For nearly two weeks in mid-August, longtime San Francisco resident Kaye Kennedy dreaded opening her mailbox.
There had been rumors swirling among her neighbors at the South Beach Marina Apartments at 2 Townsend St. that the building owner — the Florida State Board of Administration, which is the nation’s fifth largest public pension fund — planned to send notices of intent to convert the 101 below-market-rate units at the site into market-rate units.
Such a move requires only giving a year’s notice to tenants because when the apartments were built in 1989, developers obtained tax-exempt bond mortgages in exchange for offering at least 20 percent of units at below market-rate for 25 years.
That covenant expired in January.
With the skyrocketing housing costs in The City — market-rate units are listed at South Beach Marina Apartments between $3,450 to $5,475 for one- and two-bedroom units — many expect owners to take advantage of inflated rents.
“Every day I was going to the mailbox expecting to find that letter, but it didn’t come,” said Kennedy, 73.
On Monday, Kennedy was breathing a little easier thanks to the banding together of housing activists and tenants to fight their possible displacement. Such a move highlights an emphasis in The City not only on building below-market-rate units, but on preserving them as well.
A public rally organized by the South Beach District 6 Democratic Club is scheduled for today, and supporters of the below-market-rate units will deliver petitions with nearly 500 signatures to the property manager’s office.
Patrick Valentino, the club’s vice president, is aghast that there is no law to preserve the units as below-market-rate, especially because he estimates the building owner is already receiving rent from market-rate units that exceeds what was predicted five years ago.
“I think it’s good policy to lift other people up with you,” Valentino said.
Dennis MacKee, a spokesman for the Florida State Board of Administration that acquired the apartments in 1999 for $82.3 million, said Monday that no notifications have been sent to tenants and the board is considering “options while meeting its requirements as a fiduciary to the beneficiaries of the retirement system.”
For its part, The City is aware of the expiring housing-use restrictions, a challenge that is not unique to the South Beach Marina Apartments.
In fact, there are four other properties that received lower-cost bond financing in which the requirement to maintain below-market-rate units will expire by 2021, said Kate Hartley, deputy director of the Mayor’s Office of Housing and Community Development.
All together, the properties at South Beach Marina Apartments, Bayside Village, 737 Post St., Fillmore Center and Rincon Center include some 600 below-market-rate units that are ripe for conversion into market-rate.
“The City is working with the owners, and we are pursuing every strategy possible to prevent displacement,” Hartley said.
Board of Supervisors President London Breed said she is crafting a plan to address the preservation of below-market-rate units throughout The City. She scoffed at past housing policies that failed to give The City any say in the long-term future of below-market-rate units that were created to incentivize redevelopment projects like the South Beach Marina Apartments.
“We need to look at preservation on a large scale for the entire city,” Breed told the Examiner.
Meanwhile, Kennedy, who has lived in a below-market-rate unit at the South Beach Marina Apartments since 1993, said she will continue working three jobs to pay her $1,346 in rent each month. She designs and sells jewelry, works as an usher for the Giants and recently starting writing copy for real estate listings.
If she loses her apartment, Kennedy said she will likely not find another home she can afford in The City and will move to Reno — a thought that breaks her heart.
“For me, this is home,” Kennedy said of San Francisco.
Today’s rally is scheduled to begin 11:45 a.m. and organizers will meet at South Beach Cafe, 800 The Embarcadero.affordable housingbelow market rate housingFlorida State Board of Administrationhousing bondLondon BreedMayor’s Office of Housing and Community DevelopmentPlanningSouth Beach Marina Apartments