Officially lobbed by Supervisor Chiu, Mayor Ed Lee is slated to answer the following “housing crisis” question of the week in a prepared address to San Francisco’s Board of Supervisors on Tuesday:

“Mr. Mayor, last month, Supervisor Jane Kim and three colleagues introduced a ballot measure that would limit the production of market rate housing based on the total percentage of affordable housing in the City. You and others have argued that such a measure is counter-productive. In response, you introduced the “Build Housing Now” ballot measure, which is a statement of support for construction of housing at all levels, with language that would invalidate key portions of Supervisor Kim’s measure.

Given our ongoing housing affordability crisis in San Francisco, I believe we must move beyond a divisive November ballot fight that would not actually build new housing and instead focus on ideas such as a 2015 affordable housing bond and a right of first purchase for tenants. Under what circumstances could we move beyond dueling ballot measures and work together to meet the housing needs of all of our residents?”

If not on Tuesday, expect a big affordable housing bond initiative to soon be announced.  And with respect to any “right of first purchase” legislation and language, we’ll keep you posted and plugged-in.

Comments from Plugged-In Readers

  1. Posted by Hitman

    Sounds like Chiu and Lee shall stand up to Comrades Kim & Campos and the rest of the politburo!

  2. Posted by parklife

    I really can’t imagine how any “right of first purchase” legislation can solve what the BoS believe to be the problem. Any tenant can make an offer on a property and can purchase said property. I don’t believe that any landlord is going to irrationally refuse to sell the property to the existing tenant.

  3. Posted by Peter Christensen

    @parklife – It sounds like right of first refusal –

    When the landlord decides to sell, the tenant would get the right to buy it before it goes to the open market. This way, the tenant has the right to try and buy it and not move out, though they may choose not to (or not be able to). The difference from what you described is that it is not the tenant proactively making an offer, it’s still the landlord deciding when to sell.

    It sounds to me like a decent compromise – tenants may be able to stay in their units (although many won’t be able to afford it), and landlords can still sell when they wish. Of course the details could make it an enormous mess.

    • Posted by parklife

      But the tenant currently has the right to buy any property for sale and is not required to move out. All this does, in my opinion, is force sellers of multi-unit buildings to place a higher asking price on their property rather than using the low price/bidding war, sales technique.

      • Posted by Peter Christensen

        Ah, I see. This would force the landlord to start with a higher price because the tenant would get the option to buy without participating in a bidding war. This has the possibility to slow price growth, but not in a helpful way, because any delay in selling because of this just keeps the units off the market longer.

      • Posted by Somabound

        Pricing the property artificially high does no good because if the tenant passes on a house and the price is subsequently lowered due to market demand or other reason the tenants get the first right of refusal again! There is a wait time between these iterations that the owner must give the tenant to “decide” even if they can’t afford it.

        • Posted by parklife

          Is that how this concept is intended to work? If a buyer and seller agree upon a price, the tenant always has the first right of refusal? I had thought the right of first refusal would only be at the original asking price. If the concept is to have the right of first refusal be an evergreen option, then this is just one more incentive to Ellis a building prior to sale.

    • Posted by Hitman

      This is not a fair compromise. Tenants have the right of possession. By statute, their rents do not keep up with inflation. Now the right of possession will be coupled with the right to purchase. Every tenant now has a great incentive to disrupt a landlords attempt to obtain the highest price because the tenant will want to buy at the lowest price.

  4. Posted by Bob

    Jane Kim literally has no idea what she is doing. Why doesnt she create a ballot measure to force construction of gold mines instead?

    • Posted by anon

      Don’t give her any ideas…

  5. Posted by anon33

    Would affordable housing bond raise property taxes?

  6. Posted by P&M

    How is more governmental interference going to help the situation? Let’s create more bonds, more pensions for city employees, and then tax businesses and high-net income individuals at 75% and see what would happen — see France. Or look at pharma and medical devices companies merge w/ foreign companies to escape the U.S.

  7. Posted by J

    It’s astonishing that Jane Kim has a Stanford degree. Clearly she didn’t take any econ classes while she was there…

  8. Posted by Gordon

    Wow, three terrible proposals at once! Limiting housing production (even more than it already is) is certain to backfire, and tenant right of first refusal is unnecessary and problematic (and hopefully unconstitutional) for reasons already listed in this thread. Meanwhile, bonds should be for critical long-term infrastructure projects that benefit all SF residents, not to fund direct handouts to a tiny number of people who win the below-market-rate program lottery.

    • Posted by around1905

      There is a certain synergy to these proposals taken together. Many of three buildings have a tiny tax basis; if tenants purchase their units they will have to pay property taxes on the purchase price. This will generate new revenue for the city that could service the new bonds.

      What I don’t get is why a rent controlled tenant would bite at this….

  9. Posted by tommybabe

    Economics 101…it’s simple…supply and demand…prices actually do LOWER when supply trumps demand.
    Wooooooops…i forgot…the 30% need the City to foot the bill of their apts rather than work hard for it.
    U know what…that BOND ain’t lookin half bad right now!

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