SF Apartment : May 2016
Schooled by SF Supervisors
Legislation that prohibits most no-fault evictions of San Francisco school employees, child caregivers and families during the school year has moved forward. The legislation, sponsored by Supervisor David Campos and introduced back in February, passed unanimously at the Board of Supervisors on April 5, and cannot be vetoed by the mayor.
For the last few years, families with children under 18 have already been protected from owner move-in evictions during the school year. Campos’ legislation expands those protections to cover nearly any school employee or child-care provider—public or private—and any type of no-fault eviction, except Ellis Act evictions, which are legislated by the state. No-fault evictions would still be allowed during the summer break, as defined by the San Francisco Unified School District’s calendar, and teachers could still be evicted any time for failure to pay rent or other issues of their own creation.
Campos said he is unaware of any other city that bans teacher evictions during the academic year, but said that high housing prices have made it difficult for the San Francisco Unified School District to fill vacancies and hire substitute teachers. A December survey by the United Educators of San Francisco found that 70% of their members said they were renters, and 59% were worried that the high cost of living in San Francisco could prevent them from continuing to work and live in the city.
Property rights activists agreed that housing teachers is important, but questioned why individual apartment owners must shoulder the burden of this larger affordability issue. Also questioned was whether the new legislation is even legal, as the state sets the notice period for evictions, not the city. Now that the legislation has passed at the board, there could be a legal challenge to the new protections.
A New Law on In-Laws
San Francisco may allow property owners throughout the city to create legal accessory dwelling units, better known as in-law units, in existing buildings. This legislation could potentially add up to 33,000 more homes.
Supervisor Aaron Peskin introduced the legislation, which would also prohibit the newly created units from being used as short-term rentals through services like Airbnb. Additionally, property owners couldn’t create this type of unit if it would reduce existing commercial square footage in neighborhood commercial corridors, or if they had certain evictions on the books in the last five or ten years.
The addition of legal in-law units has been allowed in certain districts already, but this legislation would allow them citywide.
Updated Buyout Forms Available Through SFAA and the San Francisco Rent Board
San Francisco Board of Supervisors’ Ordinance 225-14 became effective March 7. Under the new law, a property owner must provide the tenant with a Pre-Buyout Negotiations Disclosure Form, available here or through the San Francisco Rent Board. This form emphasizes the following: that the tenant does not have to agree to a buyout, that the tenant has the right to consult an attorney or tenants’ rights group, and that the agreement can be rescinded for up to 45 days after it is signed. There is also a clause that states: “A landlord’s ability to convert the tenant’s building into condominiums may be affected by a Buyout Agreement pursuant to Subdivision Code Section 1396(e)(4) if: ‘(a) a senior, disabled, or catastrophically ill tenant in the building entered into a Buyout Agreement for any unit in the building, or (b) two or more tenants entered into Buyout Agreements during the period beginning ten years prior to the date of the condominium conversion application and ending on the date of the final or parcel map approval.’”
As part of the new buyout process, the landlord must also file a declaration with the rent board, under penalty of perjury, that the Pre-Buyout Negotiations Disclosure Form has been provided to the tenant. Finally, once a buyout agreement has been reached, a copy of the agreement must be filed with the rent board no sooner than 46 days and no later than 62 days after it has been “executed by all parties.” Failure to comply with any of these steps could result in a lawsuit being filed against the property owner by either the tenant, a tenants’ rights organization or the city attorney, and if the property owner loses the case, they must pay the plaintiff’s attorney fees.
The rent board is creating a database of the paperwork, thereby moving buyout negotiations—including owners’ and tenants’ names and buyout amounts—from the private to the public realm. The stated aim of Ordinance 22-14 is to prevent tenants from feeling coerced into buyouts, as well as to enable them to research buyout amounts for situations comparable to their own.
Academy of Art Out of Time on Zoning Violations
One of the city’s biggest landlords, the Academy of Art University, has been given a deadline to clean up its act after allegedly violating numerous city planning codes.
The planning commissioner has set July 1 as a deadline for the university to produce an environmental impact report on its properties. Commissioners said that’s an important step towards a resolution.
The Academy of Art University has been the subject of nearly two-dozen planning commission hearings since 2007. Certain properties were zoned for industrial use and are being used as classrooms. Other properties were turned from apartments into student dorms without permits. Of the 40 buildings owned and used by the university, three-quarters have some kind of violation.
Academy of Art University officials issued a statement saying they will continue working with the commission to reach a resolution.
Vacation Rental Hosts Hit with More Taxes
The city has begun notifying hosts using services like Airbnb and HomeAway/VRBO that they must submit an itemized list of all the “furniture, appliances, supplies, equipment and fixtures” used in their rentals, specifying the cost and acquisition date. After the assessor’s office calculates depreciation, this “business personal property” will be subject to a tax of slightly over 1% of its value.
Assessor-Recorder Carmen Chu said that her office has heard “loud and clear” from hosts that they are willing to pay taxes like any other business—and other businesses pay taxes on their equipment. Hotels pay on washers and dryers, beds, mattresses, other furniture, sheets, rugs, and more. (Real estate is separately taxed for both businesses and individuals, and isn’t affected by this new levy.)
For rental hosts, the items to report could range from the furniture and linens in a single bedroom to the entire contents of their house, depending on whether they rent just a room or the whole house.
Even people who rent out their home only a couple of weeks a year when they are out of town must report the cost of every piece of furniture, appliance, sheet and towel, including items whose purchase predated the home’s use as a vacation rental. But, if hosts bought their furniture and fixtures several years ago, the assessor’s office will calculate depreciation, which will considerably reduce
the taxable amount.
Form 571-R was due on April 1 but can be submitted up to May 7 without penalty. After that date, the penalty is ten percent of the total assessed value of the business personal property. For people who ignore the notice, the assessor’s office will estimate their business personal property value and then levy the 10% fine on that amount.
The notices went out to roughly 2,000 hosts who applied to the city for a business license, the precursor to registering with the city’s new Office of Short-Term Rentals. Under a law that took effect in February 2015, all short-term rental hosts are supposed to register with the city. But only a third of the estimated 6,000 or more residents who rent their homes and rooms to travelers have done so.
Eviction Lawsuit Abuse Addressed in Sacramento
In a recent rally in the state capitol, 200 small business owners came together to urge lawmakers to do something to stop what they describe as lawsuit abuse by tenants during the eviction process.
At the rally in front of the capitol, one real estate broker shared the story of one of her clients who rents a single-family home and issued a rent increase of $40, which she said amounted to about a 3% adjustment. Instead of paying the rent, the tenant sought legal counsel from the “Shriver Law” legal help center, forcing the landlord to begin the eviction process.
The Sargent Shriver Civil Counsel Act was enacted in 2009, and has received $9.5 million each year since July 2011 for seven pilot programs administered by the Administrative Office of the Courts which provide legal representation to a selected number of low-income Californians hoping to address critical legal issues which affect basic human needs. But protesters said the legal help center may be using its assistance program in ways that are abusive, forcing small landlords to prolong costly eviction processes.
Several legislators have introduced bills that small business owners hope will fix problems like this. AB 2003 or the Unlawful Detainer Reform Bill, sponsored by Assembly Member Tom Lackey (R-Palmdale), will address issues by requiring the tenant to share details of any habitability concerns when responding to the lawsuit (prior to appearing in court) and specify if they have contacted the owner or code enforcement about the problems. Similarly, Assembly Member Don Wagner (R-Irvine) introduced Assembly Bill 1948, which included provisions to help limit predatory lawsuits brought against businesses.
AB 54, introduced by Minority Leader Kristen Olsen (R-Modesto) and co-authored by Adam Gray (D-Merced), seeks to modify existing requirements for the reporting of information about demand letters and complaints to the California Commission on Disability Access regarding construction-related accessibility cases. AB 52, introduced by Gray, addresses issues around construction-related accessibility claims.
The subtitle for Stephen Bjorgan’s feature “Eco Logical” in the April issue should have read, “Going green can increase your asset value and lower your operating expenses.” SF Apartment Magazine regrets the error.