For residents of the approximately 172,000 units of the city’s rent-controlled apartments, there are few things more terrifying than receiving notice that your building has sold. And for a new landlord, there are few situations more delicate and potentially expensive than trying to empty out a rent-controlled unit. But in a city with a very low vacancy rate, it’s an inevitability — and over the years, building owners buying out tenants have become more and more normal.
Until 2015, these agreements were often done under the table or behind closed doors, but in October of that year the Board of Supervisors passed an ordinance that required landlords to follow a few rules that guarantee the tenant a little oversight into the process. (Notably, it passed 7-4, with Supes. London Breed, Mark Farrell, Katy Tang, and Scott Wiener in opposition.) Currently, before a buyout, landlords must provide tenants with a three-page disclosure form from the San Francisco Rent Board, stating, among other things, that the tenant is not required to enter into an agreement and has the right to secure a lawyer. And when a buyout amount has been agreed upon, the Rent Board must receive a copy.
The numbers are then released to the public, offering some transparency for tenants as to the going rate.
This year, there have been 254 buyouts in San Francisco, down from 319 in 2016. Although the majority are in the $20,000 to $50,000 range, a handful reached six figures: Four people who lived on the 1500 block of Fulton Street north of the Panhandle received a total of $167,000 in August. In September, one Diamond Heights tenant got $185,000. The same month, the record-setter for the year went to a tenant on the 100 block of 21st Avenue, who secured $250,000.
If this all sounds like the tenants are winning the lottery — well, some are. But this isn’t just a numbers game; at the end of the day, these are people’s homes that they are leaving. And not everyone gets a big payday: One tenant received only $1,000. For many tenants in San Francisco, the loss of a rent-controlled unit forces them to move outside the city, or even to leave California altogether. It can be a life-altering event, and receiving financial padding for the next step can make the difference between finding a new place or living on the street.
But the number of buyouts — and how much is awarded — may change significantly next year. Acting Mayor Breed has teamed up with Sup. Jeff Sheehy to draft a legislation that would offer tenants within a certain income range legal support with no-fault evictions. She’s also mentioned establishing an Office of Tenant Assistance within the Mayor’s Office of Housing and Community Development, to field tenant issues. And a measure will be on the June ballot that would offer any tenant — regardless of income or type of eviction — the right to counsel.
Whether or not these measures will lower buyout rates or not remains to be seen. If successful, the above efforts will help tenants become better aware of their rights, by providing them with the tools to fight an eviction and therefore more impetus to turn down a buyout. Alternately, buyouts might still happen at the same frequency — but if there’s a right to counsel, you’d better believe the settlement amounts will go up.
Out of the nearly 1,800 evictions that took place citywide last year, 90 percent of them occurred without any legal representation for the tenant — proving that despite an occasional hefty payout, it’s still landlords that rule this city.