San Franciscans are now debating how to pay for seismic upgrades to 44,000 San Francisco housing units vulnerable to collapse during an earthquake. The discussion concerns so-called soft-story buildings — structures in which multistory wooden-frame buildings sit atop garages or businesses with few internal walls. Such buildings famously collapsed in the 1989 Loma Prieta earthquake.
As we approach the 25th anniversary of that temblor, far too many San Francisco residences still lack the basic upgrades needed to survive a strong earthquake. With the clock ticking until the region’s next large-magnitude quake, lawmakers have introduced legislation that would mandate long-overdue upgrades to thousands of buildings, housing tens of thousands of residential units, over the next four to seven years.
Prior efforts to use an incentive program as a carrot resulted in very few voluntary retrofits. So now The City is contemplating a stick. At face value, who can argue with making sure The City’s already scarce housing stock is strong enough to survive an earthquake? But, of course, nothing is ever quite that simple in San Francisco.
The hitch involves paying for these upgrades, which, according to a City Controller’s Office report, could run between $9,000 and $20,000 per housing unit. Under the proposed legislation, the fixes would be considered capital improvements. Existing city regulations would allow building owners to pass along 100 percent of the costs to renters over a period of 20 years — up to a maximum increase of 10 percent in annual rent. The added costs would be between $38 and $83 per month for renters, according to the City Controller’s Office.
With the potential threat of such rent hikes looming, especially for low-income San Franciscans, rental advocates argued Monday at a meeting of the Board of Supervisors Land Use and Economic Development Committee that tenants should not be on the hook for such upgrades. A compromise, they say, could be a 50-50 split on the costs, which would reduce the rent increases.
But a majority of San Francisco supervisors appear to support the complete pass-through, and we agree. After all, existing laws already allow low-income people to apply for waivers from such rent increases on the basis of economic need — although tenants-rights advocates complain that these processes are laborious, unwieldy and complicated.
No solution to this dispute suits everyone. If building owners are allowed to recover all their costs, a reasonable expectation, The City’s structures would be safer but some tenants could be displaced. If landlords cannot recover their entire investments, building owners will be more likely to fight this legislation in court — further delaying repairs that should have been completed a generation ago.
What’s crystal clear is that The City cannot wait another 25 years to address the safety risks posed by soft-story buildings. After all, everyone will lose if nothing is done before the next Big One hits. Building owners would suffer losses and tenants would have less inhabitable housing to choose from. And once any damaged units were rebuilt, they would no longer be covered by rent control — which surely cannot be an outcome desired by tenants-rights advocates.
However, we also support a renewed look at the terms under which such cost-recovery could occur. For instance, it might make sense to lower the maximum annual rent increases permitted as a result of such repairs.
The appropriate solution should allow building owners to recover all their costs while sparing tenants any more rent increases than are necessary to get this work done as soon as possible.