As San Francisco continues to debate the future of its short-term rental law, city officials have launched an investigation into a well-known developer accused of illegally offering more than a dozen rent-controlled units as short-term rentals at a South of Market apartment complex.
Angelo Sangiacomo, developer of Trinity Place, allegedly leased nearly two dozen apartments – including at least 16 that are rent-controlled – to one person for the purpose of marketing them as short-term tourist rentals, according to the City Attorney’s Office.
Sangiacomo overcame years of contention to build the 1,900 apartments at Mission and Eighth streets nearly a decade ago.
City Attorney Dennis Herrera cited the investigation into the development at 1188 and 1190 Mission St. in a letter to Sangiacomo and his council Wednesday.
The investigation, according to the letter, found that at least 16 rent-controlled apartments at 1188 Mission St. and another seven units at 1190 Mission St. were leased to the same person at the same time.
Further evidence indicated each of the units were marketed for short-term rentals as part of The SOMA Suites Hotel, which would violate terms of the 2007 development agreement between Sangiacomo and The City.
The Planning Department has scheduled an administrative review hearing Thursday to assess whether units were offered as short-term rentals.
The investigation into Trinity Place for alleged illegal use of the apartments came as a surprise to housing advocates, particularly those who recall the years-long effort to iron out details of the developer’s agreement with The City that, most significantly, preserved hundreds of rent-controlled units.
The agreement, executed in 2007, included the construction of 1188 Mission St. and other buildings, as well as adding up to 1,900 residential units, of which at least 360 would serve as replacement rent-controlled units.
Chris Daly, then-supervisor of District 6, where the Trinity Place development site is located, said Thursday that maintaining the rent-controlled units was essential to the deal and the possibility those units were in turn used for short-term rentals is “disconcerting.”
“If it doesn’t violate the letter of the agreement, it certainly would be a major violation of the spirit of the agreement, which was the linchpin of getting that development done,” Daly said.
The investigation comes as short-term rentals remain a hotly debated topic in The City, with a new office created by Mayor Ed Lee in June to allow The City to streamline applications for its short-term rental registry and better coordinate complaints and enforcement.
The Planning Department has issued notices of complaint and violation to 16 addresses – not individual units – since The City’s original short-term rental law went into effect, which imposes a cap of 90 days for short-term rentals for unhosted stays, but allows unlimited rentals for hosted stays. One must register with The City and live in the housing 275 days out of the year.
As of Wednesday, the department has received 770 applications and issued 596 certificates to offer short-term rentals.
Additionally, the first-ever ballot measure in the U.S. to regulate short-term rentals is slated to go before San Francisco voters in November. Proposition F would limit short-term rentals of a unit to 75 days per year, regardless of whether the rental is hosted.
District 6 Supervisor Jane Kim, who championed for a first-of-its-kind Housing Balance Report that was released in July and showed The City loses a rent-controlled unit for every two units of housing built, said she had heard from tenant advocates last month of alleged rental violations at Trinity Place.
“I’m glad that The City is taking this on. It’s certainly probably one of the larger scale short-term rentals we’re seeing,” Kim said.
Such activity is precisely why Kim is also advocating for stricter enforcement of illegal short-term rentals, she added.