The housing policy that’s turning back gentrification
The housing policy that’s turning back gentrification
By Nick Bowlin, High Country News, June 30, 2020. Photo available here
In the wake of COVID-19, some California cities are introducing tenant protections.
In the summer of 2019, Elizabeth Bell’s apartment building in San Francisco’s Mission District went up for sale, and real estate agents were soon giving tours to prospective developers. As fear of eviction or rent hikes sank in, Bell, 74, started getting heart palpitations. Her apartment was cheap, rent-controlled, a necessity for Bell, who supplements Social Security with gig-translation work to make ends meet. There’s a rail stop less than two blocks away — useful, because Bell does not bicycle as easily as she used to. And she loves the place, which has a “beautiful arch over the front door” with cracked stained glass above the frame. The other residents are a diverse mix — longtime Latino families, one with a disabled son; low-income seniors like Bell; a young couple. All depend on rent control to live in the Mission, the historic home of San Francisco’s Latino community, now riven by some of the city’s most intense gentrification.
If forced to leave, Bell knew she could not afford to stay in San Francisco, where she has lived since 1975. “I am very bonded to the city, she said in an interview. “I don’t know where I would pick up and start again at this point in my life.”
To save the building, she and other tenants contacted housing advocates, who eventually introduced them to the Mission Economic Development Agency (MEDA), a longtime Bay Area nonprofit. Over the past few years, MEDA has emerged as a leader in an anti-gentrification effort, known as a “right-to-purchase” policy, where local nonprofits obtain residential buildings to prevent development and displacement. The average income of residents in properties acquired by MEDA is more than 30% lower than the area’s median income. Prior to the COVID-19 economic downturn, the average rent for a one-bedroom in San Francisco was $3,360 a month, the San Francisco Chronicle reported. To date, MEDA has acquired 32 buildings (more than 250 units), with two more on the way.
This and other tenant-protection policies are spreading across California. The COVID-19 downturn caused unemployment rates not seen since the Great Depression, and experts fear a housing crisis will follow. San Francisco’s city council recently passed an eviction ban. Oakland and Berkeley had already introduced their own right-to-purchase polices pre-coronavirus, both of which gained urgency after the pandemic hit. Los Angeles extended eviction protections through the summer and, spurred by COVID-19, is considering its own right-to-purchase policy. And in late June, a bill was introduced in the California legislature that would create a statewide version of the policy.
MEDA bought Bell’s building in February, just as COVID-19 was beginning to surge in the Bay Area. In addition to financial peace of mind, the purchase allowed Bell, whose age puts her at heightened risk for coronavirus, to remain in her home. Doctors never determined the cause of her palpitations, she said, “but I can tell you, I do not have them anymore.”
THE ENORMOUS LOSS of wealth for, and displacement of, low-income and Black and Latino families after the 2008 financial crisis convinced MEDA staff that they needed new and better tools “for when the next financial crisis comes,” Johnny Oliver, an organizer for the group, said. As properties foreclosed, developers bought them and turned them into high-end condos. Oliver described MEDA’s work as “reversing gentrification in the Mission District,” which has been transformed by years of unrestrained housing development and speculation. The Latino population in the Mission has shrunk by nearly 30% — a conservative estimate, given the challenge in counting undocumented people — over the past two decades.
Abetting this displacement is a California law called the Ellis Act. A powerful driver of gentrification, the Ellis Act allows landlords to evict entire buildings of tenants before selling a property. The new properties become condos or tenancy-in-common flats, a housing designation that allows buyers to purchase a percentage of the property. The rise of TICs in San Francisco is associated with the Silicon Valley tech boom. Cash-rich coders can buy their share of the building up front. For tenants, the Ellis Act can mean forced displacement; for landlords, it eases the process of selling a residential building.
Oliver and other housing organizers say that repealing the Ellis Act is not feasible given the powerful real estate lobby, so they set out to find their own policy tool. First came a program to publicly fund purchases of local buildings, established in 2014. But housing advocates found that many properties changed hands in back-channel deals between landlords and developers. San Francisco addressed this problem in fall 2019 with the Community Opportunity to Purchase Act (COPA), which guarantees local nonprofits like MEDA a five-day window in which to make an offer on a distressed property, before the building owner can sell. The nonprofit then has 25 days to match other bids.
Landlords and developers oppose COPA, largely due to this bureaucratic delay. Joshua Howard, executive vice president of local government affairs for the California Apartment Association, a trade group that represents 25,000 rental property owners across the state, said that more housing is the key to addressing California’s housing crisis. Policies like COPA don’t do this, he said, but they do “create bureaucracy and delay.” Howard supports funding for nonprofits like MEDA, but said they should bid on properties that hit the market, just like a private entity. “(Right-to-purchase policies) would not create new units of housing,” he said, “but do serve to slow down the process for a property owner to sell their rental unit.”
“These are the people who keep this city running, who make this city what it is.”
For Bay Area residents, the Ellis Act is so notorious that it has become a verb. Chloe Jackman-Buitrago, who was born and raised in San Francisco, said she feared being “Ellis Act-ed” back in late 2019. Jackman-Buitrago owns a photography studio around the corner from her building in the Inner Richmond neighborhood. When her apartment building hit the market, she looked at other rents in the area and doubted she would be able to stay in the city if she was forced out. MEDA bought the building instead, and she was able to stay.
“(MEDA) is keeping people in their homes,” Jackman-Buitrago said. “These are the people who keep this city running, who make this city what it is. The tech 22-year-olds come in and turn the buildings into some fucking cookie-cutter thing, and where do the people go?”
THE BUILDING-ACQUISITION program requires that all residents of a property favor the purchase. When she talked to her neighbors about supporting a MEDA purchase, however, Jackman-Buitrago ran into a strange problem: To people used to the city’s typical real estate moves, it seemed too good to be true. It took some convincing, but eventually they came around. With the help of the city, MEDA will manage the building for a 99-year term. It has also promised to do work that the previous landlord neglected; in Jackman-Buitrago’s apartment, for example, dirt would creep up from under the floorboards, and the wall behind the bathtub had rotted away. Jackman-Buitrago, her husband, Michael — also born in the city — and their 1-year-old son will soon move into a previously empty unit. MEDA is undertaking major repairs, including replacing the rotting boards in the old apartment and updating the kitchen in her new one.
Though it took a pandemic for tenant-protection policies to gain momentum, Oliver, the MEDA organizer, cautions that these policies are small compared to the magnitude of California’s housing crisis. Keeping people in their homes is one way to alleviate the pressure, but so is building more affordable housing. Tens of thousands of people have been forced to leave the Bay Area over the last 20 years. Then there’s the scale of the building-acquisition program, which currently involves fewer than 10 nonprofits. There are more potential properties moving toward the market than housing nonprofits can afford or manage. And because of COVID-caused budget issues, Oliver expects that San Francisco will have to reduce funding for nonprofit purchases of local real estate.
Jackman-Buitrago often feels a sense of loss; the city of her childhood is largely gone, she said, yet the area still feels like home. Bell has seen 45 years of change in the Bay Area, and she agrees. She has no desire to live anywhere else, yet development has diminished the city she remembers. “A community doesn’t just re-form,” she said. “It’s gone.”
Note: This story has been updated with new information about a statewide version of the right-to-purchase policy.
Nick Bowlin is a contributing editor at High Country News. Email him at nickbowlin@hcn.org or submit a letter to the editor.
