Treasure Island Exempt from
Rent Control
S.F. ordinance won't apply to housing units
Rebecca
Smith, Chronicle Staff Writer
Saturday, March 6, 1999
When San Francisco starts renting out former Navy housing on Treasure Island this May, tenants may be in for a surprise.
The two-, three- and four-bedroom apartments are not subject to the city's own rent control laws.
That is because units with rents set by government agencies are exempt from rent control under the 1979 law. The Treasure Island units are exempt because they are controlled by the Treasure Island Development Authority, a city agency.
Although Treasure Island rents are starting at below-market rates, such as $1,560 a month for a two- bedroom unit, there is no guarantee that they will not go higher than what rent control would allow. This year, rent hikes are capped at 1.7 percent for occupied units.
Tenants' advocates say they are uneasy with the exemption.
``It doesn't seem right that the city doesn't have to observe the rent cap,'' said James Tracy, organizer for the Eviction Defense Network, a tenants advocacy organization.
City officials say they have no intention of raising rents, at least during a seven-year period in which they have hired John Stewart Co. to manage the more than 700 units on Treasure and Yerba Buena islands.
``We're confident we will never gouge people,'' said Annemarie Conroy, executive director of the Treasure Island Development Authority. ``If we'd wanted to do that, we could have set higher prices to begin with.''
Stewart Co., which is managing the Treasure Island properties for the city, said it will be two years before all units are refurbished and leased. The city is expected to net $50 million from the housing during the next seven years.
``No one is interested in doing anything that would attract negative attention to this project,'' said Loren Sandborn, vice president for Stewart Co. ``Both sides are satisfied with the returns that are forecast.''
But tenant advocates say prospective renters should beware, especially if they are giving up rent-controlled units to move to the former base. Technically, there is nothing that prevents the Board of Supervisors, which has jurisdiction over the development authority, from deciding to raise rents once annual leases expire.
The Navy is leasing the property to the Treasure Island Development Authority for 15 years. Meanwhile, the city is negotiating with the Navy to get the property deeded over to the city.
Tenant advocates say they would like the city to voluntarily abide by its own rent-control provisions.
``We feel the city should adopt guidelines that conform to the ordinance to assure tenants their rights will be protected,'' said Ted Gullicksen, manager of the nonprofit San Francisco Tenants Union.
Among other things, the ordinance prohibits evictions unless there is ``just cause,'' such as nonpayment of rent. It restricts owners' ability to evict and occupy units in multiunit buildings, and it caps rent increases based on the cost of living.
Even if the city does not voluntarily follow its rent laws, tenants probably are better off with the city as a landlord than a private developer, Gullicksen said. ``Rents would have started out much higher if it had been entirely left to private developers,'' he said.
Stewart Co., a subsidiary of Edison Capital and affiliate of Southern California Edison, recommended that Treasure Island rental rates be set at roughly 30 percent of the median monthly income for Bay Area households.
Actual rents, ranging from $1,560 for two bedrooms to $2,160 for a four-bedroom place with a view, are $500 to $1,000 below market price for comparably sized units in San Francisco. But some longtime San Francisco renters may be paying even less in rent-controlled units.
Stewart Co. manages other units that are exempt from rent control, including about 300 units at the Presidio that are federally administered through the Presidio Trust.
Treasure Island rents will be much lower than they are at the Presidio, where they range from $1,575 for a two-bedroom apartment to $5,200 for a five-bedroom house. The Presidio is close to services, and all the stores and restaurants on Treasure Island were closed when the Navy left.
Even if the city were tempted to use Treasure Island as a cash cow,
its lease from the Navy says that all revenue generated on Treasure and
Yerba Buena islands must remain there. So the city could not decide to
fix the Muni, for example, by raising rents.