Over the past few years, the real estate industry has been cozying up to organizations that exist to help the poorest San Franciscans. It’s not well-known, but many of the nonprofits responsible for housing thousands of low-income San Franciscans and managing millions of dollars in public funding are run by people involved in real estate development, raising the question of whether, for example, an executive from Wells Fargo should be making decisions that affect some of the city’s most vulnerable residents.
This conflict of interest can be stressful for tenants.
“We have no say,” says Phyllis Bowie, who lives at Midtown Apartments, a 139-unit complex in the Fillmore that’s managed by the city’s largest housing nonprofit, Mercy Housing. Bowie says most tenants are afraid to raise issues and “rock the boat,” because they can’t afford to live anywhere else. Part of the problem, she says, is that upper-management teams and boards are filled with people from some of the country’s largest real-estate firms — such as BRE or Belvedere Capital. Employees of these corporate giants are generally less interested in renters’ well-being than in turning a profit.
But renters do have allies. Tommi Avicolli Mecca of the Housing Rights Committee ensures that residents get heard over the blare of executives, who he believes have an agenda that puts profits first on the priority list, with tenants toward the bottom.
“There’s no money for [the real estate industry] in housing for low-income people,” Mecca says. He believes the pay-off for real estate companies like Pacific Union Development is “obviously about PR. And PR equals money for them.”
For-profit companies have a lot to gain from the backing of respected nonprofits, and it’s old news that pro-development forces have done their best to win over — or, in some cases, take over — community groups as a way to influence politics. In 2015 and 2016, two attempts by pro-development groups San Francisco Bay Area Renters Federation and the YIMBY Party attempted to win enough member votes to take over the board of the local Sierra Club chapter, but failed in their efforts.
In this case, the objective was transparent. To win a mark of approval from an environmental nonprofit in San Francisco would give political clout to developers looking to build market-rate condos. Still, attempts to garner what would have been a great-looking stamp of endorsement for future political mailers and email blasts flopped.
But at groups like BRIDGE, it’s executive boards and not the public who appoint people to leadership positions. As a result, BRIDGE Housing has no tenants on its board.
Take another one of San Francisco’s largest low-income housing providers: the Mission Housing Development Corporation (MHDC). Its executive director, Sam Moss, previously worked as a realtor. Moss — and, by association, MHDC — endorse deregulation and developer-funded market-rate housing that activists argue displaces low-income San Franciscans.
Moss became MHDC’s head in 2013; since then, he’s become a board member of the pro-market rate development YIMBY Action, and Mayor Ed Lee appointed him to the board tasked with the development of Treasure Island. He’s also vocally opposed to what he hashtags as #LocalControl, comparing working-class communities of color who want to lead the conversation around housing in the city to anti-immigrant activist and right-wing commentator Milo Yiannopoulos.
MHDC, BRIDGE, and the board of Mercy Housing — which puts out the majority of the city’s affordable housing — signed on to support local state Senator and ex-Sup. Scott Wiener’s Senate Bill 35, which in practice could fast-track majority market-rate residential projects. SB 35 allows real estate companies to bypass certain hearings on proposed construction while requiring that new construction be 10 percent affordable.
What counts as “affordable,” of course, is left to local municipalities to decide.
“The danger is it eliminates that public process. It’s not just about people voicing concerns, but about letting residents be part of the process,” says Chris Durazo, co-director of housing and land development at Causa Justa, a nonprofit in the Mission District that serves mostly low-income Latinx people. Decades ago, the displacement of Fillmore’s African-American population and South of Market’s Filipino community “caused lawsuits to create the public vetting before these decisions to make it happen,” and now all that’s being dismantled, she says.
No big surprise: Sierra Club, Causa Justa, and the Housing Action Committee all opposed SB 35. When the Senate passed it on Sep. 15, Mecca expressed his angst: “No one law is going to kill us, but it can only cause more pain and suffering for those who have the least and more money for those who have the most.”
The fear of tenants and their advocates is that more housing for rich people could upend neighborhoods, just as the Fillmore District did during redevelopment in the 1960s. Under the direction of the organization then-dubbed the San Francisco Planning and Urban Renewal Association (SPUR) and the city’s San Francisco Redevelopment Agency head Justin Herman, the city wholly remade a thriving, mostly Black neighborhood. (Herman famously called the Fillmore’s land “too valuable to permit poor people to park on it.”)
SPUR, which often takes the lead on helping Bay Area developers navigate the process of constructing new buildings, has since tried to distance itself from its overtly racist past. Doug Shoemaker, President of Mercy Housing California, tells SF Weekly that while he maintains a seat on SPUR’s board and that the Mercy Board includes just one tenant, the fears of people like Midtown resident Phyllis Bowie are unfounded.
“Tenants should not feel afraid to come forward with issues they’re having,” he says.
In the Tenderloin, where San Franciscans face chronic homelessness at some of the highest rates in the country, the co-founder of the Tenderloin Housing Clinic, Randy Shaw, commutes from one of the priciest neighborhoods in the Berkeley hills. His blog, Beyond Chron, is fervently pro-market-rate development.
Shaw tells SF Weekly that “in our 37 years of operation, THC has never had anyone on its board from the real estate industry,” but board member Helene Sautou previously worked as a project manager for commercial real estate firms, and she was a director of the real-estate group Commercial Real Estate Women SF.
Apart from building alleged community support for the general idea of “more is more” development — whether market-rate or affordable — some groups believe executives are helping to directly move certain projects forward. Development company Group i prepares to “re-invent” Market Street next to the Tenderloin’s Warfield Theater with 242 new condos. Its chances for project approval got a boost from the THC and Shaw, who promoted the project on his blog and at City Hall. In exchange, Group i promised to throw down several million dollars that could go to acquiring another building of 60 to 70 units, that would be “all affordable” and administered by the THC.
Likewise, on Sep. 14, a coalition representing several community groups called Communities United for Health and Justice held a protest in the Excelsior over what they called a “backroom deal” between BRIDGE and local Supervisor Ahsha Safaí, that could make room for market-rate condos the coalition believes will displace low-income neighbors in one of the city’s few remaining working-class areas. As the blog 48Hills reports, Safaí was previously a consultant for the developer and property management company SST Investments.
The 16th Street BART station could be home to what opponents have dubbed the “Monster in the Mission,” a new 10-story complex that would change the entire landscape of the neighborhood. (Only 42 of its 330 units are considered affordable.)
One of its opponents, a resident at the MHDC’s Altamont Hotel who didn’t want to be named, says the executives supporting the project are “in developers’ pockets” and “don’t give a shit about us.” Tellingly, the Monster’s developer is Maximus Real Estate Partners, which has hired previous MHDC director Larry Del Carlo as a consultant.
Putting pro-industry people in higher-up positions at affordable housing non-profits that then influence the way that cities approve new market-rate developments is a savvy move. But there’s also a human cost, as Durazo put it. The strategy works for the industry, but when those same nonprofits cosign anti-tenant moves, the industry’s desires prevail over the community’s needs.
950-974 Market St. (Group i /Handel Architects)
Phyllis Bowie of Midtown speaks at a tenant rights rally. (Joel Angel Jurez)
(Photo: Gabriele Lurie)