Op-ed: COPA challenges displacement
San Jose residents demonstrate in favor of the Community Opportunity to Purchase Act, or COPA. Photo courtesy of Affordable Housing Network of Santa Clara County.

    The op-ed against COPA by Neil Collins of the Santa Clara County Association of Realtors is misleading, factually inaccurate and frankly irresponsible.

    The Community Opportunity to Purchase Act (COPA) is a policy that would allow nonprofit housing providers engaged with and supported by the current tenants to be able to make the first offer whenever a rental property is offered for sale. Tenant engagement means deep tenant organizing, education, technical assistance and pathways to asset building and ownership.

    Collins portrays COPA as an outlandish scheme invented by rogue actors in the San Jose Housing Department. In fact, it is an innovative approach to addressing displacement, homelessness and racial inequality that is being explored by cities all across the country. The housing department has been working on COPA because the San Jose City Council directed it to do so by a 10-1 vote in 2020.

    Collins’s claim that COPA “depresses property values” is not substantiated by any data from the two cities where it has already been put in place: San Francisco and Washington, DC. It also defies common sense. COPA only applies to rental properties. The overwhelming majority of sellers would only be impacted by the 15-day waiting period to allow nonprofits to submit a letter of intent. Nothing prevents an owner from integrating these 15 days into all the other normal activities that go into preparing a property for the market, including inspections, repairs, staging, photographs and more. Any actual “delay” would be negligible.

    A relatively small number of rental property owners would be required to wait 25 days for a nonprofit to prepare an offer after it expresses interest. The 120-day period for closing escrow would only apply to sellers who voluntarily choose to accept a nonprofit purchase offer. Nothing in COPA requires any owner to accept any offer from a nonprofit, and nothing requires an owner to sell in the first place. Even among rental owners, it does not affect single-family homes or duplexes where the owner lives on the property, and does not apply to transfers to immediate family members. COPA would have no impact on individual homeowners at all.

    Collins calls San Francisco’s COPA program a “failure” because it has “only” preserved 234 units since 2019. We suspect that the 234 families who avoided displacement or homelessness because of COPA would disagree. But 234 is not a bad number considering the fact that COVID-19 brought a lot of real estate activity to a standstill during that time period. It’s likely to rise substantially after the pandemic and as new state and regional revenues become available.

    The fact that Collins faults COPA for not producing “one new unit” of affordable housing in San Francisco is a rhetorical sleight of hand. Preservation is not supposed to produce new units. Preservation is one of the “three Ps” of housing policy generally accepted by virtually the entire affordable housing community: production, preservation and protection. The purpose is not to add new homes, but to prevent the loss of existing ones.

    The Bay Area lost 32,000 affordable homes a year between 2012 and 2017, when owners raised rents to levels that were no longer affordable. Preservation transfers ownership to nonprofits, and in some cases the tenants themselves, who then remove the units from the speculative market and keep them permanently affordable.

    What is most disturbing, however, is that Collins concentrates his criticism on the very nonprofits that are actually trying to do something about the city’s catastrophic housing crisis. He uses words and phrases like “handpicked” or “seems like a conflict of interest” or “too much power” to suggest that nonprofit activity is not only ineffective, but actually somehow shady or suspicious.

    His concern is apparently that nonprofits will unfairly “grow their housing portfolio.” In fact, that is the whole point of COPA—to move homes out of the speculative market and into the nonprofit sector, and keep rents low and affordable in the process. Collins criticizes San Francisco COPA because it does not grow nonprofit portfolios enough. He can’t have it both ways.

    There is a fundamental difference between nonprofit and for-profit entities. Nonprofits are actually legally prohibited from making a profit. Any proceeds are required to be invested to further their mission, and cannot accrue to any individual. When a for-profit entity grows its market share, its purpose is to use that power to increase returns to its owner, shareholders and investors. When a nonprofit increases its portfolio, its purpose is to serve more residents, keep rents more affordable and prevent more homelessness. We humbly submit that this is a good thing, not a bad thing.

    In fact, the entire article by Collins barely mentions the fact that San Jose is suffering through an epic crisis of housing affordability, displacement and homelessness, and that this crisis is disproportionately impacting communities of color. This is not just a question of a few individuals hitting “a rough patch in life.” What exists in Silicon Valley and many other areas across California and the country is a massive, systemic mismatch between the rents charged by owners and the incomes earned by renters.

    The Santa Clara County Association of Realtors may find this easy to ignore, but San Jose councilmembers and policymakers who have to answer to the pain and suffering of their constituents do not have that luxury. COPA is an effort to turn the tide on this crisis by beginning to build a robust nonprofit sector dedicated to keeping rents affordable.

    Josefina Aguilar is executive director of South Bay Community Land Trust. Sandy Perry is president of Affordable Housing Network of Santa Clara County. Carmen Brammer is a political strategist and community advocate.

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