SF Community Land Trust Stops Ellis Act Eviction

by Valerie Zekas on June 13, 2014

Amidst an ever-increasing background of displacement and Ellis Act evictions of lower income households in San Francisco, the San Francisco Community Land Trust (Land Trust) has prevented the displacement of 14 low-income residents in the Mission District buy purchasing the building before it sold on the private market.

On June 12, residents of 2976 23rd Street joined Supervisor David Campos, prominent housing advocates, and their former landlord to announce the sale of their building to the Land Trust. The Land Trust works to create permanently affordable, cooperative housing as a solution to San Francisco’s affordability crisis. This sale preserves 14 units of low-cost, shared housing that were at risk of eviction when the sellers decided to sell the building and listed it on the market for sale at $1,780,000.

Residents approached the Land Trust about purchasing the property, and also asked the Sellers if they would work with the Land Trust. The Sellers were empathetic to the residents considering the rash of evictions, and had already received interest from an investor who wanted to change the use of the property through Ellis Act Eviction. The Land Trust will now help the residents to form a housing cooperative through which they will operate and control the building, while the Land Trust maintains ownership of title to the land.

Observed resident Shalaco Sching, “My home is no longer someone else’s financial investment, and my living situation isn’t subject to the whims of a financial investment. Had the house sold it’s very likely that the nearly 20 residents would have all been evicted joining the tide of evictions that’s forced anyone who cannot afford to spend $3K on rent to leave the city they call home.”

Acquisition financing was provided by Boston Private Bank & Trust and a carry-back loan from the Sellers.

“With our long history of commitment to community investment, we are honored to be involved in the 2976 23rd Street project and want to congratulate the San Francisco Community Land Trust and our other partners on the successful planning and financing of this important development,” said Barbara Evers, senior vice president and community investment officer for Boston Private Bank & Trust in the San Francisco Bay area. “This is the kind of initiative that Boston Private Bank is proud to be part of because of its innovative and creative ways of preserving affordable housing that would otherwise be lost to strong market pressures.”

Brian Streiffer, one of the partners in the former owner BSGS Guesthouse LLC, explains:

“Although we did not know about the SFCLT specifically, my partners and I were familiar with similar land trust organizations.  We had always thought that the property would be a perfect candidate for a tenant-controlled Co-op, if we were ever to sell.  When we decided to put it on the market in 2013, one of our tenants asked if we would consider selling to the Land Trust.  We supported the idea immediately and contacted Tracy Parent in January of this year to pursue the idea directly.  How lucky San Francisco is to have such an organization. Although there was some extra work involved in selling the property to the Land Trust, I never doubted that the deal made sense for both sides.  Equally important, converting the property into a Co-op is the best and highest use for the property.  The Land Trust’s experience with this type of transaction breaks a mold and really paved the way for the sale to go through.  We are grateful to have played a part in seeing that the property will remain available as affordable housing – at least for the next 99 years!  The fact this deal runs 180 degrees counter to the current trend of Ellis Act Evictions and gentrification in San Francisco just makes the conversion of the property to a Co-op that much more gratifying. ”

The Land Trust plans to apply to the City’s new Small Site Acquisition Program this year to repay the seller’s loan, provide minor renovations and ensure the rents remain affordable. The acquisition-rehab strategy can be more cost-effective than building new affordable homes in San Francisco, and yields greater socio-economic benefits by preserving the existing social-economic fabric of the neighborhood. The successful acquisition of this small building reflects a new strategy that can be used by community organizations to preserve existing affordable, rental housing in a competitive real estate market.

Land Trust Organizational Director, Tracy Parent, said, “This is a small but significant victory for the community. As a result of the residents’ being pro-active and the sellers being supportive and cooperative, we were able to work together towards a win-win solution. Residents and community members have voting power within the Land Trust to ensure the long-term preservation of this unique community asset.”

In addition to rehabilitating and stabilizing the property, SFCLT will offer its financial education program to the residents to help them build their financial assets through savings, credit counseling, and debt management. SFCLT’s education program is funded by a Community Development Block Grant (CDBG) from the Mayor’s Office of Housing, The San Francisco Foundation and the Levi Strauss Foundation.

With the real estate market heating up in San Francisco, existing rent-controlled, affordable apartments are at risk of losing their affordability due to various market forces. When a long-term tenant moves out, the rent can be adjusted to market rate. Rents for a one-bedroom apartment start at $1800/month, which is not affordable to any household earning less than 80% of San Francisco’s median income. This may be good for an investor, but it’s not good for the community, especially when only 38% of San Francisco residents can afford homeownership and 62% depend on rental housing.

Additionally, Ellis Act evictions by investors who want to re-sell the units as Tenants-in-Common (TIC) units displace long-term residents, many of whom are low-income and will not be able to find alternative affordable housing in the community. According to Rent Board data, 1,977 eviction notices were filed between March 2013 and March 2014, nearing the record high in 2002, when 2,101 evictions were filed. Ellis Act evictions nearly doubled, from 116 to 216, about 11 percent of all evictions.

Filed under: San Francisco News

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