Homeowners don’t have anywhere close to a million dollars in equity in their homes
A typical homeowner who bought a home in EPA five years ago (or who refinanced a long-owned home then to take money out for expenses) likely has a mortgage close to $750,000 - money they owe to the bank and must pay back whatever happens to the value of their home. They probably put in a downpayment of $200,000 of their savings (or maybe loans from within their family) to buy the home. Even they sell their property for $1,000,000 then after preparing the home for sale and transaction costs they lose money overall. But if the property sells for $900,000 they get only $150K which is less than they put in (even before considering the cost of repairs, taxes, transactions costs). So a seemingly “small” change in the achieved selling price has an outsized impact on the size of the “nest egg” for the homeowner. Property prices may not always go up, and having a relatively lower sale price may mean there is not enough money in the sale even to pay back the bank.
The people called “absentee” in this discussion may have very personal ties to EPA
Your landlord may come and mow your lawn every month and say hello to your neighbors or may come and fix your broken blind herself. She may live in Belle Haven and her kids may go to middle school in EPA. She may have grown up in the EPA home you are now renting. Or he may travel away for work every week or as a couple they may straddle obligations to elderly relatives who are spread apart across both sides of a family. Or as in the Scenario of Kayley, her parents may have passed away while living in their EPA home and they may just be trying to sell for the estate.
This ordinance won’t make tenants more secure
Any landlord who is able to, is likely to evict tenants and move in to their property first so that TOPA doesn’t apply. After they’ve been there for six months COPA won’t apply either. This is the only way for the landlord to avoid having the property tied up for months in the OPA process and to be sure they don’t have any liability for penalties. Whereas in a normal sale there might have been the chance for a tenant to continue with the new owner, these tenants will have to move away beforehand.
This ordinance won’t bring more housing to EPA
Developers who were considering constructing apartment buildings have already indicated this ordinance would cause them to withdraw. Without being able to sell the properties on a fully competitive market the developer cannot guarantee the investment returns needed to commit their capital.
This ordinance doesn’t keep value in EPA families
Any transfer to a stepchild, a niece or nephew of any home where the owner isn't in residence would need to go through the OPA process and any tenant or non-profit would have a higher right to buy the property than that relative - there is no way to ensure that extended family can get the property at a transfer.
The ordinance doesn’t favor long-standing EPA tenants
The rules in the ordinance that apply to tenants apply to any tenant no matter how recently they arrived or how small a portion of the property they occupy. Tenants who are most likely to be able to buy a property under TOPA are those with the greatest financial resources who can qualify for a large enough mortgage on their own - this could be someone who moved in to EPA just a month ago to start a job in a nearby firm doing a lot of hiring. Those tenants will have the option to hold up the sale of a homeowner who may have owned the home for 30 years, get priority to buy the home over local families the seller might have known for decades, and if they decide not to follow through on the purchase and instead buy a different bay area home, it will take the property off the market for a period.
This ordinance won’t protect families when a homeowner dies
Although the transfer to the heirs is free of OPA, what happens when multiple heirs inherit the property or the heirs are already living outside of EPA? The person who died wanted for the value of that property to go to their heirs in the proportions they asked for. When they need to sell, if they haven’t been living in the property for six months themselves, then their property has to go through OPA. Even after probate and the family decision-making about what to do with the property has happened, it will take months to close a sale - and the value of the property won’t be as high as without OPA.
This ordinance wasn’t properly noticed and discussed in our city
These were the only affinity groups that were consulted before the November 16th meeting, other than 10 homeowners and 7 other tenants who were part of focus groups. Are you in one of these groups? If not the City didn’t think your opinion mattered during the original development phase of this Ordinance. We have many homeowners in this city who are of Latino, Asian or European heritage, or Black people who came to buy in EPA since our city formed in 1983. None of these people are represented here.