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The Complex: The City Falls Into a Housing Paradox 

Wednesday, May 28 2014
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Page 3 of 5

Well, that's unique. But in Midtown — as is, again, the case with regards to the city's scores of thousands of privately owned rental units — residents living within the same four walls since the Nixon administration pay comically low rents inspiring bafflement and envy among younger city dwellers. This is a situation that can lead to its fair share of iniquities: A real estate broker tells SF Weekly that, at one of his recent listings, no fewer than a dozen would-be buyers told him they were seeking to purchase an investment property while remaining within their rent-controlled apartments.

That'd be galling for any landlord. And, in fact, city officials claim Midtown residents have pulled this stunt, too. So, the city's move to demand income verification and extract a "fair share" from tenants was applauded by landlords and pro-landlord advocacy groups — who wish they could do the same.

"The city wants to do what makes sense for the city on its property, but not on other people's property," says landlord attorney Paul Utrecht with a laugh. "The city's desires here — on their face, they seem to be justified. If you have a dilapidated building and you have tenants who can afford to pay more rent, it makes perfect sense. It's not inconsistent with the goal of keeping housing affordable. It's not inconsistent with the goal of helping poor people.

"What they're doing is very good public policy." But, here's the rub: It's "inconsistent with rent control."

According to a different set of lawyers — the Midtown tenants' lawyers — what the city is doing enables rent control. And that makes destroying villages, or saving them, or destroying them to save them, that much more complicated.

In a city where more than 60 percent of residents rent rather than own, it's hard to overstate the political taboo against even mild criticism of the Rent Control Ordinance. Leland Yee was known to critique rent control, former colleagues say — behind closed doors. The feds may have nabbed Yee on a wire conjuring up an arms deal with foreign jihadis. But they didn't catch him badmouthing rent control.

Rent control, in this city, applies only to structures erected prior to 1979. If the landlord of your brand new Mission Bay high-rise wishes to triple the rent at the conclusion of your lease to accommodate the tech bus hordes, she need only provide you with a 60-day notice. If you reside, however, in a pre-'79 structure, your rent can only be increased every year by 60 percent of the Consumer Price Index — a matter of, perhaps, several dozen dollars a month.

Regardless of one's inclinations, rent control is the only thing preventing many thousands of San Franciscans from being economically banished. Without it, San Francisco's population would turn over with a regularity fitting the boomtown this is. In a city of renters, this is a deeply mortifying prospect. Even temperate discussions addressing mere potential rent control tweaks are quashed out of fears they'll initiate a descent down the slippery slope to its weakening or out-and-out abolition. As such, only a fundamentalist adherence to the present iteration of rent control is acceptable in this city.

But not for this city. When the government finds itself in the role of landlord, it sees things differently.

The complaints leveled by the city against Midtown residents — insufficient rental money to properly maintain the site; longtime residents being locked into startlingly low rates; aging empty-nesters dwelling in underpriced, cavernous units — mirror the lamentations made by private landlords across San Francisco. Midtown residents' rents were set artificially low at the onset and have stayed low. But most any renter who's lived in San Francisco for even a few years is paying a pittance compared to the lessee who signs her papers tomorrow. Arguments that Midtown's residents are milking the city ring hollow to the city's landlords — who would argue the city has been milking them as a matter of civic policy.

Midtown's residents were, inarguably, unprotected by the Rent Control Ordinance for decades. There are specific exemptions for structures with rents "controlled or regulated by any government unit" — and when your rent is set by the city's Board of Supervisors, you can't get much more official than that.

This provision abruptly ceased, however, when the city terminated Midtown's lease. Its tenants' attorneys — Jaime Rush of the Aids Legal Referral Panel and Josh Arce and Eddie Ahn of the nonprofit Brightline Defense Project — claim government control was terminated, too. This, they posit, triggered rent control.

This, they claim, is what it looks like when the city catches itself in a Catch-22.

Counsel from the City Attorney's Office beg to differ. And yet, a source within the city tells SF Weekly that, for years, the specter of inadvertently bestowing rent control upon Midtown residents stayed the hand of the Mayor's Office of Housing every time the suggestion was floated to sever the lease: "The reason that contract was not canceled was precisely because of that."

In an April 1 Rent Board hearing before Administrative Law Judge Peter Kearns, Deputy City Attorney Evan Gross argued that, if you read the figurative fine print, the Midtown tenants' claims will crumble.

But don't read the literal fine print.

Gross noted that, following the city's termination of the lease with Midtown's volunteer board — but days before residents took legal action — a second lease was finalized with nonprofit developer Mercy Housing to administer the property. This, the city says, squelches residents' claims.

About The Author

Joe Eskenazi

Joe Eskenazi

Bio:
Joe Eskenazi was born in San Francisco, raised in the Bay Area, and attended U.C. Berkeley. He never left. "Your humble narrator" is a staff writer and columnist for SF Weekly, which he has written for since 2007. He resides in the Excelsior with his wife, 4.3 miles from his birthplace and 5,474 from hers... more

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