SocketSite reports that San Francisco (and Oakland) rents were down from the beginning of 2017.
September 15th is the first deadline for “Tier One” property owners to submit permit applications for work under the City’s mandatory seismic retrofit program – a 2013 ordinance that requires owners of certain multiunit wood-frame buildings with “soft stories” (i.e., open space first floors that are weaker and more flexible than the stories above) to reinforce the structure to increase resiliency in the event of an earthquake.
The SF Examiner reports that, “Failure to comply with the Sept. 15 deadline will come with penalties. For instance, The City would post an ‘Earthquake Warning’ placard on the property and issue a notice of violations. After the 30-day notice, The City can assess monetary penalties along with putting a lien on the property”.
Property owners can search the Department of Building Inspection website to determine the compliance tier and associated deadline for their buildings.
SF Gate reports on a lawsuit by City Attorney Dennis Herrera against the owner and master tenant of a mixed use property in the Outer Mission, where 20 people rented space in a “windowless basement” below a Laundromat. The City brought the lawsuit after uncured violations of City fire, electrical and plumbing cods, and operating a public-nuisance building. The violations evoke last year’s Ghost Ship fire in Oakland.
San Francisco recently revised its entire Fire Code to impose significant new requirements on residential property owners in the City. Cities in California must enforce the California Fire Code and they may enact their own codes that are at least as strict as California’s. The adoption of a completely new code is therefore actually somewhat ministerial. Of course, while these changes were not prompted by Oakland’s recent “Ghost Ship” warehouse fire, fire safety (and lawful residential use of unpermitted/unregulated property) has been under increasing public scrutiny lately.
Continue reading San Francisco Legislative Update (2017): Revision to SF Fire Code Imposes Significant New Fire Safety Burdens on Property Owners
WeHoVille.com reports that infamous landlord Anne Kihagi has been ordered to jail for five days for violating an injunction in a case by a former tenant of one of her West Hollywood apartments, who is suing her for violating the Ellis Act. The former tenant’s lawsuit alleges that she violated the Ellis Act by re-renting the property.
The Ellis Act – which allows property owners to terminate tenancies in a building by “going out business” – actually does permit re-renting under certain circumstances (like offering the unit to the displaced tenant at the rent-controlled rental rate). However, re-rental within two years may subject the landlord to prosecution by the city and liability to the tenant.
“We conclude the prohibitive price standard is the appropriate standard to determine conflict preemption under the Ellis Act. It is the measure appellate courts consistently adopt to determine if a challenged ordinance contradicts the state law.”
Today, Division Five of the First District Court of Appeal affirmed Judge Quidachay of the San Francisco Housing Court, who previously held that San Francisco’s enhanced relocation assistance payment ordinance was not a “reasonable” means of mitigating the impact of tenant displacement by the Ellis Act. In 2015, plaintiffs, including individual landlords and the Small Property Owners of San Francisco, argued in Coyne v. CCSF that an enhanced relocation assistance payment regime was preempted by the Ellis Act. The payment amounted to a subsidy of a tenant’s new rent for two years after displacement under the Ellis Act.
Division Five affirmed the ruling, but determined that the correct standard was whether a local ordinance places a “prohibitive price” on a landlord’s ability to exit the rental market. “Like provisions in past City-enacted ordinances which have been invalidated, the City’s Rental Payment Differential obligation places conditions on a landlord’s right to go out of business that are not found in the Ellis Act. The Ellis Act contains no requirement that obliges a landlord to pay their former tenants future rental subsidies so that they can leave the residential rental business.” Division Five agreed with its colleagues in Division Three, which recently applied the “prohibitive price” standard to invalidate San Francisco’s prohibition on the merger of rental units for 10 years after an owner has invoked the Ellis Act.
San Francisco has updated its Hotel Conversion Ordinance to strictly limit tourist and transient use of residential hotels/SRO units. Aside from narrow and and strictly defined exceptions, owners are prohibited from renting for less than a 32-day term.
Ordinance 33-17 is available here.
Justin Goodman’s thoughts on AB 1506 – an assembly bill aimed at repealing the Costa-Hawkins Rental Housing Act – were featured in the March 2017 Newsletter of the Small Property Owners of San Francisco.
The non-profit SPOSF Institute describes its mission as providing owners of small rental properties in San Francisco with the tools and information necessary to conduct business successfully in a difficult regulatory climate, through educational programs, publications, and workshops that seek to help members better understand their rights and obligations, how to work constructively with city and state officials, and how to deal effectively with their tenants. SPOSF also seeks to protect the rights of small property owners against unfair and burdensome regulations through legal advocacy.
San Francisco may soon prohibit transient use of residential hotels (also known as “SRO” (single room occupancy) units). Sponsored by a swell of Supervisors – Aaron Peskin, Jane Kim, Ahsha Safai, Jeff Sheehy, Malia Cohen, Hillary Ronen, Norman Yee, and London Breed – the proposed Ordinance, if passed, would amend Administrative Code, Chapter 41 (i.e., the Hotel Conversion Ordinance) to prohibit the “conversion” of SRO units to Tourist or Transient Use, defined as “any use of a guest room for less than a 32-day term of tenancy by a party other than a Permanent Resident”.
By hosting guests instead of providing housing to residents, SRO owners can avoid the creation of a tenancy and the application of local eviction and rent controls to the units.
Having “only” increased by 4.5% in 2015, early 2017 rents have reportedly dropped 8% since the same time last year, and SocketSite reports that San Francisco rents have fallen back down to 2014 levels.
Only time will tell if this is a function of peak unaffordability, the inevitable realization of the development pipeline from the recent housing boom, or a decline in the number of San Francisco residents with jobs.