0403news
Uncertainty on Security Deposit Interest Rate
Last December, Joe Grubb, Executive Director of the San Francisco Rent Board, had quite a surprise when he went about setting the security deposit interest rate for 2004: the financial index used in determining the rate was gone! It turns out the Federal Reserve had abolished the index last year, and because the law regulating San Francisco’s security deposit interest rules was pegged to it, there was no mechanism to set the rate for 2004.
Two years ago that law was changed, so that every March a new interest rate was set for the following 12 months. But thanks to the Fed canceling the rate, San Francisco, for now, does not have a set rate for security deposit interest.
To solve this dilemma, Supervisor Aaron Peskin introduced legislation in late January to amend Chapter 49 of the Administrative Code. The legislation proposes using the six- month CD rate published by the Federal Reserve. Both tenant and landlord organizations have signed off on the legislation, and opposition is not expected.
If this legislation is approved as submitted, the rate
for March 1, 2004 - Feb. 28, 2005, will be 1.2 percent,
which is the same as the previous period. Although the
legislation will not become law until well after March
1, it includes a proposal to make the rate retroactive
to March 1. First, the
legislation will be referred to committee, then to the
full Board of Supervisors for two votes before the mayor
signs it, followed thereafter by a 30-day period before
becoming law. Any changes that arise during the hearing
phase will be made available on the Rent
Board’s Web site.
As this magazine goes to press, a massive battle is taking place at City Hall over Supervisor Chris Daly’s demolition ordinance. The proposal, a radical departure from current housing policies, was quickly ramrodded through the legislative process at the Board of Supervisors with little analysis done on its potential impact to San Francisco.
Daly’s legislation, a response to a proposal to replace Trinity Plaza at Eighth and Market Streets with modern apartment buildings, would prohibit the demolition of any building that contains over 20 units and is 50 or more years old. The only exception would be if the building required substantial rehabilitation.
The owner of the property had planned on replacing 377 rental units with 1,410 new apartments. The housing complex would have contained five mid-sized buildings, with 20,000 square feet of retail space and 1,350 parking spaces. The project would have replaced an aging building that once served as a motel, which many viewed as an architectural eyesore, disrupting the harmony of Market Street. According to John King, architecture critic for the San Francisco Chronicle, the provocative design of the new complex would have brought “a needed jolt for this troubled stretch of San Francisco’s most prominent street.”
But concerns over the displacement of rent-controlled tenants sent housing activists and Supervisor Daly scrambling to develop a plan that would block the project and all subsequent similar projects. Despite relocation fees and guarantees by the project sponsor to allow each tenant the right to relocate into the new complex, Daly’s legislation received eight votes when first heard before the full board.
There is hope that a compromise could still be worked out, and the legislation could be shelved. A second vote is expected in late February.