The Negev tech communes may be among the most violation-filled operations of their kind, but they are not the only ones taking advantage of San Francisco's high-demand housing market — and until recently, gliding under the radar of the law.
A hub for tech companies, The City has also become a hotbed for entrepreneurs who have cooked up ideas to house an increasingly younger work force. When Danny Haber, 26, and Alon Gutman, 27, opened The Negev Twelfth last year and The Negev Sixth and The Negev Folsom this year, they capitalized on young professionals' — and their own — need for scarce housing and set up community living models with shared common areas. A bed in one of these places went for $1,000 to $1,700 a month.
And Haber and Gutman are not the first to crack this market or break city laws doing so.
Another hacker house of sorts, StartupHouse at 934 Howard St. in South of Market, bears a resemblance to The Negev properties, with a brightly painted common area on the ground level and bunk beds upstairs where many tech workers reside. An anonymous complaint was filed this year with the Department of Building Inspection reporting illegal use of the commercial property with permanent residents and possible significant construction modifications done without permits.
In the Mission, a co-living space dubbed 20Mission at 3491 20th St. has three orders of abatement generated from outstanding notices of violation, totaling about $6,700 in fees owed to The City. Among the dozen violations, documented in the spring, was that an air well on the second floor was being used as a habitable space and packed with tables, chairs, a hammock, bottles, sound system and large propane grill.
A reinspection in September by housing inspector Bobbi Lopez revealed that the building still lacked cover plates for outlets and light switches and the gas stove needed to be replaced with electrical cooking appliances, among other violations.
Cases such as these in which property managers fail to abate issues keep inspectors continuously needing to revisit properties. With 20Mission, Lopez has checked back almost every month since March.
“It involves doing research, going out to the site, and it does take a lot of resources,” she said.
Property managers at 20Mission could not be reached for comment, but Elias Bizannes, who runs StartupHouse, said that “we are in the process of upgrading our facilities. … Our construction permits are in order.”
The Anti-Eviction Mapping Project recently identified a hacker hostel called ChezJJ at 1162 Geneva Ave. in Crocker-Amazon that makes $11,628 for 12 bunk beds per month and another bunkhouse at 185 Caselli Ave. near the Castro. The Geneva Avenue location had a string of overcrowding complaints with The City.
Many tech workers in such spaces likely don't know their rights as renters, said Jennifer Fieber, a researcher with the mapping project. Those rights include that they cannot be charged more than a proportional share of the total rent and must be provided a written statement of the true rent for a complex, as stated in The City's rent ordinance. Fieber added that selectively renting to people in the tech industry and only inviting them to apply to the digerati dorms seems to be a violation of California's Fair Employment and Housing Act.
The people behind tech communes that have taken over some of The City's single-room-occupancy hotels and houses have in many cases skipped over the proper legal process for setting up the living arrangements. Habitability issues at hotels date back to the Gold Rush, but “we've seen a lot more of this recently,” senior housing inspector Jamie Sanbonmatsu said of hacker house-style arrangements.
“As far as the condition of these three, we have seen worse in other kinds of hotels,” Sanbonmatsu said about The Negev properties. “What we're seeing in these hotels are problems following the permit process.”
Unless tenants or others bring issues before the Building Inspection or Planning departments, the operators often get away with violations.
“When we get complaints, we've been pretty proactive in ensuring that if there are any violations, we pursue them and we follow the process in order to get them down,” spokeswoman Lily Madjus said of the inspection agency.
Besides responding to complaints, the Department of Building Inspection's resources are limited to a partnership with about five community organizations that point out suspicious operations. Since 1995, with the founding of the Building Inspection Commission, the department has also been tasked with routine checkups of all properties with three units or more every five years.
Such departments in San Francisco and Jacksonville, Fla., are the only two in the nation that regularly fine negligent landlords and place liens on their properties, Sanbonmatsu said.
City departments and supervisors including Jane Kim have yet to grasp how widespread tech communes are and which ones are problematic.
“My concern — and this is highlighted by The Negev — is having new types of property managers that aren't familiar with the laws and rules and that are flagrantly violating our laws around building code and also the Rent Board,” Kim said. “And while I support new developments like this, I do have concerns they cut into what has been considered our affordable-housing stock.”
In a Facebook post to residents on Dec. 1, Haber — who has dealt with violations at all three Negev properties — described the growing pains of being a landlord.
“When we first started 11 months ago, I knew about tech and software but had no idea about real estate, construction, or buildings [still learning obviously],” the post read. “[W]e tried to avoid permits where possible; having learned after starting 6th street permits are positive in long run and we have fixed in past permit problems and continue to fix on 6th street and you can see everything on Folsom [except for a sink room which we are fixing] has been done with permits.”
But not all tech commune operators have been forced to comply after receiving citations and fines. Some have chosen to follow the rules from the get-go.
Among the co-living community, Campus runs 13 houses across The City. It has a reputation for being well-run. Units are more expensive than at The Negev, going for as much as $2,350 a month per room plus $260 for utilities.
Campus co-founder Tom Currier said each community house complies with regulations — a minimum of a one-month stay and maximum of two people per bedroom — and works with homeowners by signing two- to five-year master leases and specifying the maximum number of individuals that will live in each property.
“We take care of all the annoying logistics of shared living [house cleaning, restocking common supplies, fixing broken items in the house, and furnishing kitchens, bathrooms, & common spaces],” Currier wrote in an email.
A potential newcomer to communal living is Build Inc., which is receiving consultation services from Open Door Development Group, a firm for co-living properties founded in July 2013. Build Inc. is looking to make 1532 Harrison St. into commune-type housing.
Following the legal process for setting up commune living is “fairly straightforward,” said Open Door co-founder Jay Standish, 30, who added that the biggest challenge is fostering a social, cultural atmosphere in which everyone gets along and puts in their fair share.
“An independent, informal group of people might not care as much,” Standish said. “But we're a business looking to scale this model and so if there are any kinds of questions that come up or if something is unorthodox, we walk through the process with The City.”