[with profound apologies to the clowns at Aahmes Shriner Clowns]
Last Friday's Bizjournal included a guest editorial by Mike Sullivan of Plan C condemning the recent restrictions on TIC's and claiming some kind of new math in the quest to defend Ellis Act evictions.
"Recent attacks on homeownership in San Francisco have been justified as necessary reactions to an evictions problem."
In this real estate masquerade, Ellis-acting the dream of home ownership into existence is justified with two primary points:
1. "owner move-ins have dropped." Yes, because the Supes legislated against more than one "owner" displacing tenants. It became no longer viable for a group of two or three partners to form a TIC if only one could move in.
2. "activists have focused particularly on so-called "Ellis Act" evictions, in which the building owner goes out of the landlord business entirely, and displaces all tenants in the building." No one is going out of the landlord business here. They're not in the landlord business in the first place, they're investors and developers who are buy buildings to empty them and turn them into TIC's guided by realtors. Additionally, new mortgage practices now allow smaller, individual mortgages on each TIC unit, rather than the risk associated with one big mortgage for the entire building, making it easier for buyers to qualify.
In simpler terms, if Mr Sullivan wants to develop a condo project in San Francisco, why should he be troubled with the risk of actually putting up a building when he can buy a building, throw the tenants out on the street, do a little reno and sell the units as TIC's? Leaving the new tenants to navigate the complicated multi-year conversion process. TIC's are not condos, kids.
Ellis evictions have nothing to do with the dreams of ownership. This about greed, and it's a realtor-abetted phenomenon, with commissions on the sale, the title insurance, the financing and whatever else comes their way.
Matt Lanning saw it somewhat differently here.
· Crisis in Evictions [BizJournal]
· Plan C [Plan C]
· Crisis in evictions doesn't add up [SF Home Blog]