Daly City residents are urging city officials to take down an eight-foot-tall fence that recently appeared, blocking a public path near Thornton State Beach and featuring a handmade cardboard sign with a drawing of a gun and a message stating trespassers will be shot on sight.

As KRON4 reports, San Mateo County Supervisor David Canepa sent a letter Friday to the California Coastal Commission requesting that the property owner be ordered to remove the large, metal fence, which blocks a public path to Daly City's Thornton State Beach used by local beach-goers, hikers, horseback riders, and dog walkers.

“On the fence was a hand drawn sign with an image of a gun warning that trespassers would be shot on site,” wrote Canepa, per KRON4.

“There is only one trail down to the beach from Olympic Way,” Canepa continued, per KRON4. “This multi-use trail is a popular destination for recreation extending from the scenic bluffs and cliffs overlooking Thornton State Beach all the way down to the water.”

Per Reddit, the fence is located on property owned by Olympic Way LLC, which sits on the bluffs between the beach parking lot and the equestrian Mar Vista Stables. According to a campaign created by residents, Olympic Way LLC had previously planned to develop a private religious retreat on the land, which was shut down by the commission in 2021, as the SF Examiner reported at the time.

According to a comment on a change.org petition about the fence, some residents believe the fence was installed as retaliation for shutting down the project.

“There was zero need for the property owner to sabotage public access to a State Park by fencing off the path that borders his property other than to intimidate and seek revenge because the surrounding community did not want a religious outfit to build upon the property and take over the space,” wrote Tina of San Francisco on the petition.

“The state should purchase the property and add to the park. Keep it open and voice the need for path access to Daly City, San Mateo County and the State of California Parks system,” Tina continued. “This is such a pathetic attempt to intimidate neighbors and the use of public property.”

Per KRON4, the fence brings to mind a similar incident in which billionaire Vinod Khosla, co-founder of Sun Microsystems, tried for a decade to keep Marins Beach in Half Moon Bay to himself, as SFist reported at the time.

While most assume the property owner erected the Thornton Beach fence, some residents suspect a longtime squatter installed it, due to the highly threatening, handmade sign, per Reddit.  

“Kind of darkly funny that people are calling out billionaires when in contrast some are saying this was probably done by a mentally unstable squatter who is apparently well known to people in the area,” said Redditor m0llusk. “Property owners still have responsibility for this situation, just not in the way  many are thinking.”  

“I am urging the California Coastal Commission to stand up once again and oppose any efforts to restrict access to public beaches by private landowners and to have the property owner specifically to dissemble the fence restricting access to Thornton State Beach,” concluded Canepa, per KRON4.

Per Reddit, Daly City residents are encouraged to attend a city council meeting on Monday evening and leave a public comment before 4 pm Monday.

Image: Jin Chen; Bay Area Hikers/Facebook

Related: Silicon Valley Billionaire Wants $30 Million For His Beach Access, National Media Shames Him

Back in 2003, a friend of SFist found a discarded typewritten letter on the ground in SF’s Financial District, which reads as if Danielle Steele typed it up and tossed it out her Pac Heights window. The very Bay Area-esque diatribe is full of twists and turns.

The original manifesto, which was found outside 560 Davis Street near the Embarcadero, consists of one single painstakingly typed wall of text directed at “Tim” from an unnamed management company. It repeatedly mentions employees named Tina and Allen, along with a “neurotic” named Ernestine and someone named Able, who’s a bit of a gloater. Amidst the vitriol, the letter takes a grim turn as the author mentions an incident involving a victim of sex trafficking, from which they say the management company profited.

Whether it was written in the ‘90s, 2000s, or today, such a letter is sadly timeless in San Francisco. So, grab your popcorn.

Yes, Tim, we know where you live, and we intend to publish your address and telephone number. Wait until the tenants know where to call you and where you live. The thought of people ringing your door bell truly delights us. When Ernestine [redacted] and some of the other neurotics know where to contact you, you will be in trouble. We are doing everything in our power to alert the federal authorities and we want nothing more than to see you in jail. Greed has made you stupid, and when the time comes for the court trial, Allen, Tina and those other rats working there will throw you to the wolves.

We have a contact that gives us all the information we need. How did we know about Stephanie? How did we know where you live? How do you think the Examiner knew? The rock you hide under has become a very public place. We wait, we watch, we plan and we will ruin you. We want to see you in jail. Is that clear, you bastard?

Install your cameras, have your guards watching, hire more detectives and bring in more consultants to conduct encounter groups, your efforts are a constant source of joy and amusement — we are laughing at you. We knew about the cameras in the town house and laundry room. You cannot hide from us and neither can those pack of Hyenas you have working for you. When you fall, Able will probably have a gala party.

Do you have any idea how much the people you do business with hate you and your staff? Hopefully, this will be your last chance to cheat and rob your tenants. You are truly the most despicable people we have known. We wish you and that pack of animals that work for you nothing but ruin and disaster. We hope someone in your family has the same experience as the prostitute that was beaten up. Allen can tell them that being beaten is just a natural part of life in the big city. Did he really say that? Only an animal like you would allow that kind of statement to be made.

The woman who was beaten was only twenty years old. She was smuggled into this country and sold as a sex slave and you profited from her misery. Do you truly understand what you have done? Do you truly understand how much you are hated? Do you truly understand how much Tina and Allen are hated? How can any person work for you and those other two despicable people?

Top image: Cannell Entertainment/Fandom

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• Concord landlords paid fake activists $250 to attend a March city council meeting wearing “Repeal Rent Control” shirts. Some of the attendees were also holding signs with contact information for the California Apartment Association. [Mercury News]
• Alt National Parks, which has been organizing behind-the-scenes to fight the current administration, has a list highlighting various domestic control powers from a hidden arsenal that Trump can now access after declaring a “national emergency.” [@AltUSNationalParkService]

• An Ebony Alert has been issued for 21-year-old Laila Ford who was last seen near Belview and Palm avenues in Oakland at around 7:30 p.m. on Thursday. [KRON4]
• Sunday Streets just announced its 2025 schedule, which will be the festival’s 17th season. [Sunday Streets]

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Welp, hopes that a real estate investor who has been quietly assembling multiple properties on Fillmore Street in Pacific Heights has only good intentions to revitalize the area appear to be dashed.

We're now learning that the various shell entities that have been previously linked to 39-year-old venture capitalist Neil Mehta, which among other buildings have acquired the defunct Clay Theatre, are starting to give eviction notices and warnings  to some of the legacy businesses on the 2200 block of Fillmore.

These include La Mediterranee, a 45-year-old restaurant that received legacy status from the city in 2019, and Ten-Ichi, a 46-year-old Japanese restaurant that is being run by the children of its original founders, who were Japanese immigrants to the city.

As the Chronicle reports today, Ten-Ichi owner Steve Amano says the sale of his restaurant's building is still in escrow, and the new owner, a company called Great Stage LLC, is asking them to vacate by next month. Amano tells the paper that he knew the sale was going on from his landlord, but he just expected that the new owner would try to hike his rent.

As Amano tells the Chronicle, "We’ve been here for 46 years. This is the opposite of what San Francisco does to long-term, legacy business tenants. This guy is displacing us."

Reportedly La Mediterranee has also been told that they will need to vacate their space across the street at 2210 Fillmore Street when their current least expires.

It's not clear how many buildings Mehta and his shell companies own at this point. As of April, The Information had linked Mehta to six recently sold buildings in the area, including the Clay Theatre. These were mostly on the 2200 block of Fillmore, but all within a three-block span, and the buildings had sold for higher-than-expected amounts.

The report included info from a source saying that Mehta planned to spend "tens of millions" of dollars to assemble a portfolio on the street.

And the Chronicle had a source saying that Mehta "plans to elevate the quality of upper Fillmore’s retail offerings," and intends to revive the historic Clay Theatre "as a high-end theater and hospitality concept" — would that be akin to, say, an Alamo Drafthouse? Or higher end than that?

In any event, it is sad that five-decade-old businesses are getting shoved out, and we don't yet know what these "elevated" offerings will be down the line.

Mehta has so far declined to comment on his plans, and nor has his agent in the project, who reportedly is nightlife, entertainment, and real estate entrepreneur Cody Allen.

Previously: Mystery Buyer Who’s Bought Nearly a Block of Fillmore Street — Including the Defunct Clay Theatre — May Be Identified

Photo via Yelp

Landlords expecting that another boom time is just around the corner, ignoring the fact that retail has been struggling since before the pandemic and that restaurants are struggling to stay afloat across the city, may shoulder much of the blame for the impossible economics of managing small businesses in SF.

We’ve been hearing it since 2018 at least, if not before: In some popular neighborhoods in San Francisco, the rents being demanded by landlords for street-level commercial space are cost-prohibitive for anyone but large chains. And in neighborhoods where formula retail is essentially banned, that has meant half a decade or more of depressed blocks with multiple vacant storefronts, and businesses that open and shut within a year or two.

Jump to 2024, and with SF’s local economy still in recovery mode from the pandemic, with the cost of doing business in San Francisco — and the cost of building materials and labor for new restaurant and retail spaces — continuously rising, and you have a landscape where many businesses fail or are on the brink of failing.

The issue comes to the forefront this week with a new opinion piece by the Chronicle’s Soleil Ho, who talked to two restaurateurs with relatively new restaurants who say they’re barely making it, or could be in serious trouble, largely because their overhead is far too high.

Azalina Eusope, who has already watched a business go under that opened just months before the pandemic lockdowns began, has been trying to make a go of it in the past year in a new space in the Tenderloin. Her restaurant, Azalina’s, has won plenty of praise, from Eater, the Chronicle, and others, and it’s serving a pretty reasonable four-course prix fixe for $100 that includes beverages.

January is always a slow month for restaurants, and typically a terrible time to be asking restaurateurs how they’re feeling about their businesses, but Eusope bemoans nights when she only gets five customers in the dining room, when she has overhead of $70,000 per month to cover, including $11,000 per month in rent.

That rent was locked in before the pandemic, but it already seems outrageously steep for a space a the corner of Ellis and Leavenworth that hasn’t exactly been a prime restaurant hot spot for decades. Eusope tells the Chronicle that she has been trying to renegotiate her rent based on the current reality of the neighborhood — but really, was $11K ever reasonable for that space?

And it appears, even after everything the city has gone through, stubborn landlords are still basing their prices on a reality that doesn’t exist, and that might not exist for years. As Blake Kutner, the director of business development for La Cocina — the food business incubator that helped launch Eusope into business — tells the Chronicle, “People are still basing prices on peak times, on what they think might be possible.

He explains the thinking of landlords as being based on a hypothetical future in which, they imagine, restaurants or stores might be booming and paying them too little for the privilege. “For many places, rent is close to what it was pre-pandemic even though sales might be half. Landlords are thinking, ‘If I underprice it now, it’ll feel like a mistake three years from now.’”

If a landlord themself is facing rising costs, from insurance, interest rates, or whathaveyou, then some of this thinking might be justified. But for second, third, and fourth-generation landlords of long paid-off properties, this is pure greed at work. And while the SF Board of Supervisors and SF voters passed a “retail vacancy tax” in 2020 to combat the trend of landlords leaving spaces empty for years while demanding high rents, very few landlords have felt the impact of this. As the Chronicle reported last year, since the tax took effect in January 2022, only 74 landlords had paid it over a year later, despite probably hundreds if not thousands of landlords who would be subject to it under audit.

It’s a favorite refrain of business owners in SF to complain about “the city” not doing enough for them, and “the city” being hostile to small business for various reasons from red tape to policing. But what’s more hostile to small businesses than charging unrealistic rent that will likely mean they’ll have to close unless they’re wildly successful in their first year?

Ho also points to the fact that diners get sensitive to rising dish prices, despite the fact that restaurant owners are, in most cases, barely making a profit and hardly trying to rip you off. Ho speaks to Tracy Goh about her Noe Valley Malaysian restaurant Damansara, and how diners often tend to balk at prices over a certain level for "ethnic food," and about how delivery apps like DoorDash essentially erase all profit for any restaurant with their fees, even if they might keep a kitchen busy on a slow night.

But let’s start with the landlords. If rents weren’t so impossibly high, despite the dreary landscape for retail and restaurants that we face, then prices wouldn’t have to be so high to make things pencil. The city can surely improve and make permits easier and the like, but if the rent wasn’t so high, maybe more interesting retail and adventurous restaurants could start opening again, and landlords wouldn’t be sitting on so much vacant ground-floor space.

Previously: What You Need To Know About Prop D, the Retail Vacancy Tax

Photo: gorgonzolabee/Instagram

SF’s biggest residential landlord Veritas Investments reportedly has $1 billion in delinquent loans that the company is trying to sell off, and could lose about a third of its properties across town.

We hate to see misfortune befall any business in San Francisco. Well, except for maybe on certain occasions, when the misfortune is befalling a company whose profitability depends on evicting rent-controlled tenants while racking up record numbers of code violations. We’re referring to Veritas Investments, who apparently have $1 billion in delinquent loans, according to a Thursday report in the Chronicle. That follows a January report in the Chronicle that Veritas had defaulted on a $448 million loan, and the company could end up losing up to a third of its inventory in the city over this accumulated debt.

In real estate and banking industry lingo, these defaulted loans are referred to as “nonperforming” loans, and a third-party brokerage called Eastdil Secured is trying to sell off these loans. The Chronicle obtained the marketing materials Eastdil is using to market these loans, and they use corporate marketing-speak that would make Kendall Roy proud.  

The brochures call these loans “an irreplaceable aggregation of high-quality assets at a highly opportune time in the San Francisco market” and “an exceptional opportunity to achieve immediate scale with tremendous downside risk protection and a compelling growth trajectory,” per the Chronicle.

But the San Francisco Business Times summarizes in plain English what this means for Veritas. “The latest move appears to indicate that the lenders would prefer to sell the loans to another entity that would likely foreclose and take ownership of the properties,” according to the Business Times.

There are two portfolios of loans Veritas is trying to unload. The first is a collection of 75 buildings with 45 commercial spaces (generally ground-floor retail on apartment buildings) that has defaulted to the tune of $802 million. The second consists of 20 buildings and defaulted in January on $138 million.

There may be more to the strategic story here, when it comes to these properties. Veritas said in a statement to the Chronicle that they are “continuing to work with our partners and lenders toward a resolution on a portfolio owned by institutional investors,” and that “one of the parties in the lending and ownership structure has taken another step in the special-servicing process previously reported, and the loan-note may be sold to other parties, or may continue to involve Veritas.”

You may recall that Veritas tenants formed a union and some even went on a rent strike, alleging a pattern of illegal evictions and unaddressed code violations.  One such code violation, according to Housing Rights Committee of SF organizer Brad Hirn, is a Mission District building that hasn’t yet had its required soft-story retrofit — something the city required all buildings to complete by 2021 out of earthquake safety concerns.

Hirn told the Chronicle, "The tenants have been told that Veritas isn’t doing the soft-story work because they are in debt."

Related: SF’s Biggest Landlord Insists It Won’t Delay Selling Its 67 Rent-Controlled Building [SFist]

Image: Veritas via Facebook

The U.S. Supreme Court has denied review for a case brought by an Oakland couple regarding their owner move-in eviction, in a blow to all landlords who want to legally challenge city requirements regarding tenant buyouts in no-fault evictions.

The real estate lobby and landlords in Bay Area cities that have strict rules about tenant relocation payments were closely watching this case, which dates back to 2018. Landlords Lyndsey and Sharon Ballinger, who were both enlisted in the Air Force when they moved out of their Oakland home in order to be transferred to Washington, D.C. in 2015, came back in late 2018 to find that they could not just politely ask their tenants to leave. They were required under Oakland law to pay $6,582 in relocation expenses to the tenants, which they paid, but they then sued the city over what they considered illegal government seizure of property.

Libertarian activists nationwide, and real estate interests, saw this as a good case to run up the chain in the hopes of invalidating pro-tenant laws like this, the likes of which have been on the books in San Francisco, Berkeley, San Jose, and Los Angeles for years — but Oakland's law only took effect in 2018. The libertarian-leaning Pacific Legal Foundation took on the case.

In 2019, a federal judge ruled against the Ballingers, saying that the "[Oakland] City Council’s legislative purpose, to promote community stability and help tenants avoid displacement and high moving costs, was a legitimate one."

They appealed the case to the Ninth Circuit, which ruled against them in February. "The Ballingers voluntarily chose to lease their property and to ‘evict’ under the ordinance — conduct that required them to pay the relocation fee," wrote Trump-appointed Judge Ryan Nelson in the 3-0 ruling. Nelson further wrote that the Oakland ordinance was not an illegal government seizure of money or property, but was a standard "regulation of the landlord-tenant relationship," which the Supreme Court had consistently upheld. Cities are permitted to charge taxes and fees to property owners for various reasons, including for things like hazardous waste cleanup.

And as the Chronicle reports, the Supreme Court has essentially concurred, though without any written decision or evidence of dissent.

The Pacific Legals Foundation has tried to set this up as a conflict between two hard-working members of the military and their former tenants, who were apparently tech workers.

"The Ballingers are disappointed that the court failed to recognize that the Oakland law forcing them to pay their software industry tenants $6,500 before they could re-occupy their own home, in accordance with the terms of lease executed before the law was even enacted, is unconstitutional," the foundation said in a comment after the Ninth Circuit ruling four months ago.

But tenants' rights advocates argue that such laws are necessary especially in places like the Bay Area with extremely high rents.

Oakland City Attorney Barbara Parker said, in response to the Supreme Court's denial, that "the modest relocation assistance landlords must provide to tenants who are displaced, by no fault of their own, in an owner move-in eviction, provides critical support for those facing unanticipated moving expenses and other relocation costs," and can help tenants avoid homelessness. Parker previously has cited the fact that many displaced tenants lose the rent-control protection they may have had for years, and they face a rental market with exorbitantly higher rents than they were paying, leading to potential displacement out of their community altogether.

J. David Breemer of the Pacific Legal Foundation said in a statement, per the Chronicle, that the Ballingers are disappointed but they hope the Supreme Court, in a future case, "will ultimately agree that rental owners are entitled to real constitutional protection when government requires them to pay off tenants before moving back into their own home."

Previously: Oakland Landlords Lose Case Over Paying Tenants $6,500 To Leave

Photo: Ian Hutchinson

Two record-setting settlements of more than $2 million apiece in recent months, where the settlement cost more than the house itself, are putting a chill on the old owner move-in eviction runaround.

Evictions are way down during the pandemic, primarily because they’ve been mostly illegal thanks to certain local and state laws. This also includes the often-dubious owner move-in eviction, wherein landlords can evict tenants because they or a family member are moving into the unit, and the owner sometimes generates an implausible number of relatives to evict as many rent-controlled tenants as possible. According to data from the Chronicle, owner move-in evictions peaked in 2016 at 417 of them, dropped to 196 in 2019, and in 2020 — during the pandemic — there were but 29 of them.

But that Chronicle report notes the pandemic is not entirely responsible for this drop. Toughened owner eviction rules the Board of Supervisors passed a few years back increased the penalties on sham owner move-in evictions, and the Chron notes that in recent months, two record-setting settlements of $2.1 million and $2.6 million have spooked landlords away from the practice.

In both cases, the settlement cost more than the house itself.

“Insurance companies paid most of the money to fund these settlements and made the decisions to settle these cases,” landlord attorney Andrew Zacks told the Chron. “These extraordinary payments in cases such as these reflect on the difficulties that property owners face in the San Francisco court system. Insurance companies are reluctant to go to trial given the one sided nature of local law and the risks if the owner loses.”

This is a unique San Francisco phenomenon thanks to legislation from supervisors Aaron Peskin and (then-supervisor) Jane Kim that passed in 2018 which required landlords to declare under the penalty of perjury that they or a family member did indeed move in, and then gave tenants a three-year window in which they could sue if they thought the move-in was dishonest.

In the case of the $2.6 million settlement, attorney for the landlord of course claimed that the evicted tenant were “disgruntled former tenants who, after failing to extort an exorbitant cash payment from the Defendants before moving out, now seek to secure payment through frivolous litigation.”

There are reasons to be skeptical that the legislation is making as much progress as the Chronicle claims. They only cite two cases, though both were record-setting, and both had the same attorney, who certainly toots his horn quite well to the media. But it's an encouraging sign that one of the most notorious shady landlord practices could be on the wane.

Related: One In Four Owner Move-In Evictions Could Be Fraudulent According To New Investigation [SFist]

Image: Foreclosed or eviction notice on a main door with blurred details of a house with vintage filter (Getty Images)

Notorious landlord Anne Kihagi lost all of her SF properties a couple years ago, but her long-suffering tenants are still in the courts with her, and she just lost an appeal of a seven-year-old harassment case.

Longtime readers of this blog may recall the recurring story of “San Francisco’s cruelest landlord” Anne Kihagi, who at the peak of her San Francisco landlording in 2015, had about 50 properties across the city. Many of these generated horror stories alleging she terrorized rent-controlled tenants who didn’t take the buyout, in some cases cutting their utilities, accusing a 70-year-old grandmother of being a drug dealer, and pulling relative-move-in evictions with an implausible number of so-called relatives. Kihagi was jailed in 2017 for similar cases in West Hollywood, and ultimately, Mission Local reported in 2019 her remaining properties were placed in receivership, making San Francisco’s cruelest landlord no longer a San Francisco landlord.

Two months after that, Kihagi was even sued by her own attorney for non-payment of legal bills, much like she allegedly didn’t her properties’ utility bills.

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Kihagi may not have properties in San Francisco anymore, but the legal shoes continue to drop.  The Chronicle has the news that a $2.7 million harassment decision against her was upheld on appeal. That was an appeal of a $3.5 million harassment and wrongful eviction lawsuit from 2017,  a ruling described by SFGate at the time as the “largest in a single-unit landlord-tenant case not involving personal injury claims in the nation.”

A trial court had reduced the damages from $3.5 million to $2.7 million, but Kihagi appealed anyway. The plaintiffs cross-appealed to get the full $3.5 million, but the smaller judgement is upheld.

The full 57-page ruling from a state Court of Appeal adds new details of terrorizing landlord behavior, like “big beefy security guards” utilized to keep tenants and city inspectors from the premises, locks on mailboxes being changed so tenants could not get their mail, and the choice Kihagi quote, “I’m not spending any damn money on maintenance for the building.”

The appeal ruling is actually a setback for both parties. The evicted tenants did not get their larger settlement restored. But they did get a multi-million dollar settlement restored. Though as one of those evicted tenants Dale Duncan told Mission Local in 2019, he “hasn’t seen a dime,” and collecting on that ruling may end up requiring yet more time in court.

Related: Notorious Landlord Accuses 70-Year-Old Grandmother Of Dealing Drugs In Mission Eviction Fight [SFist]

Low-income tenants in San Francisco who were most impacted by economic shutdowns in the last year are getting another reprieve from the Board of Supervisors — and for those who owe back rent, it may be just a matter of weeks before their landlords get paid.

Both the Mayor’s Office of Housing and Community Development and California state legislators are in the process of administering federal stimulus funds for rent relief. And while the distribution of those funds gets agreed upon and underway, San Francisco is extending the moratorium on residential evictions citywide until December 31.

As the Chronicle reports, the SF Board of Supervisors voted unanimously on the extension on its first reading today, and it is all but guaranteed to pass its second vote. The extension means that the moratorium that was already extended through June 30 will go through the end of the year, and those in danger of eviction due to back rent due will have more time to get that rent paid — and/or to see their landlords get paid out by a state rent relief bill that is still working its way through the legislature.

That bill is one of the most ambitious programs of its kind ever undertaken, as the New York Times reported Monday. Thanks to a budget surplus and the influx of federal money, California is set to spend $5.2 billion to make sure all back rent is paid for low-income tenants, and another $2 billion to pay utility and water bills for those who are behind as well. The state's eviction moratorium is still set to expire on June 30, and tenant advocates have been sounding alarm bells about a potential massive wave of homelessness while some tenants wait for this state program to kick into gear.

The program is coming out of an amendment to Senate Bill 91, which Newsom already signed in January and which set up the rent-relief program.

As the SF Business Times explains, landlords are already able to apply to be paid 80% of back rent owed to them so long as they agreed to forgive the other 20%. But the amendment will make sure that 100% of rent is paid. Legislators are also working on extending the state's eviction moratorium either until September 30 or December 31.

While there is not hard data to say for certain whether $5.2 billion will cover all the back rent owed by low-income tenants statewide, Newsom's team believes it will be sufficient.

The Mayor's Office of Housing and Community Development is also in the process of distributing $90 million in federal rent relief funds, but as the Chronicle reports, there has been no publicized tally of how many renters have been assisted so far. The amount of back rent owed citywide is believed to be much higher than that. The department is expected to present the program results to a Board of Supervisors committee on Wednesday.

There has been some of the familiar squabbling between the Board, name Supervisor Dean Preston, and the mayor, over whether to allocate more city funds to the rent relief program, but if the state comes through perhaps that will be moot.

Also on Tuesday, the Santa Clara County Board of Supervisors voted to extend its eviction moratorium for unincorporated areas of the county through September, something that Marin County has already done.

Photo: Mary Hammel

A state application portal went live Monday for tenants and landlords seeking rental relief grants relating to pandemic hardship — part of a $2.6 billion federally funded aid program in California to help address lost income from the last year, and protect tenants in danger of homelessness.

Landlords can apply for back rent owed to them, or tenants who experienced financial hardship in the last 12 months and who owe back rent can apply themselves — but it behooves landlords to do this to get the maximum grant. Under the program, landlords can receive 80% of back rent owed since April 1, 2020, providing that they agree to forgive the other 20%. Tenants, on the other hand, can only receive 25% of rent owed, which is the minimum to avoid eviction under the current state moratorium, which expires in July.

"Whether it’s a health-related event or a significant financial hardship, COVID-19 has affected us all," the state says on its website. "As our state continues to recover, we are committed to keeping families housed and recognize that California renters and landlords have enough to worry about. We want to make sure that past due rent isn’t one of them."

The California state portal is here, and it prompts applicants who live in any of a list of cities and counties to use their specific portals, if they are administering their own programs. In the Bay Area, the counties of Alameda, Marin, and Sonoma are administering the rental relief funds themselves.

As KQED reports, it's not known how much back rent may be owed by tenants across the state, but it's estimated to be between $400 million and $2 billion. And the $2.6 billion in funding comes as a result of Senate Bill 91, which passed by the legislature and signed by Governor Newsom in January.

The program requires tenants to submit proof of their financial hardship — including unemployment claims, proof of job termination, etc. — and to prove that they make less than 80% of area median income (AMI). Grants will reportedly be prioritized for those making less than 50% AMI.

Applications will be accepted on a rolling basis and are not first-come, first-served, as NBC Bay Area reports.

Photo: Parker Gibbons

Back rent is piling up under the eviction moratorium, so the Board voted Tuesday that the city would pay between 50-65% of it for qualifying tenants and landlords.

We know things are bad for unemployed renters and their landlords with bills piling up under the pandemic, but we didn’t realize how bad until this week. The Examiner reported Monday on a non-partisan Budget and Legislative Analyst report which estimated that each month under the eviction moratorium, unpaid San Francisco rent was piling up to the tune of “$13.6 million to $32.7 million per month,” and over the course thus far of the pandemic, “this equates to between $81.3 million and $196.2 million.”

With employment not exactly rebounding, who’s going to pay this? The city of San Francisco might pay much of this, as KRON4 reports that on Tuesday, the Board of Supervisors unanimously approved a Rent Resolution and Relief Fund that would cover up to 65% of the rent still owed.  

“We are providing a roadmap for recovery, and that means making sure renters and small landlords are not left out in the cold if tenants can’t pay rent because of COVID,” the resolution's author, supervisor Dean Preston said in a statement to SFist. “San Franciscans have a choice: leave vulnerable tenants saddled by rent debt and small property owners at risk of default, or slightly increase taxes on billionaire real estate investors to help pay for our recovery efforts.”

The fund does not pay all back rent unconditionally. According to the text of the measure, it does “provide grants to landlords who have agreed to waive back rent that became due during the COVID-19 state of emergency. The grants shall cover up to 50% of the rent that the landlord has waived, up to $3,000 per unit per month. In the case of small landlords facing hardship, the grant may exceed $3,000 per month and may cover up to 65% of the rent that the landlord has waived.”

But hold the phone —the funding is contingent on the passage of the November San Francisco ballot measure Prop. I, which would double real estate taxes on transactions of $10 million or more. Without Prop. I’s passage, these reimbursements likely do not occur. And we should stress again that the landlord receives the grant, not the tenant.

If you can’t pay the November 1 rent looming on Sunday, you still need to make arrangements regardless of this measure. For starters, the measure has not actually “passed” the board; despite the unanimous vote, it still hasn’t technically been passed until a second-reading vote (likely Tuesday Nov. 3, and yes, that Tuesday Nov. 3.) And as stated earlier, the funding for the measure depends on the passage of Prop. I, and still needs to go for Mayor Breed’s signature.

But it’s a plan when many renters are still feeling pretty deer-in-the-headlights with the pandemic situation, and Preston’s office calls it a “a first-in-the-nation program,” and it could provide a model for other cities.

Related: SF Supervisors Extend Eviction Moratorium Indefinitely [SFist]

Image: @chrislawton via Unsplash

Veritas Investments, SF's largest corporate landlord, was recently granted a $3.6M Paycheck Protection Program (PPP) loan by the U.S. government's Small Business Administration (SBA) — funds they plan on repaying, which will help bolster some of the city's most vulnerable small businesses.

Suffice to say that the roll-out of PPP loans across the county has been anything but seamless. Restaurant chains like Shake Shack, Potbelly, and the Fiesta Restaurant Group (the corporation behind Pollo Tropical and Taco Cabana) have received tens of millions of dollars in relief aid meant to buoy genuine small businesses through these choppy times. Now we can add one of the Bay Area's largest corporate property managment firms to that list — but House Speaker Nancy Pelosi isn't having it.

According to KRON4, Pelosi has called for Veritas Investments to return the multi-million-dollar bailout they received from the federal government so that actual small businesses could sequester those funds.

“Neighborhood businesses such as hair salons, restaurants, convenience stores and others that have been hit hardest by social distancing and other necessary steps to stop the spread of the virus are in dire need of financial assistance,” Pelosi said of the subject in a press release. “Larger companies like Veritas, one of San Francisco’s largest corporate real estate management firms, which has billions in assets and access to liquidity through other sources, were not the intended beneficiaries of PPP loans. I join San Franciscans in calling on Veritas to return its PPP loan.”

Veritas Investments, which was valued north of $3B in 2016 with its then-current investor portfolios, was lambasted for applying for a PPP loan this week. When they were approved, tensions only tightened as word of their $3.6M bailout spread.

"The $3.6 million PPP loan enables us to continue to employ 123 front line workers, many of whom would have lost their jobs without the loan, in addition to bringing back 26 furloughed workers," reads a statement issued late Saturday night by Veritas, per NBC Bay Area.

Though, it seems like they've given in to the public pressure and guilt trips; in that same statement, Veritas announced they'll pay back the PPP loan... eventually. They made it a point, however, to iterate they'll not be paying it back in one lump sum.

Whenever those payments are received, the highest-ranking female elected official in United States history is keen on making sure they'll, in fact, go toward assisting small businesses.

“In the spirit of The Heroes Act, which ensures that returned PPP loans will be redistributed to small businesses with 10 or fewer employees, Veritas, by returning its PPP loan, will help save some of our city’s and country’s most vulnerable small businesses,” Pelosi continued in that press release.

Currently, more than 1.6M PPP loans have been approved and tendered by the SBA, amassing a gross dollar value north of $350B in federal aid.

The Heroes Act was passed by the House on Friday.

Related: San Francisco To Extend Interest-Free Loans To Small Businesses In Trouble During Pandemic

Site Launches To Make It Easier To Support Local Restaurants Through Gift Cards; Nightclubs Look To Crowdfunding

One Nonprofit Has Been Keeping 50 SF Restaurants Busy Feeding the Hungry and Underserved

Image: Wikimedia Commons

Excelsior and Outer Mission residents were recently shocked to discover that a popular coin-op laundromat had a secret subterranean basement full of squalid illegal apartments, as reported in May. That laundromat, the Clean Wash Center at Mission Street and Persia Street, still remains open and operating to this day. But City Attorney Dennis Herrera hopes to hang the owner and master tenant out to dry, as the Examiner reports that the city is suing the owner of the laundromat for cramming 20 people into the basement with no windows, no heat or hot water, exposed wiring, three shared bathrooms, vermin galore, and just a bunch of drywall and wooden partitions separating the beds.

The Ingleside-Excelsior Light notes that people had been living in the shabby secret basement for more than a decade. One of the poor souls was a 12-year-old girl, another was on dialysis. The tenants were charged between $300 to $900 per “unit,” and for obvious reasons, were forced to pay in cash.

“This building was a firetrap. The living conditions were not only appalling and illegal, they were extremely dangerous,” Herrera said in a statement. “These people were basically stuck in a dungeon. I don’t want to think about what would have happened if there had been a fire down there. Once the Fire Department alerted inspectors, we moved quickly to address this situation. My office is continuing to do everything we can to protect tenants and ensure they aren’t being put in harm’s way by unscrupulous landlords looking to make a quick buck.”

The “basement” was originally a garage, and the Chronicle reports the master tenant of that garage Ernesto Paredes is named in the suit. The suit also names Melissa Mendoza of Hillsborough, who owns the three-story building whose units were listed as the non-existent street address 5 Persia.

Sup. Ahsha Safai, in whose district the laundromat is located, also chimed in. “Witnessing the squalor and horrifying conditions that the residents of 5 Persia had endured for years was appalling and heartbreaking,” Safai said in a statement, “because the residents, mainly vulnerable immigrants, already represented some of our most dispossessed San Franciscans. Let this be a warning to all slum landlords and their enablers, either follow the law or be ready to face severe consequences.”

Herrera’s lawsuit seeks restitution for the tenants, civil penalties ranging from $200 to $5,000 per violation, and $1,000 per day for each fire code violation. The full text of the lawsuit is available online.

Previously: Excelsior Laundromat Exposed As 'Death Trap' With Shoddy, Illegal Apartments

It's a comment news orgs get on nearly every story about San Francisco's rent control laws — something like,"I'm a property owner, but I refuse to rent out my vacant apartment(s) because rent control is so onerous." But those wide-open-space loving landlords might soon want to hide their light under a (non-rent-controlled) bushel, as SF officials are looking into ways to impose financial penalties onto folks that choose to keep their units vacant.

To be fair, it's not just commenters (you guys know I love you, right?). After all, who can forget the 2013 New York Times op-ed from local writer Scott James, which admitted that "The City by the Bay is going through one of its worst housing shortages in memory...One reason for the shortage? Me," explaining that after years of renting out a one-bedroom apartment in the building he owns with his partner, a bad tenant soured them on landlordery.

And now, perhaps, even sourer news for the tenant-burnt, as the Ex reports today that Supervisor Aaron Peskin has asked the City Attorney’s Office “to explore legislation that would allow the city and county San Francisco to impose a vacancy tax on property owners to help mitigate the impacts of the widespread practice of warehousing valuable residential and commercial units.”

According to Peskin, “I continue to receive emails and requests from constituents to address the overwhelming number of vacancies both commercial and residential that continue to contribute to our housing crisis as well as the displacement and struggles of our small businesses.”

It's worth noting here that San Francisco's Department of Building Inspection has since 2009 required owners of empty buildings (commercial and residential) to register their property as vacant with the city, including an explanation of "what future plans they have for the property." They must also pay a $765 annual fee.

In 2014, SF's building code was amended (you can see the amendment here) to say that vacant commercial storefront spaces fall under the vacant building code unless they're currently under renovation or construction.

According to the Ex, the vacancy tax first came up at a Planning Commission meeting last month, during a discussion on San Francisco's housing supply. "The commissioners said there was a lack of city data on the number of units sitting vacant, but worried that vacancies were contributing to the shortage of housing in the city" they write.

It's tempting to interject with here with a "no s**t, Sherlock." Even landlord-no-more Scott James admits as much, saying in 2013 that SF's had "about [vacant] 10,600 rental units. That’s about five percent of the city’s total — or enough space to house up to 30,000 people in a city that barely tops 800,000."

And that number has risen sharply, as according to a 2014 census data analysis from SPUR, SF at that time had "30,000 vacant units, which included 8,900 units in the process of being rented, 2,400 ownership units in the process being sold or sold and not yet occupied, vacation or seasonal use at about 9,100 units, and 9,700 units not in any of those categories," the Ex reports.

More anecdotally, Planning Commissioner Kathrin Moore said at the meeting that she believes vacant housing units are on the rise, as “I walk my neighborhood frequently...On the outside, they all look very nice but there is nobody home.”

So from Planning, the idea went to Peskin, who is presumably seeking to push those laws further and impose greater fines, as $765 a year is to many landlords likely an acceptable cost of not doing business, as it were.

Keep an eye on this one, folks, as it could make for some interesting bedfellows — while Peskin is arguably the most "progressive" member of the Board, it's comparatively conservative Outer Sunset Supe Katy Tang who made 2014's empty storefront crackdown happen. Will the often-at-odds supes join forces to quash San Francisco's plague of vacancies? Guess we'll soon see.