One Page San Francisco Property Lease

Sometimes, things just fall into place. Or you stumble across them while walking down the sidewalk. Regardless of your metaphor, I was served up a huge heaping plate of awesome when I found this residential property lease on a sidewalk in Hayes Valley last week. To get a larger view of either image, just click on either picture below.

The current CAR (California Association of Realtors) property lease is six pages long – and that’s before including any of the required addendums and disclosures, which roughly doubles the number of pages. The Small Property Owners of San Francisco publish their own lease that is tailored to the rent-control laws of San Francisco and comes in at roughly 10 pages. Both obviously dwarf the one page lease that I stumbled across.

Residential property lease in San Francisco – Year Unknown

I often make light of the mountain of paperwork involved in a real estate transaction by pointing out that every paragraph started as a lawsuit. And while there  is a bit of humor in that, the sad truth is that almost every paragraph did start as a lawsuit. For example, in the one page lease, paragraph #5 is one sentence long and completely deals with having pets on the premises.

On the back side of the lease is the entire application – obviously no need for a credit check! The lease is not only a handful of awesome, but the application is even more so – filled with sexist language and assumptions that would put a landlord in court in 2012 before the ink was even dry. You’ll note the “husband” and “wife” assumptions, as well as a request for references from both a local bank and the applicant’s church! Not to mention the line where you asked to disclose any state aid or welfare you receive…

Lease Application – Year Unknown

If you have any idea when this lease was published and used, I’d love to hear from you. I’m going to guess that it is from the 1960’s era, but that’s just my guess. I’d love to know your thoughts!

The beginnings of a story about Prop F.

Prop F is a local San Francisco Ballot Initiative Question about our water supply and the Hetch Hetchy dam that will appear on the November 2012 ballot.

Which Way For Hetch Hetchy Dam? Photo Credit: Matt Fuller, GRI

While we eventually plan on taking a public position on Prop F, right now we are just trying to wrap our heads around it and understand exactly what the passage of Prop F would accomplish.

So while we do our own research, we wanted to take a moment and ask you what you think about Prop F.

Here are some resources we’ve found about it so far:

Below is the draft title and summary for the fall voter guide (PDF), as presented by the San Francisco City Attorney. See some of the above links for news about a lawsuit over the wording. However, this is what we have to go on for the moment.

Water and Environment Plan

San Francisco owns the Hetch Hetchy Water System (“Water System”), which provides water to about 2.5 million people in San Francisco and neighboring areas. Water System reservoirs collect snowmelt and rainfall from the Tuolumne River and Bay Area watersheds for use throughout the year. The San Francisco Public Utilities Commission (“PUC”) manages the Water System.

San Francisco’s largest reservoir is in Hetch Hetchy Valley, located in Yosemite National Park. The federal government authorized San Francisco to create the reservoir by building a dam on the Tuolumne River in 1923. Approximately 85% of San Francisco’s water comes from the Hetch Hetchy Reservoir, which also generates hydroelectric power for City agencies. The remaining water comes from reservoirs in Alameda County and Peninsula watersheds. San Francisco does not filter Hetch Hetchy water but treats it and tests it over 100,000 times annually.

San Francisco is currently undertaking a $4.6 billion project to improve the Water System and develop additional groundwater, conservation, and reclaimed water supplies. Voters specifically authorized water revenue bonds of up to $1.6 billion for these improvements.

San Francisco discharges treated stormwater to the Bay and Ocean under a federal permit.
The proposed ordinance would require the City to prepare a two-phase plan that would identify alternative water sources and evaluate how to end using the Hetch Hetchy Reservoir.

The first phase of the plan would identify:
• additional local water sources, including increased groundwater, water recycling, storm water harvesting, gray water systems, conservation measures, and expanded water treatment capacity to accommodate filtration of all drinking water;
• additional water supply options, including storage, purchase, and conservation; and
• alternative renewable energy sources.

The second phase of the plan would evaluate how to:
• improve flows on the lower Tuolumne River;
• decrease stormwater discharge into the Bay and the Ocean; and
• end using Retch Hetchy Valley as a reservoir so it could be restored as part of Yosemite National Park.

The plan would include timelines to implement the first phase by 2025 and the second phase by 2035.

The measure would create a task force to oversee development of the plan (“Task Force”) The Task Force would have five members: the PUC General Manager, the General Manager of the Bay Area Water Supply and Conservation Agency, and three experts appointed by the Board of Supervisors. The Task Force would select and manage consultants to develop the plan.

The measure would require the Task Force to complete the plan by November 1, 2015, and require the Board of Supervisors to hold a hearing by January 31, 2016, to consider proposing a Charter Amendment to implement the plan.

The measure would appropriate any available City funds to pay for the Plan, with a maximum appropriation of 0.5% of funds voters previously authorized for the current Water System improvement project (approximately $8 million).

Firehouse 8

What is it about San Francisco firehouses? Along with transforming Houses of God into ‘simple’ homes, firehouses seem to occupy a special place in the imagination of those San Francisco pioneers who seem gifted with their ability to transform historic structures.

1946 Pacific Ave., Firehouse 8

A few weeks ago, I had the pleasure of meeting with Gavin, who, along with his partner Teresa, is in the process of trying to renovate and open an old firehouse on Pacific Ave. To call it an adventure is a pretty grand understatement. The firehouse in question is Firehouse 8 at 1648 Pacific Ave. in the Nob Hill neighborhood. Firehouse 8 originally went into service in 1917, and served the city until it was closed in 1980 due to budget cuts (sound familiar?). It was used for storage from 1980 until it was sold at auction in 2006.

Gavin and Teresa were the successful bidders at auction, and shortly thereafter embarked upon their quest to turn a beautiful relic into a historic community resource. The only problem? Transforming Firehouse 8 has hit more snags and cost much more than anticipated. In fact, Gavin and Teresa are actively looking for partners to help them finish out the project. Read on, and you’ll discover that rehabbing a firehouse isn’t nearly as simple as you might imagine.

Where to start?
How about with zoning! Since it was a public firehouse, the building was zoned – you guessed it – public. Obviously, one of the first things you’ll have to do is work with planning and zoning to have the building re-zoned for its intended use. While it might sound simple, the reality of the process is that it takes years, involves numerous specialists and attorneys, and doesn’t come cheap.

Firehouse 8, Once a Public Building

Next, add some steel
Like pretty much any other brick building built in the 1910’s, Firehouse 8 ended up on the city’s unreinforced masonry building (UMB) list. Which means that without seismic retrofitting, ain’t nothing or nobody going to set foot in the building (at least, officially). So, cue the sound for structural engineers, lots of steel, and a very large bill.

Goodbye, Unreinforced Masonry


No poles for you!
While firemen and women might be well trained in the art of pole-sliding, it simply isn’t an acceptable way to traverse floors, particularly in the age of ADA requirements. While fixing up the stairs is always a must, if you guessed that an elevator is the solution to the problem, you’d be right. And while elevators are great for whisking you from one floor to the next, regardless of your physical fitness, they don’t come cheap and they require electricity.

The new elevator at Firehouse 8

Nice panel!
Apparently, when installing an elevator you need more than just an extension cord and some power-strips. In fact, as you’ll see in the picture below, you’ll need one very large electrical panel. And unless you’ve got an Amex Black, don’t plan on putting it on your credit card. By the time it’s installed and connected, you’ll be well into the six figures. And that doesn’t even take into account the paperwork and time you’re going to spend to actually install and connect the panel.

What six figures buys you in the electricty department

Are you getting the picture?
By now, smart reader, you’re probably getting the picture that converting a historic firehouse into a modern structure that will be publicly accessible is a large project. And expensive. Well, very expensive. And you’d be right!

That said, Gavin and Teresa have continued ahead with their vision of transforming Firehouse 8 into a place where people can meet, socialize, and flourish together. Their vision turns the ground floor into a  mixed retail space with a cafe, with a preference for local artisans, suppliers & vendors. On the second floor (up that brand new elevator) will be a community space available for rental: seminars, meetings, gallery openings, weddings & special occasions.

This is where YOU can help!
As I mentioned back at the beginning (before we re-zoned, re-engineered, and re-wired Firehouse 8), Firehouse 8 is actively looking for investors that can help them turn their dream into a reality. Have a little cash in the bank after your IPO? How about investing in a firehouse! If you are in a position to make a five-figure, short-term, low-interest (remember, this is for the public good!) loan, then get in touch with Gavin or Teresa.

And because I’ve learned that everybody loves firehouse pictures, here are a bunch more of Historic Firehouse 8:
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The Red Headed Stepchild of San Francisco

I have absolutely no idea if calling something a red headed stepchild is politically correct in 2012 or not. If it isn’t, my apologies in advance – leave a comment with a politically correct suggestion…

At a company meetup this morning there was an overview of condo conversion, which I’m not going to summarize here other than to say… there are so many special cases and circumstances that instead of giving you some worthless blanket advice I’ll just suggest you get in touch with your specific case. An interesting discussion did come up around “housekeeping units,” though, so I thought I’d share that here today.

The San Francisco housing code is designed to set a minimum level of habitability for safety, and as you might guess it has a definition for almost everything.

One of the interesting definitions is for a “housekeeping unit” which is defined as:

Housekeeping Room/Unit with Cooking Facilities. Housekeeping unit or room containing one guestroom with electric cooking facilities, in existence and legalized by permit prior to 1969 in a residential building built before 1960.

The dates in the definition provide a clue to the origin of the housekeeping unit. In short, these were units added without permit during the population boom that happened after the end of World War II.

World War II changed San Francisco is numerous ways, from the expansion of military bases and shipyards to the impact Japanese internment had on the African American community, but in this case I’m talking about how the end of World War II caused a major influx of people to the city.

As you can see from the chart below, in terms of number of people that moved to the city, the decade between 1940 and 1950 saw the biggest influx of people to San Francisco in the city’s entire history (yes, percentage wise the gold rush totally beat it). You can click on either chart below for a link to an interactive version.

At no other time in SF’s history – that I’m aware of – have we legalized a bunch of illegal units. From time to time, city politicians speak about legalizing all of our existing in-law units, but given objections from city planners and neighborhood groups it never really goes very far.

From a unit standpoint, the Department of Building Inspection doesn’t count housekeeping units towards the total unit count of a building. So, from their perspective a 2-unit building + a housekeeping unit = a 2-unit building. The Planning department, however, uses different math. According to the planning department, a 2-unit building + a housekeeping unit = a 3-unit building. Why does it matter? 

Because a 2 unit building (using planning’s math) can bypass the condo conversion lottery after both units have been owner occupied for one year. 3-unit buildings, on the other hand, must enter the lottery.

So beware… regardless of what an agent says, SF planning won’t allow a 2-unit building + housekeeping unit to bypass the condo conversion lottery.

Red-headed stepchild, indeed!

Bonus link: Video of city inspector discussing legal, illegal, in-law and housekeeping units

Most. Amazing. SF Maps Ever!

Happy Saturday, everyone! Via the Google Lat Long Blog comes mention of an amazing resource – a set of high resolution 1937 San Francisco maps. You can easily spend hours (at least, I have) comparing San Francisco present to San Francisco past.

I took the time to make a quick mashup of the Twin Peaks/Clarendon Heights/Midtown Terrace areas shown in a 1938 picture and compared it to how things look from above in 2012.


I was actually a bit surprised to see how built out Clarendon Heights was in 1938. I had picked that area knowing that Midtown Terrace development didn’t begin until the 1950s, and most of Twin Peaks was developed after that (1960s and 1970s for the most part). While this before and now comparison shows how much development has happened in this particular area of San Francisco, some of the other maps are awesome for taking a look at historic structures (like Kezar stadium) that are no longer around. 

It is also interesting to note the vacant lots in developing neighborhoods (Bernal Heights, I’m thinking of you). Anyway, hope you enjoy the short video. Do yourself a favor and click on over to the map collection, the images can be downloaded (in high-res if you sign up for a free account). What awesome things stand out to you in these pictures? I know you were worried that you might have to spend your weekend doing productive chores (dishes, lawn mowing, painting, etc.), hopefully I’ve just helped fill it up with something a lot more enjoyable. :-)

The David Ramsey map collection is pretty impressive, and the addition of these 1937/1938 San Francisco aerial photos makes it even more awesome in my book!

And hey, as long as you’re here, go ahead and take a moment and see what’s for sale in Clarendon Heights or Midtown Terrace!

Condo Conversions Create Jobs

Blogging over at Beyond Chron, Randy Shaw recently wrote an article about how allowing tenancies-in-common (TICs) to pay a large fee to the city and bypass the condo conversion lottery will kill jobs in San Francisco.

I don’t make a habit of refuting every ridiculous article written about TICs, but this one was so over the top that I feel compelled to bring some facts to the discussion.

In his article, Mr. Shaw posits that:

“… it [condo conversion] would be a huge job killer, eliminating desperately needed construction jobs and making financing for new condo projects even more difficult to obtain.”

While I’ve heard any number of fascinating stories over the years about what condo conversions do or do not do to the city and its housing stock, this is the first time I’ve ever heard that condo conversions kill jobs. The heart of his argument seems to be that any homes converted to condos would reduce the demand for new condos by a ratio of 1:1 (or more, perhaps?). In particular, Mr. Shaw seems to be concerned with the development of new condo projects in neighborhoods that he identifies as “emerging” like Visitacion Valley and The Bayview. He goes on to state that:

“Building condos creates living wage blue-collar jobs, and most of these new condos are slated to be built as economic engines for emerging neighborhoods like the Bayview and Visitacion Valley.” – Mr. Shaw

I have a few problems with this argument. While I’m shocked to see Mr. Shaw suddenly advocate for the creation of condo developments in San Francisco, particularly when he has a history of taking pride in defeating development opportunities, we’ll put that to the side for now. Once I picked my jaw up off the floor, though, here are some facts that we should take into consideration if we want to have a rational discussion about condo conversions and jobs.

TICs aren’t found in the neighborhoods he expresses concern about
I did a search of all listed TIC sales in the San Francisco MLS from March 1, 2009, to the present. There wasn’t a single sale of a TIC in District 10 in that entire period! In fact, I had to go all the way back to 2008 to find even one TIC sale in district 10 (a 2-unit building in the Excelsior). If I go back over ten years to look at all sales in District 10 since January 1, 2000, in District 10 (here’s a guide to the MLS districts), there have only been six TIC sales in all of the following neighborhoods: Silver Terrace, Bayview, Portola, Excelsior, Mission Terrace, Outer Mission, Crocker Amazon, Visitacion Valley, Little Hollywood, Bayview Heights, Candlestick Point, and Hunters Point.

So, at most, in the emerging neighborhoods that Mr. Shaw is deeply concerned about, six new condos will be created. At most. If they haven’t already been converted to condos.

Where are the TICs?
As  you can see from the map below (which contains the location of all TICs sold for almost the entire past three years), the overwhelming majority of TICs have been sold in central San Francisco. These are neighborhoods like The Castro, Noe Valley, Corona Heights, Duboce Park, Glen Park, Twin Peaks, Mission Dolores, The Haight, Cole Valley and Parnassus Heights. What do these neighborhoods all have in common? For the most part, neighborhoods where you find TICs are neighborhoods that have been almost entirely developed, where the opportunities for ground-up development are incredibly rare.

View TIC Sales in San Francisco in a full screen map

Neighborhoods Aren’t Interchangeable
Mr. Shaw also doesn’t appear to understand that home dwellers (renters and buyers) are rather picky about their San Francisco neighborhoods. Some folks want to live in The Mission or nowhere else. Some set their hearts on Noe Valley and won’t settle for anything less. While most people have a list of five to ten neighborhoods that they are interested in living in, I have seen very few people who view his emerging neighborhoods (Visitacion Valley, Bayview) as interchangeable with their preferred neighborhood. Put another way, I have yet to meet a buyer that says, “Well, if I can’t get what I want in Noe Valley I’ll take something in Visitacion Valley.” While both neighborhoods might have Valley in their name, the similarities pretty much stop there. Neighborhoods are not interchangeable, and the creation of housing stock in one neighborhood does not destroy demand in another neighborhood.

Take a look at the boom years for condo development in South Beach, Yerba Buena, and SOMA. If you take the entire quantity of condos built at The Palms, The Millennium, One Rincon, The Infinity, Blu, SOMA Grand, and The Beacon the total is 2,287 – about 10% more than the 2,000 potential condo conversions that have Mr. Shaw terrified (on a side note, I don’t know if 2,000 is an accurate number of potential condo conversions – anyone care to help?). Did the sale of 2,287 condos in the South Beach/SOMA/Yerba Buena area decimate the condo market in Noe Valley, North Beach, Telegraph Hill or any other part of San Francisco? No, they didn’t! Why? Because for many buyers, the neighborhoods weren’t interchangeable, and even if they were willing to consider neighborhoods with new developments, many objected to the style or the size of the building. Not to mention the fact that demand for housing has almost always out-stripped supply because of the challenges developers face in building homes in San Francisco.

“In contrast, converting a rental or a unit owned as a tenancy in common (TIC) to a condo creates no jobs.” – Mr. Shaw

Condo Conversions Create Jobs
I don’t feel like I’m going out on a limb when I say condo conversion will create jobs. For starters, every unit approved for condo conversion must undergo three inspections by the city – one general building inspection, one electrical, and one plumbing. Any deficiencies noted by the city during these inspections must be fixed as a condition of conversion to a condo (in fact, the violations must be fixed no matter what). All of the work must be done with permits by contractors that are licensed in the appropriate trade. Most of these contractors are smaller outfits – not the big construction companies bidding on large condo project developments. Could they use the work? Absolutely! Would the conversion of 2,000 dwellings to condos put these folks in the soup line? Absolutely not!

In addition to the jobs generated by physical inspections and corrective work, the condo conversion process requires the creation of legal documents (the covenants, conditions, and restrictions – or CC&Rs – along with the bylaws and articles of incorporation) and a survey of  the condominium building. Both the survey and legal documents would bring work to small businesses. While we can argue if creating more jobs for attorneys is a good idea or a bad idea, the reality is that condo conversion will help keep the doors open at small businesses across the city.

“After all, if you were a builder trying to get financing to build an approved project, why would a bank lend money to you when your units will be competing with thousands of newly converted units fresh on the market?” – Mr. Shaw

Condo Converted Homes Are Already Occupied
In contrast with building new developments like SOMA Grand or The Palms from scratch, the conversion of an existing dwelling into a condominium does not create a vacant property. TICs are already occupied – primarily by hard-working home-owners, but also by tenants. A homeowner is not going to sell simply because they converted their ownership from a TIC percentage of the whole building to a condominium. Does it make it easier for them to sell? Absolutely. Does that mean they will? Not necessarily. And guess what – even if they did sell, that would be good for the economy and jobs because it would mean that they would need another place to live.

If they do move, realistically they are going to be interested in “moving up” in their existing neighborhood (or a nearby one), but who knows, maybe they’ll want a condo in one of Mr. Shaw’s developing neighborhoods. In which case, the condo conversion helped create demand for more housing, not reduce it. The sale of a home also generates revenue from transfer taxes that go directly to the city. Not to mention the painters, landscapers, movers and other handy-folk that get business when a home is bought and sold.

“Think we would see many Ellis evictions if speculators knew that 3-6 unit buildings in San Francisco could never become condos? How about addressing this serious risk to long-term tenants instead of figuring out new ways for real estate speculators to get even richer?” – Mr. Shaw

Buildings with Two or More No-Fault Evictions Are Already Prohibited From Conversion (Including Ellis Acted Buildings)
Mr. Shaw published an article on May 11, 2006, in which he was delighted about “tough eviction protection legislation” that had just been passed by the Board of Supervisors and signed by Mayor Newsom. What was this tough eviction protection legislation? It was an ordinance that prohibited the conversion of a TIC to a condo if there was the eviction of an elderly or disabled tenant after May 1, 2005, for any reason unrelated to the tenant’s behavior. The law also prohibits condo conversion if tenants have been evicted from two or more units since May 1, 2005, for any reason unrelated to the tenants’ behavior. This eliminates any building that was vacated using the Ellis Act (or any other no-fault eviction method that removes tenants from two or more units) from eligibility for condo conversion. The law is also building specific, rather than owner specific – restrictions run with the property regardless of who owned the building at the time of the eviction. How quickly we forget…

“… does not change the fundamental issue: 3-6 unit building that were built as rental units, and typically stayed rental units for over eighty years are now off the rental housing market when rental units in San Francisco are more scarce than ever.” – Mr. Shaw

Condos Can Be Rented!
Mr. Shaw argues that the conversion of ownership from TIC to a condominium will eliminate hundreds of buildings from the rental stock. Which is, quite frankly, a blatant lie. As he immediately acknowledges in the next paragraphs of his article, condos can be rented. They are not subject to rent control, which is an entirely different concern.

I’ve been a tenant in San Francisco, and I’ve been a homeowner. The creation of condos from TICs might do a lot of things — like help the city balance its budget. But to suggest that it will somehow kill jobs is perhaps the most ludicrous thing I’ve ever read.