Commission moves HCO amortization ordinance to Board of Supervisors amid fierce public comment

The Building Inspection Commission on June 17 recommended that the Board of Supervisors consider an ordinance adding an amortization period to the Residential Hotel Conversion Ordinance (HCO), a step DBI and the city attorney prepared in response to appellate court rulings that the 2017 change from a 7‑day to 32‑day threshold constituted a compensable change of use.

Chief Housing Inspector James Sanbon Matsu framed the ordinance as a tool to preserve affordable single‑room occupancy (SRO) units, which serve elderly, low‑income and disabled residents. Deputy City Attorney Andrea Ruiz Esquide said the amortization period is intended to give hotel owners who lawfully invested in short‑term uses time to recover their investments; the ordinance adds a process for owners to request extensions and lists factors drawn from case law that the city would consider, such as investment amount, length of time investments have been in place, and suitability of investments for residential use.

The item drew extensive public comment with two clear blocs. Owners and managers from a range of SRO hotels argued the proposed 30‑day minimum (effective Jan. 1, 2022) and a multi‑year amortization schedule would eliminate their businesses and leave regular weekly renters homeless because many tenants cannot pay a month's rent or security deposit up front. Kieran Thakur, manager of the Aldridge Hotel, said the business model depends on weekly rentals and asked commissioners to vote no. Several other managers (Anish Patel, Vinay Patel, Jay Shaw, Manish Patel and others) echoed that concern.

Opposing commenters including housing advocates and the Central City SRO Collaborative argued SRO rooms are often the most affordable housing for extremely low‑income residents and urged faster implementation to protect tenants; one commenter said the delayed effective date (Jan. 1, 2022) was too long given urgent housing needs.

Attorney Ryan Patterson, representing an SRO hotel coalition, framed several legal objections: he argued the amortization period is too short, the proposed extension hearing procedure is vague, BIC may lack authority to adjudicate extensions and the Board of Supervisors needs to consider planning commission referral for land‑use category change. Deputy City Attorney Rob Capla responded to legal jurisdiction concerns by explaining that the BIC was created by charter and has authority to hear such appeals and extension requests in its administrative capacity.

Commissioners pressed staff and the city attorney on several practical questions: how to determine reasonable return on investment versus ordinary maintenance; whether EDRT or DBI determinations (for example, whether a foundation decision forces a return to the originally approved design) are binding; and whether rules and regulations can be developed within the amortization period. City attorneys advised that many specifics can be addressed in rules and regulations and that the commission's recommendation can carry caveats asking for clearer processes.

Commissioner Atisha Moss offered a motion stating the commission supports the policy intent of protecting tenants and the residential nature of SRO units, and to move the ordinance forward to the Board of Supervisors while requesting DBI development of rules and clearer processes for extension hearings. Commissioner Alexander Toot seconded. The commission voted unanimously to carry the motion and forward the ordinance with stated concerns.

Next steps: the commission’s recommendation will be transmitted to the Board of Supervisors for committee consideration (likely the land‑use committee), where the legislative process can refine amortization length, extension criteria and administrative procedures. DBI and the city attorney advised that rules and regulations could be drafted in the amortization period so owners know what information to submit for an extension request.