the june 3 meeting earlier at 10:00 a.m. we would provide the required notices. if anyone is interested you can call my staff to find out where we are on that. does that make sense colleagues? okay. so do we have a motion then to continue items five, six and seven to the call of the chair? >> so moved. >> okay. and take that without objection? that would be the order. okay. item number eight. >> item number eight is an ordinance amending the subdwigdz code to adopt condominium conversion impact fee applicable to certain buildings to convert during a six year period and suspend the condominium conversion lottery until 2024 and restrict future lotteries to more than four units and specified number of owner

occupied units. >> supervisor farrell is unable to be here today so this legislation since it was sent back to committee and continued. i know there have been a lot of discussions going i believe from what i know is going on president chiu has amendments today. >> thank you mr. chair and i do have a number of amendments and as we discussed what has been another challenging topic and i want to thank the tenets side and representatives of individuals who wish to see the conversions of these units. i do have a number of amendments that have come out of conversations over the last few weeks with the various parties and i would like to go through them. there are essentially eight categories of amendments to fine tune this legislation and address the various issues that have been raised around them. i want to thank the deputy city attorney john mallet who has been working with the

parties to move this forward there is additional language in the legislation to clarify the intent to adopt the legislative program. secondly there are provisions around the topic of ownership and allow existing owners who have applied for the process transfer the units without using eligibility for conversions which we heard from owners. the third set of amendments around expedited conversion to make sure we're dealing with the full universe of folks currently in the lottery or have been in tic's. one portion would extend the process for a seventh year and right now it's six and we would add one more year and add those ownered in that period listed or

under contract but not yet closed escrow. there are provisions to allow the most senior pool of the lottery to convert without further conditions. the fourth set of amendments have to do with a current requirement of 10 year hold on conversions and it would establish a process for buildings that have completed the legislation that has a 10 year hold on conversions to convert to condominium through the expedited process or the lottery. fifth set concerns lifetime leases and the language simplifies the requirements for owners to comply with these provisions. sixth set of amendments deals with evictions under the future lottery and accommodate owners in the future lottery by allowing one per building by the owners and evictions to vacate units because of the need to demolish a unit or other safety issues.

the next set of amendments concerns the requirement around a suspension with a lawsuit and clarifies that the section addressing the litigation to allow conversions to continue to for a period of time even in the event of a lawsuit that challenges the law and if the city loses the lawsuit that the 10 suspension stays in place and if the city wince the lawsuit it would resume. the last amendment to the legislation would address the senior buildings lost in the 2013 condominium conversion lottery and it would simply add a process to allow these buildings that represent 19 units in total and convert on january 1, 2014 and independent of procedures in the legislation. these amendments are really to address the concerns that we have heard

from tic owners and others with the legislation really trying to fine tune and address and refine the legislative proposal that we've had and with that colleagues i hope that we can support and adopt these amendments here in committee and then move this legislation back out of committee out to the full board. >> thank you president chiu and i want to say i really appreciate the work by many people that has gone into this. i think there has been a constructive dialogue and the amendments move in a positive direction in terms of addressing some very tangible concerns so i'm very appreciative of that. this legislation for me is definitely much closer to legislation that i can support. there is one item that i know was discussed and is not included in this legislation and that has to do with the issue of ownership transfers for the

revised lottery after the 10 year or minimum 10 year moratorium and specifically in terms of given that the new lottery have an increased threshold of owner occupancy of three, units to -- excuse me, three unit occupied units and two for three unit buildings. it would be my desire to have one additional amendment that would allow for transfers of ownership not to interrupt the owner occupancy levels under current law and i believe as the amendments are drafted if there say transfer in ownership in the revised lottery that would then disqualify -- not disqualify, but put the building to the back of the line again. they would need to restart the participation in the lottery.

that doesn't benefit tenants. it simply makes it very, very challenging for owners, 200 units maximum will convert each year regardless so the amendment i am proposing doesn't increase the number of conversions. it just has to do with the order of conversions. it will be very challenging for me to support the legislation as amended today by president chiu. with that additional amendment i am very open to supporting the legislation and so i distributed the amendment to you colleagues. i have some extra copies here for the clerk for members of the public. it is an amendment to page 14, section 1396e and it states "for purposes of this section a unit that "occupied

continuously" and defined by owner of record with the three year period without intrupgdz of occupancy and as long as the owners occupy it hases principal place of residence not less than one year subject to application and occupied continuously by owner of record maybe cohave ad to new owner of record and occurs not more than once every three years and the last phrase is important and the transfer couldn't happen more frequently than once every three years and i want that amendment on the table and it's my hope we can include that amendment, or in the alternative after we adopt president chiu's amendments to duplicate the file and put this amendment into one and not the

other and forward both so we don't have to have continuances in the event that we do have agreement on the amendment i've proposed in the future. i don't know if that made sense but that is the suggestion that i have. supervisor kim. >> i'm looking through all of the amendments now, and there's -- there seems to be somewhat a parallel, and so i would like to ask what this would clarify regarding supervisor chiu's second amendment which is transfer of ownership. it does allow current tic owners waiting to apply for the process and transfer the units without losing eligibility for conversion so could you clarify what it would do on top of that? >> sure. right now when the legislation was amended by president chiu and supervisor yee several weeks ago the mechanism would set up that the

lottery participants convert -- and i believe in years one and two and years through through six, the remaining tic owners are able to gradually convert. for those years three to 6tic's the owner occupancy length was extended to six years and this amendment as i understand it allows transfers of ownership for that pool of years three to six tic conversions and in other words could be comprises of succession of ownership and i think that is a positive amendment. i am appreciative of it. my amendment has to do with the new lottery after the 10 year moratorium, so it's a similar mechanism but for the current and not the future tic's. >> and president chiu if you could also clarify again the

suspension with lawsuit? what has been referred to as the poison pill, and i understand we clarify what happens when litigation occurs of this -- potential litigation occurs of this ordinance so i want to make sure i understand it correctly so if there is pending litigation conversions do continue for a period of time, but the 10 year suspension of lottery remains in place regardless whether we lose that litigation? >> so if the city loses a lawsuit then the 10 year suspension remains in place, but if the city is able to successfully win the lawsuit than the conversion program would continue. >> so if we lose the litigation the conversion program would be pending or would freeze but the 10 year suspension would remain in place orderless? >> you know what i would like

to do -- this is something the deputy city attorney spent time going back and forth and i would like him to explain. >> i am from the city attorney's office. the way it would work is if a lawsuit is filed to a subsection of the new 1396.4 or the 1396.5, also a new section, then the expedited process, the conversion process that was contemplate side suspended during the term of the lawsuit. if the city ends up losing that lawsuit the suspension of conversions would be in place for at least 10 years or for 10 years. if however the city is successful in that lawsuit -- excuse me -- the expedited process would resume. everything would be told so if

it was three years of lawsuit people otherwise in the first year of the process who have been put on hold they are able to pick up at the end of the lawsuit if the city is successful. however, one of the things that we try to accommodate is that once there is a freeze on conversions there might be multiple property owners who are in the middle of the process somewhere and we wanted to think through how would we address those particular property owners and applicants? so what is in the proposed legislation is anybody who is mid-stream in the process if you can obtain a file tentative map approval within six months of the date the lawsuit is served on the city you can proceed to convert, or if you are passed that point you can proceed to convert and you

won't be affected by the suspension. however, if you only have a pending application at this point and not have arrived at that point within that six month period then you have the ability to a proaf d pw, you can ask for a refund of the conversion fee, any fee thaws submitted as application fees to the departments. otherwise your application is denied and the conversion process is frozen until the resolution of the lawsuit. >> and so -- is it possible for the judge to decide that we couldn't treat those applications that way? is it up to his or her discretion at any point? >> what we attempted to do -- it's unclear how a judge would ultimately rule on this and if

there was a judgment what they would order the city to do or not to do. what we attempted to do is provide some direction to give a court some tools how the city would like to see it unfold but we don't know how a judge would rule. >> i appreciate that. okay. thank you. >> and regarding the so-called poison pill this provision certainly better than the originally drafted version,. it's a little more focused. one question i have, so if someone files a lawsuit and the city loses then after 10 years the lottery would resume? there would be no more accelerated conversions and after a 10 year moratorium the lottery comes back to life? is that correct? >> the new version -- >> of the lottery. so let's

say we pass this and then on very quickly someone files a lawsuit and the wheels of justice turn rather quickly and the city loses if you have -- since in the new lottery five and six unit buildings are not includes does that mean someone with a five unit building who is in the lottery in 2013 and waiting for a long time, in the lottery in 2013. there is a quick court loss for us so they weren't in the position to get a tenant map and don't get it and wait the 10 years and they are permanently banned from converting. is that right? >> the way it's set up now we don't have a provision to deal with that possibility. >> and that possibility -- that person -- some lawyers might think that person could file a lawsuit saying this is

unconstitutional because you changed the rules on me in the middle of the game. a lawyer could file that lawsuit. >> certainly. >> and i know -- i don't want to put you in an awkward position, but it might be good to have advice on that aspect of it because there could be a situation where someone who is currently in the lottery today and bought on reliance of getting into the lottery is ineligible to get into the future lottery and couldn't get the map quick enough given the lawsuit that is filed. >> that's correct. >> okay. i would like advice on that. any other comments colleagues? okay. we will open up the public comment then. are there any public comment cards? i have one card from bruce

allison. >> [inaudible] >> okay. take your time. we will allow the other commenters to go first. >> eric brooks san francisco green party and our city. as we stated in the previous hearing we think the whole idea of flipping tic's and the condos should be eliminateed in san francisco. i mean what we should be voting on the board of supervisors within the next couple of weeks is ending the practice all together so there is no more incentive for this nonsense. with that said we do understand that tenants, advocates have been strongly involved in getting a fairly decent process to move forward to produce something they're happy with, so i would say that from the -- even though from the green party standpoint what we really need is -- for you to push the state to repeal costa

hawkins, repeal the ellis act as quickly as possible and in san francisco we make some serious moves to reopen and change the deadline for rent control so that we move the 96 date much closer it to today's date so we can get a much larger pool of rent control property in san francisco. with all that said what i would say about what you're considering sending to the board of supervisors is that if the tenant advocates do not support what reaches the board of supervisors it should absolutely not be voted yes on. the board of supervisors needs to oppose it, so unless the tenant advocate vs buy in on this no way. >> >> that's the word. thanks. >> mr. collier.

>> good afternoon. steve collier. housing clic. i just wanted to address a couple of things. first of all in regards to the hypothetical lawsuit happened and the ordinance was struck down then the six unit or five or six unit owners would not be able do convert because the expedited process was suspended. well, understand the only thing that suspends the process is a lawsuit against the lifetime lease or the moratorium. okay. the lifetime lease is stricken down then no expedited conversions should happen because they're all bound together. in order to allow expedited conversions we need the benefit of not only the moratorium but the lifetime lease so the ordinance hangs together that way. that is a matter of legislative intent to

determine whether the 1396 would continue under the new form or under the old form. >> can i ask a question mr. collier? >> sure. >> let's assume that the court strikes down the lifetime lease but not the moratorium. >> right. >> under this poison pill -- if i may call it that -- there would be no conversions until the 10 year moratorium expires. is that right? >> yes, the balance of the ordinance. >> and when the lottery would come back it would come back with the new rules minus the lifetime lease since that was struck down. >> if the court interpreted that as being seferable, yes. >> that means five or six unit buildings let's say in the 2013 lottery are effectively permanently banned from converting assuming they couldn't get the tenant map within six months of filing of

the lawsuit. >> correct. we're talking about changing the rules in 2024. we're not talking about changing the rules in a year from now because the rules -- they are only allowed to convert through an expedited process if the lifetime leases and moratorium are upheld. that's the balance otherwise there would be no legislation. >> right. but under that circumstance with just the lifetime leases struck down, and please correct me if i am misunderstanding this, that five or six unit building in the 2013 lottery has to wait until the 10 year moratorium is done and operate under the new rules and excludes those buildings and permanently barred from converting? >> yes. if the new lottery is seferable, yes. people -- just because they have been in the lottery once doesn't mean they have the right to win the lottery in the future. >> right. i guess that would

be a debate probably in a subsequent lawsuit i am assuming. okay. thank you. >>i also wanted to address -- if i have a little more time -- your proposed amendment which is -- we think that the existing three year continuous ownership requirement which is law now and continued under the new lottery makes a lot of sense. three years -- it's important for the purposes of maintaining stability of people in units and avoiding a market of condominiums or future condominiums, tic's which are future condominiums developed into a market of selling back and forth with ever increasing chances of getting to condominium conversion. we want to try to avoid that kind of a marketplace which we think inflates the real estate values and bad for tenants. we also

don't see much reason why two owner occupiers in a three unit building that lived there all three years continuously should have to compete people there one year and turned over and over again. we don't think that is fair to the people actually complying with the intent of this law which is to maintain principal residence, and because those owners -- the lottery so far has been over sold in many -- >> i think -- we paused it during my question. so the two minutes is up. >> [inaudible] >> okay. >> [inaudible] >> right. >> [inaudible] >> thank you mr. collier.

welcome. >> members of the committee. [inaudible] chinatown community center and we thank the members of the committee for giving us the time to work with those owners and members of real estate industry to come up with some revisions. we understand this is not a package that everyone supports but we feel like we addressed a lot of the concerns that have been expressed to us by tic owners. in particular we sought to accommodate those from the tenant side. i think with that being said and i think the changes that we propose have really gone a long ways to address condominium owners concerns, but we think that -- and in particular the idea of allowing transfers of ownership

within the context of the six or seven year conversion process makes sense given that these are units that have already been converted. they are now ownership units and allowing those transfers isn't going to fuel further speculation but we are concerned about extending that policy to the future lottery. as mr. collier referred earlier we don't see why that change in existing rules is a good idea from the stand point of public policy. it does not -- it actually disfavors, it disadvantages those owners who have maintained stable ownership over the period of time in a competitive process such as the lottery opposed to the bypass process which is not competitive. there's a transferred property doesn't

take a unit away or a conversion away from a unit which has been held for a long time. we think that the policy of favoring family -- [inaudible] >> thank you very much. is there any additional public comment? seeing none public comment is closed. okay. so first we have president chiu's amendments. is there a motion to adopt those motions? >>i will make that motion. >> second. >> can we take those without objection? >> also i wanted to add my name to the legislation as well. >> okay. >> it's already adding added. >> it was? >> i don't think it's been added. >> i'm sorry. >> add supervisor kim as a co-sponsor. can we make that motion to amend without objection? so ordered and

colleagues in terms of the amendment that i have circulated -- while i understand the responses from mr. collier and others given the increase in owner occupancy which i am willing to support in the legislation, i think that it makes sense to allow there to be transfers of ownership and under what i am proposing it couldn't be more frequently than three years so you don't see the continual transfer of ownership. i know people for many reasons are living in any kind of housing situation at times need to move or need to sell and under the current version before us if you are in theoretical future lottery for eight or 10

years -- let's say it's a three-four unit building any change by any of the occupants for any of the unending reasons that people need to move or sell would put them to the back of the line and given that we're increasing owner occupancy i think this is an appropriate change to accompany that increasing owner occupancy that we're requiring so what i would request is that we duplicate the file and put this amendment into one but not the other. continue both because i understand it must be continued under president chiu's amendments so in two week when is we come back we can forward one or the other at that time and not have to make an amendment that might require a further continuance if that the direction that we're going so i am curious to know the feedback on that, and i

don't think by duplicating the file and in this and not the other i don't think that indicates support at this time for doing that. it is to preventus unnecessary continuances and hopefully reach a resolution. >> i appreciate the amendment that you offered supervisor wiener and i know this is challenging and what was discussed between the parties and i understand what you're trying to achieve is allow for some exchange of ownership but the concern they have is that this is a proposal that would start to disinnocent the continuance. >> >> ownership between individuals in tic arrangement that trust each other and i would be concerned that this kind of requirement might lead to additional speculation among