San Francisco’s largest owner of rent-controlled properties is unwilling to entertain demands made Monday to pause the company’s marketing and sale of 2,163 housing units to the private market, according to Juliana Bunim, a spokesperson for real estate giant Veritas Investments.
Supervisor Dean Preston and the Housing Rights Committee, which released a list of the 76 building addresses to the public on its Facebook page on Jan. 20, on Monday called for a 60-day pause in the proposed sales in order to allow The City or nonprofits more time to explore buying some or all of the units.
Preston said he sent a letter to Veritas Investments CEO Yat-Pang Au asking for the extra time, which could also help enable the creation of protections and long-term stability for the tenants whose units are for sale, as well as for the screening of potential buyers. He asked for an answer by Friday.
“The homes of thousands of San Franciscans are more than just commodities to be bought, operated and sold for maximum profit,” Preston said. “These are the homes of our neighbors, our teachers, our city workers, our seniors, our families, and our friends.”
On Dec. 20, 2019, Veritas Investments listed the units exclusively to qualified nonprofits, giving them first right of refusal until Jan. 18, 2020 — the date the company could begin marketing to potential buyers. This period of exclusivity met the requirements of San Francisco’s new Community Opportunity to Purchase Act, approved by the Board of Supervisors last year, which is intended to make it easier for nonprofits to acquire buildings.
However city officials lambasted the company for listing such a large-scale portfolio sale to qualified nonprofits over the holidays.
“When you put 2,000 units up for sale in the middle of December, you are trying to evade city laws and get top dollar and ruin people’s lives,” Supervisor Hillary Ronen said at the conference.
Monday’s press conference is only the latest in a series of confrontations between Veritas and city officials. Veritas has come under fire repeatedly in recent years over allegations from tenants that it has abused rent passthroughs and in some cases allowed living standards in its properties to fall in order to push out rent-controlled tenants.
Referring to the for-sale property list the HRC made public, Bunim said Veritas Investments will not work with Preston or the Housing Rights Committee in “good faith” due to what the company alleges is the release of confidential information.
The morning of the press conference, Veritas Investments sent its own letter to the HRC quoting Section 41B.5 of the San Francisco Administrative Code, which states that “Any information obtained from a seller by a Qualified Nonprofit under this Chapter … shall be kept confidential to the maximum extent permitted by the law.”
“(The HRC) is using that illegally obtained information to go into buildings and knock on doors to talk to residents, which one could argue is really exploiting this process that was legally followed by Veritas,” Bunim said.
Bunim said, however, that the company is willing to discuss with the Mayor’s Office of Housing and Community Development whether there is an opportunity for the city to purchase the 76 buildings. MOHCD did not immediately respond to an email asking whether it has reached out to Veritas Investments to consider purchasing the properties.
HRC Executive Director Fred Sherburn-Zimmer said she didn’t believe the HRC’s release of the addresses was illegal.
“Housing Rights didn’t violate any law, but we very firmly want to protect these 2,000 units by whatever it takes to protect them,” Sherburn-Zimmer said. “There’s 2,000 units — we’re going to go bang on those doors no matter what.”
She said Veritas Investments was attempting to distract people from the issue at hand and prevent housing rights advocates from organizing.
Preston hadn’t yet read the company’s letter.
Although the cost of rent-controlled housing doesn’t change with property owners, longtime Veritas Investments tenant Ray Sullivan said he worried that the properties would go to “another” landlord that would exploit legal loopholes to raise rent and evict tenants.
Sullivan said that a central drain below his apartment has had a backup for the second time since October 2018, forcing raw sewage into his shower. As of Monday, he was on day four without a shower. He said he knew five people who would become homeless if their rent-controlled home became market rate.
“At this point we’re trying to determine what will happen, because at this point we don’t know,” he said.