San Francisco Community Opportunity to Purchase Act (COPA) in a nutshell
If you or a client is looking to buy or sell a multi-unit building, you should know that under a newly minted law, qualified nonprofits must be given preferential treatment in the purchase of eligible properties and given deference when matching other offers from private buyers.
In an effort to solve the affordable housing dearth and give “qualified nonprofits” the first chance of permanently protecting rent-controlled buildings from the speculative market, the San Francisco Board of Supervisors unanimously voted to enact the San Francisco Opportunity to Purchase Act (COPA).
Under COPA, sellers of residential buildings with 3 or more units must notify a vetted pool of nonprofit organizations of their intent to sell the rental property, essentially giving the nonprofit buyers the right of first offer - these organizations are entitled to be first in line when multi-unit buildings go on the open market, but it doesn’t end there.
Although the seller is not obligated to hand the keys over to the nonprofit when that group expresses an interest and can entertain other offers from other buyers, the nonprofit must be given the opportunity to match a competing offer from a private party - in legalese, we call this the first right of refusal.
Listen to presentation on COPA
Daniel was privilaged to give a talk on this process, and you can listen to the recording to get a baseline understanding on the obligations that accompany the newfangled law.
Don't have time to watch the movie? Download the slides.
Understand San Francisco's new multi-family building legislation and explore the impact of COPA on sellers, buyers, and real estate brokers.
A rather exclusive bunch
The Mayor’s Office of Housing and Community Development is responsible for promulgating regulations, with a due date of September 3, 2019. The selection of qualified nonprofits is well underway but Bornstein Law predicts it will be a shortlist we can roll off our tongue.
Successful candidates must not only demonstrate the wherewithal to purchase a property, but also a commitment and experience in providing housing to lower-income residents, a tall bar to hurdle. Translation: the club of nonprofits will essentially be an oligarchy.
Till death do us part? Thinking in terms of post-purchase
Deed restrictions will be placed on the building and so once the multi-unit building is sold, it becomes rent-restricted housing in perpetuity - the new landlords cannot set rents that exceed 80% of the Area Median Income.
We hasten to say that existing tenancies will not be impacted - if a tenant is paying market rent when the property is exchanged into the hands of the nonprofit, the rent regulations will not be imposed on the tenant already implanted.
There is much we know about COPA and some loose ends need to be tied up, but you can count on Bornstein Law for answers.
Daniel offers some insights and premonitions into the new law in this video.
We can't predict the future but we can do the next best thing by giving you a glimpse into what is known about COPA and the variables that are yet to be worked out.'