>> chair wiener: good afternoon. and welcome to the san francisco board of supervisors land use and economic development committee. i am scott wienerrings the chairman of the committee. to my right is supervisor jane kim, the committee vice chair. to my left is david chiu, the president of the board of supervisors, who is a member of the committee. also joining us is supervisor mark farrell. i want to thank those at sfgtv for broadcasting our hearing and our clerk is ms. miller. are there any announcements? >> alisa miller: please make sure to silence cell phones and electronic devices. items acted upon will appear ol

board of supervisors agenda unlesunless otherwise stated. item 1, an ordinance amending a subdivision code, applicable to buildings that qualify for but was not selected or participated in the 2012 condo conversion lottery. >> chair wiener: before i turn it over to supervisor farrell, who is the lead author, i want to note since we have quite a few people here today, i have quite a few public comment cards. if you are interested in making public comment and have not done so, please fill out one of these cards and you can leave it in the tray over there. we do have an overflow room because we are at capacity in the board chambers. when we get to public comment, i will call names of folks who have signed up for public comment. if you are in the overflow room and your name is called please come to the board chambers to you can speak.

in addition, if there -- when we get the public comment, if there is anyone who, because of -- they're senior, or disabled or have children, where it would be a hardship to wait for public comment, we're happy to accommodate you, to have you go early, in public comment. i also want to note that we do have a board rule against audible expressions of approval or disapproval, such as cheering, booing, hissing, et cetera, because it disrupts the flow of the board meeting, and it also prevents members of the public, who are speaking, from having their full opportunity to give public comment. i would encourage people, if they want to express approval or disapproval to do so in a silent way, using your hands. we see that a lot in it the board chambers. with that, item no. 1 is before us. supervisor farrell is the lead author of the legislation. would you like to make any opening comments?

>> supervisor farrell: thank you. i also would like to thank my colleagues sitting through this item for your endurance and patience as well as people who have come out to speak on both sides of this issue. i realize it has received a significant amount of attention and look forward to moving this dialogue forward. before laying out the specifics of the legislation today, i wanted to take a moment to talk about the goals here. this has been something i've worked on since coming into office two years ago, and something that i am proud to see going forward. first, the goal is to help tiv owners who are at significant risk of foreclosure given the interest rates in san francisco. i want to talk about who tic owners are. contrary to the number of -- they are not wealthy individuals or speculators, but middle class working families in our city. we will hear from teachers, police officers, public defenders, nurses, single moms, many who are trying to stay in

san francisco. two came into my office this morning talking about children living in closets. these are san francisco residents, neighbors, people who love living in our city and want to stay and i believe they deserve our support. they represent the entry point for home ownership for a long time. they are priced lower because of inherent risk and have come to symbolize first time home buyers in our city. we should not be promoting home ownership in fran, it should not be a four letter word and i will continue to advocate for home ownership in the city. as i will mention, i reject the argument that promoting home ownership is at odds with protecting tenants as well. we can do both together and both groups deserve our report. most people i have spoken with are paying double the turnt market interest rates. many at 7 1/2 and 8% mortgages here in our city. on a typical 500,000 unit that's

a difference between paying 2500 a month and 1200 in mortgage. that's the difference between staying in our city and leaving. as a city, as a state, as a counterwif spent significant amounts of money helping homeowners stay in their homes. on the federal level congress has passed a number of laws reducing the tax burden on homeowners facing foreclosure, expanding home ownership counseling, expanding the the federal housing administration to play a larger role for those at risk of foreclosure. obama signed the home affordable refinance program in 2010. locally we've done many things. in january 2008, this board of supervisors established a san francisco fair lending working group, with its number one policy recommendation of whenever possible, home ownership should be preserved and foreclosure prevented. this promotes family stability in our neighborhoods and

community. second of all, the goal of this legislation was to provide security for tenants in t.i.c. buildings. supervisor wiener as coauthor want to ensure that tenants in t.i.c. buildings which might take advantage of this legislation will be presented. we wanted to provide the greatest security possible for existing tenants to be secure in their units and our legislation has done exactly that. let me specifically address this to many of the people in the hallway that seem to be misinformed about this legislation. if you are a tenant in a building that elects to take advantage of this legislation, you will receive a rent controlled lifetime lease in that building. you will not be evicted. you will not be forced out of your unit. you will, in fact, have stronger tenant protections than you do today. let me also make a comment about some of the rhetoric that has appeared from the opposition.

i think it's unfortunate that this debate has started to become infused with fear mongering and falsehoods. the tactics of the opponents of this legislation has deployed is out of line. second of all i support rent control. it is a long-standing policy in san francisco that has benefited thousands of residents, many of them my friends, and it's kept our neighborhoods and communities intact. i would never condone legislation that is an effort to, one, assault rent control to increase evictions, or increase ellis act evictions as the opponents have mentioned. this does the opposite by providing increased tenant protections. third, the goal was to provide a significant source of capital for our affordable housing community. it's a story well-known in san francisco. housing prices are on the rise and we need to do everything possible to create affordable

housing opportunities as a city. this legislation will create a massive pool of capital that will go straight into the mayor's office of housing to bring greater housing opportunities in san francisco. it is a win/win/win solution. to the the legislation itself, this legislation allows buildings, eligible for the condo lottery, to pay a one time fee and convert their buildings into condominiums. the ellis act buildings will not be eligible in this legislation. the fee begins at $20,000 per unit and is reduced based upon the number of years a building has been in and lost the lottery. if there are tenants in the building they will receive lifetime rent controlled leases for their units and fees collected from this legislation goes straight to the mayor's office of housing to support housing in our city. i have a number of amendments that i've circulated and if you don't have a copy, you want to

talk about a few of them. they're individually and collectively non-substantive but important to address. i want to clarify the buildings eligible are those in the 2012 or 2013 lotteries and lost. second, clarify that buildings which take advantage of this legislation must continue to meet all the eligibility requirements of the condo lottery throughout and to the end of the conversion process. it includes mandated contractual terms to ensure ellis act requirements, this has been the historical fund where the previous fees have been collected therefore is the most appropriate pool to fund and eliminate specific agencies called out in the legislation that are mandated to receive or distribute the fees. we have worked closely with the mayor's office of housing to administer the program going forward. i don't want to overly prescribe

internal legislation in the procedure. this legislation has support from a wide range of people including business groups, labor groups, and groups concerned about protecting homeowners and families in our city. in my opinion, everybody deserves our support here in san francisco when it comes to housing. that's homeowners, that's tenants, and people as spierg to be both. this legislation provides support to both homeowners in san francisco but also our tenants and provides them greater protection than they have today. i reject the notion that to support home ownership is to be anti-tenant or to support tenant rights to be anti-home ownership. it is a balancing act. as we see in congress, on a myriad of issues, extremism is bad for political dialogue. we need common sense solutions that work for residents, that can benefit everyone, and this

legislation provides middle ground. while challenging legislation generally takes time to weench its way through the board of supervisors i would impress the time sensitivity involved. these massive interest rates are going away. every month gets more and more difficult and gets closer to leading families to leave their homes. i hope to evaluate but also move forward as quickly as possible. thank you. >> chair wiener: thank you, supervisor farrell. collection, president chiu, supervisor kim, do you have any opening comments you'd like to make? is i have a few comments i'd like to make before we get to public comment. first i want to thank supervisor farrell for his leadership on this issue and r perseverance. this, in my view, is balanced legislation that helps us to provide housing stability for everyone, both renters and t.i.c. owners. everyone deserves housing stability. if we have learned anything from

the recent foreclosure crisis it's that not all homeowners are wealthy, in fact most are not and many in fact do not have stable housing. there's been a significant amount of misinformation, as supervisor farrell mentioned, and hyperbole about this legislation, leading some to believe, inaccurately, that it is a repeal of rent control. i have had people call me, e-mail me, or stop me on the street, thinking that this legislation ends rent control in san francisco. that's an unfortunate thing to spread those kinds of -- that kind of fear in people, and it's not an appropriate way to engage in political dialogue. i have a long public voting record supporting rent control. i don't just say i support rent control. i have almost a decade-long record of public statements and votes in support of rent control.

i supported the reviction disclosure -- eviction disclosure prob "b" which did not make it into city hall i supported prop "h". it didn't make it through city hall, i supported it on the ballot. i supported prop "m", tenant harassment measure, which is on the ballot. i was a vocal supporter of mark leno's legislation to reform the ellis act to restrict its use by short-term owners of properties. as a member of the board of supervisors, i authored successful student housing legislation that bans purchase and conversion of rent controlled housing stock to student dorms, taking that very valuable rent controlled housing stock off of the market. i also authored the successful good samaritan ordinance which provides tenants, who are displaced by disasters, with affordable temporary units. i stand by that record.

i've always supported rent control, and i always will. i understand and i embrace rent control's key role in ensuring that renters have stable and affordable housing that our communities remain diverse and that this doesn't become a city just for the rich. providing stable housing to t.i.c. owners is part of this equation and this legislation helps provide them with housing stability without harming renters. there's been a concerted effort by some to demonize these t.i.c. owners, calling them real estate speculators, part of the 1%, suggesting that they're all tech millionaires. when you look at who these t.i.c. owners are, that could not be farther from the truth. they're primarily middle class former renters who scrape together downpayments to purchase a home in the city they love. they teachers, nurses, government workers and others who couldn't afford other kinds

of homes. these t.i.c. owners didn't teleport into the city and drop out of the sky to purchase homes in san francisco. these people are our neighbors, our coworkers, our kids teachers, the people we see on muni. they are part of the fabric of this community and are just as much a part of the fabric of this community as you are, or as i am. we need to stop demonizing them and start coming up with solutions. these t.i.c. owners are at risk, as supervisor farrell spelled out, they're on group mortgages, many who purchase thinking that they would be in the condo lottery on a group mortgage for five, six, seven years, are now looking at 15 to 20 years. that's a group mortgage where if one owner defaults on the mortgage the entire building defaults on the mortgage. they're paying double the interest rate. they can't refinance. so this legislation provides them with a path towards housing stability. the units at issue are

overwhelmingly owner occupied. for the tenants who do live in these buildings, we were very meticulous about providing the strongesstrongest protection po, around lifetime tenancies and other protections, as supervisor farrell detailed. in fact these lifetime tenancies are stronger than the lifetime tenancies provided in the current condo lottery because if you're building a condo convert you receive a lease if you're senior or disabled. if you are senior or disabled you get a one year lease and can be evicted. this provides lifetime leases to all tenants whether you're a senior or disabled. so we have gone as far as we can go, and we want to go as far as we can go to protect the tenants who are in these buildings. so, colleagues, and members of

the public, let's work on housing -- on providing housing stability for everyone. i believe that's what this legislation does and i look forward to the discussion today. thank you. yes, i will note that the department of public works is here, if there are any questions i believe supervisor kim has a question. >> co-chaiquestion. >> co-chair kim: one is on the fee, and that can go to the authors of the legislation, the second is the enforceability of the lifetime leases and the capacity of the city to enforce that and the third was the number of condo conversions that we've seen in san francisco. another misnomer is that we only allow 200 a year and the numbers we've seen are far from that. mainly because two unit t.i.c.s can automatically be converted to condominiums if they