In an action which will send chills through the TIC market, the Board of Supervisors denied the condominium conversion of a 6 unit TIC which had been created under the Ellis Act, because the tenants were evicted to convert the building to a TIC. The action means that TICs created through evictions will not be able to become condominiums in the future. TICs are created mainly through Ellis Act evictions and once tenants are evicted and the building is turned into a TIC, the converters seek to turn the TIC into a condominium, because it’s a safer form of ownership and makes the property more valuable. If TICs can not be converted to condos, the TIC market will dry up.
The Supervisors’ action was based on Section 1386 of the Subdivision Code. Section 1386 prohibits condo conversions if there were “evictions preparing the building for conversion” or if “senior or disabled tenants were evicted.” The property denied its condo conversion was 400-410 Vallejo St. The tenants there, including a senior tenant, were evicted in 1999 under the Ellis Act. Because of the evictions, the City Attorney said the city “should disapprove the final (condo) subdivision map.” Board President Aaron Peskin led the effort to deny the evictors the condo conversion and, given the City Attorney recommendation, the Board unanimously agreed.
Besides evicting all the tenants, the 400 Vallejo evictors lied on their condo conversion application, denying that any evictions took place. Besides being denied their condo conversion, they may now face misdemeanor charges.
Section 1386 of the Condo Conversion Law, prohibiting conversions where there have been evictions, has long been ignored by the Department of Public Works (which administers condo conversions). The San Francisco Tenants Union has initiated a campaign to get this provision enforced and plans to challenge all condo conversions where there have been evictions. Since two-thirds of the winners of the 2005 lottery were TICs created through eviction, the enforcement of Section 1386 will result in most condo conversion applications being rejected in the future.
As part of the effort to enforce Section 1386, tenants will picket an Open House of an Ellis Act created TIC on Sunday, May 22. Potential buyers of the 4 units at 273 Lexington St. will be informed that the TIC was created through evictions and will never be able to become a condominium. The picket will be at 2 PM on May 22 at 273 Lexington.
