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Got CASH? Then Skip The Condo Lottery (Just This Once)

For years now, the condo conversion process in San Francisco has been a royal pain in the ass.
For 2 unit buildings, the process of converting a TIC (or Tenancy in Common) to a condominium process has been relatively simple (or at least as simple as anything the powers that be in the City can get their hands on, if ya know what I mean.)
But TIC owners in 3–6 unit buildings have had to suffer a much longer conversion process, that includes 3 years of owner occupancy prior to entering the building into the lottery.  While the process itself isn’t that horrible once a TIC owner has secured their winning ticket in the lottery, getting that ticket is almost as hard as getting Willy Wonka’s Golden Ticket.
Plan C, an organization, that among many things, supports reforming SF’s condo conversion process gave us some stats on the current state of TIC’s waiting to convert to “win” the condo conversion lottery.

As the results shown below show, with only 200 “winning” units each year, the odds of winning have gotten steadily worse.

Year – Units

2003 – 994
2004 – 1405
2005 – 1512
2006 – 1652
2007 – 1736
2008 – 1944

Because the number of units entered goes up each year, the backlog of units seeking conversion keeps growing. New applicants can now expect to wait 12-15 years or more before winning the right to own their home. Condo conversion reform to increase the number of condo conversions is needed now more than ever!

But this year, things are different.  San Francisco needs money!

So, according to SF Gate, “this year San Francisco is considering letting people skip the line, offering a one-time chance to the hundreds of folks on the lottery list to go condo now – for an extra fee. The goal is to generate more revenue for the cash-strapped city and to create building-industry jobs, because condo conversions generally require some construction work to bring buildings up to code.”

Hmm…. could this really happen in SF? 

The City has been notoriously friendly to tenant interests that claim that condo conversion hurts tenants because property owners evict tenants in order to convert multi-unit buildings to condos.  However, there are now controls in place that will keep a building with a history of Ellis Evictions or other evictions that are not “just cause” evictions (such as a tenant not paying rent) out of the running for condo conversion forever – so that excuse, is frankly, no longer valid.

But as SF Gate points out, “A proposal to expedite condo conversion would require approval by either the supervisors or the voters – no easy task in a city where housing issues are famously contentious.” 

The article goes on to say:


Supporters say the sour economy could change the dynamics this time around.
“What’s different this year is that the city is in such a financial hole, this is a way to help,” said Mike Sullivan, board chair of Plan C San Francisco, a moderate civic organization that supports the idea. “If all the city did was grandfather in the 1,500 people waiting behind the lottery, just doing that would help the city’s budget.”
Supervisor Sean Elsbernd, the proposal’s instigator, said the extra fees would directly benefit affordable and supportive housing, as a way to remediate the plan’s impact on the rental housing market.

So, while the odds of this thing passing through San Francisco’s powers that be are, frankly, anyone’s guess, I can tell you that there are going to be a lot of folks keeping their eye on the outcome – including yours truly.  And I’ll be sure to keep you posted as I hear new about the process.