Department of Building Inspection Annual Report Fiscal Year 2016-2017 - Page 21

Legislative History Reports and Records Required The Residential Hotel Unit Conversion and Demolition Ordinance (HCO) was originally adopted by the Board of Supervisors as Ordinance No. 330-81 on June 26, 1981. The Board found that the Ordinance was necessary to preserve the existing stock of residential guest rooms as housing for low-income, elderly, and disabled persons. The Board noted in 1981 that the residential guest room housing stock had been decreasing at an alarming rate due to vacation, conversion, and demolition of these units to tourist and other uses. The Board found that this reduction created a housing emergency and adopted Chapter 41 of the S. F. Administrative Code to minimize the conversion and demolition of residential guest rooms. All residential hotels which do not have documentation on file with the Department of Building Inspection indicating that the hotel is operated by a nonprofit (recognized by the IRS) must file an Annual Unit Usage Report on November 1 every calendar year. These residential hotels must also maintain daily logs, weekly reports, and corresponding receipts for up to two years. The Certificate of Use indicating the number of residential and tourist guest rooms assigned to the hotel must be posted at the hotel lobby along with the weekly report. Residential Hotel Certification Beginning in 1981, the HCO required all hotel and apartment house owners and operators with guest rooms to report to the Bureau of Building Inspection (now the Department of Building Inspection) how the guest rooms were being used on September 23, 1979. If the guest room was actually occupied by a tenant for 32 consecutive days or longer, the room was designated as residential. If the guest room was occupied for less than 32 days the room was designated tourist. The property owner/operator had fifteen days to appeal the certification of these designations by the Bureau of Building Inspection. Residential Hotel Description A hotel is considered residential if it has one or more residential guest rooms as certified by the HCO. Approximately five hundred and two (502) hotels are designated residential by Chapter 41 of the S. F. Administrative Code, which includes those hotels owned or operated by nonprofit organizations. The overall number of residential hotels can fluctuate because the Ordinance permits a hotel to change its residential designation upon approval of a Permit to Convert. Residential guest rooms can be legally converted to tourist uses with approval by the Director of Building Inspection. The Permit to Convert requires the hotel owner to replace the converted residential guest rooms with in lieu (replacement housing) fees, the construction of new units, or the creation of new residential guest rooms in an existing building. 21 Residential hotel owners and operators are prohibited from renting, or offering to rent, any rooms certified as residential guest rooms under the HCO for a “Tourist or Transient Use”. A “Tourist or Transient Use” is defined as any use of a guest room for less than a 32-day term of tenancy by a party other than a permanent resident. From May 1 through September 30, residential hotel operators may rent twenty-five percent of their residential guest rooms on a nightly basis provided that the guest room was occupied for at least 50 percent of the period of October 1 through April 30, and is now legitimately vacant and offered for residential use first. However, a residential hotel that fails to maintain the requisite records or illegally converts residential guest rooms will not be eligible for temporary tourist rentals for twelve (12) months. Residential hotel owners may apply to rent residential units for tourist use during the winter months. Within the last five years, no winter rentals have been applied for pursuant to Sections 41.19(a) (3) and 41.19(c) of Chapter 41 of the S. F. Administrative Code. The Housing Inspection Services Division maintains files on residential hotels which are available for public review. These files contain documentation required by Chapter 41 of the S. F. Administrative Code, such as the Certificate of Use, filed Annual Unit Usage Reports, and documents regarding enforcement activities. Funds deposited into the San Francisco Residential Hotel Preservation Fund Account are transmitted to the Mayor’s Office of Housing for disbursal pursuant to Section 41.13 of Chapter 41 of the S. F. Administrative Code. During this fiscal year one Permit to Convert was approved which required replacement housing fees to be deposited in the San Francisco Residential Hotel Preservation Fund Account. Summary of Enforcement Efforts Delinquent notices are sent to residential hotel owners/operators who have not filed their Annual Unit Usage Report (due November 1 every year) or are missing other historical information. Department of Building Inspection, Fiscal Year 2016-2017 Annual Report 21