WITH JORDANNA THIGPEN
Photo by Jack
The Decline of the Middle Class - Part II
By Jordanna Thigpen
May 5, 2006
Several weeks ago, I wrote about union membership and how it
is essential to maintaining the middle class in this country.
It is my belief that our society needs economic diversity to
succeed. To have a robust economy, we must have workers of all
ages and ability, all income and education levels, and all interests.
A robust economy will ensure that our city can succeed in the
coming century. Unfortunately, the balkanization of the very rich
and the very poor - an economic trend developing across America
- is becoming increasingly apparent right here in San Francisco.
Electeds must remember that the middle class is essential to
the future of this City. We must have some leadership to protect
the middle class - the class of small business; the class of educators;
police, fire, and other union members; the class of the vast majority
of solo practitioners in every profession; the class of the vast
majority of American society.
The latest condo conversion bill, offered by Supervisor Peskin,
does not protect the middle class. Instead it unfairly penalizes
those who seek to commit to San Francisco through home ownership.
In fact, the repeated attempt to make home ownership impossible
is an assault on the middle class in San Francisco - the class
most likely to vote, incidentally.
Faced with a 30% approval rating, a Board desperate for a new
lease on life will likely support Supervisor Peskin's condo-conversion
bill next Tuesday, in the hopes that certain factions will drum
up support for certain candidates in certain elections this year
Supervisor Aaron Peskin has introduced a ban on condo conversions
in a variety of situations, including any building where Ellis
Act or OMI evictions resulted in the displacement of two units
or more - regardless of the age, income, health or socio-economic
status of the displaced tenants. Ostensibly, the proposal is aimed
at protecting low-income, senior, and disabled individuals from
This condo conversion bill has no provision for situations where
wealthy tenants are evicted to make room for owners with lower
incomes. Possibly the worst provision of this proposal is the
ex post facto clause - retroactivity to 1999. Ex post facto clauses
are rarely included in statutes, for good reason. Some theorize
that by making this condo conversion bill as extreme as possible,
Supervisor Peskin can then "negotiate" from there in
The argument in favor of the bill is that we are facing an "evictions
crisis." Examining statistics reported by the SF Rent Board
from 1996 to 2005 demonstrates the relationship between Owner
Move-Ins (OMIs) and Ellis Act evictions. In 1996 there were zero
Ellis Act evictions. The number of Ellis evictions then spiked
in 2000 at 440, during the height of the Dot Com era - but no
one can seriously attribute any statistical normalcy to anything
that occurred in the City during that period. Last year there
were 330 Ellis evictions in San Francisco. By contrast, OMIs have
declined since 1998, when they peaked at 1440. In 1999 a ballot
measure passed restricting OMIs - so owners resorted once more
to Ellis evictions, which dropped to a low of 83 in 2002 but have
increased every year since then.
Supervisor Peskin's condo-conversion bill attempts, in theory,
to rectify the steady increase of Ellis Act evictions. Why have
Ellis Act evictions increased? Seen in the worst light, it's because
of satanic landlords who seek to cruelly evict elderly, disabled,
or health-challenged tenants for pure profiteering. And no doubt,
some of the Ellis evictions that occurred last year fall under
the profiteering category. There will always be individuals who
are greedy, immoral, and despicable. Count on it!
But what about the rest? The Ellis Act is about one thing: the
landlord's right to go out of business. An owner of a flat has
a right to move back into it. He pays the mortgage. He takes the
risk of owning. He maintains the property. He owns the property.
Tenants are protected in San Francisco through rent control -
which could probably stand to be strengthened by extending it
to post-1979 construction - and through payments which tenants
are entitled to in the event of certain evictions. In fact, the
1st District Court of Appeal just upheld higher payments in the
event of an OMI - another Peskin proposal which passed and was
immediately challenged in the SF Superior Court. Likely, the fate
of this condo conversion bill, if it passes, will be another lengthy,
expensive court battle - which will expend city resources that
could be going to human services. Is that "progressive"?
Real progressives facilitate progress, not an endless cycle of
paperwork for Fox Plaza.
The City already tried to ban TICs once - and this was rightfully
declared unconstitutional by the courts in 2002. If the condo
conversion bill passes, TICs will become the only choice for potential
homeowners. The market, and the financial institutions, will follow
suit. There is already a new loan product for financing TICs,
to take some of the risk out of the situation.
The Board grossly underestimates the middle class determination
to become more prosperous and provide a home for one's family.
It is bourgeois? Of course, and it's not unconscionable. That's
what being middle class means: providing stability, economic growth
and vitality, and investment in the community, in part through
home ownership. The middle class is an important and necessary
part of the San Francisco economy.
Some people will never own a home in their lives. And for some
people, economically, it doesn't make sense. But for the vast,
silent majority - the majority that does not have the time or
inclination to attend six hours of public comment and make their
presence and their economic power known - home ownership is the
final, logical manifestation of the American Dream. It is a dream
that will not be deferred.
District 6 resident Jordanna Thigpen is an attorney, small
business owner and President of the San Francisco Small Business
Commission. You can usually find her at work and she doesn't get
to Ocean Beach often enough. Email Jordanna at email@example.com.