>> good afternoon, everyone, if i may have your attention, my name is david campos and welcome to the meeting of november 14, 2013 of the board of supervisors neighborhood services committee. i am joined today by supervisor norman yee and we will be joined later by eric mar. we want to thank the following members of the sfgtv staff who are covering the meeting today, jennifer low and david larson. >> please make sure to silence all cell phones and electronic devices, completed speaker cards should be submitted 209 clerk. items acted upon today will appear to the november 18

meeting unless otherwise stated. >> if you can please call item 1, which is the only item on today's meeting and we have been joined by eric mar. >> item 1, hearing on the budget and legislative analyst's report to further understand the level of san francisco's housing crisis. >> i want to thank all the members of the public here at the meeting and all the people who have been contacting my office the last few weeks about the displacement that is happening. i do want to make some introductory comments but before i do that i would like to ask the budget and legislative analyst to a very brief presentation on the report and what i would say about this report is the way

this report came ba is that in the last few weeks, we in my office and i know that my colleagues in other offices have been hearing a number, about a number of cases of displacement of evictions. a lot of that information gave me the sense that there was something happening in the city, but we're talking about anecdotal information. i think it's important as we make public policy that we have more than just anecdotal information and that's the reason that we commissioned this report to make sure that the report gave us concrete data on what's happening out there so that we have a better understanding of what the issue is. you can't really come up with a solution to a problem unless you understand the extent and the magnitude of the problem. so with that i want to turn it over to the budget and legislative analyst. i want it thank their office, fred bussard and their staff, for

working in a very efficient way, to get this report completed. >> good afternoon, chair campos, supervisor mar and supervisor yee, i'm fred from the legislative analyst's ofrs. i will provide a quick report on tenant displacement in san francisco. we were asked by supervisor campos to review tenant displacement and he requested rates of change in property change, rent burden and also requested demographic profile of people evicted. just a quick snapshot so this goes back to when the rent board first started reporting

evictions and here's some detail from 1999 through 2013 on evictions, all no fault evictions which includes lfx evictions and for cause evictions, which includes those where a tenant is evicted for not paying the rent or being a nuisance of some type. you will see a sharp increase of he will -- ellis act, the year by the way the rent board tracks is through february 28 so when it says 2013, that's rent board year of 2013 which starts march 1st of 2012 and goes through the end of february of this year. you can see there have been

some peaks of ellis act evictions in the past, 2000 and 2001, that was the end of what was called the dot com boom when rents and prices of real estate were very high and escalating very quickly. again between 2005 and 2008 you see a bump in ellis act evictions and that also tracks with a general trend toward sharp increases in property rates and home sales values. and then the bottom row on the total, again, there were numbers of all types of evictions were high in the end of the dot com boom era and slowed down some 2003, down to 1,561 and in all the years since 2003 through 2013 again as of february of this year, this is the highest we have had since 2003 with 1,716 evictions reported as of the end of

february. i won't go through all the details on this table, this is in our report, but it does show the various types of evictions both no fault and for cause, and what is striking i think about the information in this table is that the overall rate increased between rent board year 2010 and rent board year 2013 by 38.2 percent from 1,242 evictions in 2010 to 1,716 in 2013. ellis act evictions, on the other hand, greatly outpaced that, increasing by 169.8 percent during that same time period, from 43 in 2010 to 116 in 2013. and this is the beginning of the recovery from the economic recession of 2008 and 9, as you'll see in some of the other tables later. that's the time when the real estate

prices started going up again and housing sales increased. we did get some more recent eviction statistics from the rent board since their reporting period ends in february, as i mentioned. so here is the 12-month period for 2013 and there were 166 evictions reported for the 12 month period ending september 30th. for the prior year, the 12 month ending september 20, 2012, there were 105 so we see an increase still and higher than what was reported in february. this map is sort of a quick snapshot showing where ellis act evictions have been concentrated. the darkest colors show where the highest numbers have been 20 2000 and 2013. you will see the intermission and the castro eureka valley noe valley, the

next, it's the blighter shade of blue is haight ashbury. this is where most of the evictions were concentrated between 2009 and 2013. the numbers are there by neighborhood. what we've put next to them is changes in property values during that period as recorded by the assessor recorder. that's counting all kinds of properties, that includes commercial property as well as residential and as you can see a number of the neighborhoods outpailsd the city-wide total for increased rates in assessed valuation. the others were also high but not as high as the city-wide rate. the ones high were the

inner mission, castro, and castro. what's more striking is the column on the right showing increase in home prices. this is the actual home price of homes for sale during that period. five of the 7 neighborhoods exceeded the city-wide total in increased sales prices of their real estate and you can see it their. inner mission again very high with 29.5 percent, castro ue reek ka valley with 36.6 percent, and the others mostly well above the city-wide rate. that was the trend we saw in the neighborhoods where ellis act evictions have been concentrated. there's a corresponding relationship with increases in real estate prices, particularly residential. and this graph shows the relationship with these, the line at the top is showing median home prices and you can see we have the numbers in there for 2009 of 735,828,

bumps up to 897,89 ate, this is the median home price for all homes in san francisco. at the same time you can see total evictions, which is the middle line, curving up also and ellis act evictions curving up so there's certainly a relationship shown there and again if you go back to 2004 through 2008 when there were very steady increases in residential real estate we also see the eviction numbers, the ellis act eviction numbers going up in sort of a corresponding curve. the rental market, so for people who are evicted and have perhaps have been long-term tenants in a rent-controlled apartment they face a rental market where, as in 2012, this is not even the most current, but the median rent for all apartments in the city, $3,414. that's an 8.2 percent increase

over just the prior year, 2011. from all indications the 2013 rate will be even higher. at the same time the rental vacancy rate, which is the number of all apartments vacant in a year versus all apartments occupied, has declined each year going from 4.4 percent to a low of 2.2 percent in 2012. this is one measure certainly of the real estate market and i know in new york city where it's tracked very carefully, anything under 5 percent is considered a discouraging or troublesome situation by the rent control authorities in that city. finally the percent of san francisco households who are rent burdened, what rent burdened means, a u.s. census bureau definition, means the household is paying more than 30 percent of their household income on rent. so you can see

here in 2010 and 2011, not much change but still a substantial portion of san francisco households are in fact paying more than 30 percent of their household income on rent. looking for causes, and we looked at the different neighborhoods where the ellis act and other evictions are concentrated but ultimately came to some of the basic conditions in san francisco and the basic economic changes that have taken place. >> excuse me, sir, we have a question from supervisor mar. >> yes, sorry. >> thank you for the great study. so on the rent burdened households in san francisco, that's almost 1 in 2 households in the city seem to be rent burdened but could you define what that means again? >> sure, yes, it's paying more than 30 percent of your household income on rent or housing. and this one is particularly rent. >> can i ask you a question

about that? >> sure. >> can you explain why that's perceived to be a burden, why 30 percent? >> that's sort of a benchmark used by the federal government for what a household should spend on housing. the benchmark that used to be used by the banking and mortgage industry as well, sort of the cutoff for what people could afford. i think those rules have been bent over the years because housing has become more expensive, but it is the traditional benchmark of the up err -- upper limit of what should be spent on housing. back to the overall economic condition, the pressure on the real estate market and why there may be more ellis act evictions occurring and other types of evictions. just from 2010 to 2012, the population has increased in san francisco by 20,400. there are 40,817 new

jobs and during the same period there's only been 122 new housing units added to the housing stock in san francisco. so there's great pressure on rents and sales prices, it means you can command a much higher price of course if you are trying to sell a unit and could explain some of the interest on the part of landlords and property owners in ellis act evictions where they can turn their rental housing into another purpose or sell it at a steeper price than they might have got a year or two in the past. we attempted to get demographic information on people who have been evicted. it's not something the rent board collects, though they track all the evictions but they don't keep statistics on the demographic make-up of that population. we did go, though, to a number of community organizations that serve tenants and surveyed them, asked them if they had that

kind of information for the 7 -- 4 of the organizations we surveyed were able to provide it. this is clients they served who had been evicted for not just ellis act evictions but any type of eviction. of the 2,208 clients that they reported on, 49.3 percent were reported below the poverty level for san francisco, 41.7 percent were reported to have a disability, 12.7 percent were 62 years of age or more, 66.7 percent or about 2/3 were evicted for nonpayment of rent or habitual late payment and racial profiles on the right, 39.1 percent white, 21 percent black or african american, 16 percent latino, 8.9 percent asian. they did not provide other information but certainly the information we had reported that showing the concentration

in particularly 7 of the city neighborhoods. that is the quick summary, we have a lot of information in the report, happy to respond to questions now or as the hearing proceeds. >> thank you very much, mr. russo, again i want to thank you and your staff for the very quick turn around on this report. just want to make a couple of comments and i want to begin by thanking all of the residents who have come out to this hearing. i know that there are a number of people in this audience who they themselves have been impacted by this displacement, they themselves are being impacted by this displacement. and the point of this hearing is to not only get a better grasp of the data, the statistics, but it also put a human face to what's happening because for every eviction, for every person, for every displacement number, there is a human being behind that number and it's not just a human being but also that family that comes with that

person that is also being impacted. i do want to ask you a question to provide some context as well. one of the things that i know is not included in this report because it's not something that we track or can track at this point is the issue of buy-outs. can you explain that, what we're talking about and how that could actually have a greater impact in terms of the number of people that are being displaced? >> chair campos, buy-outs occur and you are correct, they are not tracked by the rent board, they are privately negotiated arrangements where a land lord will approach a tenant and ask them to move and offer to pay a certain amount so that they can cover some of their expenses related to it. so if that occurs and the tenant voluntarily leaves it is not subject to rent board controls and regulations and would not be reported to the rent board. we don't know how

many of those occur. we hear probably as you do that it is occurring. i know people who have been approached in that way and either moved or chosen not to move, so there is some number out there of those type of arrangements occurring. one other thing just to your point, we did a quick calculation of the 116 evictions reported for rent board year 2013, the average household size of a san francisco household is 2.63, so you can do the math, it is more than 116 people, that's units and within that could be households of varying sizes but certainly that gets us up to 380 or so people at average, some households being larger and some being smaller. >> thank you. before i say anything i want to ask folks if you want to speak if you can please fill out a speaker card,

they are up here, available up here. let me simply say the following. we have been talking, i have been talking about a housing crisis for quite some time and i know there is a difference of opinion among some folks as to whether or not we have a crisis or not. i believe that the numbers that we have seen, especially when looked at in the context of the buy-outs that are not being reported, show that in fact we do have a crisis. it is a crisis that in many respects goes to the very request of who we are as a city. are we a city that will allow working people, middle class people, to be able to live in this city? i have talked about how for quite some time it seems that we have a tale of two cities, that we have a small segment of the population that is doing extremely well and the economy certainly is booming for many