A proposal that would place nonprofits first in line to purchase multi-unit buildings going up for sale across San Francisco is gaining traction in City Hall.
The Community Opportunity to Purchase Act, or COPA, introduced by District 1 Supervisor Sandra Lee Fewer late last year, would change The City’s Administrative Code to give nonprofit housing operators the right of first refusal on the sale of residential buildings with three or more units or vacant lots.
Property owners would have to notify The City of offers from a potential buyers on the private market, and selected nonprofits would have 30 days to make an offer. The owner would be free to reject any offer made.
Additionally, if a property owner were to receive an offer from the general public, the owner would have to also give the nonprofits a chance to match it.
At a Planning Commission hearing Thursday, COPA received unanimous support from the commissioners, who forwarded the legislation to the Board of Supervisors with a positive recommendation for approval. However, they asked it’s authors to amend it to give property owners more incentives to participate.
“Housing stability should not just be for folks that can attain homeownership — it should be for everyone,” said Commissioner Milicent Johnson, echoing the words of one of more than two dozen people who came to speak in support of the legislation. No one spoke in opposition at the hearing.
“The City and nonprofits are really turning up here to create a third way,” said Johnson.
Under the proposal, a list of nonprofits chosen by The City would have five days to deliberate the purchase of a site, and 25 additional days to make an offer on the building.
The Planning Department’s most recent housing balance report revealed that less than 18 percent of the net new units built in San Francisco over the past decade have been affordable.
For every two new affordable units built, one is lost to “Ellis Act evictions, owner move-in evictions, demolitions and condo conversion,” said Ian Fregosi, Fewer’s legislative aide. “We cannot continue taking two steps forward and one step back.”
Tenant, homeless and affordable housing advocates hailed the plan as an innovative and viable way to prevent displacement and preserve existing affordable housing in a city in the midst of a massive housing crisis.
“We see so many people who have been evicted or priced out of their homes, and we really fight tooth and nail to keep people in their homes before they are evicted because we know what it’s like on the other side,” said Sam Lew, an advocate with the Coalition on Homelessness.
Citing recent city data, Lew said that “70 percent of The City’s over 18,000 homeless people were housed San Franciscans before they became homeless.”
She called COPA “necessary tool” in her work to prevent The City’s most vulnerable households from slipping into homelessness.
David Woo, of South of Market Community Action Network, said that one of the largest challenges facing nonprofits working to purchase residential buildings through the City’s land trust model is “the fact that there is no mechanism in place to ensure that residential buildings that go up for sale on the private market [are sold to] a nonprofit that’s interested in purchasing.”
Affordable housing advocates said the proposal would “level the playing field” for nonprofit housing developers.
“COPA allows organizations like ours and others to have a leg up and to have a fighting chance against people who have a lot more liquid capital and maybe less good intentions,” said Alexandra Goldman, of the nonprofit Tenderloin Neighborhood Development Corporation.
“We are excited about looking into the acquisition of Single Room Occupancy hotels — there’s a market-rate threat on these buildings that have been seen as safe places for low-income people to live,” she said.
The Board of Supervisors on Tuesday allocated $40 million for Small Sites Acquisition program, which nonprofits could use to buy the properties that would come to their notice under COPA.
Commissioner Rich Hillis pointed out that securing funding for the program continues to be a challenge, adding that The City must “grow funding almost exponentially to make a dent.”
Johnson said that she would like COPA to be seen “not as a requirement, but as the first option by owners thinking of selling.”
She added this would require “giving owners agency to be able to negotiate with nonprofits.”
Commissioner Dennis Richards agreed that the proposal needed incentives to encourage property owners to “want to be part of the program.”
“The City can act as guarantor to make sure contracts don’t fall through,” said Richards.
The board’s Rules Committee will take up the proposal next, though a hearing has yet to be scheduled.