A stream of perturbed tenants living in buildings owned by one of the city’s largest landlords, CitiApartments, Inc., converged on City Hall May 12 to testify that in recent years the company has engaged in an alleged campaign of intimidation and harassment against residents living in rent-controlled units.
Attendees, many wearing stickers that read "Tenants standing together for fair treatment," quickly filled to capacity a committee room used by the Board of Supervisors before the overflow was moved to two other large rooms where televisions airing the meeting were situated.
CitiApartments turned out its own army of supporters in an attempt to offset the impression that it’s unpopular among renters in the city. Dozens of people who claimed to back the company’s business practices attended the meeting wearing shirts that stated, "I support CitiApartments."
But a volunteer with the Queer Youth Organizing Project and organizer against CitiApartments complained to the supervisors that the crowd of supporters had either been paid to attend the meeting or were employees of the company. Few CitiApartments supporters filled out comment cards or spoke publicly in defense of the company.
Some CitiApartments tenants said they endured months of lingering construction work that filled their buildings with debris and garbage after CitiApartments bought its buildings, the upheaval intentionally designed to drive them out in frustration and thus give up their stabilized rent rates.
Others said vulnerable tenants like undocumented immigrants and seniors were specially targeted with intimidation tactics by a private security group working for CitiApartments that appeared at their doors asking for personal information. Utilities were frequently shut off, tenants said, or elevators relied upon by the physically disabled were left inoperable for long periods of time, all part of a campaign to scare them away from their apartments.
"This is not simply about a bad landlord," tenant Debbie Nuñez, who lives in a Lower Nob Hill building purchased by CitiApartments in 2000, told the supervisors. "This is about a well-oiled machine."
Sup. Chris Daly sponsored the hearing by the board’s Land Use and Economic Development Committee to receive an update on the city attorney’s lawsuit against CitiApartments, a.k.a. Skyline Realty. He also wanted to discuss the company’s swift rate of property acquisitions in San Francisco and to hear testimony about mounting alleged building code violations at some of its buildings.
City Attorney Dennis Herrera sued the company and several of its subsidiaries in August 2006 alleging an "egregious pattern of unlawful and unfair business practices," and a "shocking panoply of corporate lawlessness, intimidation tactics, and retaliation against residents."
Five months prior, the Guardian published a three-part series of stories documenting claims by current and former CitiApartments tenants that they had been the victims of persistent, aggressive attempts to oust them from rent-controlled housing units. If such tenants vacate the apartments for whatever reason, CitiApartments can raise the rent on those units dramatically.
A recent report by the Legislative Analyst’s Office shows CitiApartments today owns nearly 300 properties here, which combined hold from 6,300 to 7,500 units and about 12,000 tenants.
Sup. Aaron Peskin, who sits on the committee with Sups. Gerardo Sandoval and Sophie Maxwell, said at the meeting that his office receives a complaint once a week or at least every 10 days about CitiApartments, a figure that has increased over the last three years.
"I don’t recall ever hearing complaints about Trinity Properties in the city," Peskin said. "They own 6,000 units."
Daly pointed to a May 9 New York Times article that reported on the rising phenomenon of "predatory equity," in which private investment funds bankroll the acquisition of a large number of rent-controlled apartments in New York anticipating higher-than-usual vacancy rates. But tenant advocates say achieving such rates requires a concerted effort, either through offering one-time buyouts, finding nuances in the law that allow for an eviction, or harassing tenants until they grow exasperated and leave.
The significantly higher revenue generated from market-rate rental prices then enable building buyers there to repay the equity firms that gave them the huge loans to buy the properties in the first place. Daly wants to find out if CitiApartments is deploying a similar "business model" in San Francisco.
According to the Times piece, developers backed by private equity firms have purchased nearly 75,000 rent-controlled units over the last four years in New York. One company that bought a group of buildings in Queens subsequently filed around 1,000 cases against tenants in housing court during an 18-month period.
A lawyer for CitiApartments, Tara Condon, promised the committee members that the company would investigate the complaints made by tenants at the May 12 meeting. She added that the company increases tax revenue for the city when it improves the conditions and appearances of buildings it purchases. She also declared that the company makes local charitable contributions and has reached out to financially troubled tenants.
"We are a business, but we try to work with [the tenants,]" Condon said. "We want to make sure they can stay in their apartments."
One former tenant, Donna O’Brien, testified that CitiApartments helped her and her husband find a more affordable apartment after the company bought a previous building she lived in at 516 Ellis St. last year. She said CitiApartments also paid for her moving expenses. "Quite honestly, CitiApartments has been very good to us."