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Thursday, January 20, 2022

Should Renters Get First Benefit in Bay Area Real Estate Deals?

As the Bay Area gears up for new ways to address its affordable housing shortage, several cities are considering controversial policies that would give some tenants a shot at buying their own homes — a move that could help property owners and renters alike. rapidly dividing.

To prevent big-pocket investors from scouring homes, raising rents, and kicking out tenants, East Palo Alto, San Jose, Oakland and Berkeley are eyeing ordinances that allow certain sales to renters, nonprofits or the city. But will pay attention for the first time. Known as the Opportunity to Buy Acts, the ordinances have been heralded by tenants rights advocates as a way to give renters a leg up in the hot housing market. But the idea faces stiff opposition from some landlords and real estate groups, who argue that they represent an unconscious interference with property owners’ rights.

“It’s going to be a fight,” said Sandy Perry, board member of the South Bay Community Land Trust, which seeks to buy residential buildings and convert them into affordable housing. “We are fighting against the real estate industry, which Don’t want that to happen. But I think it’s a good chance. This is an opportunity to do something concrete against this wave of displacement that is still continuing in San Jose and Silicon Valley.”

SAN JOSE, CA – DECEMBER 15: Community members participate in a rally for the San Jose Community Opportunity Purchase Act or “COPA” at City Hall on Wednesday, December 15, 2021 in San Jose, Calif. (Eric Crabb/Bay Area Newsgroup)

Proposals vary, but they generally require owners of multi-unit rental properties to inform tenants in their building if they intend to sell qualified affordable housing nonprofits and/or non-profits. or town. If none of those groups submits an offer that the seller finds acceptable, the seller can list the property on the open market. After choosing the best offer, the seller must offer tenants, nonprofits or the city the opportunity to match it. If that happens, under East Palo Alto’s proposed ordinance, the owner will have to sell the one that matches the offer. The buyer will be prohibited from raising the rent beyond a certain level.

The model under which San Jose is running the workshop will give the owner the final say in choosing the buyer.

The San Francisco Community Land Trust is in the process of buying its first two buildings under the city’s two-year-old Purchase Act — 40 units at Tenderloin and four at Russian Hill. Although the city ordinance gave land trusts an unprecedented opportunity to compete with corporate investors, it is challenging for nonprofits to close cash deals, said Keith Cooley, director of asset management for the land trust. Weighing Opportunities Other cities are considering linking purchase acts with city funds.

At an East Palo Alto City Council meeting earlier this month, heated debate over the city’s proposed Purchase Act lasted until midnight, forcing council members to postpone their vote. Opponents called the proposed ordinance unconstitutional and said it was a “hostile takeover” of people’s homes, while supporters said it could be their only means of buying property. The city council is set to revisit the item on Wednesday.

Should Renters Get First Benefit in Bay Area Real Estate Deals?
EAST PALO ALTO, CA – DECEMBER 19: Community member Carolyn Tang attends a rally to protest the “opportunity to buy” or “OPA” ordinances at City Hall in East Palo Alto, Sunday, December 19, 2021. California (Eric Crabb/Bay Area Newsgroup)

Jennifer Liu, vice president of the homeowner-focused business and housing network, worries that East Palo Alto’s policy will prevent owners from selling to tech companies or their employees and getting the best prices. He also worries that the ordinance will reduce sales during the months of red tape.

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“They are my lifelong savings for my retirement,” Liu said of his real estate investments. “So my concern is that later when I need the money and I need to sell it, I can’t sell it. And because of this policy the price will be discounted. I am deeply concerned.”

According to an analysis by the city, the ordinance will have no effect on sales in large numbers in East Palo Alto. Owner-occupied single family homes, duplexes and triplexes will be exempted. Based on historical sales figures, fewer than 23 single-family homes and seven multi-unit buildings will be subject to the ordinance each year.

In Oakland, a group of tenants last week convinced their landlord to sell their Fruitvale building for $3.3 million. Oakland Community Land Trust is ready to buy it and help tenants become partial owners. But the process led to more than two years of rent strikes and protests, including a recent march to the landlord’s house.

Should Renters Get First Benefit in Bay Area Real Estate Deals?
ALAMEDA, CA – DECEMBER 16: Joseph of Boulder Creek, dressed as Leonard Miller and their donkey Sally, prepare to join a procession of apartment tenants who march through their building in Alameda, Calif., Thursday, Dec. Visit the owner’s house. 16, 2021. With the help of a land trust, tenants have been attempting to purchase their apartment building in Oakland for the past few years. Organized by the Alliance of Californians for Community Empowerment, the procession repeats a traditional “posada”, reminiscent of Joseph and Mary’s journey from Nazareth to Bethlehem in search of a safe refuge. (Ray Chavez/Bay Area News Group)

Advocates say the opportunity to buy the ordinance could have made the process easier. And if one does pass, it could open up a buying opportunity for more tenants.

“This is something that, over a 10-year period, I think could have a radical impact,” said Leah Simon-Weisberg, legal director of the Alliance of Californians for Community Empowerment.

Oakland has been toying with the idea of ​​an opportunity to buy the act since early last year, inspired by the active group Moms4Housing, which skyrocketed to national fame when members began sitting in an empty house with their kids. Started. Progress stalled during the pandemic, but Councilwoman Carol Fife plans to bring the idea back for the next vote.

In Berkeley, Mayor Jesse Arreguín discussed a proposed tenant opportunity to buy the Act on Hold, after significant pushback. City is expected to introduce an updated version early next year.

Should Renters Get First Benefit in Bay Area Real Estate Deals?
SAN JOSE, CA – DECEMBER 15: Community members participate in a rally for the San Jose Community Opportunity Purchase Act or “COPA” at City Hall on Wednesday, December 15, 2021 in San Jose, Calif. (Eric Crabb/Bay Area Newsgroup)

San Jose housing officials are also working on an ordinance and expect to bring it to the city council next spring.

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