Tenant advocates are concerned about the financial impact of a proposal to require owners of earthquake-vulnerable buildings to make safety upgrades.
For more than a decade, The City has struggled with how to get owners of what are known as “soft-story buildings” to upgrade them to withstand a major earthquake, but costs and the debate over who has to pay for fixes have long hampered the effort.
Tenant advocates worry that having renters shoulder the entire bill will cause widespread displacement before any earthquakes occur.
Last month, Mayor Ed Lee and Board of Supervisors President David Chiu attempted to settle the debate with legislation that would mandate the upgrades of thousands of soft-story buildings comprising 44,000 housing units.
The proposal would allow landlords to pass 100 percent of the cost of seismic work through to tenants. According to City Controller’s Office chief economist Ted Egan, tenants could be paying an additional $38 to $79 per month in rent.
“While retrofitting clearly makes buildings safer for tenants, it is not known if the additional level of safety is worth the additional cost to tenants,” Egan said in his report presented Monday to the board’s Land Use and Economic Development Committee.
Egan said while the benefits for tenants are unclear, property owners’ building values would increase and The City itself would have reduced response costs during an earthquake.
Tenant advocates are decrying the potential rent hikes and suggest they would compromise on a 50-50 sharing of the costs. Current laws allow landlords to pass on 100 percent of the costs for capital improvements.
“That is way too expensive for some to be able to afford, and we fear it will cause displacement,” said Sara Shortt, executive director of the Housing Rights Committee, a nonprofit that counsels tenants on rent laws. “It makes more sense that tenants should have no costs to bear in this.”
Lee’s earthquake safety manager, Patrick Otellini, stands behind the 100 percent pass-through rate.
“These are laws that are currently on the books and we believe the process works,” Otellini said. “If someone can’t afford to pay this there are avenues for them to take. And we believe that this process works in The City.”
Tenants who feel they cannot afford the extra cost, seniors and people with disabilities can apply with the Rent Board to claim an economic hardship and avoid the rent increase. But tenant advocates say the process is cumbersome and final decisions can seem arbitrary.
The legislation already has the support of seven supervisors, enough to ensure its passage. Supervisor Jane Kim, who is not currently listed as a supporter, said she would like to examine changing the pass-through percentage and easing the process by which tenants can apply for a hardship exemption.
The board committee will hold a hearing on the legislation next week, where amendments could be made, with the intention of forwarding it to the full board for approval.