OMI Laws Leave Landlords in Limbo

After four years of saving, Keli Cwynar decided last fall that it was time to buy a home in San Francisco. Because she couldn’t afford the average $350,000 that a single-family house costs, she chose instead to join a couple in buying a three-unit building in the Panhandle.

“It’s always been my dream to buy a home here,” said the 34-year-old project manager for a decorative furniture firm. “I was so excited about my accomplishment, finally reaching that point.”
Cwynar and the couple anticipated moving into their own units when the deal closed in November. The couple evicted their unit’s tenants and moved in, but four months later, Cwynar is still locked out. The reason: Neither of the remaining tenants in the rent controlled apartments will leave willingly, and under new city legislation, they don’t have to for the foreseeable future.

In November, San Francisco voters passed Proposition G, which bars owners from evicting tenants from more than one unit and makes permanent a ban on evicting elderly or disabled tenants. Landlords responded by invoking the Ellis Act, which allows them to evict all their tenants if they pull their property off the rental market. Sixty-five buildings were “Ellised out” in 1998; only five were in 1995.

Last month, a San Francisco Superior Court jury voted 9 to 3 to allow Jason and Ming Luk to invoke the Ellis Act to move into their four-unit Noe Valley building, which they had bought in October. Newer owners, though, face not only Prop. G but an ordinance passed last month requiring landlords to get permission from the Planning Commission before converting properties to “non-rental use”—a requirement that Realtors say forces landlords to seek permission to live in their properties even when tenants leave voluntarily.

For Cwynar and other landlords, that was the last straw. They joined the Greater San Francisco Association of Realtors, the San Francisco Apartment Owners Association and the San Francisco Coalition for Better Housing to challenge both Prop. G and the “Conversion of Residential Rental Uses” resolution passed by city lawmakers in recent weeks.

“This lawsuit is filed to protect the fundamental constitutional and statutory right of San Franciscans to live in the city in residential property that they themselves own,” declared the plaintiffs in their brief to the court. The City Attorney’s office said it planned to respond to the suit within the next month.

“In my opinion, this takes away the rights of the private owner, would discourage investment in apartment building in San Francisco and create even higher shortage in rental units,” said Lily Dao, the newly elected chair of the Chinese Realtor’s Association.

As a group, Asian Americans in San Francisco are more likely than other residents to own rather than rent. In fact, according to the California Realtor’s Association February 1999 economic profile, nine of the 10 most common buyer surnames in San Francisco were Chinese. Sonia Ng, a frequent co-host of the San Francisco Neighbors’ Association radio program, has estimated that half of the city’s adult Chinese Americans are property owners, and a poll by the Chinese American Voter Education Committee last year found that 56 percent of Chinese Americans owned their own homes.

Asian American Supervisor Mabel Teng, who two years ago got the OMI ball rolling, came under fire from not only Asian American landlords but also tenants over what critics said was her equivocal stance. In 1997, Teng sponsored an 18-month moratorium on owner-move in evictions of elderly and disabled tenants, but it was Supervisor Sue Bierman who spearheaded the board’s approval the following year of a measure largely paralleling Prop. G.

By approving that measure, said Prudential Realtor John Wong, the board “has exacerbated the situation for tenants- the Board of Supervisors and Supervisor [Sue] Bierman are responding to a situation that they helped to create.”

Owning a home is something that most Asian-American immigrants dream and save up for, he said.

“Those from Far East have a great willingness to live together as extended family. For someone of Asian background, that is common way of existing in the Far East - two or three generations, two siblings to want to live together. This legislation makes it impossible to live with parents ... you can only occupy one unit, if you have reasonably sized family, there is no place to put your parents.” Under Prop. G, a protected senior or disabled tenant can be evicted only if a landlord lives in a unit, all the tenants are otherwise protected and the relative moving in is 60 or older.

Wong fears that an exodus of individual landlords will eventually allow faceless corporations to control San Francisco’s rental market. “You are driving away rental property owners who don’t do it as their full time job, but are planning for retirement, have other jobs and professions and frankly, are more lenient in their relationships [with the tenants,” he explained.

Dao said that in her experience, more potential investors are “going to the South Bay or Peninsula because there is no rent control there.”

A landlord who doesn’t see tenants face to face is more likely to view the relationship as strictly business, Wong said, and are more likely to “slap a 3 day notice for one day late in rent.” He added, “This is continuing the course of an even worse situation for tenants.”

However, Chinatown advocate Gordon Mar cautioned against regarding rent-control as an anti-Asian American issue, saying that in “Chinatown, that’s clearly not the case. As far as I know, it’s 100 percent tenants. There are no owner occupied residences here in Chinatown.”

Mar said the 15,000 residents in the neighborhood, many elderly or new immigrants, especially need rental protections. He acknowledged, though, that Asian Americans may differ on how far it should go. “I think the Chinese and APA community is diverse so there are different interests, depending on people’s social and economic situation.”

Meanwhile, Cwynar has been trying to comply with the latest landlord restriction.

“I called the Planning Commission and I asked them the procedure ... It’s going to take a long time to work out; no one seems to know what the criteria will be,” Cwynar sighed.

Planner Julian Banales acknowledged that the panel has not yet developed any criteria.

“It’s brand new; we don’t have a program in place yet,” he admitted. “I don’t even know the extent of the legislation.”