Wednesday, April 16, 2014

The Times Are A-Changing: Pending Developments Affecting San Francisco Real Estate In 2014

There are several developments currently--and rapidly--changing the San Francisco real property scene, all worthy of attention: condo-conversions, Ellis Act, vacation rentals, changes in in-law apartments, and more, all actively brewing right before our nose. Here is the short summary of the developments as of today:

Vacation Rentals

Supervisor David Chiu introduced legislation to legalize vacation rentals in the city, at least partially. The proposal is controversial, it seems to affect the rights of the landlords by giving more leeway to permanent tenants, who would lease-out to tourists on short-term basis. This kind of the short-term subleasing by tenants is generally disapproved by the landlords. The proposal may also upset pro-tenant advocates, who are traditionally against the practice of vacation renting. There is also an argument made that offering residential apartments for transient or short-term rentals may decrease the stock otherwise available for regular tenants. This will be an interesting compromise-in-making to watch.

[Update 8-12-14]: Chiu's legislation passed the Planning Commission on August 7, 2014. The proposal, modified with the Commission's recommendations, now moves to seek approval by the Board of Supervisors.

In-Law Apartments Come In Law

Another unprecedented change in San Francisco housing happened with a pilot program, allowing owners of single-family residencies to legalize their in-law units. This is not a simple process and there are plenty of moving parts to be considered by the owners before moving forward. One benefit from legalizing the unit will be the eliminating of the "pari delicto" issue. On the other hand, converting your single-family from a de facto duplex to a de jure one may bring more restrictions for your ability to evict a tenant, even a tenant not paying the rent. A cost of the improvements possibly accompanying the conversion is another factor. In today's booming construction economy in San Francisco, price for renovation per square foot is skyrocketing.

Challenges to the Ellis Act law.

There is a proposed challenge to the Ellis Act, presented by Mark Leno, now moving forward with the bill SB1439 in Sacramento, seeking a change to this statewide law with an eye for its local implications in San Francisco.

Condo Conversions.

Last year, a major change happened in the City's approach to condo conversions. It is still enforced today, look especially for the Expedited Conversion Program. New series of the homeowners eligible for application can apply starting yesterday, April 15, 2014.

Marijuana Dispensary Zoning.

Currently approved areas for dispensaries (so-called "green zone") is about to increase significantly--as much as five times--in a recent attempt to de-clasterize current zoning and shrink the mandatory distance from the schools from 1000 to 600 feet. Obviously, not everyone agrees with the proposal, seeing the change as opening gates for dispensaries to go into Richmond, Sunset, and other residential areas. Property owners are advised to check both the status of this proposal and the map, because the property values are expected to decrease, should a dispensary open nearby.

More real property posts

If you are facing a challenging issue with your real property in San Francisco Bay Area, your actual options and a strategy will depend on your case's particular facts. To learn more about your rights and obligations, make your first step toward taking control over the circumstances, and call my office at (415) 987-7000. I will be glad to assist in guiding you through the jungle. The only thing you can't afford is to stay put and uninformed. My office provides a confidential assessment of your particular scenario, free of charge, and I will share with you the results of the analysis along with my thoughts on available solutions.

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