The San Francisco Community Land Trust (SFCLT) last month purchased a 14-bedroom Victorian home with a rich history to prevent the displacement of its low-income residents. Originally built as two duplexes, over the last century the Mission District building has served as a single home, a group home, and even an international travelers hostel—where, according to local lore, at least ten couples met and later married.
The residents of 2976 23rd Street, dubbed the “the merry-go-round house” for its whimsical décor, knew they were at risk of eviction last year when the owners listed the home for sale at $1,780,000. The tenants, many of whom are artists and musicians, approached the SFCLT about purchasing the property. The sellers were sympathetic to their concerns, and agreed to work with the nonprofit group to preserve the units as affordable housing.
“We’re so happy this opportunity came along,” says Tracy Parent, the organizational director of the SFCLT. “It was a real community effort, and shows that landlords and tenants don’t always have to be on opposite sides.” The land trust is helping the residents form a zero-equity housing cooperative to operate and control the building, while it maintains ownership of title to the land.
The residents plan to sign a 99-year lease with the SFCLT, and promise to pay it $4,000 a year in stewardship fees. In exchange, the land trust will rehabilitate the property, make sure all new households are low- or moderate-income, and pay the insurance bills and mortgage. The SFCLT will also offer residents classes on building financial assets through savings, credit counseling, and debt management.
“My home is no longer someone else's financial investment,” says resident Shalaco Sching, who believes he and his housemates would’ve otherwise fallen victim to, as he put it, “the tide of evictions that have forced anyone who cannot afford to spend $3K on rent to leave the city they call home.”
To prevent that from happening, the owners provided a $400,000 short-term loan to the SFCLT. The land trust plans to repay the loan later this year, when funding from the city is expected to become available through its new Small Site Acquisition Program, which is designed to help nonprofits buy real estate.
Other players in the deal agree it’s a win-win. “This is the kind of initiative that Boston Private Bank is proud to be part of,” says Barbara Evers, senior vice president and community investment officer for the San Francisco Bay area institution, which provided acquisition financing for the deal. “It’s an innovative and creative way of preserving affordable housing that would otherwise be lost to strong market pressures.”
“I never doubted that the deal made sense for both sides,” says Brian Streiffer, a partner in BSGS Guesthouse LLC, the former building owner. “And the fact this deal runs 180 degrees counter to the current trend of Ellis Act evictions, and gentrification in San Francisco, just makes the conversion of the property to a co-op that much more gratifying.” Streiffer also credits the SFCLT for its help in paving the way for the sale to go through.
While the merry-go-round house is no longer in danger of losing its affordability, other buildings in appreciating areas around the state are vulnerable. A California law known as the Ellis Act allows apartment building owners to sell to investors, who evict the tenants, then resell units at a sizeable profit. According to Rent Board data, Ellis Act evictions nearly doubled between March 2013 and March 2014 in San Francisco, from 116 to 216: about 11 percent of all evictions.
Many of the displaced residents are low-income, and would have difficulty finding alternative affordable housing in the city—where rents for a one-bedroom apartment start at $1,800 a month. That figure is double what tenants pay at the merry-go-round house, where the average rent is now $800-900 month.
Parent is delighted with the SFCLT’s purchase. “Real estate in San Francisco is a shark tank, but this was a very collaborative experience. It’s rare that the stars align like this.”
Are there lessons other land trusts can learn from the SCLT’s success? “Make yourself known through community outreach, so tenants and homeowners at risk can find you,” says Parent. “If they hadn’t reached out to us, this never would’ve happened.”
(Photo courtesy of SFCLT)