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Sympathy for the Landlord
Lauren Smiley | Photo: Brittany McLaren | August 30, 2013
They’re greedy. They’re parasitic. They’re trying to fleece us all. It’s a familiar battle cry in San Francisco’s raging rental wars. But the truth is far more complicated.
Alcalde is no real estate shark—he’s just the executor of his deceased uncle’s estate, charged with selling the old man’s Portola district house. When Alcalde went to take a look at the property last September, he discovered an off-the-books tenant: a shambling 69-year-old retiree named Frank Angelos who said that his rent was $500 a month. Alcalde’s realtor told him that an elderly tenant could bring down the selling price by $100,000, and Angelos promised to leave as soon as he found a new place. But months later he was still at the house, and Alcalde was on the hook for mortgage payments, insurance, utilities, and taxes. Under city law, not having a formal rental agreement isn’t grounds for eviction. “I was like, ‘Oh my God, it’s a nightmare!’” Alcalde says.
However, single-family homes are exempt from rent control for tenants who took up residency after 1996. So Alcalde raised the rent to $2,600, and Angelos protested to the Rent Board. At a hearing in May, Alcalde offered to give Angelos—who now revealed that he was suffering from cancer, which Alcalde didn’t know—another 90 days, rent-free, to move. “There’s no animosity here,” Alcalde’s attorney said. “I don’t want to get too Godfather-ish about it—it’s just business.” Family members urged Alcalde to change the locks or kick Angelos out. “I’ve thought of a lot of things,” he tells me, “but you can’t do it. You’ll get in trouble. I understand his situation, too—he’s elderly, he can’t just leave.” Finally, in July, he and Angelos struck a bargain: Angelos would relocate to a new place in South San Francisco, and Alcalde would throw in $4,500 in relocation money and a 1989 Ford. The house will fetch a lot more than it would have with Angelos living there, and Alcalde expects to pocket a broker’s fee. But that’s all he’ll get—per his uncle’s wishes, the proceeds of the sale will go to a cousin in Peru.
It’s not PC to say so in this anti-landlord city, but plenty of tenants lie and cheat too. Two can play at that game. On a May morning at the Rent Board, Mohamed Ahmed, a gray-suited Century 21 broker from Hillsborough accompanied by a lawyer and a typographer, sits across a table from Ethel M., a worn-looking woman in her 50s with her boyfriend at her side. These hearings often end up playing out like reality TV, and this one is no exception.
In 2002, Ahmed bought the Excelsior building where Ethel’s elderly mother had lived since the ’60s (and where Ethel had been raised). Ahmed learned in March that the mother had died back in January, though he’d gotten a $572 rent check for February. (“Somehow [she] came out of the grave to send me the rent check and pull the wool over my eyes,” Ahmed quips.) When he called, instead of acknowledging her mother’s death, Ethel pretended to be the old woman, Ahmed claims. Later she said that she had been living with her mother, but because she wasn’t on the lease, she wasn’t eligible for the rent-controlled rate. When she didn’t pay the April rent on time, Ahmed won an eviction. Then he raised the rent to $1,800, effective in July. Now Ethel is trying to negotiate. What if she agrees to pay $1,800 and first and last months’ deposit, her boyfriend asks. Can she stay? “No,” Ahmed responds with a slashing movement of his hand. After the hearing, Ethel turns away from the table in tears.
As a lowly tenant myself, I find my natural sympathies tending toward Team Ethel. She seems to have had a rough time of it in life, and the hearing is hard to watch. But when I call Ahmed for his side, he insists that Ethel’s impersonation of her mother is only part of the story, and he rattles off a laundry list of complaints from other tenants. “Get the notion out of your head that my desire to get this woman out of there is just to get market rent,” he declares. “When you have a bad tenant, it’s like a marriage—you don’t want to be with them.” The Rent Board ended up siding with Ahmed, and the sheriff evicted Ethel in June. “I’m an immigrant, and I came here with nothing,” Ahmed tells me. “The world has been fair to me, and I try to be fair.” To him, Ethel was the one not playing by the rules.
If every scheming tenant was just trying to hold on to her childhood home, it would be one thing. But a lot of cheaters—for example, a friend of mine whom I’ll call Anne—hardly qualify as desperate. Last fall, Anne decided to move her fledgling business out of her home and use a colleague’s one-bedroom in a great neighborhood ($950 a month) as a shared office. There was just one problem: The colleague was now living elsewhere, which meant that the flat was no longer her primary residence and, thus, that she was no longer entitled to rent control. “It was totally illegal, what we were doing,” Anne admits.
She figures that the landlord must have gotten wise to the ruse after a maintenance check, because he scheduled another inspection. The women scrambled to make it look like Anne’s friend still lived there—bedding on a blow-up mattress, cosmetics on the dresser, wine on the kitchen counter. “It was like a staging,” Anne says. The landlord wasn’t fooled, though, and he bumped the rent to $2,500. “There are so many people looking for places to live. I don’t blame him,” Anne says.
Many owners have been cracking down on renters by trawling Airbnb—subleasing your place for less than 30 days is illegal in the city. (Never mind that lots of landlords use Airbnb too.) Another common ploy, as recent transplant Ginger C. discovered, is the gouging of roommates by the main tenant (the one on the lease)—also illegal. Ginger found herself in this position when, apartment-hunting from New York, she spotted a Craigslist ad for a room in a three-bedroom Pacific Heights carriage house. Rent: $2,000 a month. She skyped with the “master tenant,” Cynthia M., a blond beauty who is a regular on the gala circuit, often on the arm of a well-known society scion, and wired Cynthia $6,000 in rent and deposits. “The market in New York is also really hot,” Ginger says, “so I’m like, well, if that’s what I need to do...”
But things quickly went awry. After just a month in the city, Ginger suddenly found herself unemployed. Cynthia, who worked from home as a stylist, banned her from the apartment during the day, forcing her to search online job listings from a nearby café. When Ginger asked to see the rent check, Cynthia told her that her father handled payments and that she didn’t know the total. (That’s unlawful, by the way: A master tenant is required to disclose the full amount.)
Finally, Ginger spotted a notice revealing that the total rent was $3,666, of which Cynthia’s share came to a measly $406. (Cynthia claimed that she was actually paying $50 more.) Because the apartment was rent-controlled, Cynthia was also benefiting financially from the landlord’s inability to charge market prices. (The going rate for three-bedrooms in the neighborhood is $6,000 and climbing.) Ginger moved out and filed a Rent Board petition against Cynthia in hopes of recovering some of her money.
At the June hearing, Cynthia argued that the rent she was charging was fair because she had furnished the whole apartment, including Ginger’s room. “I feel...just a little bit of harassment,” she complained. But the Rent Board sided with Ginger, ordering Cynthia to reimburse her ex-roommate to the tune of $3,774.
The most telling part of the story is that Cynthia didn’t lose her sweet deal. In San Francisco, overcharging subtenants may be illegal, but it’s not grounds for eviction or even for raising the master tenant’s rent. After Ginger moved out, she spotted a Craigslist ad for her old room. The ideal candidate had to like labradoodles, fresh flowers, and The Real Housewives of Beverly Hills. The posted rent: $2,000, later lowered to $1,750. The amount that the Rent Board ruled was fair: $1,371.