Rally focuses on ways to take housing out of the private market — starting on Folsom Street

Critical Mass founder Chris Carlsson fights for his home -- and for permanently affordable housing
Critical Mass founder Chris Carlsson fights for his home

By Tim Redmond

MAY 6, 2015 – Long-term residents of a Folsom Street building, all of whom have been active in San Francisco arts, culture, and politics, rallied outside their homes yesterday in an effort both to encourage the property owner to sell to the San Francisco Community Land Trust – and to discourage speculators from bidding on the property.

In some ways, it’s a classic San Francisco situation, and in some ways, it’s tragic: The landlord, an older woman who by all accounts was close to her tenants, was put under court conservatorship in 2013, meaning that she no longer controls her own financial assets.

She has been moved from the house, where the tenants helped feed and care for her, to an assisted living facility – and the trust that now controls the property has put it up for sale.

The tenants, of course, fear that the buyer will invoke the Ellis Act and toss them all out: Most have been there for ten years or more, and pay well below market rent.

Landlord Frances Carati inherited the property at 2840-2848 Folsom from her father, who had bought it for $12,000 cash in 1946. Without mortgage payments, and with the tax benefits of Prop. 13, she was able to make a profit while charging reasonable rents. (Property taxes on the place, public records show, are just $844 a year.)

In fact, the tenants say they had worked with the ailing Carati to find a way for them to buy the building after she died.

But now it’s out of her hands – a legal conservator controls the property, and yesterday afternoon, as the tenants rallied, a series of potential investors walked through the units to consider making offers.

A message to potential buyers
A message to potential buyers

The Land Trust, a community-based group that is able to leverage loans and city grants to buy property and take it forever out of the private market, wants to buy the Folsom Street place and has put in an offer at $2 million, Chris Carlsson, one of the tenants, told me.

That would preserve the place as affordable housing forever – not just for the current residents but for future tenants.

“If we succeed here,” Carlsson said, “we will remove a building from the marketplace.” And that, he said, would set an important example for how housing can be kept affordable.

Carlsson is a founder of Critical Mass and the co-director of Shaping San Francisco. He’s also a founder of the legendary underground magazine Processed World. He is, in other words, part of living SF history.

Banners adorn the Pigeon Palace at 2840 Folsom
Banners adorn the Pigeon Palace at 2840 Folsom

But if the conservator and the Franceca Carati Living Trust, which now owns the building, insist on selling the place at auction to the highest bidder, the tenants (who have set up a nonprofit called “Pigeon Palace,” in honor of Carati’s love for pigeons), and the land trust, could be out of luck.

But speculators who might be looking to buy and flip the place were warned during the afternoon rally: The tenants are longtime local activists who know how to organize and aren’t going to leave easily.

In fact, they were openly advising possible buyers to avoid the place. “We are going to make your lives hell if you buy this place,” Carlsson said.

And the demonstration may have had an impact: I spoke to several potential buyers who were on hand for an open house, and one of them told me he was considering making an offer “but this scene here is giving me second thoughts.”

Mike Bernstein, who told me he owns a number of rental properties in the area, said if he bought the place, he wouldn’t evict the tenants.

On the other hand, he and a person he identified as a possible investment partner said that they might offer the tenants buyout money to encourage them to leave.

Carlsson said that he’s worried that anyone who buys the place – a valuable property in a hot neighborhood – will want to turn it into TICs or flip it for a huge profit – with the tenants gone.

That’s the pattern in the neighborhood.

And it’s why the tenants don’t want a buyout for themselves; they want the units to be affordable forever. And in this case, it’s actually possible – if the place isn’t lost to speculators.

 

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Tim Redmond has been a political and investigative reporter in San Francisco for more than 30 years. He spent much of that time as executive editor of the Bay Guardian. He is the founder of 48hills.
  • SolAlex

    You weren’t stating the law, originally. You were stating that landlords were prevented from doing something. I corrected that and pointed out that in fact it is quite common.

    But I now see you have a much broader misunderstanding, and that is that you believe the only motivators of human behavior are purely technical and academic considerations. That probably explains why you prefer book knowledge to real world knowledge. The former is always easier as it doesn’t involve getting out of an armchair.

    Meanwhile I’d like you to quantify your categorization of “risky”. That is rather meaningless unless expressed as a percentage.

    • wcw

      No landlord may accept such an offer under the Rent Ordinance.

      If stating what a landlord may not do under the Rent Ordinance is not ‘stating the law,’ what is it?

      • SolAlex

        There is a difference between a legal structure that specifically prevents an activity (like an injunction) and a legal structure that merely provides for possible remedies if prosecuted successfully.

        I know you only debate these things endlessly with me because you learn from it, so I will oblige by giving you an actual real-world example that happened:

        A, B and C rented a flat from me. Some time later A informs me that B and C will be moving out, and that he would like me to approve D and E as replacement roommates. A also tells me that D and E want to be on the lease because otherwise their position is vulnerable if A later moves out.

        It’s not in my interests to have D and E on the existing lease, but I might be willing to sign a new lease with A, D and E in return for some consideration. If everyone likes that idea then it happens, and there is little risk that anyone will later try and renege. The contract has consideration for both parties and was entered into in good faith.

        Speaking of risk, I notice that you ducked my request for you to quantify your use of the word “risky”.

        • wcw

          Substantially every prohibition under law provides for possible remedies. It is injunctive relief that is the outlier.

          Why wouldn’t injunctive relief also be available, should a property owner regularly break the law as described?

          • SolAlex

            I am explaining reality and the basis of human co-operation and decision-making, and not advancing a general theory of jurisprudence.

          • wcw

            Sure, why not? None of that makes a flat, simple restatement of the law anything but correct and precise.

          • SolAlex

            You did not originally describe the law. You said landlords were “prevented” from offering new leases. That statement is blatantly false.

            There are various situations where a new lease can be issued, and I have already given one example. Obviously a landlord will consider the risk/reward profile of any such action, just like with any other action. I notice you cannot quantify any alleged risk, but landlords perform that analysis all the time.

            The worst thing the SFRB can do is make a landlord pay back excess rent. That’s like saying that if you rob a bank, the only thing that happens if you get caught is that you have to hand the money back.

            The real world is a very different place from your armchair-view of things.

  • SolAlex

    Prejudice against people based on stereotypes used to be a pregorative of the right but, these days, it is mostly the left that practices such discrimination.

  • The overwhelming majority of the human race for has not contributed anything and never will . Who has accomplished anything over human history? Perhaps the person who started the first fire.Maybe the people who started the first written language. A thousand years from now who will people remember? Probably Einstein, Darwin, Benjamin Franklin, Aristotle, and a few others. Who has changed the course of human history or changed the way people think and look at the world? Don’t kid yourself – whether you are a highly paid Google executive or a struggling beatnick you are just another worthless human being taking up the same amount of space on the planet

    • SolAlex

      So your message of hope and optimism for the human race is that we are all worthless?

      • I don’t have much hope and optimism for the human race at this point in history. We live on a grossly overpopulated planet. All of the problems we face now – wars, disease, famine, global destruction, are all byproducts of overpopulation/civilization. It is probably going to get worse before it gets better. There are a lot of good people out there but when people feel threatened by each other the results are nasty.

        The whole tenant/landlord relationship is degrading and demoralizing for the tenant. Having to pay someone to live somewhere is dehumanizing enough without having to feel constantly threatened.

        Many countries and some local areas with the US recognize that some level of rent stabilization is necessary to maintain civil order and some modicum of social justice in an unjust world. it creates a more peaceful environment. Of course tenants don’t have the right to interrupt traffic any more than anyone else, but did the people in Baltimore have the right to destroy other peoples’ property and homes? And by the way the real estate market in the area of the Baltimore riots died overnight – no sales, no buyers, no interest – and they are not likely to come back any time soon. Kind of makes you think…

        • folderpete

          I used to think the problem was “overpopulation” til I realized that most of the world didn’t live the way I did (motor vehicles, central heat, airplane travel, throw-away consumer goods. If you cure that ‘problem’, there’s room for plenty of people that consume a minimum of food, shelter, water and other essentials.

          However, that still doesn’t mean they can all live in SF.

          You sound like someone who has never owned property. There’s plenty of demoralizing and powerlessness for owners too. I can agree with a certain amt of renting “stabilization”. However, I don’t feel that means cementing someone in place at a constantly diminishing actual rent. To me, “stabilizing” means to let those people know that – long term – they are probalby not going to be able to continue in place; but which gives them more than 30 Days to get their affairs in order. I would accept, depending on longevity or seniority, up to 5 years of “stabiliziing” at which time its swim-or-sink.

          But then, if someone wants to grandstand and promise more of ‘other peoples money’, then that will get turned into what we have today, with the few touted as “heroes” and a vast majority feeling victimized becasue they believed the lies of those ‘heroes’, despite their own common sense.

          • I own my own home and it is all paid for without a mortgage. But I doubt I would ever get into the landlord business. To me it is just an ugly business. Depending on where they live you end up adopting the renters, and good luck trying to get rid of them if it doesn’t work out. its like adopting a child who doesn’t want to be there.
            Overpopulation is the main problem in the world – there are many textbooks and evolutionary theorists who have expounded on this for thousands of pages of text explaining why. Its beyond the scope of this site.

          • folderpete

            ” Depending on where they live you end up adopting the renters, and good luck trying to get rid of them”

            For some of us, the only way to own property was this route. You provide sweat, skill, and all your money, and they (hopefully) pay the expenses you couldn’t handle on your lonesome.

            Being an owner-occupant used to have a special status that made things workable. A few people screwed up, and the professional haters seized the opportunity. When they lumped us in with corporate absentees, yet left the tenants living above, beside and below us, it did become ugly. If I could walk away at 5pm, then it could be a business – maybe somewhere btw leasing, plumbing and pawn-shopping. As it is, I”m a hostage to those I have no control over – both professionally and personally – yet its MY home! And yes, its their home too. But they have almost no responsibility, little skin, and get a truly great deal by City mandate.

            As the Zen Master said: “we all get what we deserve – whether we deserve it or not”..

            I see the City changing, and its not that its going up or down – just sideways in different directions. Not pleasant in my book.

          • You have to look at the problem from both perspectives and the reason that San Francisco is attracting so much attention is the extent to which rents have increased geometrically over the last ten years. Most people who rent recognize that it is a temporary situation and the price of rent will increase with the cost of living. But no one really expects rents to explode 400% , or that there will be no affordable housing within the area. It is the responsibility of the government to provide some affordable housing to people if they are going to give big tax breaks to businesses to locate in the city.
            Ultimately some critical businesses like hospitals will have to build dormitories for workers who are essential and can’t afford to live in the area if they want to stay in business

  • Good luck comments, valid you must have knowledge realty market land trust are you sure? Billion market for realty in California my former resident 3 eviction “Twin Peaks to speak land trust gotten how much? To discuss these only small investors: $26 million to leave building 22 plex now going torn down. Without frown, where standing around as clowns speaking “acquisition” this what enemies expect reaction! Repeal is needed never defeated dirty tricks of MODCH and BOMA-SF. Renter elated, your property managers didn’t eviction you soon going on brokers. Whom know markets and owners and insurance firms getting best deals in “California” do expect if acquire title of building going
    get reduce taxes? Consult your business attorneys real estate laws, assumptions going cause disparity good luck excuse us. Small-Pro SF getting owners cash for “rate holes”!