Will California’s Renters Be Able to Go on Strike?

A budding state bill would have allowed tenants to withhold rent from landlords, union-style — until the real-estate lobby killed the provision. Could it become the next big fight for California renters?

Tenants at 300 Buchanan St. formed an association to raise building issues in a united front. (Photo by Peter Lawrence Kane)

UPDATE, 5/28 10 a.m.: The story has been updated with a statement from Veritas Investments, reprinted in full below.

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Glenn Foster’s Hayes Valley home sat in a relative state of peace for more than 15 years — until he says the new owner, megalandlord Veritas Investments, shook things up. Construction took place six days a week, from early morning to the evening, preventing residents from getting a decent night’s sleep. The elevator also suddenly started breaking down more, affecting elderly tenants and people with disabilities, such as Foster.

After speaking with his fellow rent-controlled neighbors about their building’s sudden flood of issues, Foster says he and roughly 20 of them formed a tenant association to take a stand against landlords who dodge their complaints and emails. But despite San Francisco’s renter protections and the group’s appeals to the Rent Board, their rent has risen about $500 in five years — a sizeable amount for people living on fixed incomes. (A spokesperson for Veritas says the company invested more than $900,000 in safety and habitability issues for the building, limits construction noise, and that the elevator was out of service due to severe vandalism. Rent increases were also approved by the Rent Board, in accordance with San Francisco law.)

What Foster feels has been missing for his group of neighbors are laws with better enforcement.

“Even though there’s protections on the table, there’s no teeth to them,” says Foster, a plaintiff in one of at least four lawsuits against Veritas. (A spokesperson for the company is confident one will be dismissed as a judge recently said it appeared improper.) “There’s no recourse, except to go to court.”

That’s where Senate Bill 529 came in. Authored by Tenants Together and sponsored by state Sen. Maria Elena Durazo, the bill would have allowed tenants to withhold rent, and essentially strike just as labor unions do.

Tenant associations that would be protected under the bill must consist of renters from three or more units under the same landlord and must adopt bylaws. They would be able to withhold rent for up to 30 days, at most twice in a calendar year, in the event their landlord fails to respond to written complaints about habitability issues, rent increases, or noncompliance with the law, within 30 days.

Members must vote to authorize the strike, and write a cashiers check or purchase a money order to set aside the collective rent payment. The idea is to bring landlords the table for good-faith negotiations with leverage that tenants currently lack — relieving the overburdened court system while they’re at it.

“People have the right to organize at work, but they don’t have the right to organize at home,” says Shanti Singh, spokesperson for Tenants Together. “There are a lot of communities that don’t have any organizing infrastructure. We’re trying to build that infrastructure.”

The Housing Rights Coalition of San Francisco has also prioritized efforts to support SB 529, with lead community organizer Brad Hirn saying it could bring landlords to the table and expand the rights of just cause evictions to areas of the state mostly lacking it. The bill’s main purpose is to protect tenants with the same landlord from retaliation.

“The bill is meant to create and codify a process for good faith negotiations that doesn’t currently exist,” Hirn says. “The prospect of a public rent strike is much more leverage than shaming a landlord or the same old types of letters that we already do.”

However, opposition quickly marshaled. The California Apartment Association, California Chamber of Commerce, California Association of Realtors, and California Business Properties Association raised concerns over the potential abuse of the right to strike, saying that other avenues to mediate tenant-landlord disputes already exist. But these groups also took issue with specifying cause for eviction in writing, as they believe it will lead to significantly higher rents and “put good tenants in danger” by making it difficult to remove bad tenants.

“In California, it’s too expensive and time-consuming to terminate a tenancy, and most owners would much prefer to work with a tenant,” the group wrote in an April letter. “California law already has some of the strongest protections in place for tenants who face retaliatory or discriminatory evictions.”

Foster and his fellow Veritas tenants went to the State Capitol to speak to the bill’s need, facing down the opposing real-estate lobby. The same day, the Appropriations Committee sent SB 527 to the full Senate — yet without the provision allowing tenants to withhold rent.

Nevertheless, the fight is not over. Tenants Together Executive Director Lupe Arreola indicated that her organization will still seek to add the provision back in — or, at least, allow local jurisdictions to take up the matter.

“This bill is still strong and will create the space for tenants to organize without the very real threat of retaliation,” state Sen. Durazo tells SF Weekly. “Not only does the bill still contain provisions codifying protected organizing activities, but it retains the essential piece of requiring a landlord to state in writing what the reason for eviction is, and that reason must be the dominant motive for eviction.”

But Foster represents the segment of tenant advocates disappointed by the major amendment. He feels it was a way to satisfy both the real estate industry and the growing tenants’ rights movement in California, but that it’s not working for the latter. If San Francisco tenants are having problems enforcing their rights, state laws need to adjust to that reality.

“The determination to get back out there is very strong,” Foster says. “Everything we put in there for renter-rights bills always gets diluted. It’s not appeasing us.”

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Note: After the publication of this story, a spokesperson for Veritas offered the following statement.

Dear Editor,

In its story “Will California’s Renters Be Able to Go on Strike?” on May 22, 2019, the SF Weekly published allegations against Veritas Investments without first contacting Veritas to give it an opportunity to review and comment on those allegations.  As you know, that is contrary to the basics of fair journalism.  A day after the posting, your writer inserted a phrase based on our urgent call of incredulity, and now the online story cites a “spokesperson for the company” to pretend that Veritas did have an opportunity to comment.  I’m the spokesperson for Veritas, and the following material is our response which should be woven into the story ASAP as other journalists would have from the beginning, or alternatively post in entirety on the same page, to create a fair, journalistic picture:

Your inclusion of Veritas in a May 22 article, from its very substance, gets it wrong.  The building at 300 Buchanan is not suffering from habitability issues that would warrant a rent strike.  To the contrary, back when it was acquired, the building was known as the “Crystal Palace” with open drug dealing and seedy characters hanging around.  Today, it is clean.  At acquisition, it had a grossly deficient electrical system that endangered residents.  Today, after Veritas invested more than $600,000 to overhaul that system, it is safe and modern.  At acquisition, the building suffered from exterior water intrusion.  Today, after Veritas invested more than $300,000 in waterproofing and painting, it is sealed.  At acquisition, the common area was run down with old, foul carpet.  Today, it is pleasant.  As to the elevator for which a tenant was quoted to complain about in the article, it was knocked out of service for a month due to severe vandalism that required replacement of the elevator gate—which had to be specially constructed to fit.  That was unfortunate, but not the fault of Veritas.

The story further gets it wrong in asserting that Veritas has raised rent $500 on the group of tenants at 300 Buchanan, as cited in the article.  In fact, some of the tenants in the lawsuit pay under $1,000/ month in rent, and one of the tenants in the lawsuit pays under $300/month in rent.  As to the cost of the improvements in the property, and as determined by San Francisco law and specifically reviewed and approved by the Rent Board, part of the cost is borne by the landlord and part is passed through to tenants—in this case, ranged from only about $45/month to $90/month depending on the tenant.

And yes, there may be some occasional noise because of construction, but that construction is part of rehabilitating a building that had been slowly decaying before Veritas worked to bring it back to life.  But, contrary to your assertion, Veritas does not do construction work six days a week and actually limits its construction hours to less than what is allowed by the City of San Francisco, in order to limit the impact on tenants. 

Veritas Investments treats all its residents with respect, and disputes the allegations, contrary to the one-side story you published. We are confident that the failing litigation will be dismissed in due course, and look forward to our day in court.

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