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The Complex: The City Falls Into a Housing Paradox 

Wednesday, May 28 2014

Page 2 of 5

They are, however, conspicuously silent when the landlord is their city benefactor.

If Dec. 23 marked a divorce between the city and Midtown, the 45-year marriage was troubled and unsought. It started, appropriately enough, with a shotgun wedding.

Nearly 2,000 units of federally funded cooperative apartments were constructed in Bayview and the Western Addition in the 1960s alone. Midtown was intended to be a limited-equity co-op — a collectively owned moderate-income community — like nine others dotting the city.

Then its developer went belly-up.

The city, in 1968, stepped in. It found itself — rather than the federal Department of Housing and Urban Development — in the property management business. So, a misbegotten development was dropped into the lap of city officials without the time, manpower, expertise, or, frankly, inclination to oversee it. And, on top of this, the transfer of ownership from the city to the residents — which makes a co-op a co-op — was never consummated.

Instead, the residents methodically paid off the city's mortgage for land and buildings they did not own and in which they held no equity. They remain renters, not owners.

A troublesome relationship festered for decades. An untrained, volunteer board of low-income residents with no experience in real estate or property management — and a built-in incentive to pull for keeping their rents as low as possible — was entrusted with long-term property management duties normally handled by city-funded housing nonprofits with paid, professional staffs. The city owned the land and structures, but accountability for managing the place was deferred to amateur volunteers and a succession of property management companies. For many years, even describing the city's oversight as "hands-off" would have been generous. As such, the system couldn't have been better executed to obscure accountability and ensure the complex's long-term needs went unaddressed.

"It was a day-to-day, month-to-month management process," says San Francisco Community Land Trust director Tracy Parent, who worked, abortively, to establish a co-op at Midtown. This was the case "for years. Without a plan for the future."

When the future arrived, it was expensive.

For generations, the city's de facto position on Midtown had been, in the words of one longtime housing activist, "everyone cross their fingers, close their eyes, and walk away. It has not been the proudest civic moment in San Francisco." But shortly after residents paid off the city's mortgage in 2006, officials from the Department of Building Inspection cruised through the premises. Their subsequent citations, charging a litany of violations, were delivered to the complex's landlord — the city.

Accusations of negligence and incompetence leveled at Midtown's volunteer board by city officials ensued; these only intensified as the city disgorged the aforementioned $4 million between 2009 and the present on faltering boilers, leaky roofs, mold removal, and crumbling staircases.

(These expenditures, directed toward Midtown over the course of five years, incidentally, represent the amount the city spends on homeless services in just over a week).

The Mayor's Office of Housing now estimates Midtown requires an additional $38 million in long-deferred maintenance.

Numerous calls and messages directed to the Mayor's Office of Housing either went unreturned, or were shunted to personnel who, subsequently, did not return calls and messages by press time. A source from within that office, however, accuses the city of "justifying 35 years of neglect," asking, "Why was no one at the Mayor's Office of Housing watching a $40 million asset?"

They're watching now. In a letter penned following the termination of the city's lease with the complex's resident board, Midtown dwellers were told "The City cannot spend money on emergency repairs to residents when the residents are not paying their fair share. ... Residents will receive rent increases based upon ability to pay. In no case will low income residents be asked to pay more than the standard affordable rent. Raising rents will bring in more income that will be used to pay bills and make some changes that will benefit residents. Raising rents is critical to the future major rehabilitation and new construction projects."

Midtown tenants' district supervisor, London Breed, has repeatedly called for "no displacement" of the complex's residents. This was also the crux of a 2007 board resolution stating no Midtown tenant should be evicted — even if "his or her income is too high or too low."

Numerous city observers have told SF Weekly, however, that this is a fanciful notion. Following an initial screening, Midtown dwellers' incomes are not monitored. A state low-income tax credit that the city hopes to use to enable the site's development, however, is bound by strict rules regarding residents' income levels. So, well-off Midtown residents aren't breaking any rules — but they are an impediment to the city's grand plans to stanch the bleeding on a money-losing property and develop it via an influx of outside funds.

The commitment to "no displacement" has not been offered in writing.

Instead, internal emails among staffers at the Mayor's Office of Housing gripe about intransigent Midtown residents having it too good. Tenants are accused of subletting rooms or whole apartments, and even using Midtown units as pied-à-terres.

A former longtime property manager at the site tells SF Weekly he believes perhaps 10 percent of the complex's residents were gaming the system in this way. "The parking lot," he marvels. "It looks like a car show!"

A quick jaunt around Midtown's parking lot does indeed turn up its share of Cadillacs. Some of the vehicles even sport Mitt Romney bumper stickers.

The city's contention that Midtown residents are locked into artificially low rents and ought to be "paying their fair share," undergoing income verification, and being made to contribute an appropriate sum to fund long-neglected rehabilitation and new construction on their own homes is difficult to argue against.

And yet, the city argues against it every day — with rent control.

Midtown dwellers' rents are low — paying well less than $1,000 for a three-bedroom setup is par for the course. Unlike residents at a public housing project, however, Midtown tenants' rents aren't calculated as a percentage of their verified incomes (as the city hopes to impose in the future). Rather, rates were established when denizens moved in, and raised incrementally in the years since — not unlike just about every other renter's experience in San Francisco. Per the contract nixed on Dec. 23, Midtown's rental rates were set by the Board of Supervisors.

About The Author

Joe Eskenazi

Joe Eskenazi

Joe Eskenazi was born in San Francisco, raised in the Bay Area, and attended U.C. Berkeley. He never left. "Your humble narrator" was a staff writer and columnist for SF Weekly from 2007 to 2015. He resides in the Excelsior with his wife, 4.3 miles from his birthplace and 5,474 from hers.


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