Joe and Ruby Lee bought a three-story building by Chinatown on Pacific Avenue near Taylor Street in 1998 with the intent of moving into one floor and renting out the other two until their sons grew up and could house their own families there.
But things didn’t go according to the Lees’ plans.
Upon getting married, the Lees’ sons moved out of The City — one to the Los Angeles area and the other to Cincinnati. The Lees are now leasing one two-bedroom unit to a family for $2,050 per month and the other for $940 per month to an elderly Chinese couple that had lived there for a few decades prior.
When Joe Lee, 67, tried to raise the couple’s rent even by a small amount, they complained. The building would be worth more if the unit weren’t rented so far below market rate, but Lee said he doesn’t “have the heart to force them to move.”
Tired of the problems that accompany landlord duties, the Lees are thinking about selling the building once the current tenants vacate their unit. The Lees’ sons, after all, have no interest in moving back or becoming landlords.
“I would sell it and move out of The City so I wouldn’t have to have such a headache and be worried,” Joe Lee said. “Because right now, the rent I get is very low and the building is not worth as much.”
The Lees are part of a generation of property owners with American-born children, who, in many cases, aren’t interested in operating the buildings. The children often can’t agree on how to manage or split the income, which creates a prime opportunity for speculators to swoop in, evict tenants and raise rents.
Josephine Zhao, co-founder of BetterHousingPolicies.org, said her organization includes several property owners, including the Lees, with buildings in Chinatown and that many members end up selling.
“The reality is, it’s so hard to make it work to be property owners,” Zhao said. “Speculators are the ones that come and prey on us and buy our property cheap because we can’t deal with it anymore and they can just flip it.”
Longtime landlords putting their properties on the market signals the first step toward increasing ownership changeover in the Chinatown housing stock that has traditionally been within the reach of new immigrants and those of low income, said Malcolm Yeung, deputy director of the Chinatown Community Development Center.
“The worst case scenario is they want to cash out, and I would say the best case scenario is the siblings can’t figure out how to run it,” Yeung said. “They don’t want to split the revenue for it and then they just decide at that point, ‘We have to sell it and split the asset.’
“I would say virtually every one of the eviction patterns came across because of that kind of situation and it’s startling,” he said.
Data compiled by the Office of the Assessor-Recorder shows 64 properties north of the Financial District were sold in 2014, 77 were sold in 2013, 67 in 2012, 21 in 2011, and 9 so far in 2015.
The single-family residential building with the highest price tag this year was 611 Washington St., No. 2204. It sold for $2.05 million in March.
Thomas Lee, a housing-rights attorney for Asian Americans Advancing Justice Asian Law Caucus, said property with potential for ownership change by generation is alarming in the Chinatown area because “that’s the only type of property that is available in the hot San Francisco market right now” to speculators.
The City can disincentivize speculator behavior with programs like Mayor Ed Lee’s small site acquisition program, in which The City partners with nonprofits to buy a property in danger of entering the market, said Jay Cheng, deputy director of the San Francisco Association of Realtors.
“[The Association] would be supportive,” Cheng said of the program. “Because we see a clear solution on the table that can solve the problem.”