New Considerations When Buying and Selling San Francisco Apartment Buildings

Ian O’Banion

Whether you are an owner of a San Francisco apartment building or an investor looking to acquire an apartment building in San Francisco, there are new rules to take into consideration at both the local and state level.

San Francisco — Community Opportunity to Purchase Act

The Community Opportunity to Purchase Act (COPA), enacted for the purpose of creating and preserving affordable rental housing in San Francisco, was effective June 3, 2019, but the rules were not published by the Mayor’s Office of Housing and Community Development until September 3, 2019. COPA gives certain qualified nonprofits in San Francisco a right of first offer to purchase any local apartment building containing three or more residential units before the apartment building is put on the market, as well as a right of first refusal if the qualified nonprofit’s initial offer is rejected. COPA also applies to the sale of vacant lots that allow for the development of three or more residential units (without the need for a variance or conditional use approval).

Under COPA, before an owner of an apartment building (or vacant lot that could be developed as apartments) can offer the building for sale, the owner must first provide notice to certain qualified nonprofits and give them the opportunity to make an offer to purchase. Currently, there are only six “Qualified Nonprofits” listed on the website for the Mayor’s Office of Housing and Community Development.