APA Property Manager Sees HOPE for City Renters

Controversial measure probable on Nov. 5 ballot

By Andrew Chow
AsianWeek Staff Writer

As a child in India, the “big thing” for Sarosh Kumana was learning about San Francisco’s “Summer of Love.”

“I dreamed of living in the Haight, with no thought that it would ever happen,” said Kumana, now 48, who “just got lucky” in owning a home and a property-management company in the storied neighborhood.

But many city residents aren’t so lucky. They’re caught in a “war” between landlords and tenants, Kumana said — a war in which tenants can’t afford to buy even a starter home in the city, and landlords are stuck with multi-unit buildings that are more hassle than they’re worth.

That’s why Kumana came up with a proposal allowing tenants to purchase the apartment units they live in — an idea he initiated about five years ago as Home Ownership for Tenants, or HOT.

Last week, supporters of a revised version of that proposal — now called Home Ownership for Equity, or HOPE — submitted more than 20,000 signatures supporting its placement on the Nov. 5 ballot. The signatures will be verified by the Department of Elections within the next few weeks.

“For a very long time it was one voice being drowned out by a million other voices,” Kumana said about the HOPE proposal. “Now it’s got its own credibility and momentum. And only after the media got involved did the politicians start taking it seriously.”

Supervisors Tony Hall, D-District 7, and Gavin Newsom, D-District 2, have thrown their support behind the measure, which allows tenants to purchase their apartment units as condominiums, if a certain percentage of tenants in the building agree. (The percentage differs depending on the number of units in the apartment building.)

Those opting not to buy will be given lifetime leases, according to the proposed legislation.

But critics say the proposed HOPE conversions will reduce the city’s number of available rental units. Renting an apartment is one of the few ways most people can afford to live in the city, said Ted Gullicksen, director of the San Francisco Tenants Union which opposes HOPE.

“People recognize that they themselves cannot afford to purchase a condominium and that it’s important to maintain the stock of rental housing — that’s the only thing people can afford,” Gullicksen said, noting the median price of a home in San Francisco hovers around $400,000. “The problem with HOPE is it does not add a single new unit of homes on the market. It simply cannibalizes the current stock.”

Taking away rental units may increase demand on existing units, driving rents in the city — already among the nation’s most expensive — even higher, critics say.

Kumana, however, sees it differently.

“If the tenant who already lives there buys it, it’ll take one unit [out of the market]. But it’ll also take one person out of demand, so it’s one unit less of demand and one unit less of supply,” Kumana said. “We’re not moving anybody around. Nobody’s getting evicted. But instead of one landlord owning hundreds of units, it’s the guy living there owning it.”

Home-ownership proposals similar to HOPE have been attempted before in San Francisco, where about 65 percent of residents are renters, according to 2000 census figures. Already, the measure is receiving the support of many in the city’s more conservative neighborhoods, along with several supervisorial candidates.

Kumana said his measure may also resonate with the city’s Asian and Pacific Islander populations — now comprising one-third of city residents, half of whom are immigrants — who place a priority on self-sufficiency.

“My very first step up the economic ladder was buying a house,” Kumana said. That was in Michigan in the 1970s, when he and his then-girlfriend “put every penny into it.”

“That’s when I started working as a Realtor, selling houses to mostly immigrants,” he said. “I realized how important it was to have this sense of security.

“Families, immigrants, minorities — really minimum-wage people, we would work very hard to get them to qualify for a loan,” Kumana continued.

“Extended families were pitching in and saving their pennies, and then three, four, five years later, they’d have enough money. They were the most grateful — you can’t believe, they would come to me and give me presents later. That’s how much it means for an immigrant to come to the United States, myself included.”

But there are legal ramifications of the HOPE proposal that may take away from tenants’ rights, Gullicksen said. For example, units that are purchased could make their way onto the rental market again without rent control, he said.

“Real-estate people have tried to disguise [HOPE] with tenant protections that are invalidated by state laws,” Gullicksen said. “For tenants in these buildings, it’s a very risky proposition that will result in them being displaced. Meanwhile, the landlords doing the conversions will greatly increase the value of their properties by turning [them] into condos. It’s a windfall for landlords.”

Among the worst-case scenarios Gullicksen envisions: “We’re going to see market-rate condos affordable only to the very wealthiest San Franciscans, sold to people moving in from other places, from the next dot-com boom.”

Kumana, on the other hand, attributed that thinking to “a whole culture of fear and mistrust and resignation,” calling Gullicksen’s Tenants Union “people who capitalize off hostilities.”

“The truth is, it is complicated, and I happen to have 30 years in this business,” Kumana said. “I want it win-win so everybody comes out ahead.”

Reach Andrew Chow at achow@asianweek.com.