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.”
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.
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.
“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.
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.
San Jose housing officials are also working on an ordinance and expect to bring it to the city council next spring.
Mayor Sam Licardo said the city wanted to make sure the measure would not stall the housing market. After all, taxes on real estate transactions help for affordable housing, he said.
“We need people to be able to engage in the market without thinking, hey, in San Jose you’re never really going to be able to transact sales because of the red tape,” Licardo said.
Community group SOMOS Mayfair, which held a rally in support of the ordinance buying opportunity outside San Jose City Hall last week, is prompting officials to vote by February.
Andrea Portillo, community organizing and policy manager for the group, said, “We are hoping that this policy will give people the opportunity to remain in the communities they are in, to live in the habitat they are currently in.” Once their property is sold, they are displaced.”