SEC. 1385. PRESERVATION OF LOW AND MODERATE INCOME HOUSING.
§ 1385
When a rental building is converted to condominiums, the Department of City Planning must identify units that are currently part of the city's low and moderate income housing stock. Those units must be priced affordably using a formula based on income levels (no more than 2.5 times the highest moderate-income threshold), with price increases tied to the cost-of-living index. Tenants have the right to purchase at that price; if they decline, the unit must be offered exclusively to qualified low- and moderate-income buyers for at least 12 months, with priority given to those displaced by other conversions. After 12 months of good-faith marketing effort with no sale, the unit may be sold to anyone at market rate.
When an apartment building becomes condos, the city has to decide if any units are currently home to low- or moderate-income households. If they are, those units can't be sold at a price that would push out low-income residents. The units must be priced using a specific formula based on how much money those households make, with some room for increases tied to the cost of living. The tenant living there gets first chance to buy at that price. If they don't buy, the unit has to be offered to other low- and moderate-income buyers (with priority for people moved by other conversions) for at least a year before it can be sold to anyone else at whatever price the owner wants.
- Complex:The section contains multiple cross-references, nested conditional rules, and technical formulas (income multiples, cost-of-living adjustments, priority criteria) that require careful reading to fully understand all pathways and obligations.
- Controversial:Affordable housing preservation in condo conversions is a politically contested issue in San Francisco, involving debates about tenant rights, developer interests, and affordability policy.
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Official text
The provisions of this Section and its application to certain properties may be affected by amendments creating Section 1344. Please consult Section 1344 in addition to this Section for Units subject to the Below Market Rate Condominium Conversion Program.
The Department of City Planning shall determine whether any units to be converted are part of the City's low and moderate income housing stocks. If the Department of City Planning determines that any unit to be converted is part of the City's low or moderate income housing stocks, then the price of the unit upon conversion shall not be such as to remove if effectively from said low or moderate income housing stocks and shall be no greater than 2.5 times the highest income level for low and moderate income households as defined in Section 1309(e) and (f), and as adjusted for household size according to the size of the dwelling, as set forth in Sections 1309(1) and (m). The resulting sales prices established pursuant to this formula may be increased consistent with any increases in the housing component of the "Bay Area Cost of Living Index, U.S. Dept. of Labor," during the period between the most recent establishment of the above highest income levels and the date of commencement of sales. If the tenant does not exercise the contract right to purchase the unit which has been determined to be part of the low or moderate income housing stock, then the unit shall be made available exclusively for purchase by qualified households of low or moderate income on first-come, first-served basis for a period of not less than 12 months from the date of the decision by the tenant not to exercise the contract right to purchase or, if there is no tenant, from the date of issuance of the State Department of Real Estate Final Subdivision Public Report, at a price no greater than that allowed under the low and moderate income price guidelines set forth above. Priority, however, shall be given to low or moderate income households who can demonstrate that they had previously relocated from a dwelling in a building which has been approved for condominium conversion. The alternatives for low and moderate income occupancy set forth in Section 1341 shall not apply, except for those additional number of units which may be required pursuant to Section 1341(a) to be made available for rental or for purchase by households of low or moderate income. In cases where no low or moderate income household has purchased or contracted to purchase such unit within this 12-month period, after good-faith efforts by the subdivider, the subdivider may offer the unit to the general public with no price limitation.
(Amended by Ord. 45-82, App. 2/11/82; Ord. 257-88, App. 6/22/88; Ord. 320-08, File No. 080520, App. 12/19/2008)