Thousands of San Francisco’s so-called soft-story homes — three-story or higher wood-frame buildings built before 1978 — are vulnerable to earthquakes. On Tuesday, the city’s Board of Supervisors will look at a proposal to mandate earthquake retrofitting of these structures by 2020.

Chris Poland, structural engineer, chairman and senior principal at Degenkolb Engineers and member of the advisory group that helped draft the ordinance
Charley Goss, government affairs officer with the San Francisco Apartment Association and member of the advisory group that helped draft the ordinance
Noah Arroyo, journalist with San Francisco Public Press, a KQED News Associate

  • Alex Alshanetsky

    Perhaps an earthquake tax on properties could help San
    Francisco prepare funds to rebuild after an earthquake. A similar tax exists in New Zealand and is currently helping to finance the rebuilding efforts following the Christchurch earthquake. Tax breaks for property owners who retrofit their buildings may in turn help incentivize owners to retrofit their buildings.

  • Patrick

    I am a landlord
    and do not want to have an unsafe place, but just got through the real estate
    debacle and managed to keep my place. My credit is shot, so a loan is doubtful. $20k is still expensive for an underwater,
    rent control property. $60k is really tough.

    • Ehkzu

      The city should guarantee loans for the retrofit and let you pass through the cost to tenants amortized over a 20 year timeframe–including rent-controlled units of course.

  • Fay Nissenbaum

    The dirty word you are not saying regarding apartment buildings is the word “passthrough” So in a five unit building, assuming $20,000 cost, that means $4000. per tenant, divided by 5 (for the number of units), that’s an increase of $333. per month. And that assumes that $20, 000 maximum figure is realistic which many think is ludicrously low.

    The city gives away our tax dollars to homeowners – no matter how wealthy they are – to install solar collectors, so why not apply the same give away to homeowners to earthquake their buildings?

    The City

    PS- And now all the in-law units will haunt this issue, as those folks are forced to move out to do work in garages

  • Fay Nissenbaum

    This show was remiss in not having a representative of the tenants’ point of view. Also, Forum erred in sticking this topic in at the end of a pledge-break shortened show. Michael, you blew this one. Revisit it soon to do it justice and use REAL numbers not pitchman’s lowballs like that $20,000 figure.

    • NoahArroyo

      It’s true, the cost initially floating around this show was $10K-20K. Michael threw the number out there in a general sense, and then his guest Chris Poland used it again, but specified it was $10-20K “per unit.” This is accurate, though not the whole story. So, this legislation would affect buildings with 5+ units. That means that theoretically the cheapest projects will be between $50K-100K. I emailed this fact correction during the show, and Michael Krasny read it out loud. It’s an important distinction, and you’re right, it deserves to be underlined.

  • Ehkzu

    How about an opt-out provision for any building owner or homeowner’s association–with the proviso that in the event of a quake, no city services will be allocated to helping the building in question or its residents, with the owner(s) required to notify residents of same?

  • As a soft story building owner I am all for retrofitting my building and I think it is the right thing to do. However, most owners can’t afford to do this, and I have looked at the current options that the city provided. Here is my story. I looked at retrofitting my building and I got several quotes. The least expensive was 85k and could go up to 95k from the cheapest contractor. With a commercial loan for a 4 units+ owner occupied building your loan to value needs to be 75% if your luck you might get a refi at 85%. This means few landlords have the option to just barrow the money and get the work done and few banks lend because you want to do this type of improvement. Yes you would get a little property tax relief from the city and a nominal reduction in insurance but not nearly what you need to make up the expenditure. You also have to think if you really want to take on this debt load which could prevent you from doing other investments. Now if you look at the Capital Improvements for Seismic work under rent control; “the amount of the pass through may not exceed the max of $30.00 or 10% of a tenant’s petition base rent in any 12-month period.” On a 6 unit apartment building that is an extra $10k per year I would really need to cover the cost of taking out a loan to pay for the retro fit. The other issue with the pass through is you have to do the work first, then file the pass through and tenants could file for a hardship and the rent board could decide that they don’t have to pay. Who in their right mind would take on that risk? Therefore the owner can’t know what he will get in the pass through and it would never be enough to recoup the expense anyway. Renters need to know that they have a stake for seismic upgrades and that is their apartments are safer places to live and if the big one hit, it’s more likely they won’t get displaced. If you want owners / landlords to seismically retrofit a soft story this is what the city should do the following

    1. Allow renters to ask landlords or the rent board for seismic work and hold increased rent money in an escrow account only to be used for such work. Renters could collectively propose the amount the entire building could pay to help in the retro fit cost. Renters get a safer place to live.
    2. Allow the owner to file for a pass through of 100% including interest prior to the work starting with and estimated amount of the rental increase approved by the rent board. The pass through could be 10 to 20 years period based on the amount of a retrofit estimate from a licensed contractor.
    3. Allow rent increase to be a percentage increase with no maximum limit based on the time period of 10 to 20 years. Total cost$200,000 including interest over 20 years is 10k per year, $883 more per month in total rent or $138 increase a month in a 6 unit building. For some this is expensive but what would it cost renters if the house is un-inhabitable or has to be torn down or you lose your life.
    4. Have the city work out a loan guarantee with some banks so that an owner can borrow the money for the retro fit, so banks would relax the 75% to 85% loan to value rules with the sole purpose of retrofits. If the building is sold the bank is paid aback in full.
    5. City needs to inform tenants about the need or retrofitting buildings and it is in their best interest to allow this to happen and rents to go up so that the work can be done. As an owner my revenue is locked in because of rent control and pass through restrictions. If you look at the financials now it does not make sense for the owner to take on all this risk when I know I have insurance that will take care of me. There is no such safety net for renters.

  • NoahArroyo

    The SF Public Press has published:

    -Coverage of today’s Board meeting, at http://bit.ly/XmBQuX
    -A breakdown of the legislation, at http://bit.ly/12qvL8j
    -A copy of the full legislation, at http://bit.ly/VH1j87

  • Fay Nissenbaum

    In complete contrast to today’s Forum, sfgate today reports that cost per building will be $60,000 to $130,000 each building! That’s many times – as much as ten times – greater than the bee-ess we were fed today. “Fed up” is how we feel about these fee passtroughs that make it harder to survive day to day living here.

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