Starboard Commercial Real Estate

Hans Hansson | November 24, 2006

When San Francisco voters passed Proposition H (Relocation Assistance for No Fault Tenant Removal) earlier this month, they moved closer toward killing the American dream of home ownership. Now landlords will be forced to pay up to $22,000 to remove tenants from their properties, regardless of whether the tenants are on a long-term lease or simply renting month to month.

The issue at hand is greater than just home ownership in the long run; it speaks to our city's ability to upgrade its aging housing stock. The average home in San Francisco is 63 years old; most lots do not have the room for single-family residences to expand. Proposition H will make it harder for owners to spend money to upgrade their properties, leading inevitably to the decay of existing residences.

An example of the potential blight can be found in the lower Sunset. "Sunset Juniors" were entry-level homes built after World War II for returning military and young families. These homes were built quickly and cheaply, intended to last about 50 years. Seven decades later, some of these homes have been upgraded, but some remain in their original condition. If you drive through this neighborhood, you can witness the overall decline of the area, driven by the many homes that have not been improved.

San Francisco needs to address its housing stock problem. One solution is to offer property owners with long-term tenants low-cost loans to upgrade their properties. Potentially greater market value would create an incentive for landlords. Tenants would also benefit because their living standard would increase.

The RAP program, implemented in the 1970s, was a combination of low-interest loans and tax credits to tempt landlords to upgrade their properties as well as to upgrade sidewalks and landscaping. Many Eureka Valley apartments, vacated during the previous decade's exodus of families to the suburbs, were renovated through RAP loans. San Franciscans need to consider implementing a similar measure to create incentives to maintain and update our existing housing stock or face a housing blight.
Posted 13 years, 2 months ago on November 24, 2006
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