06/11/1980 Meeting - Laserfiche WebLink

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e Mr. Delay stated the proposal was to offer a way to deal with the problem. He is not necessarily locked into any particular thinking. Mr. Lieuallen asked about amending the ordinance to exempt a certain class of property based on financing mechanisms. Ms. Niven responded that whether it is financed that way or not, the owner will run out of depreciation in seven or eight years. Every time a cut-off date is established, it sets a climate of encouraging conversion and dis- couraging new construction. Ms. Schue asked' if there was any discussion toward a reservation or arrangement system whereby the investor would be able to know prior to acquiring financing whether or not conversion would be allowed. She stated she is concerned about the availability of rental housing. Ms. Niven responded it is very difficult to know who and where the investors are. The suggestion had been made that the intent be registered with the Planning Department, but not imposing the formula would be a better solution. Housing investors are not necessarily local people. Mr. Delay noted that in terms of the current conditions due to the carry-over aspect, there would appear to be no impending effect of the conversion formula in the near future. Novel techniques have been used in other areas such as Oakland, California, where, builders are issued conversion certificates for each unit constructed which can be traded or sold which puts them back in the free market- place. The investors who are involved with new multi-family conversion would receive additional value, thus encouraging additional new construction. Annual reports may be a reasonable compromise. New multi-family housing construction can be encouraged and additional construction of this nature can be added to the list of priorities charged to the Joint Housing Committee. Robin Johnson stated the ordinance contains a $500-per-unit tax upon conversion to create rental housing development replacement funds. Staff could not reach a consensus on this proposed tax. The main argument in support of the tax is to contribute to future multi- family unit development. The primary argument against the tax came from the Joint Housing Committee who felt that most, if not all, of these costs would be passed on to the buyers of the converted struc- tures. According to the committee, this tax runs counter to existing City policy concerning housing and its availability to all segments of the population. Converted units are one of the most inexpensive forms of ownership available today with many purchasers being first-time home buyers attempting to develop equity in housing. The conversion fee is inequitable and contrary to City policy since it would be passed on to a group of low- and middle-income buyers, least able to afford an increase in the price of their units. The committee raised the basic question of the appropriateness of taxing a particular group of buyers of converted units (relatively lower-income) to provide funds to build housing for another group of renters (also relatively lower-income). e e 6/11/80--5