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A Superior Court judge ruled yesterday that San Francisco's law barring landlords from imposing special rent increases on their tenants to pay for property improvements is unconstitutional. Judge James Robertson Jr. said that Proposition H, approved by city voters last fall, does not provide landlords a constitutionally guaranteed fair rate of return on their properties. His verbal ruling is expected to be formally issued in a written opinion today or tomorrow. Proposition H bars landlords from raising rents to pay for such upgrades as new roofs and fresh paint. The only cost that could be recouped from tenants is for certain seismic upgrades. Real estate interests sued to overturn the law. Deputy City Attorney Marty Greenman said there's a "high likelihood" the city will appeal. Tenant activists, who placed the initiative measure on the ballot, said they might try to get the Board of Supervisors to rewrite the law to withstand court scrutiny. "We're going to look at the options," said Ted Gullicksen of the San Francisco Tenants Union. Backers of the restrictions say landlords have used capital improvement rent hikes to force tenants out of their rent-controlled apartments because they no longer could afford the higher rents. Once a unit is vacant, there is no legal limit on what a landlord can charge. Landlords say the rent increases are essential to keep their properties in good condition. For now, at least, landlords can resume petitioning the city's Rent Board for permission to raise rents for property improvements. "We're pleased with the court's ruling, and if it is appealed, I think it will be found just as unconstitutional," said Brook Turner of the landlord- backed Coalition for Better Housing. And while property owners chalked up one legal victory, they filed another lawsuit in San Francisco Superior Court yesterday that seeks to overturn the city's new law placing tight restrictions on a popular method of homeownership for first-time buyers. The supervisors gave final approval to the law last month when it overrode a veto of the legislation by Mayor Willie Brown. The law limits tenancies in common, known as TICs, in which a group of people purchase and occupy a multiunit building. While the practice is considered one of the few affordable options for people -- many of them renters -- to get into the homeownership market, it has resulted in the eviction of hundreds of other tenants who are displaced by the new owners. "Not only is this ordinance illegal, but it is bad public policy," said attorney Andrew Zacks, who filed the suit on behalf of seven tenants who want to buy homes in the city and San Francisco's largest organizations representing real estate interests. "We believe the court will find that limiting the conversion of apartments to tenancies in common 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," Zacks said. But Supervisor Jake McGoldrick, the law's chief sponsor, said yesterday he is confident the courts will uphold the policy. "The way it is written will stand up constitutionally, will stand up to (state) law," McGoldrick said. Furthermore, he suggested that the city has the moral responsibility to protect tenants from losing their homes. "What are the values of home ownership if they're built upon having to evict someone?" McGoldrick asked. The board's action, he said, had one goal: "We don't want to see the kinds of evictions that are happening. We don't want to see the kinds of social upheaval that is happening." Pushed by tenant activists, the restrictions don't come down to a pure tenant-property owner dispute. Some renters, such as Joe Capko, oppose the law. A plaintiff in the lawsuit, Capko said he hopes to own a home in San Francisco someday and is counting on buying a tenancy in common to do that. "What the board did certainly put a damper on that," said Capko, who lives in Glen Park with his pregnant wife and two children.
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