An email screw-up could give an affordable housing nonprofit another three weeks to consider buying properties from the city’s largest landlord, SF Weekly has learned.
Last week, Veritas Investments put 76 buildings —nearly a third of its housing stock — up for sale after giving nonprofits a first chance to make an offer per city law.
The Community Opportunity to Purchase Act, passed in April 2019, requires that building owners notify the six city-designated qualified nonprofits of their intent to sell more than 2,000 units and give them 30 days to make an offer before accepting offers from private buyers.
Veritas notified nonprofits on Dec. 20, 2019. Tenderloin Neighborhood Development Center, Mission Economic Development Agency, and Chinatown Community Development Center expressed interest but did not make an offer. Nonprofits have 25 days to do so after receiving comprehensive building information, which comes after expressing interest.
But one qualified nonprofit, the San Francisco Community Land Trust, said they never heard back with the information after emailing a broker at Ackman-Ziff on Dec. 26, 2019.
Turns out, it was in the broker’s junk folder and discovered after SF Weekly inquired about the miscommunication.
Once Ackman-Ziff hands information to the Community Land Trust, the nonprofit will have 25 days to weigh information and make an offer.
“The original request for information from the Community Land Trust came in after the five day deadline to request information under COPA,” Veritas spokesperson Paul Rose told SF Weekly in an email. “Nonetheless, as an act of good faith, we intend to provide the Community Land Trust the requested confidential information regarding the properties they expressed interest in. Additionally, we are cooperatively working with The Mayor’s Office of Housing to evaluate any potential interest the city may have in buildings that would be a fit for the city’s affordable housing program.”
This indirectly answers demands for Veritas to pause the sale of more than 2,000 units across 76 properties that tenant advocates fear could further destabilize the affordable housing stock. Supervisor Dean Preston and the Housing Rights Committee of San Francisco called for a 60-day pause at a City Hall rally last Monday to give community groups more time while Veritas told SF Weekly it was willing to discuss with the Mayor’s Office of Housing.
“The goal at this point is to pause the sales so there’s an opportunity to actually talk about the options that might exist and for tenants to be in the room,” says Brad Hirn, an organizer with the Housing Rights Committee of San Francisco. “A building sale is an extremely stressful time for tenants.”
Legally speaking, Veritas would still be in clear for COPA as nonprofits have five calendar days to respond with interest. But the legal text makes no mention of holiday exemptions, which was the common complaint among interested nonprofits like the Community Land Trust. The Tenderloin Neighborhood Development Center said Veritas cooperated but that the timing made it difficult to make an offer on six buildings it expressed interest in.
“We did not make an offer because of the lack of staff time available to perform the necessary due diligence an offer requires — largely because Veritas issued their notice the Friday before Christmas and many of our staff were on vacation the subsequent 1-2 weeks — as well as questions we had regarding the source of public subsidy needed to finance the acquisitions,” said TNDC spokesperson Melinda Noack in an email.
On the flip side, MEDA appears to have missed an email with building information from Veritas. The nonprofit first attributed its lack of an offer to lack of provided tenant information, but SF Weekly reviewed a receipt of the email confirming Veritas sent the information past 10 p.m. on Christmas Eve, the same day MEDA expressed interest to comply with COPA timing.
At the very least, the large Veritas sale shows COPA might have to get more specific to prevent questions of timing. Supervisor Sandra Lee Fewer’s office, which spearheaded the legislation, said it’s working with the city attorney on potential amendments.
“We didn’t contemplate the situation of having 76 buildings drop at the exact time,” says Ian Fregosi, a legislative aide to Fewer. Adding, “It’s pretty unfair to make Christmas Eve and Christmas Day the final two days they would have to respond.”
The email discoveries come during a tense week between tenant organizers and Veritas, who are often at odds.
Managers of the real estate giant blocked volunteers with HRC from approaching tenants in three buildings up for sale in the Tenderloin, organizers say. Teams approached a handful of buildings in the Tenderloin on Tuesday evening to door-knock, a routine practice to inform tenants of their rights when a building goes up for sale.
Per California Civil Code 1942.6, they would not be considered trespassing if let in by an occupant to provide information on tenants rights or to organize them into a tenant’s association. But once they were let in, volunteers at three buildings were approached by managers threatening to call the police despite organizers invoking their rights.
Many volunteers are tenant organizers themselves, like 18-year-old Jenny Ramirez who was confronted by someone who works for her landlord.
“It was honestly really uncomfortable,” Ramirez says. “But this situation gave me more motivation to go out to the other buildings. I just feel like they’re scared about something.”
Veritas said a tenant in one of the buildings was pressured to let organizers in and didn’t actually speak to them about tenant rights. In the case of another building, a tenant did speak to organizers about their rights after letting them in but Veritas says they have no right to knock on doors after. Veritas called an attorney while at the third building and organizers left in all three cases.
“We often receive complaints from residents about uninvited people knocking on their doors and it is our job to make the building secure and not have tenants feel insecure when unknown people show up in their building at unexpected times,” said a Veritas spokesperson. “Veritas staff only introduced themselves to remind the people entering the building of the law.”
It also comes after Veritas sent an email out to residents on Monday warning them of a data breach, pinned on information given during the COPA process. HRC posted a list of buildings up for sale on social media but says personal information of tenants is secure and that the notices from Veritas are a scare tactic. The company also warned residents to call 911 if they see people inside “who don’t belong.”
“It’s escalating this week but it’s not a new thing,” Hirn says. “Tenants are trying to stop the cycle of speculative hand-offs from going from one investor to the other. The cycle doesn’t have to continue.”