82,089 / 40.00% Yes votes ...... 123,129 / 60.00% No votes

See Also: Index of all Measures

The Proposal:
Proposition R is an ordinance that would allow apartment buildings of any size to be converted to condominiums. Up to one percent of the City's total housing units could be converted for each of the next 25 years. (About 3,400 additional apartments per year could be converted.) After 25 years, the annual limit would be 200 conversions. If the conversion cap were not met in a given year, the balance would carry-over to following years.

Under Proposition R, an owner could convert an apartment building if:

• Tenants were offered the option to buy their apartments;
• Tenants or resident owners from 25% to 40% of the units agreed to buy their apartments. The percentage would depend upon the total number of units in the building;
• Tenants who did not wish to buy would receive a lifetime lease - if the unit remained the tenant's primary residence - with annual rent increases limited to 60% of any increase in the regional consumer price index; and
• There had been no "owner move-in" eviction in the building during the past five years, and no eviction to remove apartments from the rental market in the past ten years.

Our estimate is based on industry studies that show approximately 10 percent of people who live in San Francisco can afford the median-priced home of approximately $550,000. About 30 percent can afford a $300,000 home. If more than 30 percent of renters elect to purchase under this program, then general property tax and property transfer tax revenues would be greater.

Also, there will be additional costs to the Department of Public Works and the Department of Building Inspection for this program. However, the City is allowed to set user fees to recover these costs.

Meaning of Voting Yes/No

A YES vote of this measure means:

If you vote "Yes," you want to allow apartment buildings of any size to be converted to condominiums and increase the number of units that can be converted each year, with certain conditions.

A NO vote of this measure means:

If you vote "No," you do not want to make these changes.

How to Evaluate the Propositions

Decide for yourself

Televised Ballot Measure Discussions:

Check the SFGTV Cable Channel 26 Schedule for rebroadcasts.

Yes on R

• Yes on R - Official Website
• Tenants for Homeownership - Information for tenants who want to own

• No on R - Official Website

TENANT - INITIATED HOME OWNERSHIP PROGRAM FOR EVERYONE

NOTICE OF INTENTION TO CIRCULATE PETITION

Notice is hereby given by the person whose name appears hereon of his intention to circulate the petition within the City and County of San Francisco for the purpose of enacting an initiative ordinance. A statement of the reasons of the proposed action as contemplated in the petition is as follows:

STATEMENT OF REASONS

HOPE for San Franciscans who want to buy a home

The sky-high cost of buying a home in San Francisco threatens our city's unique character.

The people who make San Francisco work -- teachers, firefighters, waiters, carpenters, shop owners and many others -- often can't afford to buy a home in their own city.

As a result, San Francisco's middle class is fleeing, leaving behind a city of rich and poor.

That is why a diverse coalition of tenants, homeowners, faith-based organizations, firefighters, small business owners, major employers, and community groups have come together to place the Home Ownership Program for Everyone, or HOPE, on the San Francisco ballot.

HOPE allows tenants in apartment buildings the opportunity to buy their own units. Under the proposal, if at least 25 percent of tenants in the building and the owner of the building agree, the tenants could buy their apartments. Tenants who don't wish to buy could remain in their units with strong eviction protections and the same rent control they currently enjoy.

HOPE benefits tenants who want to become owners because it offers them the opportunity to buy their own units for substantially less than the cost of a single-family home or condo. HOPE allows tenants to buy their units with easily available no- and low-down payment loans.

HOPE benefits tenants who want to remain tenants because it allows them to remain in their existing units with the same rent control rules they currently enjoy and stronger eviction protections.

HOPE benefits homeowners because it strengthens neighborhoods. When tenants become owners, they make an investment in a community. They put down roots and gain a powerful incentive to work for better public schools and safer and cleaner streets.

While many proposals to reduce displacement and evictions have failed because they pit tenants against property owners, HOPE will succeed because it encourages cooperation.

Please consider adding your name to the list of thousands of San Franciscans who already have endorsed this common-sense approach to increasing homeownership in San Francisco.

TEXT OF INITIATIVE

The written text of the Initiative is attached hereto and incorporated herein by this reference as if fully set forth at this point.

Date: ____________ ____________________________ Joe Capko Proponent P.O. Box 31096 San Francisco, CA 94131

[Tenant-Initiated Home Ownership Program for Everyone]

Ordinance amending the San Francisco Subdivision Code by adding Article 11, consisting of Sections 1399.1 through 1399.16 to permit the subdivision of existing residential buildings into residential condominium or other ownership subject to certain requirements.

Be it ordained by the People of the City and County of San Francisco:
Section 1. FINDINGS. The People of the City and County of San Francisco hereby find and declare as follows:
A. The high cost of buying a home in San Francisco has displaced thousands of working- and middle-class San Franciscans, and threatens to permanently change the City's unique, diverse character.
B. It is the policy of the City and County of San Francisco to promote homeownership and to make homeownership accessible for San Franciscans across the economic spectrum.
C. The health, safety and welfare of San Franciscans is enhanced through programs that expand home ownership opportunities while protecting against the displacement of tenants.

Section 2. The San Francisco Subdivision Code is hereby amended by adding Article 11,

consisting of Sections 1399.1 through 1399.16 to read as follows: Article 11

TENANT- INITIATED HOME OWNERSHIP PROGRAM FOR EVERYONE

SEC. 1399.5 LEASES. (a) The subdivider shall offer a lease on the following terms to each person who was a tenant on the date the Application Packet was submitted and who has actually and continuously resided in the unit as his or her principal residence from the date on which the Application Packet was submitted to and including the date of recording the subdivision map.

(b) The initial rent shall not exceed the rent charged on the date the subdivision map is recorded and may be increased not more than once a year in an amount equal to 60% of the increase in the U.S. Bureau of Labor Statistics Consumer Price Index-All Urban Consumers-San Francisco-Oakland-San Jose, CA, or any succeeding index, from the date of the last rent increase. (c) The lease shall contain a provision allowing the tenant to terminate the lease and vacate the unit on thirty days written notice. (d) The lease shall terminate on the death of the tenant or the date on which the tenant ceases to actually and continuously reside in the unit as his or her principal residence, whichever occurs first. The landlord may terminate the lease during its term only for a Permitted Eviction. (e) There shall be no decrease in maintenance of the unit .

(f) If, on the date the Application Packet is submitted, the tenant occupies the unit with a person who is not a tenant but who is a related party, at the request of the tenant the related party shall become a tenant under the lease. A "related party" is an adult who is a grandparent, grandchild, parent, child, brother, sister, spouse, or person registered as a Domestic Partner of the tenant pursuant to San Francisco Administrative Code 62.1-62.8. (g) A tenant's rights under the lease are not transferable, and any attempted transfer shall be of no force or effect. The foregoing does not prevent the tenant from allowing other persons to occupy the unit with him or her to the same extent as allowed under the agreement existing between the landlord and the tenant on the date the lease is made under this Section, provided that (i) the tenant continues to actually reside in the unit as his or her principal residence, and (ii) no other person residing in the unit shall succeed to the rights of the tenant on account of any acts of, or oral representations made by the landlord or the tenant. A tenant must provide the landlord with the name of each person who occupies the unit with the tenant as well as emergency contact information for that person in writing. The tenant must also give any other occupant of the unit a written notice that the occupant is not a tenant and has no rights under the lease. (h) The owner of a unit subject to a lease made under this Section or his or her successor in interest may require the tenant to enter into a written agreement documenting the tenant's lease rights. The lease shall include the terms set forth in this Section and shall also include the terms of the existing written rental agreement between the landlord and the tenant to the extent those terms do not conflict with this Section. If there is no existing written rental agreement, the written agreement shall include the usual and customary terms of residential rental agreements in the City that do not conflict with the terms of this Section. Where the tenant has the right to use certain common areas of the property, as, for example, parking or storage, or the right to have pets, those rights shall be included in the written agreement. (i) A Notice of Right to Lease Under Subdivision Code Section 1399.5 shall be in the following form, printed in 12 point type or larger: NOTICE OF RIGHT TO LEASE UNDER SUBDIVISION CODE SECTION 1399.5 TO: (name of tenant) RE: (address of unit) This Notice of Right to Lease under Subdivision Code Section 1399.5 is given to you as required by Section 1399.5 of the San Francisco Subdivision Code. If the property in which you live is subdivided and you do not purchase your unit, you will have a lease. A. The lease will start on the date that the subdivision map for your building is recorded with the San Francisco Recorder. B. The following terms will be incorporated into the lease.
1. The initial rent payable under the lease shall not exceed the rent charged on the date the subdivision map is recorded, and the rent may be increased not more than once a year in an amount equal to 60% of the increase in the U.S. Bureau of Labor Statistics Consumer Price Index-All Urban Consumers-San Francisco-Oakland-San Jose, CA, or any succeeding index, from the date of the last rent increase.
2. You have a right to terminate the lease at any time on thirty days prior written notice to your landlord.
3. The lease terminates on the earlier of the death of the last person named as a tenant on the lease or when none of the people named as a tenant on the lease actually and continuously reside in the unit as their principal place of residence.
4. Your landlord may terminate the lease during its term only if: a. you fail to pay the rent to which the landlord is lawfully entitled under the oral or written agreement between you and the landlord or you habitually pay the rent late or give checks which are frequently returned because there are insufficient funds in the checking account; b. you have violated a lawful obligation or covenant of tenancy other than the obligation to surrender possession upon proper notice and you have failed to cure the violation after having received written notice of it from the landlord; provided that notwithstanding any lease provision to the contrary, your landlord shall not endeavor to recover possession of your unit as a result of your subletting the unit if your landlord has unreasonably withheld the right to sublet following a written request from you, so long as you continue to reside in the rental unit and the sublet constitutes a one-for-one replacement of the departing tenant(s ). c. you are committing or permitting to exist a nuisance in or are causing substantial damage to the rental unit, or you are creating a substantial interference with the comfort, safety or enjoyment of the landlord or tenants in the building; d. you are using or permitting the unit to be used for any illegal purpose; e. you have, after written notice to cease, refused the landlord access to the unit as required by state or local law;
5. If, on the date the application for subdivision is submitted to the San Francisco Department of Public Works, one of the following persons lives with you at the unit and is an adult, at your request the landlord must name that person as a tenant on the lease, even if the landlord has not previously accepted that person as a tenant: your grandparent, grandchild, parent, child, brother, sister, spouse, or domestic partner.
6. You may not assign or transfer the lease. However, you may allow other persons to occupy the unit with you to the same extent as allowed under the agreement existing between you and your landlord on the date the subdivision map is recorded, so long as you actually and continuously reside in the unit as your principal place of residence and you give the landlord the name of each person who resides in the unit with you and emergency contact information for that person. You must give any person who resides in the unit with you notice that he or she is not a tenant and has no rights under the lease. C. At your landlord's request, you must enter into a written lease with your landlord that includes those terms of your existing rental agreement that do not conflict with your rights under the lease. If you do not have a written rental agreement, the written lease will contain provisions usually and customarily found in a residential rental agreement in San Francisco that do not conflict with your rights under Section 1399.5 of the San Francisco Subdivision Code.

Date:__________________________

_______________________________ Signature of Subdivider SEC. 1399.6 TENANT PURCHASE RIGHTS. (a) Each tenant at the property has the right to purchase the unit he or she occupies provided the tenant continues to reside in the unit up to and including the date of close of escrow on the purchase. (b) If one tenant purchases a unit and another tenant who resides in the same unit with the purchasing tenant does not jointly purchase the unit, the purchasing tenant takes the unit subject to the rights of the non-purchasing tenant to have a lease under Section 1399.5. (c) Within thirty calendar days following the issuance by the California Department of Real Estate of the Final Subdivision Public Report for a property containing five or more units, or the recording of the subdivision map for a property containing four or fewer units, the subdivider shall notify each tenant in writing of the right to purchase the unit in which that tenant resides. The written notice shall be served in person or by certified or registered mail, and shall include the price at which the unit may be purchased and the date on which the offering period expires. (d) The tenant's right to purchase expires 180 calendar days following the date the offer to purchase is made to the tenant. The offering period may be extended by an agreement in writing between the subdivider and the tenant. (e) With respect to a tenant who signed an Intent to Purchase, the right to purchase shall be at the price stated in the Intent to Purchase and on the other terms negotiated between the subdivider and the tenant in connection with the purchasing tenant's Intent to Purchase. Where more than one tenant executes an Intent to Purchase for a unit, the tenants who executed the Intent to Purchase shall purchase the unit jointly. (f) With respect to a tenant who did not sign an Intent to Purchase, the selling price for the unit shall be determined by the subdivider at the time the offer is made to the tenant, which price shall be no greater than the price at which the unit would be offered to the general public. (g) A tenant may not assign his or her right to purchase a unit, except as follows: (i) a tenant may jointly purchase a unit with another person who resides in the unit with that tenant; and (ii) a tenant may add a person to title who is a co-signer on a first or second loan secured by the unit. (h) To effectuate a purchase, a tenant must, before the offering period expires, execute a binding, non-contingent purchase and sale agreement that includes all material terms negotiated between the subdivider and the tenant, such other usual and customary terms found in an agreement for the purchase and sale of residential real property in the City and, where a Final Subdivision Public Report from the California Department of Real Estate is required, all terms required by that agency. Unless the subdivider and the tenant have agreed otherwise: (i) close of escrow shall be 60 days from the date the purchase and sale agreement is executed by the tenant; (ii) brokerage, attorney and inspection fees incurred in connection with execution of the purchase and sale agreement and closing escrow shall be paid by the party who incurred the fee; and (iii) documentary transfer tax, title insurance, and escrow fees and costs shall be paid according to custom in the County of San Francisco. (i) A signed Intent to Purchase is irrevocable by the signing tenant for purposes of establishing the subdivider's compliance with the qualifications for subdivision under this Article 11 unless the Director finds, after hearing as described in Section 1399.10, that the subdivider obtained the signature by fraud or duress. (j) An Intent to Purchase required under this Article shall be in the following form, in 12 point type or larger. INTENT TO PURCHASE Definitions: "Eligible purchaser" means a tenant or an owner who has continuously resided in unit at the property for at least two years prior to the date the Application Packet is submitted and who resides in a unit at the property on the date the Application Packet is submitted. A person may qualify as an eligible purchaser only one time in a seven year period. "Tenant" means an individual residing in the property on the date the Application Packet is submitted who has an express oral or written agreement directly with the owner. The undersigned states that:

1. I reside at ____________________________________________, Unit ____. By signing below, I indicate my intent to purchase this unit at the price of ________________.

2. I am an eligible purchaser, as defined above. I have not executed an Intent to Purchase with respect to any other property within the last seven years.

3. I have read and understand my right to purchase my unit at the price stated above and on the terms set forth in Section 1399.6 of the San Francisco Subdivision Code.

4. I have received a Notice of Right to Lease under Subdivision Code Section 1399.5 and have read and understand my right to a lease as stated in that Notice.

5. I understand that any person who lives in my unit with me, who does not purchase the unit with me and who is a tenant of the current owner has a right to remain in the unit under a lease under Subdivision Code Section 1399.5 . Once I become the owner of the unit, I will become the landlord under that lease.

6. I am buying my unit with the intent of residing in it for at least two years. I understand that if I resell my unit within 12 months after the date that escrow closes on the purchase of my unit, I will be required to pay 20% of my net profit to a housing fund administered by the Rent Board, and that if I resell my unit between 13 and 24 months after the date that escrow closes on the purchase of my unit, I will required to pay 10% of my net profit to that fund. This payment is due unless I can demonstrate that I did not know or could not reasonably foresee at the time that escrow closes on my purchase of the unit that I might be required to resell the unit within 24 months of purchase.
7. I understand that signing this Intent to Purchase does not create a contractual obligation. However, as of this date, it is my intention to purchase my unit at the time that the unit is available and offered for sale.
8. I understand that this Intent to Purchase will be filed with the City and County of San Francisco in order to establish that the building qualifies for subdivision, and that my signed Intent to Purchase is irrevocable for establishing that purpose unless my signature was obtained by fraud or duress.
9. I have been advised that I have a right to seek legal or other professional assistance in connection with my rights to purchase my unit or to have a lease under Subdivision Code Section 1399.5, and either have obtained counsel or have waived my right to do so. I/We declare, under penalty of perjury, that the foregoing statements are true and correct. _______________________________ ____________________________ Eligible Purchaser Eligible Purchaser [Completed Notary Acknowledgment must be attached.] SEC.1399.7 RESTRICTION ON EVICTIONS DURING SUBDIVISION. An owner or subdivider may not endeavor to recover possession of a unit from any tenant in a building for which an Application Packet has been submitted unless possession of the unit is sought based upon a ground for a Permitted Eviction. SEC. 1399.8 ADDITIONS AND DELETIONS TO APPLICATION PACKET FOR SUBDIVISIONS UNDER ARTICLE 11. (a) Application Packets submitted under this Article 11 shall contain the following items in addition to those required by Sections 1322, 1323 and 1324 of this Code: (1) Intent to Purchase forms from the following percentage of the total number of units; Buildings of 2 to 6 units at least one eligible purchaser from 40% of the units Buildings of 7 - 12 units at least one eligible purchaser from 33% of the units Buildings of 13 or more units at least one eligible purchaser from 25% of the units (2) A declaration of the subdivider, executed under penalty of perjury, stating that (A) each tenant has been offered the right to execute an Intent to Purchase with respect to his or her unit and has been served with a Notice of Right to Lease under Subdivision Code Section 1399.5; (B) escrow on the sale of a unit to the general public may not close until escrows have closed on the sales of at least 25 percent of the units to eligible purchasers or to persons who will have been tenants at the property for at least two years preceding the date of close of escrow; (C) a notice of intent to withdraw rental units from rent or lease under the Ellis Act, California Government Code Sections 7060 et seq. has not been filed with the Rent Board for a period of ten years preceding the date the Application Packet is submitted, nor has a notice of termination of tenancy seeking to obtain possession of a unit in the property because the landlord wishes to withdraw from rent or lease all rental units at the property as provided in Section 37.9(a)(13) of the Rent Ordinance been served on a tenant at the property or filed with the Rent Board for a period of ten years preceding the date the Application Packet is submitted; (D) within five years preceding the date the Application Packet is submitted, no notice of termination of tenancy seeking to obtain possession of a unit in the property for occupancy by an owner or a related party of an owner, as provided in Section 37.9(a)(8) of the Rent Ordinance, has been served on a tenant at the property or filed with the Rent Board; (E) after reasonable inquiry and to the best of the subdivider's knowledge, within the five years preceding the date the Application Packet is submitted no tenant has accepted compensation to vacate the property and has vacated the property based upon a representation by the owner or the owner's agent that the owner intended to withdraw from rent or lease all residential rental units at the property under Section 37.9(a)(13) of the Rent Ordinance and under the Ellis Act, California Government Code Sections 7060 et seq. (F) all of the information in the application is, to the best of the subdivider's knowledge, true and correct. (3) The materials required by Section 1381(a)(1) and (2).

(b) The statements required by Section 1323(a), paragraph 1 shall not be included in an Application Packet for subdivision under this Article.

For a period of 25 years from the effective date of this legislation, not more than 1% of the housing stock in San Francisco may be approved for subdivision under this Article in any calendar year, subject to the carry-over into future years of any unused allotment. Thereafter, not more than 200 units may be approved for subdivision under this Article in any calendar year, subject to the carry-over of any unused allotment into future years . If fewer than the number of units allotted for any year are approved in that year, the unused portion of the number of allotted units shall be carried over into the next and, if applicable, into subsequent calendar years. As used below, "Article 11 Allotment" means, for each calendar year for a period of 25 years from the effective date of this legislation, a number equal to 1% of the housing stock in San Francisco as reported by the Planning Department in the "Housing Inventory" in the most recent available calendar year plus the unused allotment, if any, from all previous years. At the end of the 25 year period, "Article 11 Allotment" means a number equal to 200 units per year plus the unused allotment, if any, from all previous years.
Within 90 days from the effective date of this legislation and on March 1 of each calendar year after the year in which this legislation becomes effective (or on the next business day if March 1 falls on a Saturday or Sunday) the Director shall hold a lottery and shall select at random tickets representing buildings containing the number of units in the Article 11 Allotment for that year. Buildings containing units equal to the Article 11 Allotment for that year shall be placed on the Regular List. After selection of the Regular List, the Director shall continue to select tickets and shall establish a Standby List containing any remaining units in the lottery. Placement of an application on the Standby List does not vest in the Subdivider any right to file an application for subdivision if the number of units for which subdivision has been granted equals or exceeds the Article 11 Allotment for that year.
When applications can be accepted for filing from the Standby List because of the withdrawal or denial of other applications, the passage of time, or other circumstances, the Director shall accept Applications Packets in order, beginning with the first on the Standby List. The Director shall continue to call applications from the Standby List until the number of units in the Article 11 Allotment for that year have been approved.. No Application Packet shall be accepted that, if approved, would result in the subdivision of units in excess of the Article 11 Allotment for that year.
If fewer units than allowed under the Article 11 Allotment apply for the lottery in any year, the Director shall accept Applications Packets after the lottery has been drawn until the number of units in the Article 11 Allotment have been approved in that calendar year.

Section 3. SEVERABILITY

Except for Section 1399.5(b), if any section, subsection, provision or part of this initiative ordinance, or its application to any person or circumstances is held to be unconstitutional or invalid, the remainder of this ordinance, and the application of such provision to other persons or circumstances, shall not be affected. If Section 1399.5(b) is held to be unconstitutional or invalid, then this entire ordinance shall be held invalid.