Intermediate Length Occupancy Rental Law in San Francisco

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Attorney for thirty six years and regularly writes and lectures on local real estate laws and issues including condominium law and advises his clients on land development and real estate transactions throughout the bay area. So welcome to the show mr gladstone. Thank you matt. Happy near happy new year's well here's looking at twenty twenty one So you have been doing san francisco real estate in real estate law for a very long time and we are so fortunate to have you on the air today to speak with us about a very specific law which is intermediate occupancy law. So maybe before we even get started about how this came to be what isn't intermediate occupancy law thanks man it's actually called intermediate length occupancy law and all grieve as i l o. That's what the industry calls it and what it says. Is that starting a couple years. Only a thousand unison. The city will be allowed to be rented between thirty days in one year and it affects for kinds of buildings First of all buildings that one to three units which can't have these at all if they have them today they have to stop. Then in effect seed billings afford to nine units in the Aloes are loud there as long as the number of the building does not exceed twenty five percent of the units in the building. Then there's a category of buildings ten some more and i a- lows are only allowed there if the planet commission gives approval and the planning commission has a lot of discretion in the planning commission to say yes. Ask you to show the following three or four things first of all that at the time you seek approval from the commission. There's only a thousand or less units better. I at that moment you'll have show that only twenty percent of the units in your building will be you have to show that at least two thirds of all at the time our downtown and you have to show that less than one third of the is at the time we seek permission. Aren geographic areas of displacement. And they're they're given The locations of those areas of displacement in recent years are indicated we can go into which areas they are later but that is essentially the law and one more thing if you ever building than has notice of violation against it for any reason your disqualified from being off from having i lows in your building and you were also mentioning. There's the fourth category of building while the fourth is a building that has vs. Okay so i. Re- categories are distinguished by the number of units and the fourth category is building a with overseas notices of violation. Which case you have no chance of having l. alot ellos and does the date of construction of the building matter at all or is it everything that's ever been built in san francisco. It's everything that ever has been built. There's one rule based on a day. Any buildings built after june. Twenty or june. Fifteenth of twenty twenty cannot have eiloz at all so from here on new. Buildings cannot have iowa's gotcha and in terms of unit counting may. Maybe the hasn't been litigated yet. Are unwarranted units units for the purposes of ilocos. It's a good question. The ordinance does not say that but other ordinances in the city for example. The ordinance called copa which gives nonprofits the right to By building three or more units in that rule a non-legal unit doesn't count toward being one of three units for the purpose of deciding whether the building is three or more units and thus subject to copa which gives the nonprofits the right to offer to purchase prior to the in general. Yes so hopefully. It'll be interpreted that way on this law. I would hope so if you're listening to this. You're like wow. This sounds like a really complicated law. how this law come to be. Why do we need it. Or why did i not that you can speak for the board of supervisors but what can you tell us about how it kind of came to be in the problem that it's tempting to solve sure we'll for many years. Progressives in the city have been considering going to the board of supervisors to regulate the number furnish rentals that are short term with the idea that those units are taking away housing from those who have a housing needing can't afford market rate housing but what really was distracted for the camel's back was the project known as twenty one hundred market street in which the developer bryan spears. Put up a. I think about sixty units and without telling the city he was doing so he mastered least all rental units to accompany called saunder and that of course was a good deal for him because it means he never had to worry about vacancies. That saunder would take the risks. There were vacancies. He'd get one steady check from saunder. Every month and people noticed it. Solder was moving in furnishings. And obviously there were all of them. We're going to be furnished. Units with the exception of eight units that are below market. Which saunder did not lease so city planning for was made aware of it in the board supervisors were made aware of it end a felt. This wasn't the intent of the planning commission improving in approving the project however looking back to approval there was no Provision that this could not happen in fact the laws did not prevent this from happening so while many intended to half saunder its use of the building that way The c- could do nothing about it. saunder end. Mr brian spirit had found a loophole. It was perfectly legal and the board of supervisors decided. We should do something about this by creating some legislation and that's how it came about met so that is a conflict complicated story And actually you know to your point. intermediate length occupancy law rentals have been around in the city for a while like sander is not the first company and bryan. Spears is not the first developer but what was very different as you pointed out was this was brand new building and it was one

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