For Immediate Release
August 8, 2001

Renters, Property Owners, Prospective home-buyers unite
Coalition asks S.F. Court to declare McGoldrick TIC Ordinance Unlawful

A group of San Francisco tenants has joined with the San Francisco Apartment Association, Small Property Owners of San Francisco and The San Francisco Association of Realtors in filing a lawsuit in San Francisco Superior Court that challenges the constitutionality of a measure adopted by the Board of Supervisors on July 9, 2001 that severely limits opportunities of home ownership in San Francisco.

"Not only is this ordinance illegal, but it is bad public policy," says Andrew Zacks, Attorney for the Plaintiffs. "We believe the Court will find that limiting the conversion of apartments to Tenancies in Common (TICs) unfairly and illegally deprives tenants in San Francisco of the right to own their own home and is a fundamental violation of privacy and property ownership laws."

The lawsuit was filed on behalf of a group of tenants interested in purchasing their rental units and 1st time homebuyers. In a housing market that prices out all but the very wealthy, TICs represent their only hope of realizing the American dream.

"While it is a noble goal to protect low income tenants from eviction, limiting the home ownership rights of others is not the way to do it. This is a legally flawed measure that does nothing to solve the problem. It will only make it harder for residents of modest means to own their homes in San Francisco," says Janan New, Executive Director for the San Francisco Apartment Association.

Joe Capko, one of the plaintiffs, is a young professional and a renter with two children and a third expected. During the coming year, Capko and his wife planned to buy and move into a 3-unit building as a TIC with close friends who also have children. "Under this ordinance my Family's choices are to rent forever or leave San Francisco. Instead of encouraging home ownership in our City, this law does exactly the opposite."

The lawsuit challenges the legality of the TIC limits on several fronts:

• The ordinance violates the right to privacy because it interferes with individuals' rights to structure their living arrangements. The ordinance allows competent adults to purchase multi-unit residential buildings but does not allow them to agree among themselves to occupy a specific residential unit.
  
  
• The ordinance is preempted by the State's Ellis Act which protects the rights of owners of residential real property to leave the rental housing market
  
  
• The ordinance violates the State's Subdivision Act by seeking to regulate TICs as condominiums, when a tenancy in common is a form of ownership legally distinct from a subdivision. TICs are a form of undivided interest in property while a subdivision involves the division of land. This ordinance usurps State authority by defining TICs as condominiums when this is not recognized under State law.
  
  
• The ordinance violates the takings clause of the Fifth Amendment of the United States Constitution because it deprives property owners of the use of their land without any mechanism for just compensation.
  
  
• The ordinance exempts related owners from the requirement to record exclusive rights of property in the deed. There is no justification for allowing relatives to displace tenants while denying the same right to non-related persons. In effect it denies these rights to persons who are not part of large families. This violates the Equal Protection Clause of the 14th Amendment to the U.S. Constitution and the California Constitution.
  

The ordinance becomes law Wednesday, August 8th. The legislation provides that in the event of legal action its provisions are "suspended unless and until there is final judgment in the lawsuit in all courts and the validity of this legislation is upheld."

Other Contacts:

Andrew Zacks, Law Offices of Andrew Zacks
(415) 956-8100

Janan New, Executive Director, San Francisco Apartment Association
(415) 255-2288

Jim Fabris, Executive Vice President, San Francisco Association of Realtors
(415) 431-9103

Brook Turner, Executive Director, Coalition for Better Housing
(415) 474-6987

Ted Loewenberg, Small Property Owners of San Francisco
(415) 336-8679