Converting nearly 1,800 units into condos for a fee was rejected, costing The City the $8 million the proposal would have generated.
San Francisco has a lottery system that selects 200 units annually for conversion into condominiums. With 1,799 units having lost the lottery this year and a multimillion-dollar deficit to close, Mayor Gavin Newsom proposed legislation that would allow these units to bypass the lottery system by paying a $20,000 fee per unit. The cost would’ve been reduced depending on the number of years one had participated in the lottery.
But, the proposal was slammed by Budget and Finance Committee Chairman Supervisor John Avalos, who said it threatens San Francisco’s rental stock and encourages evictions. The condo conversion is “a program to disincentivize the turning over of rental property,” Avalos said.
The five-member committee voted 3-1 late Monday night to table the proposal, effectively killing it. Supervisors David Campos, Sophie Maxwell and Avalos voted to table it, while Supervisor Sean Elsbernd voted not to. Supervisor Ross Mirkarimi was excused from the vote. He has applied to convert his home into a condo.
The rejection forces supervisors to find $8 million, since the revenue was assumed in Newsom’s proposed $6.5 billion budget.
Newsom spokesman Tony Winnicker said the committee made the wrong decision.
Also, the board has signaled it would reject $13 million in savings Newsom proposed by contracting out services performed by city and county workers. “They are blowing a giant permanent hole in the budget and the only answer they have to fill it is a mountain of new taxes,” Winnicker said.
The vote came as the city controller sent a memo that real estate property transfer tax is higher than expected and there will be $7.8 million in unexpected revenue.
“This is a policy matter that the board didn’t agree with,” Avalos said Tuesday. “We should have policy measures that we can support, that are less controversial for us to base our budget assumptions on.”