|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
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Home Ownership Program for Equity
HomeOwnership a Real Possibility for San Franciscans!
HomeOwnership is the largest single source of household
wealth in the US (HUD)
San Francisco has 34% homeownership. The US average is 68%.
HomeOwnership is the top goal for 350,000 SF tenants living in 220,000
current rates of 200-400 per year, it will take 550-1100 years for
these 220,000 tenant households to achieve homeownership. Is it
fair to make anyone wait that long?
HOPE enables HomeOwnership while
were over 5000 rental units sold last year at an average price of
makes it legal for each tenant to buy their unit from their owner.
If you want to buy the apartment in which you live, and
the owner is willing, why not? Why
is it illegal?
HOPE Proposal: On a limited basis (1%
of housing stock per year), the city would subdivide a building,
if a certain percentage of tenants in the building choose to buy,
and negotiate with the owner for a voluntary and mutually acceptable
price for their unit. The price would typically be below the market-price
as a condo, but higher than its value as a rental. Tenants choosing
not to buy would continue to rent, with recorded protections against
OMI + Ellis evictions and Costa-Hawkins rent-increases, using
lifetime leases that have worked in existing SF ordinances for
the last 20 years. HOPE reduces evictions! Existing Federal
zero and low downpayment loans and co-signers make financing possible.
Buyers get tax deductions. Moderate, limited and low income families,
and the elderly and disabled will qualify for mortgage loan assistance
from new HOPE-generated funds.
Moderate income working families are being forced
to leave San Francisco when they seek the security and economic
benefits of homeownership. Homeownership marks the great divide
between the haves and the have-nots. Lack of homeownership opportunity
in SF creates a group stuck in the paycheck-to-paycheck poverty
trap. Have-nots are stuck in rent-slavery, and have lost
hope of ever being able to afford to be homeowners.
But, we seek to bring HOPE back to San Francisco:
Questions and Answers about HOPE:
the year 2000, over 5,000 San Francisco rental units were
sold for an average of $ 156,000 each (statistics from Old Republic
Title Company, details available). Under HOPE, owners would also
be able to sell these units to the individual tenants who live in
them, instead of being required to sell in bulk, and
only to other investors. As a condominium, each unit qualifies for
affordable zero and low downpayment loans; such mortgage loans are
readily available through Federal programs for condominiums,
but not for purchases of co-ops, TICs or entire buildings. The before-tax
monthly payment for a $ 156K unit is $ 1325/mo, and the after-tax
cost is $ 775/mo. This is affordable even to those earning just
50% of SF median household income, and includes most working families.
HOPE would allow and encourage property-ownership for all SF tenants
who want it, and thereby help democratize property ownership. The
practice of subdividing apartment buildings for the benefit of tenants
is widely used in Europe.
EVICTIONS: All non-buying
tenants in buildings subdivided under the HOPE program automatically
get lifetime leases, with iron-clad written protections from the
state Ellis Act and owner-move-in evictions, and from rent increases
exceeding the guidelines established by the Rent Board. This significant
benefit provides security to non-buying tenants in HOPE-subdivided
The HOPE program will result in a number of purchase and sale transactions,
which will produce increased transfer tax and property tax revenues,
solely attributable to HOPE subdivisions. These monies, along with
other fees, will go to an affordability fund, and help
pay for mortgage and downpayment assistance to tens of thousands
of low, limited and moderate income households, with preference
for the elderly and disabled, to accomplish the homeownership that
they could never otherwise afford.
PROFIT: Tenants who
buy their units may resell them later for profit. Tenants will typically
be able to buy their units at a price significantly lower than the
condo market-price, but probably higher than the value of the unit
as a rental. The lower the rent amount the tenant currently pays,
the lower the price for which they could probably buy the unit.
To discourage speculation, some fees (paid to the affordability
fund) are imposed on tenants who immediately resell the units
for a capital gain within a short time after purchase.
QUALIFYING % FOR SUBDIVISION:
To qualify for a HOPE subdivision, a minimum of 40% of occupants
in a 2-6 unit building, 33% of occupants in a 7-12 unit building,
and 25% of occupants in a 13 unit or larger building must choose
to buy the unit they occupy, and enter into an agreement with the
owner to buy that unit, on terms that they freely and voluntarily
WAITING PERIOD and RESIDENCY
REQUIREMENTS: Occupants of a building become eligible to
be part of the qualifying percentage for subdivision only after
they have continuously resided at the building for a minimum 2 year
period prior to the application. Buildings where there has been
an owner-move-in eviction cannot apply under HOPE until at least
5 years have elapsed between an OMI, and the application for subdivision.
This is significantly longer than the 3 year good-faith
period required by the OMI laws. In buildings where there has been
an Ellis Act eviction, the waiting period is 10 years.
LIFETIME LEASES: Tenants
who do not initially buy their apartments automatically get lifetime
leases. Lifetime leases have been in use for the last 20 years,
to protect seniors in buildings where a regular condo-lottery subdivision
has taken place. They have held up legally, and been successful.
Some critics claim that HOPE lifetime leases can be overturned by
court challenges based on Costa-Hawkins, and will result in unlimited
rent increases and evictions. This is SIMPLY NOT TRUE. HOPE lifetime
leases are enforceable, and protect against Ellis, OMI and Costa-Hawkins.
Many experienced real estate attorneys have confirmed this fact,
and there is a written legal opinion verifying it, available for
review. The McGoldrick McTIC legislation also uses lifetime leases.
CHOICE IN HOUSING: Some critics insist,
for ideological reasons, that tenants should not be given either
a choice or an opportunity to be homeowners. We believe in making
this choice, an integral part of the American dream, freely available.
HOPE makes homeownership a real and affordable choice for San Francisco
tenants, as it is in the rest of the USA. Those who prefer to rent
are free to do so. Why do the critics oppose this free and voluntary
choice for tenants? How are tenants benefited by being condemned
to lifelong rent-slavery?
HOUSING STOCK: HOPE
does not change the number of housing units in SF. We simply propose
to democratize the ownership of SF housing units, by giving
tenants an opportunity to become homeowners. Under HOPE, the same
person would continue to live in the same unit, but instead of one
investor owning many units, there would be many homeowners, each
owning and living in their own unit. HOPE allows existing tenants
to become owners of the units they already occupy, thus accomplishing
homeownership without causing displacement or eviction. Down the
road, there will be fewer tenants in rent-controlled apartments,
because they will all be owners of their own condominiums, having
exchanged the security of rent control for the superior security
INCREASED STABILITY AND SECURITY:
The city as a whole benefits with increased homeownership: stability
increases, families are not forced to leave the City to achieve
homeownership, and neighbors everywhere have a greater stake in
OWNERS and TENANTS BOTH BENEFIT FROM HOPE:
Some ideologues have a problem with solutions which are WIN-WIN,
and where owners and tenants cooperate for mutual benefit. We believe
that one should try to craft solutions where everyone comes out
ahead, instead of always requiring a disfavored group to suffer,
in order to benefit a favored group.
TENANT-ORGANIZATIONS: Some tenant organizations
fear that when there are many tenants who have become homeowners,
they will no longer need or want protection from evictions and rent
increases, because Homeownership Is The Ultimate Form Of Rent
Control. Consequently, there might be less demand for tenant-organizations'
services, and perhaps less funding for them.
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