Political leaders slam Housing Dept's COPA program as slow, costly, ineffective

In a SJ Merc op-ed, former councilmember Johnny Khamis sharply critiqued a strange new proposal from SJ's activist Housing Dept that would wildly favor local housing nonprofits over Mom-and-Pop housing providers in future property transactions. CM's Dev Davis and Matt Mahan express their concerns, and D3 CM hopeful Irene Smith provides a small business housing provider's analysis.

Johnny Khamis:
Under COPA, any rental property owner, whether they are a mom and pop owning one rental unit or a corporation owning 200 units, would be forced to provide the city and nonprofits over a month with the first right to submit an offer before the public has access to purchase the property. Then, if the nonprofit matches a competing public offer, the property owner would be required to accept the nonprofit’s offer, with the possible risk that terms and conditions have not been met. Meanwhile, all this would be accomplished with the creation of an even larger bureaucratic process that would be run by the San Jose Housing Department.

A whole department will need to be set up to regulate all housing sales, and it will need to be empowered to give and collect fines for people who sell their units without following these new regulations. New departments are often expensive to run with city employees and may not result in a single unit being purchased through the new regulation. In fact, in San Francisco, where COPA has been implemented for the last two years, only 37 units have been purchased by the city as a result of this unproductive ordinance.

There is a lot of money coming into the Housing Department from federal, state and new local tax sources to help alleviate the housing crisis. Let’s not waste it all on inventing a new bureaucratic system for commerce that will not yield any additional inventory. Instead of inefficiently utilizing taxpayer resources, the City of San Jose can mitigate its inability to find properties by hiring a brokerage. The broker can proactively find properties without disrupting the open market while saving time and money for the city and nonprofits.

Dev Davis: D6 Councilmember:

I am very concerned about COPA, because it adds unnecessary bureaucracy to the housing market. COPA will do nothing to encourage housing supply. Making property transfers take longer increases the cost of each transaction and discourages additional housing supply -- exactly the opposite of what we need to do. This is just one more example of proposals from the Housing Department hurting our housing supply.

Matt Mahan, D10 Councilmember:

I am concerned by the prospect of yet another layer of bureaucracy imposed on anyone wanting to sell residential rental property in San Jose — especially when data from San Francisco clearly shows us that COPA has a negligible impact on the creation of new affordable housing. We ought to spend our scarce staff resources on programs that create real impact and ambitiously increase our housing stock to alleviate our supply crisis.

Irene Smith, candidate for D3 Council seat:

COPA is an attack on homeownership itself because it reduces basic property rights and instead, we should implement ways to increase homeownership at all levels. In addition, mom and pop housing providers will become targets of COPA. They are the ones who own the majority of rent-controlled affordable housing that does not require taxpayer subsidies in San Jose. I am one of those small business mom and pop housing providers as I own, manage, and clean older rentals. COPA will target older buildings owned by mom-and-pop small businesses because these will cost less to buy.

If specialized buyers are allowed to purchase these properties at an unfair advantage because they are privy to confidential sales information and are given the first right of refusal at multiple points in the sales process this will further erode naturally occurring affordable housing. COPA may say it is to help, but the biased impact will be singularly felt by mom and pops, not regular sellers. This developing law unfairly disadvantages mom and pop, small businesses and reduces naturally occurring (non-government taxpayer subsidized) affordable housing as an unintended consequence.