|Endorsed by the Reform Party, Ron Brown Democratic Club, Isaiah Project,
AFRAM SEIU 250, AFRAM SEIU 535, AFRAM SEIU 616, AFRAM SEIU 790, AFRAM SEIU
1000, AFRAM SEIU 434-B, CAHEED, ASNA, OMI NEIGHBORS
Email us on:
Introduction to HOT
Home Ownership is the principal goal for 70% of San Francisco tenants, according to FNMA studies. Yet City policies in San Francisco seem intent on preventing homeownership for tenants.
Ownership of housing in San Francisco seems increasingly out of reach for tenants. Yet there is a commonsense practical win-win solution, which we have called: “HomeOwnership for Tenants“.
Why not let tenants buy their own apartments and convert the building to ownership apartments?
Tenants in other urban areas, particularly in Europe, do it all the time. It is a great way to break into first-time homeownership.
Here is how it would work: Tenants who want to buy their unit would get together as a group with their building owner on a voluntary basis and draw up a contract to buy their units. Tenants who choose NOT to buy would continue to rent, but with enhanced rent control and eviction protections. Since the existing tenant is the new owner of the unit, no-one would get evicted. No-one would get hurt. Thousands would benefit.
Each tenant would agree with his landlord on a price for their apartment.
When a critical mass of tenants -- say 25% -- is ready to make a deal with their landlord, they would apply to the city to subdivide the building. Within a few months -- voila -- homeownership for tenants who want it, and enhanced protections for those who will continue to be renters.
A property management company would make repairs, pay bills, collect homeowners association dues etc., in exactly the same way that the owner now manages the building, or, alternatively, the homeowners could perform those tasks themselves.
Many zero and low-downpayment loans are readily available eg FHA Access, DALP, CRA loans, FNMA etc. (Read our website for more information on loans, see below).
Roommates/family/friends as co-signers can help tenants qualify for their loans.
The reason that this works is that the mortgage payment and property taxes are deductible on Federal and State income taxes forms. This is a huge (25-35% of the payment amount) subsidy from Uncle Sam available to encourage homeownership. Tenants who do not take advantage of it are allowing their federal tax dollars to subsidize someone else to become a homeowner.
The after-tax cost of homeownership is typically no more than, and sometimes actually less than, the cost of the renting in San Francisco.
An example, on a typical studio or 1BR unit costing about $200,000, the typical monthly mortgage payment would be about $1500/mo. The typical after-tax out-of-pocket cost would be about $ 1100/mo.
Find out about the Affordable HomeOwnership Alliance, the Housing Ownership for Tenants (HOT) proposal, and how to achieve homeownership for yourself in SF at our website:
For any other information please contact us on firstname.lastname@example.org