South Beach Tenants Fight to Save Affordable Housing

Yesterday morning, affordable housing tenants launched their latest salvo in what has become a high-profile fight to remain in San Francisco — the city that just won’t stop getting more expensive.

At high noon, about forty community members, activists, politicians, and journalists packed the front office of the South Beach Marina Apartments at 2 Townsend Street along the waterfront. They were there to formally deliver a petition asking the building’s owner not to raise rents in 101 apartments, which are currently priced far below market rate.

[jump] Approximately 550 people had signed the petition — more than 350 had found it on, while the remaining 200 signatures were gathered from the community and at a recent Sunday Streets festival, said Patrick Valentino, Vice President of the District 6 Democratic Club, which organized the rally.

Richard Dickerson, who manages the property on the owner’s behalf, politely accepted the petition and promised to “pass it along.”

Valentino said he hoped the petition will encourage the building’s owner to consider the value of leaving the existing community intact — something the owner should be able to afford.

“They’ve been the benefactors of enormous rent increases,” Valentino said, referring to the building’s 300 other market rate apartments. Monthly rents are as high as $5,475 for a two-bedroom apartment, the San Francisco Examiner reported.

Valentino said the Democratic Club will now wait to see how the building owner responds before formulating a next move.

The South Beach Marina apartments have been priced low for decades as part of an agreement, or “covenant,” that the owner made with the city when the structure was originally built.

But that covenant recently expired. Now the building's owner, the Florida State Board of Administration, is considering whether to raise those rents to bring in more revenue. The board manages the fifth largest public pension plan in the nation.

Supervisor Jane Kim and the mayor’s staff have been in contact with the building’s owners to try to keep the South Beach tenants in place. Sophie Hayward, the Director of Policy and Legislative Affairs at the Mayor’s Office of Housing and Community Development, would not say how those conversations are progressing.

And Kim did not respond by press time.

The South Beach apartment building isn't the only one facing an expiring covenant. Altogether, about 600 below market rate units could transition to market rate prices in coming years, in buildings all over the city.

As we reported last month, those addresses include 737 Post Street (expires March 2016), Bayside Village near South Beach Marina Apartments (expires December 2016), the Fillmore Center in Japantown (expires December 2017), and Rincon Center near the Ferry Building (expires January 2021). In all cases, rents wouldn't increase until one year after building owners notified tenants.

If persuading the owners doesn't work, City Hall has no way to force them to keep rents low after the covenants expire.

The buildings were originally constructed using money from the city’s Redevelopment Agency, which was dissolved in 2012.

The city “basically had no long-term plan for how to maintain these properties,” said London Breed, President of the Board of Supervisors. She wants to comprehensively diagnose the problems in these and other former redevelopment properties in her own district, which includes the Fillmore/Western Addition.

In some cases, a building might need mold abatement or re-roofing, she said. Or, like South Beach Marina, a building's tenants could face the looming threat of massive rent hikes.

For each building, Breed said, the question is: “What is our long-term plan? Where is the money going to come from?”

Breed isn’t the only politician brainstorming solutions.

Supervisor Scott Wiener, who attended yesterday’s rally in a show of support for the tenants, suggested that City Hall might buy the units to keep them at their current rent levels using money from the small-sites acquisition fund.

“Obviously, we have a limited pool of resources, though we’re expanding that pool,” Wiener said, referring to the $310 million housing bond that will go before voters in November.

“Anything’s possible,” he added.

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