SAN FRANCISCO (KPIX 5) – Elderly tenants living on a fixed income in San Francisco are paying the mortgage of the city’s largest landlord, and they say it’s getting to be too expensive.
Patrick Shannon and his wife Kathy live in a rent-controlled apartment in San Francisco’s North Beach neighborhood. Two years ago, Veritas Investments bought their building and has been steadily raising the rent ever since.
Recently, Kathy suffered a stroke. Patrick says the stress of her health and the increased rent is getting to be too much.
“I wish they would have picked on me when I was in good fighting form, but they come at me when we’re a bit vulnerable,” Shannon said.
What Veritas is doing is legal. It’s what is known in San Francisco as “reasonable reliance.” Landlords are allowed to pass on the cost of the building to any tenants, rent controlled or not, if they can prove that they reasonably relied on the increased rent to cover the cost of operating the building at the time of the purchase.
Patrick’s rent has gone up 19 percent in two years, from $1,697 a month to $2,021.
“They’re pushing it. They’ve cost us so much money,” he said.
Veritas is valued at $685 million and owns 500 buildings and some 2,000 apartment units in the city. In addition to passing on their debt, landlords can pass along the cost of operating the building which means tenants can see rent increases for garbage services, utilities, and construction repairs.
“Veritas needs to be a good corporate citizen, I hope they understand that,” Supervisor Aaron Peskin said.
Peskin co-sponsored legislation back in 2017 that put an end to tenants having to pay their landlord’s mortgage, but the law is not retroactive.
“While it’s a great law going forward there are some folks who got caught in the middle,” Peskin said.
Landlords had a window of opportunity after the law changed to apply to pass along their mortgage costs. The rent board has seen 35 applications for these types of fees and has approved 31 of them, 16 of which were for Veritas properties.
When asked if he was disappointed in Veritas’s decision to apply for these petitions with the rent board, Peskin replied, “Look, it’s a business. I wish everyone could be a benevolent landlord. I’m begging and pleading because I have people on fixed incomes in an expensive town who have to be taken care of but the law is not on my side.”
“When a property is purchased these go through historically,” said Veritas spokesperson Paul Rose.
Rose points out the company is working with Supervisor Peskin and Supervisor Vallie Brown on a hardship waiver program.
The program launches Tuesday, September 24th. It will waive rental increases for tenants who can prove the rent increases are impossible for them to “absorb.”
“This is something we’re looking at citywide there’s things we can do to help that this is one of those,” Rose explained. “Veritas will be taking their tenants word on good faith and granting the waiver immediately, versus tenants having to wait through the rent board process.”
“No one wants to really sit down and talk with us like people,” Shannon said.
Tenants like Patrick worry they will still continue to see increases from their new landlord going forward.
“This is a gathering storm I don’t think this is going to dissipate, I think they’re gearing up to buy apartment buildings and put all residents under this stress and pressure,” Shannon said.
Veritas tenants are planning to march through San Francisco on Tuesday, September 24th to protest the rent increases they’ve endured so far.
>>> For more Project Home with Susie Steimle, click here.