— They are two of the faces of this city's housing crisis.
Cindy Zhao, 48, works two jobs to keep her dream of home ownership afloat. Like thousands here, she bought a flat in a tenancy-in-common — a share of a four-unit building that has left her family financially entangled with co-owners.
The interest rate on their collective mortgage is more than double those available for solo loans, and if one fails to make a payment they all could face foreclosure. For years she and her husband have entered a lottery that allows 200 such units to be converted annually to condominiums. The tenants in the four-unit building all enter the lottery.
Then there's Ana Gutierrez. For more than three decades, the 67-year-old mother of five has lived in a rent-controlled Mission District duplex. But her property is in demand in today's tech-driven economic boom.
In November, the landlord notified Gutierrez and her neighbors that they will be evicted under the Ellis Act, which allows building owners to get out of the rental game. There's a good chance the building will be resold as a tenancy-in-common.
In an attempt to help homeowners like Zhao, two San Francisco supervisors last year proposed legislation to allow about 2,200 TIC units on the waiting list to be converted to condos. In exchange, each would contribute a hefty sum — $20,000 — that would go toward new affordable housing development.
It seemed like a win-win proposition. But nothing is simple when it comes to San Francisco's housing politics.
Convinced that loosening the condo conversion rules would spur the creation of more TICs and further displacement of tenants from the city's dwindling rent-controlled housing stock, tenant advocates fought back and won.
Condo conversions can be regulated by the city, but there's no legal mechanism for challenging the creation of TICs. Tenants rights advocates believe that if condo conversions are limited, TICs may become less popular.
Amended legislation approved by the Board of Supervisors last week calls for a 10-year moratorium on all conversions after the one-time flood, lifetime leases for any tenants in buildings that do become condos and limits on who can convert when the lottery resumes.
Although the law gives Zhao and other tenancy-in-common owners a chance to buy their way to condo conversion, the process largely would be frozen in the likely event of a legal challenge, leaving many owners in limbo.
In a city where nearly two-thirds of residents rent, the median market rate for a one-bedroom apartment is $2,700 a month — prohibitive for many low- and middle-income families. Tenancy-in-common units, which are more affordable than condos or single-family homes — are out of range for many, and tenant advocates maintain that each new unit detracts from the rental stock.
"I don't think we've solved the problem as a whole, but what we've done is send a very strong message to the real estate industry that this is still a tenant city," Sara Shortt, executive director of the Housing Rights Committee of San Francisco, said after Tuesday's vote.
But Supervisor Mark Farrell, who led the effort to help struggling TIC owners, called the compromise a "mess."
"We talk about keeping families in San Francisco. We might have a difference in opinion of how to do that. But killing home-ownership opportunities, to me, is ridiculous," he said.
The battle marks another front in a long war over housing in this dense, affluent city.
Although tenancies-in-common exist elsewhere, San Francisco's housing scarcity has made them much more prevalent here, said Lyssa Paul, an attorney who advises those who own the units. During the last tech boom, "they sort of exploded."
At first, only group mortgages were available. But some lenders now provide fractional loans so that one default doesn't pull other owners down. Rates on those also are relatively high, and the longest fixed-term available is seven years. Since the loans can't be pooled and sold to investors, few banks offer them.
Despite the restrictions, for many middle-income residents, "there is, quite frankly, no ability in this city to get into properties without TICs," Paul said.
Zhao and her husband chose their Richmond District unit in search of a good school for their son. They are not "greedy developers" — the enemy invoked by tenants-rights advocates. But most TICs once housed tenants in rent-controlled units. Some left on their own; some received buyouts; some were evicted.
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