San Francisco tenant attorneys and affordable housing advocates work tirelessly to prevent vulnerable households and residents from slipping into homelessness due to the numerous evictions that get carried out daily by landlords wanting to take advantage of high-market rents. The lack of affordable housing in the City is a problem that has to be addressed aggressively and creatively through legislation. One such piece of legislation that is gaining traction and positive support from many nonprofits, advocates, the San Francisco Planning Commission, and the San Francisco Board of Supervisors is the Community Opportunity to Purchase Act (COPA).
What is COPA?
If approved, the COPA would give the first right to purchase (this includes a first right to offer to purchase and a first right of refusal to match an existing offer) vacant lots or residential rental buildings with three or more units to nonprofit housing organizations. This means that when an owner of a multi-unit building puts it up for sale or has received an offer to purchase, nonprofit housing organizations that are pre-selected by the City would have a chance to bid on the building first or to match an existing offer.
Once the owner puts the building up for sale or has received an offer from a potential buyer, the owner would need to notify the Mayor’s Office of Housing. The pre-selected nonprofit housing organizations would then have thirty days to make an offer to purchase the building. To be pre-qualified, the nonprofits would need to show that they intend to create permanent affordable housing for low- and moderate-income residents and demonstrate the capacity to not only acquire the property but also the ability to manage residential property.
This Act is not the first of its kind. COPA was inspired by and modeled after Washington, D.C.’s District Opportunity to Purchase Act, which requires property owners to provide the District of Columbia with the opportunity to purchase properties that consist of five or more rental units where twenty-five percent or more of them are defined as affordable. Although approved in 2008, the law was not implemented until late 2018. Washington also has a Tenant Opportunity to Purchase Act (TOPA), which puts the District’s right to purchase a property subordinate to the tenant’s right to purchase. If San Francisco’s COPA is approved, a tenant purchasing act similar to Washington, D.C.’s may also be in the City’s future.
How will COPA affect San Francisco tenants if it is adopted?
The intent of the COPA is to keep tenants in their homes. If the building is owned by a nonprofit housing organization, the likelihood that a tenant would be evicted under an Ellis Act eviction, an owner-move-In eviction, demolition, or condo conversion would be non-existent. Also, single room occupancy (SRO) hotels, which typically house low-income tenants and are often at risk of being turned into market-rate units, will find refuge under nonprofit control.
When a nonprofit organization buys a rental building through COPA, the deed will restrict the building’s use to permanent affordable housing, with a mean value of all rents to not exceed eighty percent of the area median income. Further, some advocates have predicted that if rental buildings are under nonprofit control there would be more opportunities for the building to be transferred to tenant ownership under a limited-equity cooperative. An ownership structure like this would allow tenants to purchase shares in a cooperative, which would entitle them to live in one of the units in exchange for paying their share of mortgage payments, property taxes, and operating and maintenance expenses. Tenants would also have a vote on the governance and maintenance of the building.
What is the status of COPA?
The Act was introduced late last year and has since been reviewed by both the San Francisco Planning Commission and the Board of Supervisors. At a recent Planning Commission hearing, COPA received unanimous support from the commissioners and a recommendation for the Board of Supervisors to approve it. There were no speakers in opposition to the plan at the hearing. The board’s Rules Committee will take up the proposal next, although, as of March 2019, a hearing has not been scheduled.
To find out the latest developments of the Community Opportunity to Purchase Act, or to learn more about your rights as a tenant if the building you live in is being sold, contact a tenant attorney at Tobener Ravenscroft LLP.