Real Estate

Ellis Act and AirBNB reactions

Supervisor Scott Wiener wants granny units to be out in the open, photo: courtesy scott wiener

ELLIS ACT ACTIONS

San Francisco Supervisor David Campos is pushing legislation that would increase the amount of money landlords must pay tenants under the Ellis Act. Currently, landlords must pay displaced tenants $5,265 each, plus additional penalties if the tenants are elderly or disabled. Campos’s plan would force the landlord to pay the difference between the current rent and two years’ worth of the market-rate rent for that unit, which could cost landlords tens of thousands more than they would pay under existing Ellis Act eviction penalties.

Meanwhile, the California Apartment Association complains that legislation that has been introduced in the state legislature would “allow local jurisdictions to prohibit rental property owners from selling or converting their buildings. This would force rental property owners to stay in business even if they are losing money.”

AN AIRBNB CAUSE FOR PAUSE

The short-term rental service AirBNB is getting some of its users in hot water. AirBNB, which allows people to rent out their homes — owner-occupied or rentals — has made some good extra cash for folks who have a room or a home available, but renters are finding that they can fall afoul of many rental agreements, the San Francisco Chronicle reports.

The website for attorney David Wasserman, who represents many landlords, states that “Current San Francisco law prohibits short term rentals of less than 32 days, and no-subletting clauses in apartment leases prohibit residents from re-renting to others, nightly or otherwise. However, many tenants might not know that by using apartment-sharing websites to generate additional income, they could be violating their lease and several local laws, jeopardizing their housing in the process.”

As a result, those tenants are frequently surprised when they get an eviction notice. Landlords of rent-controlled apartments feel particularly put out, being forced to rent below market rate only to find their tenants making premium rents off their properties.

But things could be worse. The New York Post reports on Manhattanite Ari Teman, who used AirBNB to rent out his apartment while he left town for a wedding, only to return home unexpectedly to find that a “rowdy sex party” was taking place, ultimately costing $67,000 in damages to his home.

DOWNPAYMENT BOOST

San Francisco doubled the amount of money it lends to low- and moderate-income first-time homebuyers as part of its efforts to keep them in the city. On March 17, Mayor Lee announced the down payment loan maximums would increase from $100,000 to $200,000; the loans do not need to be paid back for 40 years or until the resale of the home.

The Down Payment Assistance Loan Program “has assisted many working families in our city and will continue to support our diverse workforce that is so critical to our economy,” said Mayor Lee.

For details on the program and application instructions, visit sf-moh.org.

GRANNY GOES LEGIT

The city’s Plann-ing Commission gave the green light to proposed legislation by Supervisor David Chiu to legalize so-called “granny units” or in-law units, secondary units in homes that are rented out. The commission also okayed District 8 Supervisor Scott Wiener’s plan to allow Castro homeowners to create new granny units.

Granny units have often been built illegally, as homeowners sought to earn money from unused garages, attics, ground-floor storage, and other available spaces. There are believed to be between 30,000 and 40,000 illegal granny units in San Francisco.

Chiu’s plan would allow up to one legalized unit in single-family homes and would not allow the units to be subdivided or condominiumized. Owners of currently illegal units who wish to find out if they can make the transition will have a yet-to-be-created screening process to use without being penalized for inquiring.

Wiener said his legislation “will create a low-impact path for more affordable housing options in the Castro, as in-law units are the most affordable kind of non-subsidized housing. In-law units also tend to be more accessible for individuals with mobility challenges, including seniors.”

SF RESIDENTIAL MARKET UPDATE

File this in the “thanks, Sherlock” category, but a report finds that San Francisco was one of the top three cities in the country for house price increases. Las Vegas, Los Angeles and San Francisco each had gains of more than 20 percent during 2013. According to the S&P Dow Jones Indices, pricing in all three of those cities decelerated a bit at the end of the year.

However, Pacific Union reported that San Francisco wasn’t even the best performing of its eight Bay Area regions. Four other regions (led by Napa with its 34 percent increase in 2013) had larger increases than San Francisco.

YOU’VE BEEN WARNED

Julia Hartz, the co-founder of online ticketing service Eventbrite, says that even tech companies are having trouble because of San Francisco’s high rents. “I just signed a lease that made me want to throw up,” Hartz told the Business Insider.

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E-mail: john@marinatimes.com

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