Renters See No Justice, Poetic or Otherwise
Nestled in the northeast corner of this city between Chinatown and Fisherman’s Wharf, North Beach has long been a favorite of locals and tourists alike, known for its Italian eateries as much as for its place in Beat poetry’s history.
But it’s also becoming known as a place not too friendly to renters, some say. Rent-controlled apartments are being converted into units for sale, forcing the evictions of some longtime residents.
Chris Larose, for example, has made his home in a three-story North Beach apartment building for about seven years. A waiter, he lives with his girlfriend, Bobbi, and their 5-year-old son, Quintin, in a two-bedroom apartment.
Come August, however, Larose and his family might be forced to move. That’s because last fall, a group of limited liability companies bought the building and evicted Larose’s family and the 13 other tenants.
When the new owners served eviction notices to residents at 424-434 Francisco St. in April, they invoked the Ellis Act, a state law allowing landlords an easy way out of the rental business. Approved by the Legislature in 1986, the act was in direct response to a court ruling that said owners could be forced to remain landlords.
Tenants’ advocates say that, almost two decades later, the act is being used by investors and hundreds of people are being evicted each year. Since 2000, Ellis Act evictions at more than 350 buildings, all with multiple units, were filed with San Francisco’s Rent Board. In the ZIP Code that includes North Beach, the Ellis Act was invoked last year at 11 buildings, encompassing 47 units. No evictions were filed in that neighborhood from 1989 to 1998.
If North Beach LLC -- one of the companies that bought the Francisco Street apartment house and at least two others in the area -- and its partners succeed, most of the tenants will be forced out by court order as soon as August. The Ellis Act’s 120-day grace period expires next month, though the elderly and disabled will have an additional eight months to move out.
Real estate speculators W.B. Coyle, Gary Rossi and their partners -- who bought the building together and entered into a so-called tenancies-in-common or TIC agreement -- can then sell the building off one unit at a time. Tenants estimate the units will go for at least $500,000 each -- way out of their reach.
But Larose and the Tenderloin Housing Clinic, which is representing all but one of the units at the Francisco Street building, have filed a lawsuit challenging the evictions, which they call bogus abuses of the Ellis Act and flagrant violations of other state laws.
Twelve of the building’s tenants sued last month, alleging that the investors violated California law by subdividing the property without gaining approval from the state Department of Real Estate.
Tenderloin Housing Clinic attorney Dean Preston, who is representing Larose’s family and the other plaintiffs, said the lawsuit also alleges “that the owners and former owners of the building negligently failed to maintain the building and breached the warranty of habitability.”
Coyle said he and his partners are simply doing what they do for a living, and argues that the high percentage of renters in San Francisco is a negative. He said he bought his first property here at 18 -- using the tenancies-in-common program, which differs from condominiums because there is joint responsibility for all the units.
“There’s no easier way to homeownership than joining forces with others,” he said, adding that a refurbished version of the “dilapidated” Francisco Street residence would better serve the North Beach community.
Coyle would not comment on the pending lawsuit or on specifics of his business partners and dealings.
But Janan New, executive director of the San Francisco Apartment Assn., said the city was to blame for its “no-development policy” and increasingly stringent rental laws.
For most of the 1980s and early ‘90s, the Ellis Act was rarely invoked in San Francisco, according to the city’s Rent Board. Then, said the board’s Tim Lee, speculators and landlords began snatching up rent-controlled buildings for way below market value. When the units were sold separately, the owners would “greatly enhance” their profits.
Compounding the problem, Lee said, was the race for housing during the 1990s dot-com boom, when property values skyrocketed, demand was high and many owners were looking for a quick way out of the rental business. Many owners were able to get their tenants out under eviction laws in the early ‘90s, Lee said, but when those laws were changed, Realtors and speculators began using the Ellis Act.
Lee called the practice unfair and said it contradicted the act’s intent. “If the big rationale was that you couldn’t force an owner to be a landlord, why allow people to buy a building knowing it’s a rental?” he asked.
New argues, however, that the act is seen as a last resort for most landlords, “like an escape valve out of rent control.” Her organization, which represents about 3,000 people, supports the act as a way for owners to get out of the rental business. She would not comment specifically on the Francisco Street property.
“We believe that the government has a responsibility to provide affordable housing, not individual owners,” she said. “If the city provided enough market-rate condominiums to spread throughout the city, people would not need or profit from Ellis Act buildings.”
Preston, the Francisco Street residents’ lawyer, calls the Ellis Act evictions a “direct attack on rent control and eviction limitations.” He balked at the notion of a $500,000 unit as affordable housing, though New said that, generally, home prices in the city start at $300,000 to $500,000.
Preston said he knew of four other North Beach buildings where residents were being evicted. Many of those tenants have lived in the area more than 20 years and are “really part of the fabric of North Beach,” he said.
North Beach tenants grappling with Ellis Act evictions have strikingly different stories. James Foy is a 59-year-old taxi driver who can work only part-time because of health problems. He has lived in the Francisco Street building 17 years and pays $300 a month to share a three-bedroom apartment with another person -- about a third of what he would pay for a new apartment.
The decline in the tourism industry has cut his salary by about half in recent years, he said, and the $4,500 per unit offered by Coyle and his partners to move out -- about $2,500 for him -- would not lighten that burden. “It’s hard to live on $50 a night,” Foy said. “I will not be able to live here.”
Larose, too, is worried. “I’m fighting for my family, but I’m also fighting for the ragtag group that lives with us -- it’s important they have a voice. Last time someone was evicted from this building, they were homeless for a year before they found a place. That’s what eviction costs.”
