SAN FRANCISCO (CBS SF / AP) – Even in the crazy world of San Francisco real estate, the $ 475,000 voluntary ransom offered to one couple to evict from the apartment they have lived in for three decades has caught the attention of social media and local residents. residents.
The voluntary buyout is considered the largest in the history of the city and reflects the high cost of the apartment.
The tenants, a couple in their 60s with teenage children, recently paid $ 12,500 a month for an apartment with seven beds and eight bathrooms. It occupies most of the floor of a century-old building with panoramic views of the bay, the Golden Gate Bridge and the nearby Presidio Park. They refused to give their name.
San Francisco has one of the most stringent tenant protection measures in the country, prompting tenants to keep their apartments in the face of rising market prices. While California recently introduced rent controls and other tenant protections, San Francisco approved its rent control ordinance back in 1979 as a way to alleviate the city’s housing crisis.
This means that landlords can only raise a certain amount of rent annually by a certain amount, with the current increase being less than 1%. Landlords cannot evict tenants without a valid reason, such as non-payment of rent. Owners who wish to move into their own single family home must pay tenants for an exemption. The maximum amount that tenants in one apartment can receive for a move is $ 22,000, plus $ 5,000 for families with minor children or seniors 60 years of age or older.
In this case, no moving costs were charged; the landlord and tenants have reached a voluntary agreement on their departure.
Stephen Adair MacDonald, a lawyer representing the couple, said the reaction was split into a six-figure ransom, which is enough to buy a home in most parts of the country.
“The homeowner’s lawyers think this is outrageous, and the tenants are all excited, they think it’s great,” he said. But MacDonald believes the homeowner is the winner, as he can rent an apartment for $ 25,000 a month and recoup the redemption sum in just over three years.
“After that, there will be sauce, so this is a great investment,” McDonald said.
McDonald is also suing homeowner Friedman Properties on behalf of “fairly affluent” tenants in nine other apartments who have moved out since March, unable to withstand the constant noise and dust from ongoing renovations to the building.
Marty Friedman, listed as the company’s authorized agent, did not return a phone call seeking comment. His lawyer, David Wasserman, did not immediately respond to the email.
The Financial Times was the first to report on the agreement.
In 2020, the San Francisco Rentals Board filed over 300 tenant buyout applications. McDonald said the average buyout is $ 50,000, and that is rising given the difference between market rent and tenant’s length of residence.
San Francisco’s rents fell during the pandemic, but remains one of the highest in the country. The average rent for a one-bedroom condo is $ 2,750, according to Zumper’s rental platform. According to Redfin, the median home sale price is $ 1.5 million.
Tenant groups say that without rent controls, the poor and working class will be driven out of San Francisco before they can keep up with market rent.
Charlie Goss, who handles government affairs for the San Francisco Apartment Building Association, said homeowners are recognizing that rent control is part of doing business in the city. But there are times when wealthier tenants stick to rent-controlled apartments, he said. The association represents about 4,500 homeowners.
“Paying half a million dollars to a wealthy man who owned a rent-controlled apartment in a city with a housing shortage and an affordability crisis is like talking about how our local rent control is distorting the market,” he said.
© Copyright 2021 CBS Broadcasting Inc. All rights reserved. The Associated Press contributed to this report.