planning Commission to deny condo conversions in a building where renters have been evicted for that purpose. Franklin suggested that Daly was misinterpreting that law.

The other Daly measure that received initial board approval Tuesday would require notification to prospective buyers viewing condos or other housing units in a building where evictions of the elderly or disabled had occurred.

"Why hide the truth from them when it impacts what they can do with the product?" Daly asked, noting that another city law gives TIC owners of buildings where elderly, disabled or catastrophically ill tenants had been evicted lower priority in the annual condo conversion lottery.

Dufty offered an amendment that would require the notification be made during the period of finalizing a sale, but the amendment was voted down.

Franklin said it was unclear whether Newsom would veto that measure, which passed on its first of two readings with seven votes.

"We're going to take a hard look at the disclosure," Franklin said. "We'll have to consider where we go with it."

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Board meeting

Other action at Tuesday's Board of Supervisors meeting:

The board approved 8-3 legislation by Supervisor Jake McGoldrick that will grant the city more authority to prevent large trees on public and private property from being cut down.

Supervisors approved a bill introduced by Supervisor Chris Daly that expressly permits supervisors to maintain a Web log on their official city-funded Web sites.

Board of Supervisors President Aaron Peskin introduced a new piece of legislation to prohibit corporations from making campaign contributions directly to candidates for elective office. The bill would require companies to establish separate funds for campaign contributions, which would be subject to federal campaign laws.

E-mail Charlie Goodyear at cgoodyear@sfchronicle.com .