The number of tenants in rent controlled apartments who received a buyout offer to vacate and sought counseling from the San Francisco Tenants Union has increased from 90 in 2007 to 175 in 2013.
While the maximum offer reported to the Tenants Union was $80,000, the average offer was closer to $21,000 with a median of $16,000, a median which increased to $20,000 over the past year.
The highest concentration of reported buyout offers over the past year, and roughly since 2008 as well, has occurred in the Mission, Castro, Noe Valley, Western Addition, Haight-Ashbury and NoPa. And the median monthly rent for the tenants in two-bedroom apartments who reported receiving a buyout offer was $1,700 over the past year.
With a market-rate rent for a two-bedroom in San Francisco currently averaging closer to $4,200, the payback for a $20,000 buyout, assuming the unit could be re-rented at an average market rate, would be all of eight (8) months.
Keep in mind that the buyout data above is based on intake forms prepared by tenants seeking counseling from the Tenants Union and is not a comprehensive picture of all buyout activity in San Francisco. In addition, the data likely understates the actual averages, as those tenants seeking counseling are less likely to have received offers which were “too good to refuse” and initial offers are often countered and increased.
As noted by San Francisco’s Budget and Legislative Analyst’s Office which compiled the data for Supervisor Campos:
Compared to current City requirements pertaining to No-Fault evictions, tenant buyouts: 1) allow landlords to re-rent their apartments at market rate to new tenants, with no obligations to re-rent to existing tenants at rent-controlled rates, 2) release landlords from tenant notification time requirements of the Rent Ordinance; and, 3) keep open the possibility of converting the rental units to condominiums for sale which could be prohibited as current City law does not allow condominium conversions at buildings where No-Fault evictions of tenants have occurred after March 31, 2013, or where multiple No-Fault evictions occurred prior to March 2013.
Supervisor Campos has been working on legislation which would categorize buyouts as No-Fault evictions as well, disallowing landlords to re-rent cleared apartments at market rate, requiring notifications, and restricting future condo conversions of buildings where buyouts occurred.