Full board to vote on plan allowing landlords to share cost of tax hike with tenants
In a move that could quell opposition to the $450 million school facilities bond on the November ballot, a Board of Supervisors committee supported legislation Tuesday that would ensure all future bonds include a provision permitting building owners to pass on 50 percent of the costs to tenants.
The legislation would make automatic the 50 percent cost share of the upcoming measure as well as future bond measures, which are funded through increases in property taxes paid by homeowners. The Land Use and Economic Development Committee unanimously supported the legislation on Wednesday, and the full board is expected to vote on it next week.
A loophole in legislation adopted in 2002 permitted bonds to go on the ballot without the 50 percent “pass-through” provision. Influential groups such as the San Francisco Apartment Association, which represents 2,800 rental property owners, were expected to campaign against the San Francisco Unified School District bond if the loophole was not fixed, even though the school board voted in August to include the 50 percent provision in its bond measure.
“This amendment would close an unintended loophole for my Tenant Protection 2002 Ordinance,” Supervisor Tom Ammiano said. “The cleanup legislation will restore the original agreement, which had broad support of tenant and landlord groups. Today, there is broad consensus behind closing this unintended loophole.”
Approving the legislation would be a “benefit to the school district,” he added.
In 2002, tenant groups, landlord groups and city supervisors struck an agreement that in exchange for allowing the shared cost of future bonds, building owners would pass on only 50 percent of the cost of capital improvements to their tenants.
“Frankly, the fact that it was dysfunctional was good for tenants but it’s the spirit of the agreement that we agreed to,” said Ted Gullicksen, director of the San Francisco Tenants Association. “So, regrettably I approve this,” Gullicksen joked.
“The chamber’s endorsement of the school bond was contingent upon passage of this legislation,” said Jim Lazarus, vice president of the San Francisco Chamber of Commerce. “And we’re convinced this legislation will get through in the next couple of weeks and will be signed by the mayor.”
The school district’s $450 million bond measure is on the Nov. 7 ballot to help fund a $1.4 billion backlog in maintenance costs, which includes a number of fixes to comply with the Americans with Disabilities Act. It’s estimated that it will assess about $22 per $100,000 of property value over the next 20 years. The cost to tenants would vary.
For example, an owner of a 10-unit apartment building worth $1 million would pay a total of $220 a year. The owner would then divvy up half the cost among the 10 units, so renters would pay about $11 a year on top of their base rent.