Owners' groups vow to fight back in eviction battle

By J.K. Dineen
Staff Writer
Published: Tuesday, May 24, 2005

A week after the Board of Supervisors blocked North Beach condominium conversion using a little-known city code, real estate attorneys and homeownership advocates say they are ready to fight back.

The board sent shudders through The City's red-hot tenancy-in-common market last week when it rejected the "subdivision" of a building at 400-410 Vallejo St . The move barred the joint owners of the six-unit building from converting the apartments into individually owned condominiums.

The subdivision was blocked, in part, because the supervisors said it violated Section 1386 of the Subdivision Code, a law empowering the Planning Commission to turn down condominium conversions in cases in which tenants are evicted "for the purposes of preparing a conversion."

After the vote, Board of Supervisor President Aaron Peskin said The City would start investigating all condo conversions to see if buildings had been cleared by means of Ellis Act evictions. The Ellis Act, a state law allowing landlords to evict protected tenants so long as the building is not rented out again within five years, is a common way for developers to clear buildings, turn them into TICs and ultimately convert apartments to condos.

But landlord attorneys say the argument is flawed because the evictions are done to prepare the building for a TIC, not a condominium, according to Andy Sirkin, an TIC attorney. While most TIC buildings, in which several people own a "portion of a building," enter The City's condo-conversion "lottery," most have little or no hope of ever actually seeing their TIC become a condominium.

"I think if you evict tenants for the purpose of occupying a building, that is not preparing it for conversion," said Sirkin. Sirkin said only 2 percent of TIC owners won the condo lottery last year and most TIC owners are aware of the odds. Still, they apply. A total of 1,029 units in 177 buildings were cleared out using the Ellis Act in fiscal year 2003-04, a 49 percent increase over the previous year, according to the Rent Board. There are approximately 5,000 TICs in The City. "It's like going to Reno or playing the lottery, you do it because it's fun," he said. "The reality is the percentage is what the percentage is."

Michael Sullivan, an attorney who heads up the moderate group Plan C, said The City's pro-tenant laws have made TICs the only viable homeownership avenue for thousands of young city dwellers. "The tenants said there was no market for TICs that will remain TICs, well they are wrong about that," said Sullivan. "There is a market, and it's growing every single day."Landlord attorney Paul Utrecht said just because most TICs enter the condo lottery, that doesn't mean the "the evictions were for the purposes of condo conversion." "These evictions are done for TICs so people can live in them," he said. "Obviously, this is an effort to frustrate Ellis Act evictions and that is not allowed by state law."

Ted Gullicksen, the tenants union director, scoffed at the arguments. "Clearly the whole purpose of a TIC is to circumvent the condo laws and TIC evictions are being done expressly for the purpose of conversions," he said. "They have nothing to stand on."