Where Do San Francisco’s Evicted Go?

In San Francisco a loophole in California law is allowing speculators to push residents out of their apartments. The question is, where do they go?

By Julianne Hing Dec 13, 2013

When 80-year-old Poon Heung Lee and his 74-year-old wife Gum Gee Lee found a new apartment late last month after their high-profile eviction from their San Francisco home this fall, it was a true community victory.

The couple, together with their 47-year-old daughter, had fought their eviction for months but lost in late October to Matthew Miller, a real estate developer who specializes in flipping apartment buildings into luxury condos. It’s a lucrative trade these days in the city’s red-hot housing market, where as a result of the tech boom, housing prices, median rent, and no-fault evictions have skyrocketed in recent years.

The Lees were offered a buyout, which they attempted to make use of, but they had few options. Elderly, living on fixed incomes and responsible for the care of their disabled daughter who depends on the culturally competent public services and care she receives in the city, the Lees couldn’t just up and move anywhere. But the community rallied around them, said their attorney Omar Calimbas, and community groups in Chinatown eventually found them an apartment they’re currently settling into right now. "Fortunately they’re still in the greater Chinatown area," Calimbas said, where they depend on neighborhood support and services.

The Lees’ eviction story has become all too common in San Francisco, though their happy resettlement is much less so. In pushing out the Lees, Miller exploited a loophole in California property law. Under the state’s Ellis Act, a landlord may evict tenants if they are pulling the unit off the residential rental market. Enacted in 1986, it was meant to give landlords who were looking for a way out of the rental housing business the option. These days, it’s become a weapon of gentrification, allowing speculators to swoop in, purchase a building, evict the tenants because they’re ostensibly leaving the rental market, then renovate the building into condos and sell them off for a hefty profit. It’s cruel, but perfectly legal. And Ellis Act evictions are increasing at a quick clip. While evictions in the city increased by 36 percent between 2010 and 2013, Ellis Act evictions increased 170 percent, from 43 in 2010 to 116 in 2013, according to a report released last month by the city’s budget and legislative analyst office. Between 2009 and 2013, average home prices in the city grew 22 percent to nearly $900,000.

The Evicted

The San Francisco Rent Board doesn’t collect racial demographic data, so it’s tough to pin down exactly who is being pushed out. However, a recent survey of direct legal and tenant aid organizations conducted by the city found that 28 percent of clients were black, 16 percent were Latino, 9 percent were Asian, and 32 percent were white. The numbers offer a rough, but telling, proxy for gauging housing instability. According to the 2012 Census, blacks are 6 percent of the city population, Latinos are 16, whites are 42 and Asians are 34 percent.

High-profile cases like the Lees’ have attracted attention because they’re compelling, says their attorney Omar Calimbas, but also because they’re very much representative of the populations who are being targeted for eviction, explained Dean Preston, the executive director of Tenants Together, a housing advocacy group in San Francisco. Preston said that Ellis Act evictees represent a cross-section of the city–families, the elderly, people living on public assistance and middle-class union members–but in his years representing hundreds of clients in eviction defense work, he never dealt with a building in an Ellis Act case where there wasn’t a unit occupied by a senior citizen or a person with disabilities. 

Speculative property buyers purposefully look for properties that are undervalued because they offer potential for the highest return. The cheapest properties to snatch up are the ones where long-time residents, the poor, disabled and those on fixed incomes live. On the housing market, a rental building’s price is informed by the rent revenue from its residents; a building with many long-term residents on low or fixed incomes where folks are paying less than the current market rate becomes especially attractive when the intent is to renovate the building and sell it off, Preston explained. 

"We are seeing a high number of seniors of color, particularly Latino and Chinese immigrants, being pushed out because of the types of properties the Ellis Act targets," says Maria Zamudio, a lead organizer for the San Francisco housing rights campaign of Causa Justa (Just Cause). "It’s not an accident which neighborhoods get gentrified. Noe Valley," a cozy upper-middle-class residential neighborhood, "is not getting gentrified," she says.

No Room for the Poor

Zamudio’s seen long term residents who’ve been kicked out of their homes via no-fault evictions head out to working-class Bay Area suburbs like Hayward, or Brisbane. But some Causa Justa members, who are primarily monolingual Spanish speakers, have moved as far away as the Central Valley or Watsonville, a rural town 90 miles south of San Francisco, or up north to Sacramento, another 90 miles away.

According to a 2012 report (PDF) from San Francisco’s Eviction Defense Collective, researchers found that 82 percent of the collective’s clients had to leave their homes after an eviction lawsuit, and that among those they were able to track down, 35 percent had to leave San Francisco as a result. Another 15 percent were using a post-office box as an address or had become homeless. Evictions are a common trigger for homelessness, too. "Thirty-five percent of respondents indicated that immediately prior to becoming homeless they lived in a home owned or rented by themselves or their partner," the EDC report reads.

As new money descends on San Francisco, the subsequent displacement of poorer families raises basic questions about what, if any obligation the city has to its lower-income residents. With San Francisco median rent prices topping those of Boston, Washington, D.C., and even that of New York City, the current housing market certainly sends the message that if you can’t afford the city anymore, you don’t deserve to stay. But some lawmakers disagree. San Francisco Mayor Ed Lee has supported calls from city leaders to craft policy that would discourage Ellis Act evictions, while Supervisor David Campos has called for a moratorium on Ellis Act evictions altogether, the San Francisco Chronicle reported.

Amidst the city campaigns to curb Ellis Act evictions are efforts at the state level to revise Ellis and target speculative property deals. A holding period, for instance, which requires property owners to hold onto a building for a number of years before invoking Ellis, could discourage the speculative use of the law.

"It’s not if you allow gentrification, or you get urban decay. It’s a false choice," Zamudio says. "When you prioritize profit over people you’re going to get a city where working-class folks, its most vulnerable, and the city’s own workforce cannot live."