Get Proactive on Retrofits
On March 16, 2010, the San Francisco Board of Supervisors unanimously passed legislation introduced by Mayor Gavin Newsom to support property owners throughout the city who act immediately to voluntarily retrofit and strengthen wood-framed, soft-story homes and multiunit buildings to help protect them from collapse due to a major earthquake.
The new legislation, which took effect on April 19, 2010, waives Building and Planning Department Plan Review fees, saving hundreds or even thousands of dollars per project; expedites the processing, review and approval of permits for voluntary seismic retrofit upgrades of soft-story, wood-frame buildings; and enables those who retrofit voluntarily now, and who meet the building performance standard (established by the San Francisco Department of Building Inspection) for these voluntary retrofits, to be exempt for 15 years from any requirements that may be adopted in the near future as mandatory retrofitting legislation is enacted.
A recent study from San Francisco’s Community Action Program for Seismic Safety found that soft-story, wood-frame buildings were the most likely to collapse in a major earthquake. (You can read the entire study at DBI’s website, www.sfdbi.org.) A key finding from that study is that a little retrofitting goes a long way to protect your tenants and your buildings. Without retrofitting this type of building, one in four is expected to be damaged to the point of not being safe for occupants following a major earthquake. With minimal retrofitting, the rate of being able to repair/move back in becomes much higher—a substantial improvement in building and life-safety—and worthy of immediate action by property owners.
Changes to Inclusionary Zoning
San Francisco officials are proposing changes to the city’s inclusionary zoning laws, after the California Supreme Court decided to leave intact the appellate court decision in Palmer/Sixth Street Properties v. City of Los Angeles. This decision limits the enforceability of inclusionary housing ordinances, such as San Francisco Planning Code Section 315, which require residential developers of rental housing to set aside a portion of their rental units as low-income units with restricted rents. For-sale projects are not affected by Palmer, nor are projects partly or fully financed from public subsidies.
Generally, San Francisco’s inclusionary ordinance requires developers of both for-sale and rental housing projects either to provide a certain percentage of the project’s units as affordable units (onsite or offsite) or to pay a very hefty in-lieu fee to be used by the Mayor’s Office of Housing. Whether a unit is “affordable” is based on its restricted rent or sales price. For example, Section 315 sets rents for an affordable rental unit at 30% of household income for a household earning 60% of San Francisco median income, and sales prices are capped at a level affordable to households earning an average of 100% of San Francisco’s median income.
Because of a similar rent restriction feature in Los Angeles’s inclusionary ordinance, Palmer held that the ordinance conflicts with and is preempted by the state Costa-Hawkins Act, which provides that “an owner of residential real property may establish the initial rental rate for a dwelling unit.”
In response to the Palmer decision, San Francisco proposed amending its inclusionary housing ordinance to generally eliminate the option of providing rental units as a means of satisfying the inclusionary requirement, and instead require all developers to pay the in-lieu fee unless the project qualifies for an exception. Some means of avoiding payment of the in lieu fee is needed because the advance payment of a large fee is simply not feasible or financially viable for most rental projects. The proposed changes were introduced jointly by Mayor Gavin Newsom and San Francisco Board of Supervisors President David Chiu earlier this year.
Under the proposed amendments, there are three alternatives developers can elect if they choose not to pay the in-lieu fee: provide an affidavit to the Planning Department that any affordable units will be ownership units for the life of the project; provide proof that the developer has entered into an agreement to obtain some form of public subsidy, financing or density bonus; or execute an agreement with the city that includes a covenant to provide onsite rental units in exchange for a waiver of the in-lieu fee.
At press time, the changes were under review by the San Francisco Planning Commission. Once it has made its recommendations on the ordinance, the Board of Supervisors will consider it.
Chiu Garage Restrictions Approved
San Francisco Board of Supervisors President David Chiu successfully passed his no-parking initiative recently, albeit in a tempered form. The legislation imposes restrictions on the construction of parking garages in certain residential buildings located in North Beach, Telegraph Hill and Chinatown. The restrictions may be expanded in the future to include other areas of the city.
Chiu made a number of amendments to gain the support of all his colleagues, including eliminating a provision that would have required all parking garage projects to obtain a special conditional-use permit, which is expensive and could be appealed. The change significantly lowers the bar for adding new garages compared to the original proposal.
The amended legislation, adopted in a 10-0 vote, prohibits the construction of parking garages in residential buildings where there were two or more “no-fault” evictions during the past 10 years. A planning review process for garage applications goes into effect, with a more intensive review, for buildings with four or more units. Approval of garages would be based on certain criteria. A parking garage could not, for example, reduce the building’s living space.
Huge Portfolio Hits the Market
The biggest apartment portfolio to hit the San Francisco real-estate market in a decade was recently announced by lender UBS. The four-building, 245-unit foreclosed portfolio has an asking price of $34 million and includes 825 Post St., 1008 Larkin St., 750 O’Farrell St., and 72 Gough St. Alain Pinel Investment Group is marketing the portfolio and Managing Director Stephen Pugh reported that interest in the portfolio is running high.
If a buyer pays the asking price, the cost will be only $140,000 per unit for a mix of studios, one-bedroom and two-bedroom units, along with eight commercial units. Pugh added that he has been in the industry for more than 20 years, but he can only think of two other times he has seen a portfolio of this size come to the market in San Francisco.
“Renter’s Relief” Returns
Last year, Supervisor Chris Daly was unable to overcome a mayoral veto to pass his so-called “renter’s relief” package at the Board of Supervisors. Now Daly has moved the package to the June 2010 ballot, where it remains largely the same as what he tried to push through at the board. The ballot measure disallows rent increases if they are more than one-third of the income of “hardship” tenants. Just as he did to quell opposition during the board battle, Daly limited those eligible for the “tenant hardship” provision to people who are unemployed, those whose wages have fallen by 20% or more over the past year, or those whose sole income is from government assistance. The tenant would also have to file a hardship petition at the San Francisco Rent Board in order to be covered by the proposed measure.
SFAA will be fighting hard against this measure and is calling on its membership to be a part of the campaign against this unnecessary and harmful legislation. It is important to stop this legislation at the ballot box, because it is unlikely to be challenged in court, according to SFAA Director Janan New. Right now, there are a lot of grey areas in the legislation. For example, how would students and roommates be treated under the legislation? The SFAA is attempting to make the language clearer so that the implications of this legislation are easier to understand. For more information on how you can help stop this confusing and unjust measure, please contact SFAA Government Affairs and Community Relations Manager Lisa Fricke at 415-255-2288 or lisa@sfaa.org.
DBI Town Hall May 14
Join Department of Building Inspection Director Vivian L. Day, DBI division managers and other professional services experts on Friday, May 14, 2010, from 1 p.m. to 5 p.m. at the Koret Auditorium in the Main Public Library for a “town hall” where you can ask questions and obtain answers on building permits, inspections and code enforcement issues. DBI professionals will update you on recent changes in over-the-counter processing, as well as be prepared to talk about newly passed legislation that may affect you—including voluntary seismic retrofitting of soft-story wood-framed buildings, annual vacant building maintenance and registration, and other matters. There will be limited space, with chairs available on a first come, first seated basis. Visit www.sfdbi.org for more information, or email william.strawn@sfgov.org.
Census Workers Coming to Your Property Soon
Census workers are required by law to contact, in person, those who have not filled out and sent in their census questionnaires by the April 1, 2010, deadline. These legally mandated door-to-door contacts may necessitate repeated attempts to visit the property in case properties are gated or locked and/or if they have not been able to contact residents during a previous visit. U.S. Civil Code dictates that apartment community owners and managers are required to assist Census workers/enumerators in the collection of data. If owners and/or managers refuse to allow reasonable access to the property, they could be fined up to $500.
Multiple efforts to enter difficult-to-access properties in both day and evening shifts over the three-month Census enumeration period may possibly disrupt tenants and managers. So, it is not only the law, but also very important to the quiet enjoyment of your housing community to work with Census enumerators when they arrive.
Managers should never provide a key or supply personal or private information about residents. Remember that the Census taker is one of 140,000 temporary employees. If in doubt about your responsibility, ask the U.S. Census Bureau. Questions can be directed to 1-888-758-1060.
All Census workers have been fingerprinted and have undergone a complete FBI background check prior to employment with the Census. They will have a badge, a handheld device, a Census Bureau canvas bag and a confidentiality notice. Ask to see their identification and their badge before answering their questions. However, you should never invite anyone you don’t know into your home.
Do not give your Social Security number, credit card or banking information to anyone, even if they claim they need it for the U.S. Census. Remember, no matter what they ask, you really only need to tell them how many people live at your address. While the Census Bureau might legitimately ask for basic financial information, such as a salary range, you do not have to answer anything at all about your financial situation. Again, the bureau will not ask for social security, bank account or credit card numbers, nor will they solicit donations. Anyone asking for that information is not with the Census.