News & Research Archive

Local Election Results Not Good For San Francisco Real Estate

Nov 20, 2006

When San Francisco voters passed Proposition H (Relocation Assistance for No Fault Tenant Removal) earlier this month, they moved closer toward killing the American dream of home ownership. Now landlords will be forced to pay up to $22,000 to remove tenants from their properties, regardless of whether the tenants are on a long-term lease or simply renting month to month.


The issue at hand is greater than just home ownership in the long run; it speaks to our city’s ability to upgrade its aging housing stock. The average home in San Francisco is 63 years old; most lots do not have the room for single-family residences to expand. Proposition H will make it harder for owners to spend money to upgrade their properties, leading inevitably to the decay of existing residences.


An example of the potential blight can be found in the lower Sunset. “Sunset Juniors” were entry-level homes built after World War II for returning military and young families. These homes were built quickly and cheaply, intended to last about 50 years. Seven decades later, some of these homes have been upgraded, but some remain in their original condition. If you drive through this neighborhood, you can witness the overall decline of the area, driven by the many homes that have not been improved.


San Francisco needs to address its housing stock problem. One solution is to offer property owners with long-term tenants low-cost loans to upgrade their properties. Potentially greater market value would create an incentive for landlords. Tenants would also benefit because their living standard would increase.


The RAP program, implemented in the 1970s, was a combination of low-interest loans and tax credits to tempt landlords to upgrade their properties as well as to upgrade sidewalks and landscaping. Many Eureka Valley apartments, vacated during the previous decade’s exodus of families to the suburbs, were renovated through RAP loans. San Franciscans need to consider implementing a similar measure to create incentives to maintain and update our existing housing stock or face a housing blight.


Written by: Hans Hansson


Hans Hansson is President of Starboard TCN Worldwide Real Estate Services as well as a member of the Board of Directors for TCN Worldwide Real Estate. Hans has been an active broker for over 21 years in the San Francisco Bay Area and specializes in office leasing and investments. If you have any questions or comments please email or call him at (415) 765-6897. You may also check out his website,

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