thousands of evictions on the horizon

The SF Examiner has called out a new development in the TIC trend. Apparently, the real estate industry has come up with some way to treat TICs like condos, which enables banks to make loans where the various owners are not dependent on each other.

Speculation on bigger apartment buildings is being fueled, in part, by widespread reports that at least two city banks are preparing to offer a new type of mortgage loan specifically catering to tenancy-in-common, or TIC, buildings, in which an individual owns a portion of a building as opposed to a specific apartment, according to several attorneys involved in the TIC industry.

The loans would make it easier to finance large TIC buildings by providing individual mortgages to owners. Under the current TIC loans, partners share the total mortgage, which means that if one of the TIC owners defaults, all the borrowers suffer.

This is huge and scary. By making TICs work like condos, the speculators can get around the city's condo-conversion law and gut the rest of the city's rent-controlled housing.

The Examiner is framing this as primarily affecting large buildings, and they are right that it opens up those buildings for plundering. However, I think it has much broader implications. The city can limit condo conversions or require that they be done ethically. We do not, however, have any influence over TICs, and I don't know if we legally can.

In the meantime, though, we do have requirements that people not evict tenants before they convert to condos. And there's another building being sold as TICs which will not be eligible for condo conversion:

Join us Sunday, June 12, for another picket of a TIC Open House where the tenants were all evicted to convert the building to a TIC and then to condos. The last one was hugely successful and most potential buyers were turned away! This Sunday, we’re targeting ANOTHER one on Lexington Street—226 Lexington. We may be able to stop 2 Open Houses simultaneously if our last target (275 Lexington, almost directly across the street!) also has an open house on Sunday (it probably will—the realtor has stopped doing advance listing of that building’s open houses).

The tenants at 226 Lexington were all evicted under the Ellis Act and now the units are being sold as TICs.

TIC Open House Picket
SUNDAY, JUNE 12, 2 PM
226 LEXINGTON
(at 20th Street; Lexington runs parallel to Mission, between Mission and Valencia)

This is part of our campaign to enforce Section 1386 of the Subdivision Law, which prohibits condo conversions following evictions. We will educate buyers that tenants were evicted and that the units will not be able to become condos.

To download a flyer for the picket, see www.sftu.org