HAYWARD — A compromise being negotiated between city officials and apartment building owners could make it easier for owners to convert apartments into condominiums next year.

But the proposed change in the city's longstanding condo conversion law also would require those owners to make the buildings more seismically sound before they can put units up for sale.

"We struck what we think is a reasonable compromise," said City Manager Jesus Armas, who has negotiated for more than a year with property owners who want to transform their apartment complexes into market-rate condos.

The compromise means nothing unless the Hayward City Council votes to approve it early next month. Most council members have expressed support for condo conversions, at least in theory, because conversions increase the stock of owner-occupied housing in the city.

City officials are seeking to strength-

en certain portions of the law, which is more than 25 years old, while owners hope other portions will be weakened to make conversions more financially feasible.

Mayor Mike Sweeney, who has not seen the draft compromise, said the burden is on proponents of the revision to persuade him and the council that the law needs changing.

"The standards that have to do with life-safety factors are the most important to me," Sweeney said. "I would also be opposed to changes in the standard that force senior citizens out of their homes."

The chief proponent for revising the law is Chris Zaballos, whose family's property management company owns Creekwood Apartments on City Center Drive, and several other Hayward apartment complexes.

Zaballos said he agrees with one proposed revision that would force owners to retrofit "soft-story" apartment buildings, which have garages tucked beneath the housing and are some of the most dangerous buildings to be in during an earthquake. Creekwood Apartments, which opened in 1978, are soft-story buildings.

"We don't have a problem with that. Some of that needs to be done," said Zaballos, who noted that his company already voluntarily retrofitted its Walnut Hills Apartments on Walpert Street, built in 1965, by installing steel frames in all the garages.On Tuesday, Zaballos met with Armas, Fire Chief Larry Arfsten, the city economic development director and other city staffers to work through the proposed revisions.

A reporter who attempted to attend the afternoon meeting was asked by Armas to leave on the grounds that the discussion did not fall under the state's definition of a public meeting.

Armas said tenant advocates also were not present for the discussion, though they had been during earlier meetings.

"The meeting went well. I think there was a lot of cooperation," Zaballos said later. "We're not going to get everything we want."

Zaballos said the city looks to be backing off on what he considers an onerous demand that owners install water meters at every housing unit before converting it. The city is digging its heels, however, on requiring property owners to install double-pane windows, another costly enterprise that saves energy and reduces noise.

The debate over condo conversions has been a controversial issue throughout the Bay Area in recent years. The demand for affordable housing has made conversions a high-profit enterprise for some property managers, but many say that demand is beginning to subside as the housing market slows.

Meanwhile, many tenants cannot afford to buy the units in which they live. When the 258-unit Clarendon Hills apartments transformed into the Montierra condo community in South Hayward last year, at least one Clarendon Hills family said it was forced to move out of state.

Emotions flared again this year when hundreds of residents of three apartment complexes on Second Street and Fletcher Lane were forced to move out or buy their units. Prices ranged from about

$310,000 at one complex to $580,000 at another.

Gary Marsh, a spokesman for the San Francisco firm that converted the three complexes, acknowledged that most renters don't buy into a unit when it becomes a condo. 

Typically, Marsh said of converted condo buyers, "fewer than 10 percent are former residents and often it's fewer than

5 percent."

From a legal standpoint, Hayward has not had any condo conversions since it established its condo conversion law more than 25 years ago.

But in reality, several multiunit apartment complexes such as Clarendon Hills have converted to condo complexes without city scrutiny. The conversions were allowed regardless of local regulations because the complexes, although they were being rented out as apartments, were originally approved, built and "mapped" as condos in the city's zoning code.

Zaballos has repeatedly told city officials that Hayward will benefit from making more converted condos possible because it increases homeownership.

"It's the best entry-level housing," Zaballos said. "It's the lowest-cost housing people can get into."

About half of Hayward's housing stock is rental, and half is owner-occupied. The city's goal is 70 percent homeownership.

The City Council will have a work session — during which no formal decisions are made — on the proposed revisions to the condo conversion law Dec. 19 at City Hall. The council is then expected to vote on amending the law in early January.

Matt O'Brien can be reached at (510) 293-2473 or mattobrien@dailyreviewonline.com.