The utter failure of California housing law was on display today on 19th Street, where 20 residents of a rent-controlled building, many of them LGBTQ and Asian seniors, were fighting to save their homes from speculators who seeking to profit by evicting them under the Ellis Act.
The building at 3661 19th Street was bought in 2018 by a group of investors who have a record of buying rent-controlled properties, tossing out the tenants, and flipping them as tenancies in common—in essence, condos.
The players in this operation, according to records on file with the state and the city, are Jeff Pollack and Ryan Fong of Redwood City and Pierre Malak, who appears to live in San Jose.
They have served tenants with Ellis Act papers, meaning they want to “go out of the business” of being landlords.
But of course, they just recently bought the building; if they didn’t want to be landlords, they had no reason to buy it.
No: As Deepa Varma, a longtime tenant activist now working for Tenants Together, said at the event, there is no reason for this to happen at all–except “greed.”
The investors paid $6.3 million for the property, about $500,000 a unit. If they can get rid of the tenants and flip the units, they will almost certainly get $1 million each, in essence doubling their money by destroying the tenants’ lives.
Larry Kuester, who described himself as a gay senior, has been living in the building for 31 years. “The only reason I can stay here is rent control,” he said. “This inhuman corporation is about to evict seniors and working-class people. I am afraid I am going to end up homeless.”
Paul Mooney, a longtime LGBTQ activist who helped found the anti-racist group And Castro For All, has been living in the building for 18 years. “The owners are speculators,” he said. “Seven of these units are LGBTQ tenants who have been here for decades.”
He said the community should work to push the owners to sell the property to a nonprofit so it can remain rent-controlled housing.
Sup. Rafael Mandelman spoke at the rally and said he agreed that the city needs to put up the money to buy buildings like this one. “We need to buy these properties,” he said, noting that Sup. Dean Preston is asking the board to set aside $64 million in Prop. I money to purchase properties at risk for speculation and evictions and that he supports the approach.
Buying this building for $6.3 million would be far cheaper than building 12 new units of affordable housing. I don’t understand why the Mayor’s Office hasn’t been more aggressive about this; the supes are willing to put up the money, and there are plenty of nonprofit and land-trust groups that can hold the title and manage the place without forcing out the tenants.
Mandelman made another point, though: The Ellis Act is creating a “cancer on the city,” with evictions of tenants who have done nothing wrong. “D8 is ground zero for no-fault evictions,” he said.
And the city’s representatives in the state Legislature need to do better. Repealing, or at least reforming, the Ellis Act “has to be the thing in Sacramento,” he said. Our representatives need to make it clear that “any time someone wants their vote for something,” Ellis Act repeal has to be part of the discussion.
State Sen. Scott Wiener has made a huge deal of trying to address the state’s housing crisis. He hasn’t made Ellis Act repeal even a modest part of his agenda.
But Assemblymember Alex Lee (D-San Jose) has a bill, AB 854, that would mandate a landlord who buys a building operate it as a rental for five years before invoking the Ellis Act. Lee’s office notes that “there has been a trend of serial evictors who evict tenants from multiple buildings.”
It’s stuck in the Housing and Community Development Committee, which was chaired by San Francisco’s David Chiu, who is now the city attorney.
