Real Estate Wars: Inside the class and culture battle that's tearing San Francisco apart

San Francisco beautiful bohemian San Francisco finds itself in a full-blown class and culture war in a battle over real estate this community meeting started with the ruckus demonstration outside by opponents of the development we're in the middle of a terrible affordability crisis the booming tech industry has brought jobs and prosperity but it's also brought a demand for housing that far outstrip supply sparking a surge in luxury development along with anger fear and greed I'm paying nine hundred and fifty six dollars and it's going up to three thousand five hundred and seventy five dollars one hundred and twenty five thousand dollars two hundred and thirty two square feet eighteen twenty dollars very good the worlds of tenants landlords and home buyers have been upended pitting private interests against civic responsibility tech workers against artists rich against poor and neighbor against neighbor all of this threatens the fabric of San Francisco's cultural and artistic heritage and its progressive ideals since high paid programmers you know this is a playground for them and they have the money to be able to put cash on the Barrelhead and say we want it get out of our way if we had seen the thousands of people who have been displaced displays by a natural disaster we would have called in FEMA and we would have said help us the city just hasn't planned for it they haven't zoned for they haven't built we want to keep this jewel of a city the way that it is and that just isn't going to work don't let them take your home away from you and their city away from you fight bad we're fighting poor in a way that the soul I'm here in the Duboce triangle neighborhood in San Francisco and we're here to speak with David Branca a longtime resident of Walter Street Brenkus is about to be evicted but he doesn't want to leave this place I'm happy to show you my home here I've lived here 34 years as you can see I'm a I'm an artist I have memories of youthere memories of pain you know injury and of great joys and triumphs know the apartment is both his home and his workspace and then back here is one of my dark rooms everything you see I built myself he retailed the bathroom and renovated the basement turning it into a usable space I've got a a woodworking studio down here I'm losing my workspace as well as my living space I will never be able to duplicate that Brenkus and his roommate pages 735 dollars a month for this rent controlled two-bedroom apartment Bronchos also counts as his contribution all the work he's put into the space over the years any where you live for 34 years you passed that amount of time in a place and I don't know what to say you know it's uh it becomes a part of you and you become a part of it very soon he faces near-certain eviction in 2014 the three unit building was bought in for closer by Isha Charlotte and his family issues the co-founder of a tech startup and his wife Emma is an art curator our plans since the beginning is to been moved to move our family into the house grandparents downstairs my wife and me here in the middle unit with our baby girl and the my brother in the top unit in the San Francisco legally when you purchase a building you also were buying the tenants that live there too so you knew that you were going to have to either buy out or evict the people living here yeah why not just buy a different building we tried to find a three unit building in this neighborhood that we could all live in as a family wasn't easy took us we were looking for two years for a place after the Harsha Watts purchased the property they offered buy outs to the tenants to took them but Brenkus did not the family eventually upped their offer to a hundred and thirty five thousand dollars eighty-four Brenkus and fifty five for his roommate brink is declined I myself have suffered greatly you know through all this stress it's not a way to live people who who are trying to force you out they they bank on that they bank that the stress will make you move in the end but I won't I won't I will fight as long as I can because I think somebody has to somebody has to say this is wrong it's wrong for the city and fight he has bring cases staged protests at the Museum where Emma works and at their now shared home he wanted to essentially make the story about me as an assistant curator evicting an artist in February of 2015 when the negotiations broke down the Harsha Watts filed to evict bring cos by law there are two primary types of no-fault evictions attend to scale one is used when owners move in but it can't be invoked a tenant for seniors or disabled second the ala fact it is designed allowed landlord to quote go out of business and it's not protect any class attendance the department cannot be rented for a period of years but it can be sold or condo converted the harsher loss file for an alt activation of David Reyes did it ever occur to you though that being that you were renter and not an owner of the home that something like this could happen someday sure sure it occurred to me however you have to understand that the people who lived here I formed a relationship with them the people who owned the place I mean after a certain point it seemed like well this is a place I can live long term and then they went bankrupt in the financial crisis they lost everything they lost everything and it was a catastrophe for them and it became a catastrophe for me we just don't feel that we represent the problem here we're homeowners that want to live in a property that we rightfully purchased we should not be the scapegoats for a problem that the city really bears responsibility for he doesn't get a lifetime lease on that unit for that much money it just we don't believe that that's fair either if that's how the property laws in the United States are supposed to work then I guess were under a different Torbert sighted sort of system than what I thought we had in this country the crisis has intensified over the last five years with home prices skyrocketing 67 percent in the median home price now coming in at 1.1 million dollars scarcity is a huge part of the problem nearly half of the housing stock is rent-controlled apartments 36 percent is owner occupied just 9 percent are market rate rentals that sliver a free market opportunity is being exploited to the max the average one-bedroom rental $3,600 greater than New York or Boston Erin McElroy is the director of the anti-eviction mapping project which uses data visualization to chronicle the eviction crisis in the Bay Area since 2011 evictions have risen dramatically as have rental prices and property values right now San Francisco is considered the city in which income inequality is growing more rapidly than any other city in the US due to the rich getting richer city supervisor Jane Kim represents constituents harmed by what she calls greed fueled evictions and and we've seen a tremendous increase in no-fault evictions in San Francisco what's extraordinary about that is over 70% of those no-fault evictions target seniors immigrants and individuals with disabilities so often our most vulnerable residents speculators are buying up buildings under the pretense of being landlords immediately evicting the tenants and then selling the buildings and making a lot of money and now even for cause evictions are on the rise what we're finding is that people are being addicted for really petty things like bringing your bike in through the front door or hanging laundry out on the clothesline it's doubtful any of this would be happening were it not for the booming technology sector unlike the late 1990s many of this eras top companies including Salesforce Twitter and uber are choosing to locate in the city flooding the market with high paid workers even techies who work in Silicon Valley are opting to live in the city and commute via luxury charter buses 69% of no-fault evictions between 2011 and 2013 occurred within four blocks of the private tech bus stops mysidia how many 69% 69% of no-fault evictions between 2011 and 13 occurred within four blocks of the private tech post-ups their symbolic but they're also actually material in terms of their impact air B&B itself a lauded local startup has been at the center of its own San Francisco controversy with landlords kicking out tenants to effectively become full-time B&Bs a november referendum would have limited the number of days in a month that a home can be rented out this way Airbnb staged a multi-million dollar advertising public relations and lobbying campaign and the measure went down to narrow defeat without question the tech industry has invigorated the local economy san Francisco's unemployment is in the 3% range among the lowest anywhere and in October the bay area accounted for 42 percent of California's job growth even though it has less than 20 percent of the population those companies also bring a lot of jobs and a lot of economic benefits to the region's they can't be all bad there's no evidence that working-class jobs are being preserved or created and in fact it seems is that people are being either exploited or paid a lot of money and not a lot in between Danny yadegar is a prime example of someone in between he's neither a tech worker nor working for the minimum wage I make over 80 sing about 85 and you can't afford to rent a marketplace unit here no definitely not because the rent is so high in San Francisco more often than not you end up moving into an apartment where somebody has had a lease for several years you often end up moving into whatever room you can find yadegar did just that moving into a room on someone else's least two years ago the three-bedroom rent controlled unit cost $3,500 a month but the building recently sold his lease holding roommate is taking a buyout and yadegar is out of luck like most people in his position he started to scour Craigslist I have seen postings of beds I like bunk beds that are going for over a thousand dollars a month or people I just saw somebody was renting a truck that was like parked in a 24 hour area and they were rented it was just like a u-haul renting it for 750 I asked Danny to show me what market rate rentals in his neighborhood looked like so do you want you want to taste of my misery I do and as you okay here's a one-bedroom for forty eight hundred here's a two-bedroom for fifty seven hundred Oh bargain I don't really understand who's making this much money too Billy Billy Frank and also like if you are making that much money why aren't you buying a house even for those making that kind of money the sales market is often no better than the rental one to see what potential buyers like yadegar were up against we toured a North Beach studio with a local real estate agent I've had one open house been on the market 11 days we've actually had him lined up at the door went for that first open house this is could be your living area and this is your TV the TV is coming with the unit possibly you could put your bed here you could do a futon tech bed that pulls out or you can do a Murphy bed there's a lot of great options for creative people so this is your kitchen two burner stove could always put a microwave in no oven that I see no oven it's 232 square feet what is the listing price four hundred and twenty-five thousand dollars eighteen hundred dollars for sure good yeah holy in San Francisco me in San Francisco Danny yadegar did look into potentially buying a home but the experience was far worse than he was expecting it's pretty ruthless the way that realtor is advertised property I think it's just a movement towards the understanding of housing as an asset rather than like a home where people live you'll see in the listing they will say three-unit know protected tenants so it's like hey you can kick people out if you want and they're not even shy about it and he says the ethical lapses extend beyond evictions well write an offer and then two hours later we'll come back and say hey you know there's other offers why don't you guys rewrite and one pole position and then they come back a couple hours later and they're like hey change this number you got it and so we've walked away from a couple deals because we were like this is this is like collusion and extortion at the same time when the first internet bubble burst in 2001 Bay Area housing prices took a huge hit which could happen again one difference now though many of the companies who employ today's Bay Area home seekers have real revenues and long-term futures is San Francisco's housing market in a bubble right now I think if you compare them per square foot sales prices to other expensive cities around the world like New York and London San Francisco is similar so that actually is really scary to me to think it might not be a bubble to think it might be something that is going to be around for a long time state and local policies and politics underlie much of the crisis for example why aren't more houses built down peninsula in Silicon Valley the answer tax laws especially proposition 13 which caps property taxes and effectively incentivizes the building of commercial not residential space and in the city there are complex and time-consuming zoning requirements for every new project starting with an environmental impact analysis normally it will take six to nine months for them to assign you a planner who will begin to figure out how to do that environmental impact analysis and normally it will take several years before they're done studying it even after a project receives sign-off from the Planning Commission residents can then appeal the project and many don't hesitate Dave Osgood the head of the Rincon Point Neighborhood Association is one such resident spend a lot of my time following City Planning issues trying to keep San Francisco on the right course one of the things that you read a lot in the news stories about the housing crisis and the developmental issues in the city is that there's institutional NIMBYism or not in my backyard but from what you're saying that's not really the case there's only a few select projects that individuals or groups oppose in the city is that right exactly right only 2/3 percent of projects that get this kind of opposition and I I find that that's completely reasonable if you look at the skyline now you'll see that there's scores and scores perhaps hundreds of large buildings under construction so almost all of the construction that I've seen walking around San Francisco has been luxury high-rise condominiums which aren't really going to help most of the people that want to live here I feel like there's a disconnect there why are there so many buildings like that versus other buildings that might actually house more real San Franciscans the rich people that would go into a fancy new condo if they don't get to go in that condo it's not that they just disappear they buy the place you live and evict you and so it actually helps to stack them up in concrete boxes on top of each other so yes residential developers are busy building in San Francisco and they have a choice set aside a percentage of each project for affordable housing build a corresponding amount of affordable housing within a mile of the building or pay a large fee to the city the last of which many opted to do by contributing to an affordable housing program their donation will probably go to a good program that helps the very poorest people in the very a very poor neighborhood and that's good but it also contributes to the big gulf between the haves and the have-nots beginning a luxury building on the waterfront and something for the poorest perhaps homeless people in the Tenderloin but there's nothing to help the moderate income residents nothing for them we are struggling with economic inequality as much as anywhere and that's bigger than us right it's a national and a global problem it's just that we want to do better because we actually have progressive values here and we care about it Janis Joplin called San Francisco home as did so many great twentieth-century American musicians and writers the city brought us the anti-war hippies of Haight Ashbury and gay rights leader Harvey Milk it's strong counter cultural and progressive values live on don Faulk is the CEO of a housing nonprofit in the Tenderloin long one of the poorest neighborhoods in the city and we're directly across the street from a parking lot where we aspire to build an eight story building that will house 110 households 110 families mostly who will all pay affordable Rebs what what we want at TDC we want people who when they walk in to our buildings they feel like I'm home this is a safe place this is safe it's warm the street is behind me and now I'm someplace else T in DC started buying land in 1981 and now owns thirty five buildings comprising three thousand units as Falk explains this puts the land into nonprofit hands and dedicates it in perpetuity to low-income people quite a few of them are visible from here so I had said they're Franciscan towers which we just finished renovating that's new construction it's called current house at 67 family units there's a way in which the ten Oien is a model not just for the rest of San Francisco but really for the whole country because so many big cities are experiencing this crisis and that is that to take the long-term view and so put land into the hands of nonprofits and basically this land is tied up forever the nearby Mission District long and artists Haven is now among the most sought after areas by tech workers its outspoken supervisor Dave Campos wants the government to buy land in the community and proposed a moratorium on development to that effect you cannot have art without artists and artists are no longer able to live in San Francisco because it's too expensive without the free market is not going to address this issue on its own there is a role for government to play because if you leave it up to the developer the developer will not only build luxury housing heck they'll build ultra luxury housing among those offering solutions there are plenty of pro development voices we could change our city charter to basically say that if you are proposing to build a housing that fits within the zoning it's automatically allowed we'd say please build it supervisor Kim wants to streamline the process once a project is approved this is a project we wanted to see here in San Francisco you've you know you've jumped over every hurdle I think that we as a city should be helping you build faster at that point others want to use financial disincentives we had a ballot measure last year to basically require speculators would pay a tax if they sold a building after buying it within five years the silver lining is that things have gotten so bad that finally something will happen people are justifiably about it we're talking about people's lives their futures their families all of it if you are indeed evicted as it looks like it's probably going to happen where will you go I don't know I really don't know none of us have very good options about what to do when you're forced out you can't turn around and rent a new place someone else owns this building now though why shouldn't they be able to do with it as they please when your lease expires it's immoral to do what they're doing here you're permitted by law to do it but it's not right that they are doing it from a moral perspective we do feel that we're doing the best we can here we look for two years for a place this is the place we found finally that meant what we needed and within a price range you know if that hadn't happened you know doubtful that we would have been able to stay in the city also there was a time when you traveled and you say I'm from San Francisco and you could be in another country where where they have a very low opinion of Americans and they would say San Francisco that's all right they know it's a cool place people are nice but now it's not the case anymore the housing shortage in the cities this is what it's done it's forced people to it's forced people to fight against each other for housing it's our most important problem but we do have the power to solve it we could make different choices that would at least make it a lot better and and I hope we do can San Francisco be the worki interesting progressive city that it has been if middle-class people can no longer afford to live in San Francisco we're talking about San Francisco and neighborhoods like the mission becoming places where only wealthy millionaires and live you

Channel: Business Insider

Views: 941,089

Rating: 4.6004901 out of 5

Keywords: Business, Insider

Id: LVVO8b4vvis

Length: 23min 52sec (1432 seconds)

Published: Fri Feb 19 2016

Reddit Comments

[u/bi-hi-chi]

Just one earthquake away from it not being that expensive.

But this is happening in any city of interest. The rich want to live in the city now. They don't want to be in suburbia, probably because many where raised in the hell scape that is suburbia.

[u/smuglydismissed]

Lol, that old guy is the face of the housing crisis in SF? Pays <800/mo rent for a 2 bedroom apt and expects that should continue forever because he got there first? Why aren't we decrying this as an entitled old boomer wanting his easy housing?