Purpose. | |
Modification to Existing Code. | |
Definitions. | |
Application. | |
Limitation on Number of Conversions. | |
Mayor's Office of Housing:Certificate of Clearance; Conversion Oversight and Monitoring. | |
Administrative Fees | |
Tenant Purchase Rights. | |
Tenant Lifetime Lease Rights. | |
Formula for Determining Initial Purchase Price of Member Share and Member Carrying Charge for Qualifying Households. | |
Subdivider's Notice of Intent to Convert. | |
Tenant Opt-In. | |
Sale of Vacant Units. | |
Intent to Purchase Form. | |
Income Certification. | |
Additions and Deletions to the Application Packet for Subdivisions Under this Article. | |
Action on Application Packet; Conditions of Approval. | |
Resale Formula. | |
Final Maps and Parcel Maps; Deed Restrictions. | |
This Article 11 is enacted to establish a method for converting parcels containing 2 or more existing residential units into limited equity housing cooperatives. The conversions allowable under this Article 11 are intended to:
(a) promote the expansion of residential ownership opportunities for existing tenants by making conversions into limited equity housing cooperatives possible at a level they can afford because limited equity housing cooperatives are widely recognized as vehicles to:
(1) provide affordable home ownership opportunities for very low and low-income individuals and families.
(2) allow low-income individuals and families the ability to acquire a limited ownership interest in a building.
(3) participate, through the voting rights granted to each share owner, in the management of the limited equity cooperative, and
(4) restrict the annual appreciation of membership shares to increases not to exceed 10 percent of the original consideration paid for the share in order to provide appreciation for the share owner and continued affordability for other low-income households at resale;
(b) balance the interests of home ownership with the need to protect existing tenants from displacement;
(c) increase the availability of affordable home ownership opportunities citywide;
(d) target affordability levels that reflect the needs and income distribution of the City's residents; and
(e) improve the physical condition of the converted housing stock without fueling neighborhood gentrification.
(Added by Ord. 319-08, File No. 081513, App. 12/19/2008)
This Article modifies applicable provisions of the San Francisco Subdivision Code ("Code") for all conversion applications submitted under Section 1399.17. Article 9 of the Code does not apply to conversions to stock cooperatives under this Article except as expressly noted herein, but would apply in the event that a stock cooperative formed under this Article seeks to convert to a condominium. The provisions of Sections 1332(a), 1341 and 1385 of the Code do not apply to conversions under this Article. Subdivisions permitted by this Article shall not constitute an increase in the limits of Section 1396 for purposes of Sections 1341A(2) or 1385A(2).
(Added by Ord. 319-08, File No. 081513, App. 12/19/2008)
(a) "Carrying Charge" shall refer to the sole monthly charge to Resident Members covering that Resident Member's share of the operating and maintenance costs including, but not limited to, debt service on mortgages held by the Limited Equity Housing Cooperative, property taxes, management fees, maintenance costs, insurance premiums, common utilities, and contributions to reserve funds. Carrying Charge shall not refer to utilities solely attributable to the unit occupied by the Resident Member.
(b) "Department" shall refer to the Department of Public Works.
(c) "Director" shall refer to the Director of the Department of Public Works.
(d) "Limited Equity Housing Cooperative" shall refer to a non profit public benefit corporation formed as a limited equity housing cooperative as defined under California Civil Code section 1351(m) and California Health and Safety Code section 33007.5.
(e) "Maximum Allowable Allocation" shall mean the maximum number of unit conversions permitted per year, beginning on June 1st of each year, and shall equal 200 units per year plus any unused allocation from the previous year. Notwithstanding the foregoing, the number of unit conversions under this Article shall not exceed 400 in any year. Units or member shares located in City-owned buildings shall not be counted as part of the Maximum Allowable Allocation.
(f) "Maximum Annual Rent" shall mean the maximum rent that a Limited Equity Housing Cooperative may charge any Resident Tenant who is also a Qualifying Household as rent or any Member who is also a Qualifying Household as an annual Carrying Charge for the calendar year as published by the Mayor's Office of Housing. The maximum annual rent for a unit of the size indicated below shall be no more than 30 percent of the annual gross income for a Qualifying Household as defined in this Section, and as adjusted for the household size indicated below as of the first date of the tenancy or purchase of the Member Share:
Number of Bedrooms | Number of Persons in Household |
0 | 1 |
1 | 2 |
2 | 3 |
3 | 4 |
4 | 5 |
(g) "Member Share" shall refer to a share of stock in the Limited Equity Housing Cooperative that provides the owner(s) with an exclusive right of occupancy to a portion of the residential property converted under this Article.
(h) "Qualifying Household" shall refer to the residents of a unit in the residential property to be converted who, taken together as a household, earn less than eighty (80) percent of the San Francisco Median Income, as defined by the San Francisco Mayor's Office of Housing, and at least one of whom has occupied the unit as his or her primary residence for at least one year prior to the date of submission of the Certificate of Clearance.
(i) "Permitted Eviction" shall refer to any attempt to terminate a tenancy of a Resident Tenant pursuant to San Francisco Administrative Code Section 37.9(a)(1) – (4), (6), and (7).
(j) "Resident Member" shall refer to a resident of the Limited Equity Housing Cooperative who has purchased a Member Share in the Limited Equity Cooperative.
(k) "Resident Tenant" shall refer to a tenant of the Limited Equity Cooperative who has entered into a lease with the Limited Equity Housing Cooperative pursuant to section 1399.8A.
(l) "Subdivider" shall mean, for purposes of this Article, a nonprofit public benefit corporation formed pursuant to California Corporations Code Section 5110 and their successors in interest.
(m) "Total Development Cost" shall mean, for the purposes of this Article, all costs relating to the purchase, improvement, rehabilitation, upgrade, and conversion of the property to be converted under this Article based upon a budget submitted to and approved by the Mayor's Office of Housing in the application for a Certificate of Clearance.
(Added by Ord. 319-08, File No. 081513, App. 12/19/2008)
This Article shall apply to all applications for initial conversion of residential buildings with 2 units or more into a Limited Equity Housing Cooperative, filed on or after the effective date of this ordinance. The Subdivider for an application for initial conversion under this Article must be a non-profit public benefit corporation formed under California Corporation Code Section 5110. Applications for initial conversion shall be filed with the Department of Public Works in accordance with the provisions of Section 1399.17 of this Article.
(Added by Ord. 319-08, File No. 081513, App. 12/19/2008)
(a) The Department shall not, under this Article, approve applications for conversions of more than the Maximum Allowable Allocation each year, beginning on June 1. The Department shall carry over any unused allocation from year to year. Units or member shares located in City-owned buildings shall not be counted as part of the Maximum Allowable Allocation and may convert under this Article 11 regardless of the number of units.
(b) The Department shall keep a list of complete applications in the order that the Department deems the application complete until the cumulative number of units reaches or would exceed the Maximum Allowable Allocation. If a project is within the Maximum Allowable Allocation then the Department shall accept the application for processing. In the event that the number of units represented by completed applications exceeds the Maximum Allowable Allocation, those buildings not accepted for processing by the Department shall be placed on a waiting list and, unless otherwise withdrawn by the Subdivider, shall be given priority in the order that the applications were deemed complete for the following year's Maximum Allowable Allocation.
(Added by Ord. 319-08, File No. 081513, App. 12/19/2008)
The Mayor's Office of Housing shall have the following responsibilities under this ordinance:
(a) Certificate of Clearance: The Department of Public Works shall not deem an application for conversion under this ordinance complete unless the applicant includes a "Certificate of Clearance" issued by the Mayor's Office of Housing for the application. MOH must issue a Certificate of Clearance to the Subdivider within (i) 7 days of receiving an application if the Subdivider or Limited Equity Housing Cooperative is a recipient of funding under the Real Ownership Opportunities for Tenants program or (ii) 30 days of receiving an application from any other Subdivider or Limited Equity Housing Cooperative if all of the following criteria have been met:
(1) The Subdivider has submitted income verification information for all households in the building pursuant to Section 1399.16 and the Mayor's Office of Housing determines that at least 50% of the existing households at the time of submission are Qualifying Households;
(2) Two-thirds of the Qualifying Households have submitted an executed Intention to Purchase form;
(3) At least a majority of all households in the building at the time of application submission have submitted an executed Intention to Purchase form;
(4) The following offer has been made to any tenant who, in the two years prior to the Subdivider's application for a Certificate of Clearance, surrendered their tenancy or were evicted due to a notice to quit under San Francisco Rent Ordinance Sections 37.9(a)(8) – (15) and who has resided in the building for at least one year prior to their surrender of tenancy or eviction: The former tenant shall receive the option to purchase a member share and occupy a unit appropriate to the size of the household at the time the household surrendered their tenancy under the same terms as a tenant in the building at the time of application. If the Subdivider, after making a reasonably diligent search, cannot locate a tenant, the Subdivider shall document its efforts to reach the tenant and shall request a waiver from this subsection. MOH shall evaluate whether all reasonable measures have been taken to locate the tenant and, if it finds that they have, shall grant such a waiver.
(5) The Subdivider and the Mayor's Office of Housing have entered into a binding agreement to record a notice of special restrictions against the property as a condition of subdivision that imposes: (A) all requirements of California Business and Professions Code Section 11003.4(b)(3), (B) the resale restrictions set forth in Section 1399.21(C) Carrying Charge restrictions set forth in Section 1399.9, (D) subleasing restrictions set forth in Section 1399.6(b)(3), and (E) rent restrictions for Resident Tenants set forth in Section 1399.8A. The notice of special restrictions shall run with the land and be binding on the Subdivider, any future Limited Equity Housing Cooperative, or any other successor in interest.
(6) A Limited Equity Housing Cooperative has been formed and the Limited Equity Housing Cooperative holds a fee simple interest in the parcel to be converted or entered into a lease of no less than 99 years, or the Subdivider covenants under the agreement above to transfer a fee simple interest to or enter into a lease of no less than 99 years with a duly formed Limited Equity Housing Cooperative.
(7) A rental history detailing for each unit the size in square feet, the number of bedrooms, the current or last rental rate, and the names of the current tenant or tenants for each unit, including the names of all occupants 18 years of age or older, to the extent that such information is known or can be made known to the Subdivider.
(8) A budget detailing the Total Development Cost.
(b) Ongoing Monitoring: On an ongoing basis, the Mayor's Office of Housing shall perform the following monitoring activities:
(1) Verify that vacated units purchased by households that are Qualifying Households at the time of the application for a Certificate of Clearance are re-sold to Qualifying Households;
(2) Before a proposed resale of a member share, verify that the resale price of the Member Share complies with the requirements of this ordinance;
(3) Ensure that each Limited Equity Housing Cooperative converting under this section submit an annual report certifying the following:
(A) For Resident Members who purchased their shares as a Qualified Household, (i) the cooperative is their only residence and (ii) they have not subleased their unit for more than 12 months in the previous 3 year period;
(B) For Resident Tenants, (i) the cooperative is their only residence; and (ii) they have not subleased their unit unless approved in writing by the Limited Equity Housing Cooperative.
(4) Prepare an annual monitoring report to the Board of Supervisors that analyzes: (A) the number of conversions per year; (B) the type, location, quantity, affordability, and number of resales of units in each project converted; (C) a list of projects converted under the ordinance including address and contact information; (D) known barriers and issues related to conversion under the ordinance; (E) effectiveness of the ordinance in serving low-income households; and (F) recommendations to the Board for improvements or legislative amendments.
(c) Income Verification: The Mayor's Office of Housing shall perform income verification as detailed in Section 1399.16.
(d) The Director of the Mayor's Office of Housing may issue administrative citations for violations of this ordinance. San Francisco Administrative Code Chapter 100, "Procedures Governing the Imposition of Administrative Fines," is hereby incorporated in its entirety and shall govern the procedure for imposition, enforcement, collection, and administrative review of administrative citations issued to enforce the Sections set forth in this Subsection 1344 and related provisions of the Subdivision Code. Nothing in this Section shall prevent the City from pursuing other remedies provided by law in addition to or instead of the fines provided for here.
(Added by Ord. 319-08, File No. 081513, App. 12/19/2008)
(a) The Department of Public Works, on behalf of itself and the Mayor's Office of Housing, is authorized to collect fees under Section 1315 of this Code which shall be applicable to all applications for initial conversion filed under this Article 11.
(b) The Department of Public Works shall be additionally authorized to collect fees on behalf of the Mayor's Office of Housing in the amount of $50 per unit for reviewing the tenants' income documentation and issuing an Income Certificate as provided in Section 1399.16 of the Code.
(c) Within one year after the date this Article becomes effective, and every three years thereafter, the Director shall review the proceeds of the administrative fee, and the costs of administering and monitoring Article 11 and shall prepare a report to the Board of Supervisors. Based upon the result of the review, the Director shall recommend to the Board of Supervisors any necessary adjustment to the fee structure and any necessary legislation to make the processing of such applications more efficient. In the event that the fee proceeds have exceeded, or are anticipated to exceed, the costs of administering and monitoring Article 11, the Director shall recommend legislation to the Board of Supervisors that modifies the applicable fee to ensure that fee proceeds do not exceed the costs of administration. In the event that fee proceeds have under-collected, or are anticipated to under-collect, the Director may recommend legislation to the Board of Supervisors that modifies the applicable fee to more accurately recover the costs for administration and monitoring.
(Added by Ord. 319-08, File No. 081513, App. 12/19/2008)
Loading...