SEC. 1399.1. PURPOSE.

This Article 11 is enacted to establish a method for converting parcels containing 2 or more existing residential units into limited equity housing cooperatives. The conversions allowable under this Article 11 are intended to:

(a) promote the expansion of residential ownership opportunities for existing tenants by making conversions into limited equity housing cooperatives possible at a level they can afford because limited equity housing cooperatives are widely recognized as vehicles to:

• (1) provide affordable home ownership opportunities for very low and low-income individuals and families.

• (2) allow low-income individuals and families the ability to acquire a limited ownership interest in a building.

• (3) participate, through the voting rights granted to each share owner, in the management of the limited equity cooperative, and

(4) restrict the annual appreciation of membership shares to increases not to exceed 10 percent of the original consideration paid for the share in order to provide appreciation for the share owner and continued affordability for other low-income households at resale;

• (b) balance the interests of home ownership with the need to protect existing tenants from displacement;

• (c) increase the availability of affordable home ownership opportunities citywide;

• (d) target affordability levels that reflect the needs and income distribution of the City's residents; and

• (e) improve the physical condition of the converted housing stock without fueling neighborhood gentrification. (Added by Ord. 319-08, File No. 081513, App. 12/19/2008)