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| The SF-based volunteer group Anti-Eviction Mapping Project created this interactive online graphic to illustrate how Urban Green Investments has bought up hundred of units through forced evictions. |
Mary Phillips is a 98-year-old San Franciscan who has lived in her apartment at 55 Dolores St. for 50 years. After all that time and those years of rent control, the notice still came.
Her building sits adjacent to a construction site for new housing and across the street from 2001 Market St., where new dwelling units rest atop a Whole Foods — all additions from the last year and a half.
The other tenants left on buyouts, and just Phillips and her caretaker, Sarah Brant, remained in the old three-story building to fight the forced removal. Now Brant, a public school teacher at Balboa High, is being litigated against, a move that could leave Phillips without her caretaker.
At age 98, after a TV interview and a barrage of press, she has closed herself off from the media. She sought legal counseling from the Tenderloin Housing Clinic, which has seen its share of Ellis Act cases over the last year. Attorney Matt McFarland said he was unable to comment on the specifics of the case due to ongoing negotiations with the new owner.
The new owner is Urban Green Investments. Urban Green is actually a division of Cornerstone Holdings, based in Aspen, Colorado. The company has concentrated its buying of investment properties in Hawaii, Colorado and New York, but has particularly intensified its presence in the Bay Area over the last few years. They own at least 385 units in over 15 buildings in the city and are currently involved in roughly 40 LLCs, many of which they use to buy buildings, evict tenants and then resell buildings for a profit margin. And as there is no legal penalty for buying low-priced rental properties and converting them into high-priced units for sale, this whole operation is all just business in the black in terms of the law.
“Urban Green Investments invests in multi-family, commercial and entitled land real estate in California. Once a property is acquired, UGI adds value by increasing efficiencies, enhancing entitlements, and employing carefully calibrated green renovations,” CEO David McCloskey stated in a release to the media. McCloskey and his father Thomas McCloskey, the Chairman of Cornerstone, did not return phone calls.
But investment property can be a messy business, and Urban Green has come under fire among pro-tenant organizations in the city for its amassing of property. The Anti-Eviction Mapping Project is one such volunteer organization. This summer it added to its website an online, interactive map of Cornerstone’s aggregate buying efforts in the Bay Area. The Castro and Mission neighborhoods are the heart of the affected areas.
Erin McElroy, a member of the group, said they were prompted to create the map due to the growing number of rental properties acquired by Urban Green. She pointed to two 2013 statistics from the group’s research: 60 percent of Ellis Act evictions were issued by property owners who had owned the building for less than one year; and 79 percent of those evictions came from owners of less than five years. She said Urban Green and Cornerstone generally fall into this category.
“The last thing that they need is more property — they’re doing just fine. They certainly don’t need to displace a 98-year-old woman of her home of nearly 50 years,” McElroy said, adding that they own quite a bit of property in the Castro area.
One such area property is 49 Guerrero St., where Mervyn Wong and his elderly disabled mother dealt with an eviction in 2013 before reaching a settlement. Others include 257-261 Sanchez St. (via 257 Sanchez Street LLC), which was sold in late June, 591 Waller St., later sold off as TICs after the tenants were served an eviction, and 109 Alpine Terrace, McCloskey’s former residence, now empty.
Eviction Free SF is another organization that has taken direct action against Urban Green. In addition to a number of organized protest calls to McCloskey and his offices, on July 9, dozens of members descended on their 1746 Union St. office to protest its business practices and to support Mary Phillips.
Member Fred Sherburn-Zimmer said Urban Green is simply an out-of-town speculator. She said it has demonstrated a pattern of buying up properties with low-income renters, often housing seniors, the disabled, and people with medical conditions —evicting the tenants to convert the units into higher-end housing such as TICs, and finally reselling them for a high profit margin.
“What we are seeing is a different class of renter moving into the area, much more well off tenants,” she said.
She said that the Urban Green would often just threaten to evict everyone and then offer a buyout package to the renters.
“Ninety-percent of the time they just threaten to Ellis Act,” she said. “It’s pretty troubling.”
McElroy said the company’s buyout tactics amount to bullying tenants.
“Urban Green is notorious for offering buyout brides,” she said. “They purchase the building and then tell all the tenants they are being Ellis Act evicted. But then what they do is they’ll say but if you want to take the buyout, the first tenant will receive $40,000 and the second tenant will receive $30,000. It’s kind of a divide-and-conquer technique.”
The Anti-Eviction Mapping Project has also posted a number of notorious lists on their site for landlords and property speculators who they say have misused the Ellis Act by displacing seniors and those with disabilities. There are the “Dirty Dozen” and the “Dirty Thirty” — both which McCloskey finds himself on — along with “Dirty 2.0: Tech Evictors” and “Dirty Developers.”
Besides just large speculators, more people are also getting into the game of buying and selling. When large companies like Urban Green use the Ellis Act to evict tenants and make profits flipping buildings it directly encourages “wannabe” real estate speculators and realtors to try their hand, said Ted Gullicksen, executive director of the San Francisco Tenants Union, which houses the Anti-Eviction Mapping Project.
“Small-timers are beginning to use it more aggressively,” he said. “Small-time landlords who never would have thought of selling are now thinking to sell.”
Now former Castro resident Ashley Taranto was recently affected by this type of small-time sale. After six years of good relations and prompt rent payment to her onsite landlady, the landlady’s attorney served Taranto an eviction notice on July 19.
“I went through all of the avenues available to me locally — the Tenants Union, the Eviction Clinic. I spoke to administrative judges on the Rent Board,” she said. “When it comes down to it, I was being evicted legally so my landlord could sell the house that I was living in. So, I have been legally evicted and have 30 days to find a new home.”
With respect to the Ellis Act, local politicians have looked to the State Legislature for changes. In late May, State Senator Mark Leno’s SB 1439, aiming to halt such evictions within the first five years of a building’s sale in San Francisco, passed the Senate in Sacramento. In late June it went to the Assembly, and 98-year-old Phillips traveled to the capitol building to rally support for the legislation. But it failed in the Assembly by one vote and is now effectively dead.
“Clearly it’s a sign that the state Democrats get too much money from real estate,” Sherburn-Zimmer said.
But a ballot measure for November’s election is not. The Anti-Speculation Tax is a measure that, if approved by voters, would impose a graduated transfer tax on short-term sales of apartment buildings. If the sale of a building occurs within the first year of ownership, the tax would be 24 percent of the selling price, decreasing to 14 percent by the fifth year. It doesn’t apply to single-family homes, condos, or TICs.
Gullicksen said it is imperative that voters pass this measure in November to discourage rampant real estate speculation.
“It goes at the profit motivation of speculators,” he said. “If we can grab half of their profit, then we can limit the evictions.”
But November is a long time off for Mary Phillips. There has been talk by Urban Green of allowing her to stay in one of the new units. But if there is one thing the 98 year old has learned in 50 years of renting in the city, it is that there are no guarantees.
Graphic by Anti-Eviction Mapping Project
Story from August 2014 Edition of The Castro Courier
