SAN FRANCISCO (KPIX 5) – A fight between rent-controlled tenants and San Francisco’s largest landlord has reached a truce.
All year, tenants on fixed incomes have been paying off their landlord’s mortgage through rent increases known as passthroughs. After substantial public pressure, Veritas Investments agreed to stop this practice.
Longtime San Francisco residents were facing double-digit rent increases and were fearful of losing the homes they have lived in for decades.
San Francisco passed a law last year to ban these mortgage passthroughs, but the law is not retroactive, so landlords like Veritas were still passing on their debt until now. Veritas has voluntarily stopped passing on its debt.
“We wanted to do our part in really creating more economic stability for our residents,” Justin Sato, Chief Strategy and Portfolio Officer for Veritas Investments said.
KPIX asked Sato if dropping theses passthroughs is Veritas admitting that it made a mistake.
“No. We have always followed the law as the city has required us to do. This was a step of us showing that we are committed to San Francisco, we are committed to our residents,” Sato said.
When asked about fractured tenant trust that led hundreds of tenants to protest in the street last month, Sato said, “I can certainly understand some of their frustrations. Rebuilding trust is certainly a long process but what I can tell u as a company is that we are fully dedicated to it.”
Sato says some 532 families in 34 buildings will get refunds in the form of credits and any petitions for mortgage rent increases that are still pending at the rent board will be suspended.
Tenants’ rights advocates say this is welcome news that wouldn’t have happened without a fight.
“This was truly tenants being in the street, tenants talking to the media, Channel 5,” Brad Hirn with the Housing Rights Committee said.
Hirn led the campaign to stop the rent increases.
“This kind of practice is totally incompatible with a city that is wrestling with affordability, tenants who are on the verge of being priced out,” Hirn said. He says it’s not over yet, landlords can still pass on capital improvement costs that can raise rents by as much as 10 percent.
“We are still seeing tremendous abuse of capital improvement passthroughs,” Hirn said.
City supervisors are calling for a public hearing on that later this year, but for now, tenants in Veritas buildings are breathing a sigh of relief and celebrating a big win for the little guy.