Rent to Evict

For years, many low-income renters called the building their home. That's until a developer, who told the government it would be affordable, raised the rents.

Altogether, KDF received more than $11.1 million to acquire the property and renovate it.

Since then KDF has, in fact, hired a squad of contractors to make extensive improvements to the 93-year-old structure, but the firm's notion of affordable is curious. When KDF bought the property it was governed by the city's rental control law, which kept the rents from surging precipitously. After signing the deed, KDF concluded the city's law didn't apply.

That meant rents could shoot skyward.

Tony Arvidson, 55, has been dwelling at 1030 Post since 1992. "KDF definitely did some things that were not kosher," he says.
Tony Arvidson, 55, has been dwelling at 1030 Post since 1992. "KDF definitely did some things that were not kosher," he says.
1030 Post now has "minimum income requirements and I don't meet them," explains Patrick Murphy, 49.
1030 Post now has "minimum income requirements and I don't meet them," explains Patrick Murphy, 49.

The Pohleys, for example, say they were told the cost of the cramped one-bedroom apartment they share with their adult son would go from $712 a month to $1,150.

Documents obtained by SF Weekly show KDF is planning to boost rents steadily on a year-by-year basis — in some cases doubling them within five years.

Dean Preston is an attorney at the Tenderloin Housing Clinic, a nonprofit law firm famous for jousting with landlords. He represents about a dozen tenants who live at 1030 Post, and says he's never seen anything like this before: people pushed out of a building for low-income people because they're too poor. "It's an unconscionable abuse of an affordable housing program," Preston argues.

Gathering dust in a file cabinet in Sacramento is a thick sheaf of paperwork that sheds a lot of light on how this whole situation came to be. Under the rules of the tax credit program, which was established in the 1980s and has undergone several permutations since, KDF has fairly wide latitude in setting the rents and determining who stays and leaves 1030 Post.

Because rents are so high in San Francisco, KDF is allowed, under the rules, to charge up to $1,200 for a studio, and $1,272 for a one-bedroom, and those figures are likely to go up in the future.

So people like the Pohleys who've been living at 1030 Post for years can have their rents jacked up substantially — even though, in theory, they're now living in an "affordable" building.

This, of course, raises the question of just what constitutes affordable housing. At $1,150 per month, KDF is currently charging about $50 less than the average cost of a one-bedroom apartment in the Bay Area, according to RealFacts, a real estate data firm.

Asked about the turmoil at 1030 Post, KDF acquisitions and development chief Ray Harper will only offer SF Weekly a few brief comments. "It's regrettable that there have been hardships for the tenants as the building is undergoing $1.6 million in renovations," he says, noting that KDF has "financially assisted several tenants" who were moved out of the building. "Anyone who has qualified financially has been invited to stay," insists Harper, a gravelly voiced former Marine.

It's not just low-income people who are on their way out. Under the committee's rules, people who earn too much money aren't allowed to stay in the building, either. No single person making more than $47,500 will be able to remain, according to state documents.

As Preston started researching KDF, he ordered a 2-foot-tall stack of documents from the tax credit committee, and, as he was poring over them, discovered something startling. When KDF had submitted its application to the tax credit committee, it had included income information about every tenant at 1030 Post. But looking at the numbers, Preston knew they were wrong — unemployed senior citizens with little cash flow were listed as making far more than they actually did. The figures made it look like the tenants could afford to pay higher rents.

After conferring with his clients, Preston concluded the information, which KDF had submitted to the committee under penalty of perjury, was bogus. In his rent board briefs, Preston claimed KDF had made "material misrepresentations" to the tax credit committee.

Another form submitted to the committee dealt with relocation. Would KDF have to move out any of the 1030 Post tenants after it bought the building? KDF stated, "[it] does not expect there to be any significant amount of relocation required," continuing, "there is no displacement expected." Yet tenants have left in droves — apparently forced out because they earned too much money or too little.

"It was pretty obvious from the documentation that someone lied," recalls Preston. "It was a shock to see how blatant the misrepresentations were."

The lawyer alerted the tax credit committee to the matter via a letter sent late this summer. "We are particularly concerned regarding false statements made by KDF in its application," he wrote. "It appears [the committee] and perhaps other governmental agencies were misled into approving this project based on the false assertion" tenants wouldn't be booted.

In response, the committee's executive director, William Pavão, mailed back a letter saying the committee was concerned about the ouster of poor folks from the property. But Pavão didn't promise to do anything other than "stay in touch" with KDF. The committee, in a statement made through a spokesperson, sticks up for KDF and the transformation of 1030 Post, observing that the project conforms to state and federal rules.

Regarding the discrepancies on the company's application, the committee says, "KDF's statement was based on information provided by the previous owners. Only upon KDF's purchase of the property did more detailed income information become available." The committee also says it has assurances from KDF that the firm is making "accomodations" for low-income renters who can't handle the increased rents. Preston isn't happy with the committee's do-nothing posture, and he's not the only one. At the Mayor's Office of Housing, Matt Franklin has been tracking the intrigue at 1030 Post for months. "It's very clear there were misrepresentations made to Mr. Angelides' office," Franklin tells us, adding that KDF "has an obligation to ensure that the information they provide is accurate." In Franklin's opinion, "this is an out-and-out abuse of the California tax credit program. The whole goddamn program is built on providing affordable housing. This is not affordable housing." The tax credit program, he tells us, "is a good program, but they've blown it on this."

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