Many Tenancies, Each With a Position
In a two-unit building the tenancy question is a conversation. In a Tenderloin or SoMa apartment building or residential hotel it is a project, because every covered unit carries its own position and every displaced household has to be dealt with individually.
Where the Rent Ordinance covers the building, each of those households may have a right to be offered their unit back within 30 days of repairs being completed, at their prior rent adjusted only by allowable increases. Multiply that across a building and the restoration is not simply a construction project; it is a construction project with a set of legal obligations attached to its completion date. The rules layer is on our page covering units, tenants and demolition control.
What Makes a Downtown Building Harder Than a Smaller One?
The Building Cannot Easily Become Something Else
Tenderloin and SoMa buildings date largely from the 1900s through the 1920s, many rebuilt after 1906. Planning Code Section 317 requires Conditional Use authorisation for any loss of residential units, and Building Code Section 103A.3 imposes a 5 year permit restriction after an unlawful demolition. Each covered unit carries a 30 day offer obligation once repairs complete.
The second constraint is that reducing the unit count is a Planning Commission decision. Section 317 requires Conditional Use authorisation for any permit resulting in the loss of a residential unit, and on a building with many units the arithmetic of a conversion or merger runs straight into it.
Residential hotel stock carries its own additional layer of protection beyond section 317, which is worth establishing early on any such building rather than discovering during design.
Can a Damaged Apartment Building Be Converted to Fewer, Larger Units?
We publish no unit counts, rent figures or conversion guidance for downtown buildings. Each is specific to the property, and residential hotel status in particular carries requirements that need establishing building by building.
What This Does to the Number in the Tenderloin and SoMa
Two effects pull in the same direction. The income a buyer underwrites is the existing rent roll rather than market rents, because the tenancies return. And the flexibility a buyer might otherwise pay for — converting, reducing units, repositioning — is constrained by a discretionary approval they cannot assume.
The result is that Tenderloin and SoMa fire-damaged buildings price on their actual, constrained economics. Any buyer whose number implies otherwise has not understood what they are acquiring, and that number will not survive their own diligence.
What Is My Burned Tenderloin or SoMa Building Actually Worth?
Downtown in Context
The other area where the Rent Ordinance dominates and rent gaps are widest, though in smaller buildings, is covered on our page about a neighbourhood of older flats. Where buildings hold only two or three units and the file is correspondingly simpler, see our page for smaller buildings with two or three units.
Downtown Questions
Half My Tenants Have Not Been in Touch Since the Fire.
Silence is not a waiver. The obligation is to offer the unit back after repairs, so a household that has not been offered anything has not declined. Document what you have done for each.
Is My Building a Residential Hotel?
It has a specific legal meaning with its own protections, and it is worth establishing definitively rather than assuming from how the building is used. It changes what may be done with the property.
Will You Buy a Large Damaged Apartment Building?
Yes. The tenancy density and the planning constraints both affect the figure, and we would rather set that out plainly than quote a number built on rents that will not materialise.