Affordable housing nonprofits could get first crack at buying multi-unit buildings under legislation introduced Tuesday to protect tenants from real estate speculators.
Introduced by Supervisor Sandra Fewer, the legislation would require property owners to notify the Mayor’s Office of Housing if they plan to sell properties with three or more residential rental units for nonprofits to possible purchase by affordable housing nonprofits.
If a seller receives an offer from a potential buyer on the private market, they must make the same offer to the nonprofit.
“Nonprofit organizations seeking to create and preserve affordable housing may be willing and able to pay market prices to purchase residential buildings for sale, but nevertheless find themselves unable to purchase such buildings before they leave the market,” the legislation says.
The City would compile a list of qualified nonprofits who would have five days to decide if they were interested in purchasing sites. The nonprofits would qualify under certain criteria, such as if they have within the previous three years acquired at least two residential buildings using San Francisco’s existing Small Sites acquisition program.
The Small Sites program, which began in 2014, has secured 26 housing sites comprising about 184 units.
Under the proposal, if property owners plan to sell, they have to notify the Mayor’s Office of Housing and provide information about the building, including the number of units and the amount of rent due from each tenant. Qualified nonprofits would have five days to decide if they want to make an offer on the site. If they do, they will have more time to come up with an offer.
The owner could reject the offer.
The legislation also mandates a right of refusal. If an owner plans to sell a property, the qualified list of nonprofits would have the right to match the officer and the owner would have to sell to the nonprofit.
Fewer called the legislation a “win-win for landlords and tenants as it protects the landlord’s ability to sell their building at market rate while preventing the displacement of tenants.”
She said that The City cannot keep up with the pace of affordable housing lost to evictions and demotions, but this was a “a critical tool to stop the bleeding by purchasing multi-family buildings from landlords looking to exit the rental business.”
The proposal, which Fewer calls the Community Opportunity to Purchase Act, was crafted with the support of affordable housing nonprofits and inspired by Washington DC’s District Opportunity to Purchase Act.
Fernando Martí of the Council of Community Housing Organizations, who supports the proposal said in a statement that “the state of our evictions and speculation crisis demands that we have every tool possible.”
Fewer also made a pitch to put a portion of a $181 million windfall from excess property tax revenues received through the Educational Revenue Augmentation Fund toward the purchases the legislation would help with.
To become law, it would require approval by the Board of Supervisors.