A woman holds a sign stating “Veritas lies” as Justin Sato, chief operating officer at Veritas Investments, speaks during a Board of Sueprvisors Public Safety and Neighborhood Services Committee hearing. (Kevin N. Hume/S.F. Examiner)

Time for landlord licensing in San Francisco

A proactive approach will deter misconduct and protect tenants

Landlord Kip Macy poured ammonia on his tenant’s bed and clothes and directed a contractor to cut the support beams below the tenant’s unit. He later pleaded guilty to criminal charges. After his prison term, he’s free to buy rental property and start harassing tenants again.

Ann Kihagi, recent owner of more than 50 rent-controlled apartments in San Francisco, is, according to City Attorney Dennis Herrera, “among the most abusive and lawless landlords I’ve encountered.” Before investing in SF real estate, Kihagi tormented tenants in Southern CA where she was hit with a $2 million penalty and ordered to jail for violating state housing law. That didn’t stop her from becoming a landlord in San Francisco.

Currently, Veritas is being sued by its tenants for an alleged campaign of harassment. Even if a court judgment is rendered against Veritas, that would have no impact on Veritas’ right to expand their real estate empire in San Francisco.

San Francisco needs to protect tenants from rogue landlords. Landlord licensing is a crucial tool that would create accountability, improve landlord professionalism, and protect tenants from abuse, unhealthy living conditions, housing discrimination, and wrongful eviction. Landlords who follow the law would have nothing to fear.

Most professions already require licensing to protect consumers and the public. Bar owners that serve minors, attorneys that mishandle client funds, and real estate agents that engage in fraud can all lose their licenses. Yet landlords can engage in systematic abuse of tenants and violation of housing laws and just keep on being landlords, and even buy up new rental properties.

The city already requires landlords of four or more units to register as a business with the City for purposes of tax collection. Adding a licensing requirement should be straightforward.

San Francisco should create an Office of Landlord Licensing responsible for oversight of the program. Landlords of bigger buildings would be required to obtain a landlord license. Conditions for issuing a license would include completion of minimum landlord education training/classes and a clean record in terms of civil or criminal liability for fraud, habitability violations, or housing discrimination.

Once licensed, landlords that repeatedly violate the law and disregard the health and safety of their tenants should face consequences. The OLL could decline to renew licenses based on findings or judgments by courts or administrative law judges. Conditional licenses could be issued for those landlords facing pending, but unresolved, city enforcement actions or notices of violations from city departments. Landlords who lose their license would be precluded from collecting rent, at least until the license was reinstated, perhaps following the model of the Rent Escrow Account Program (REAP) in Los Angeles. Meanwhile, in extreme cases, the City Attorney and District Attorney could seek a court order permanently banning the worst landlords from holding a landlord license in the City.

To be clear, the City already has the power to go after bad landlords, but it is cumbersome and slow. Too many tenants suffer as a result. For example, San Francisco sued CitiApartments and reached a settlement that effectively banned the company from owning or operating rental property in the city. But it took a decade of tenants being mistreated before the landlord was driven from the city, and the company single-handedly displaced hundreds, if not thousands, of tenants during that time.

Currently, landlords that routinely subject tenants to unhealthy conditions, unlawfully evict tenants, or violate tenant protection laws are allowed to continue abusing tenants with little fear of anything beyond a lawsuit that their insurance company will help them cover. A more proactive approach – landlord licensing – will help shut down the bad apples, deter misconduct, and protect tenants.

Dean Preston is a tenant attorney and candidate for District 5 Supervisor

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