Tim Lincecum Joins the Ranks of Blacklisted Tenants

By Dean Preston

Tenants Together would like to welcome Cy Young winner Tim Lincecum to the tenant blacklist. Here, with nothing more than a landlord’s accusations, a tenant’s ability to find rental housing can be damaged forever.

Last week, Lincecum was sued by his ex-landlord. Headlines blared that Lincecum had allegedly “trashed” his apartment, stolen items from the unit, and caused hundreds of thousands of dollars in damages. The sole source of information was, and is, the landlord’s complaint filed in superior court. No details were submitted with the lawsuit. No photos of the alleged damage were made available. In fact, not a single story contained independent verification of any of the landlord’s claims. But the price tag was widely reported – a whopping $350,000.

Now maybe Tim Lincecum will find a landlord willing to rent to him next season, but it’s likely that regardless of the facts of the case, he will be discriminated against if he tries to rent housing in the future. Even if he wins the case and disproves the allegations, the lawsuit will remain in the files of credit reporting agencies and tenant screening services, not to mention Google searches. He has been, and will forever remain, blacklisted, and there’s not a thing he can do about it.

Lincecum is not alone. Each year, tens of thousands of tenants in California are sued by their landlords, often in eviction actions. In some cases, there are grounds for the lawsuit. In others, there are not. The blacklist does not distinguish between the two types of cases.

Credit reporting companies scour court records for cases and report them to prospective landlords as part of credit checks. These companies include cases regardless of outcome. So even if a jury decides the landlord’s cases is frivolous, the case will likely end up damaging a tenant’s credit history.

There’s a state law on the books that prohibits credit reporting companies from including eviction case information unless the landlord wins the case. That makes a lot of sense, since only after the landlord wins is there reason to believe that the case had merit. However, California courts struck down this law, announcing that credit reporting companies had a First Amendment right to report available court records. As a result, credit companies report cases regardless of merit.

Rather than uncritically accept Lincecum’s landlord’s claims, let’s wait for some evidence. I’ve practiced landlord-tenant law for years. I’ve never heard of a tenant doing hundreds of thousands of dollars worth of damage to an apartment without a fire or flood. It makes me wonder what price tag this landlord would have claimed if her tenant didn’t have a multi-million dollar contract with the San Francisco Giants.

Get Involved! Make Things Happen!

Tenants Together is a dynamic, growing organization, and our power comes from you. Join with us and tenants across the state to protect and improve renters' rights throughout California. Here is how our members are getting the word out:

Tabling: Grab a friend and set up a table at a shopping plaza or other busy intersection. TT will send you written materials to help you engage others in our work.

Door-knocking: Meet your neighbors while informing them about their rights. Groups of 2 or more choose a block or a neighborhood and knock on doors to get people talking about renters' rights.

Speaking up: Attend a City Council meeting and remind your local elected officials that they represent renters, not just homeowners.

Plan a meeting: Pull together some friends and allies for a meeting in your home or in a public place. Work together to create a Tenant Action Group that will set the agenda in your city.

For more information about taking action for tenant rights, email tag@tenantstogether.org or call 415-495-8100.

Will Wells Fargo Sell East Palo Alto to Vultures?

By Dean Preston

Wells Fargo is poised to sell half of the rent-controlled housing in East Palo Alto, CA, and the potential buyers are raising more than a few eyebrows. The properties were previously owned by Page Mill Properties, a predatory investment group headed by David Taran, until Wells Fargo foreclosed on the portfolio in 2010. Page Mill’s business plan was to purge EPA of most of the city’s rent-controlled tenants. The question now is whether Wells Faro will hand the portfolio over to another predatory investor that plans to finish what Page Mill started, or whether the portfolio will at long last land in responsible hands. Unfortunately, the former scenario is looking more likely, but this story is not over yet. It is time for anyone who cares about rent control to weigh in on the fate of East Palo Alto.

Sharon Simonson of The Registy broke the news on July 21 that Wells Fargo had identified three finalists for possible purchase of the Page Mill portfolio. Tenant groups reacted quickly to the news, warning Wells Fargo not to turn the property over to predatory investors and urging that the community be part of the selection of the new ownership. Click here for Tenants Together’s letter to Wells Fargo. Tenants Together also launched a petition urging Wells Fargo to protect EPA’s tenants and select a responsible buyer.

Tenants have three major complaints about how Wells Fargo is handling this process. First, Wells Fargo has failed to involve the community in selecting the final potential buyers. Second, Wells Fargo intends to violate the community’s repeated calls for the portfolio to be broken up, not sold to a single investor. Third, Wells Fargo’s short-list reportedly includes some of the worst predatory investors around.

Wells Fargo will not disclose who is on the short list, but media reports identify AREA Property Partners and Equity Residential as two of three finalists. Either would spell disaster for East Palo Alto and its residents.

Apollo (AREA Property) – A History of Predatory Deals in New York

AREA Property Partners was founded in 1993 as Apollo Real Estate Advisors. Apollo is among the most notorious predatory equity investors. Apollo was the equity partner in the acquisition of thousands of rent-controlled units in New York City as part of plans to displace rent-regulated tenants.

As spelled out in an excellent report by the Association for Neighborhood and Housing Development, Apollo’s deals involved acquiring buildings at prices reflecting Gross Rent Multipliers more than double the industry standard, making clear that they had no intention of honoring tenants’ rights to remain in their homes under local rent-regulations. The report notes as examples the acquisition of Savoy Park in Harlem and Broadway Portfolio in Washington Heights.

Apollo’s strategy has been well covered in the New York Times. Here are relevant excerpts from an August 26, 2008 article:

Many of those deals involved major players like Apollo Real Estate Advisors…

In March 2006, for example, Apollo and its partners paid $175 million for Delano Village, a seven-building apartment complex in Harlem that was built in the 1950s as middle-income housing by the Axelrod family, which held onto it for nearly five decades.

The new owners told their lenders they would vastly increase the rental income, even though all of the 1,802 apartments were subject to New York’s strict rent-stabilization program. And the banks went along. …

At Savoy Park, for example, the building’s annual net cash flow was only $4.3 million at the end of last year, yet the loans were underwritten for an ultimate cash flow of $19.1, million, according to Realpoint. Executives at Apollo and its main partner, Vantage Properties, declined to comment. …

A real estate professional who is familiar with the Savoy Park deal but was not authorized to speak about it publicly said the new owners had projected an annual “natural attrition” of 10 percent as tenants relocated for business or personal reasons. …

Frank J. Anelante Jr.. the chief executive of Lemle & Wolff, which owns and manages 7,000 apartments in Upper Manhattan and the Bronx, said turnover in his units was closer to 2 percent. “I have been in this business since 1977,” Mr. Anelante said, “and I have never seen these huge turnover numbers that a lot of these properties seem to have used.”

…when Apollo and Vantage bought eight apartment buildings in Washington Heights with a total of 455 units, they said they planned to empty as many as 30 percent of the apartments within a year and 10 percent a year thereafter, according to S.E.C. documents.

If Wells Fargo turns EPA over to Apollo, now known as AREA, tenants will be in for the fight of their lives.

Equity Residential & Sam Zell – A History of Attacking Rent Control

Equity Residential is a real estate investment trust headed by Sam Zell. Zell is reviled by California renters with good reason. The billionaire real estate mogul has funded lawsuits and ballot measures to gut rent control across the state.

Proposition 98, on the June 2008 ballot, would have repealed rent control ordinances across California. Zell through his company was one of the largest donors to the campaign to pass the measure.

A February 28, 2008 article in Capitol Weekly summarized Zell’s anti-rent-control history:

“The rent-control fight is not a new one for Zell. Zell’s company has filed several lawsuits against cities across California in efforts to repeal local rent-control ordinances. The company settled a suit with the city of Santa Cruz; the settlement allows the company to increase rents after existing tenants move out.

The company has also been engaged in an ongoing battle with the city of San Rafael in federal court and has been sued by tenants’ rights groups in Marin in response to the company’s efforts to raise rents.

Zell has made a name for himself purchasing what are considered to be undervalued or distressed properties, and seeking changes in laws and regulations to increase their value. A 1995 New York Times article on Zell, who once tried to acquire Rockefeller Center, described him and his late partner as “classic ‘vulture’ investors...”

It seems impossible to reconcile Wells Fargo’s stated commitment to work with the community with any serious consideration of selling half of East Palo Alto to such a well known “vulture investor” with a track record of attacking rent control.

Wells Fargo has a short window of time in which to involve the residents of EPA in this decision in a meaningful way or else face a public relations nightmare. To urge Wells Fargo to do the right thing, please start by signing our online petition today.

Civil Grand Jury Report Blasts Parkmerced Proposal -- Inadequate Tenant Protections

The Civil Grand Jury of San Francisco has just released a report, entitled Government-By-Developer, criticizing the proposal at Parkmerced to demolish over 1500 rent controlled homes. The report concludes that "the proposed Development Agreement does not give adequate rent control protection to the residents of the Parkmerced property."

Tenant advocates have warned of the significant risks that the developer or a future owner would use state law to invalidate commitments to relocate existing tenants into new rent-controlled housing. The concerns are based on recent court cases that have allowed developers to avoid obligations to provide affordable rental units in newly constructed units, despite clear written agreements and local city laws. After extensive criticism from tenant advocates, city staff finally acknowledged that there was some risk that the rent control promises on new construction might not be enforceable, though Michael Yarne of the Mayor's Office of Economic and Workforce Development, who has taken the lead on the project, claims that the risk is minimal.

Validating the tenants' concerns, the Civil Grand Jury specifically found that "By not explaining how it will override/resolve potentially conflicting provisions of state law, the Development Agreement does not protect tenants against rent increases as it claims."

The findings stand in stark contrast the developer's recent doorhanger, distributed throughout Parkmerced, characterizing replacement rent control units as guaranteed.

The report also criticized the lack of a project alternative that does not involve mass demolition.

The Development Agreement presumes demolition is necessary, and presents no alternative, or combination of alternatives, that might satisfy the programmatic goals of redevelopment without the demolition of 1583 occupied units.

The Board of Supervisors is scheduled to vote whether to approve the project on May 24, 2011.

Santa Barbara and Ventura Landlord Hall of Shame Nominee Spotlighted by Local Media

The Santa Barbara Independent has spotlighted Dario Pini, a Santa Barbara and Ventura mega landlord recently nominated to Tenants Together’s Landlord Hall of Shame.

As noted by the Santa Barabara Independent:

Pini is known for consistently racking up complaints against his dozens of properties throughout Santa Barbara and Ventura counties, often neglecting basic upkeep and turning a blind eye to overcrowding. At one point he and his company, Dario Pini Investments, were targeted in a massive police investigation that ended in nearly 800 building code violations and a jail sentence. Pini famously chose to spend 30 days behind bars instead of going on house arrest in one of his rentals.

The need for Tenants Together to shine a public spotlight on California's bad landlords is clear. Since launching it's Landlord Hall of Shame, hundreds of California tenants have suggested nominees and local media outlets have responded to its nominations with great, investigative coverage.

All California tenants can suggest nominees for the Landlord Hall of Shame by going to http://hallofshame.tenantstogether.org. Based on the information submitted and its own research, Tenants Together announces Official Nominees throughout the year. Annually, members of Tenants Together vote to determine which of the Official Nominees will be inducted into the Hall of Shame. Last year’s inductees were Donald Sterling, a Los Angeles area mega landlord and owner of the LA Clippers and David Taran, a East Palo Alto mega landlord and owner of Page Mill Properties.

L.A. Sues Deutsche for Abusing Tenants

Huge news out of Los Angeles. The City Attorney has sued Deutsche Bank for its treatment of tenants after foreclosure. Tenants Together welcomes this major step toward holding banks accountable for abusing tenants after foreclosure.

Click here for L.A. Times Coverage, and here for the City Attorney's press release.

According to the City Attorney's Office, "Deutsche Bank has become one of the largest slumlords in the City of Los Angeles."

In addition to holding Deutsche accountable for its conduct, this case should serve as a warning to all financial institutions acquiring foreclosed properties that they had better start acting like responsible landlords when they acquire renter-occupied properties.

Local Media Covers Plight of Tenants in Foreclosure

Tenants are innocent and often forgotten victims of a foreclosure crisis they have done nothing to create.

Tenants Together, continues to lead efforts to mitigate the impact of the foreclosure crisis on tenants. Among other activities, Tenants Together publishes an annual report on California Renters in the Foreclosure Crisis, operates a hotline for tenants in foreclosure situations, and works with local media to spot the crisis and educate tenants.

Recently, News10, ABC in Stockton, KSBY 6, NBC in Santa Maria, the Tribune in San Luis Obispo, and the Los Angeles-based blog, Neon Tommy, ran stories spotlighting our foreclosure work.

Third Annual Foreclosure Report Released: 200,000 California Tenants Affected by Foreclosure Crisis in 2010

Earlier this week, Tenants Together released its third annual report, California Renters in the Foreclosure Crisis. The report highlights recent foreclosure-related developments affecting tenants, quantifies the impact of home foreclosures on tenants in 2010, and makes recommendations to strengthen protections for tenants in foreclosure situations.

Tenants Together conservatively estimates that in 2010, at least 38 percent of residential units in foreclosure in California were rentals, directly affecting over 200,000 tenants, most of whom were displaced from their homes. The report quantifies the impact of the foreclosure crisis at the state and county level.

Tenants Together's annual foreclosure reports are designed to shed light on the plight of tenants in foreclosure situations and offer solutions to the ongoing crisis.

California Tenants Elect Donald Sterling and David Taran to Landlord Hall of Shame

Tenants across the state elected David Sterling of Los Angeles and David Taran / Page Mill Properties of East Palo Alto as the inaugural inductees to Tenants Together’s Landlord Hall of Shame.

The Landlord Hall of Shame is designed to shine a public spotlight on California’s bad landlords and send a clear message that their actions will be announced and publicized.

Throughout 2010, California tenants suggested nominees for induction into the Hall of Shame. Mr. Sterling and Mr. Taran distinguished themselves from this list of candidates by the egregiousness and scale of their bad conduct.

Donald Sterling, LA Clippers owner and LA-area mega landlord, has been involved in a number of out-of-court settlements in discrimination cases. In 2009, Sterling paid the Department of Justice (DOJ) the largest settlement ever involving a housing discrimination case. According to the DOJ, Sterling "engaged in a pattern or practice of discriminating on the basis of race, national origin, and family status." The DOJ stated that Sterling "refused to rent to African Americans and that his conduct was willful." In 2006, the Housing Rights Center in Los Angeles sued Sterling for discrimination, a case that Sterling settled for an undisclosed amount that included over $5 million in fees. Sterling has also been sued for harassment and employment discrimination based on race by NBA legend and former Clippers General Manager Elgin Baylor.

David Taran, through his company Page Mill Properties, orchestrated and executed a scheme to evict thousands of rent controlled tenants in the city of East Palo Alto (EPA). After acquiring more than half of the rent controlled housing in EPA, this landlord soon began imposing exorbitant rent hikes and aggressively displacing tenants from their homes. Within a few years, the scheme imploded with all units going into foreclosure in 2010, but not before an estimated 1500 tenants lost their homes, according to research by the Fair Rent Coalition of East Palo Alto.

Washington, D.C. Extends Rent Control for 10 Years

In its final 2010 meeting, Washington, D.C.'s Council voted to extend the city's local rent control for another ten years. The Washington Post summarized the development:

RENT CONTROL. Extended for 10 years the District’s rent-control laws that limit annual rent increases to about 2 percent plus inflation, or no more than 10 percent a year. The 35-year-old program was meant to protect tenants from rising costs. Increases for the elderly and disabled are limited to 5 percent a year; increases on vacant units may rise no more than 30 percent.

California readers will note that, unlike California, D.C. law permits vacancy control -- i.e. the amount that a landlord can increase rent after a vacancy.

Congratulations to the D.C. city council and local tenant activists. Particularly in these difficult economic times, the security provided by rent control laws is essential.

Ninth Circuit Throws Out Rent Control Challenge

By Dean Preston

Earlier today, an en banc panel of the Ninth Circuit Court of Appeals threw out a challenge to the City of Goleta’s mobilehome rent control ordinance. This closely watched case is a major victory for mobilehome residents and rent control.

Tenants Together, National Housing Law Project and other allies had submitted an amicus brief in support of the City of Goleta.

The Ninth Circuit panel squarely rejected the park owners' argument that the rent control law somehow denied them their "investment backed expectation." The court found that the owners knew exactly what they were buying – a property subject to rent control -- and could not now challenge the rent control law as a taking. The court also noted that "the people who really do have investment-backed expectations that might be upset by changes in the rent control system are tenants who bought their mobile homes after rent control went into effect. Ending rent control would be a windfall to the Guggenheims, and a disaster for tenants who bought their mobile homes after rent control was imposed in the 70’s and 80’s."

Speculators like the Guggenheims routinely buy property cheap because of rent control and then turn around and try to invalidate rent control laws claiming that these laws deny them their ‘investment backed expectations’. The court's opinion will make it far more difficult for speculators to use these disingenuous arguments in the future.

Today's decision reverses Judge Jay S. Bybee’s decision from last year. In that decision, Bybee wrote that mobilehome park owners had a constitutional right to compensation by the City because the rent control ordinance constituted a “regulatory taking” under the Fifth Amendment. Despite the fact that the park owner bought the park with full knowledge of the rent control law, Judge Bybee, joined by Nixon-appointee Judge Alfred T. Goodwin, found that the law improperly interfered with the park owner’s “investment backed expectation.”

Judge Bybee, of course, was controversial long before his poorly reasoned anti-rent control decision. Bybee authored the torture memos while at the Office of Legal Counsel under George W. Bush, after which he was appointed to the Ninth Circuit Court of Appeals. When his responsibility for the torture memos was exposed, there were widespread calls for his impeachment. In April, 2009, The New York Times called for Bybee’s impeachment, stating: "These memos make it clear that Mr. Bybee is unfit for a job that requires legal judgment and a respect for the Constitution." Bybee was not impeached and remains on the Ninth Circuit Court of Appeals.

Bybee’s Goleta ruling angered many advocates for renters’ rights who saw the court bending over backwards and contorting the law to find in favor of park owners and against those protected by rent control.

Today's en banc decision is an encouraging sign that the Ninth Circuit recognizes the right of cities to adopt and enforce their rent control laws, even if conservative activist judges like Judge Bybee do not.

As a result, many working families and seniors in Goleta and beyond will rest a little easier this holiday season.

Parkmerced tenants turn out to oppose demolition of rent controlled homes

By Dean Preston

Hundreds of tenants showed up at the Planning Commission last night to speak out against the proposed demolition of over 1500 rent controlled homes in San Francisco's Parkmerced.  The hearing began with a contentious exchange between Commission President Ron Miguel and tenants of the property.  Residents, many of whom have endured hours of waiting for public comment at prior hearings, demanded that Miguel give the public the opportunity to speak at the beginning of the hearing, rather than after a extensive staff presentation. Miguel ultimately relented, allowing public comment and rescheduling the staff presentation.  

Over three hours of public comment followed.  Virtually every speaker spoke against the project. The speakers included tenants who had lived at Parkmerced for decades.

Speakers from the Coalition of San Francisco Neighborhoods spoke near the end.  They explained how the developer had presented the plan to their group and had stated that there was not much opposition among Parkmerced residents.  They were moved by the public testimony, noting that there was clearly extensive opposition in the community.

Parkmerced is owned by private equity groups that would have the right to sell the complex to the highest bidder once entitlements are obtained.  The same ownership group has financed schemes to displace tenants and redevelop rent controlled housing in New York City.  These projects ultimately failed due to tenant opposition and financing problems, raising concerns about the financial viability of the massive development project at Parkmerced. 

Under the proposal, over 1500 rent controlled "garden apartments" would be demolished. The construction would extend for decades (up to 30 years of construction), creating an environment that would be miserable for the thousands of residents of Parkmerced, many of whom are very long term tenants.  The developer claims that tenants would be relocated to new rent controlled units, but serious question exist as to whether such promises are enforceable in light of state law and recent court rulings.

One thing is clear from the hearing.  At long last, tenants at Parkmerced are coming together with each other and community allies to stop this project.  They are doing so just in time.  The Planning Commission will soon decide whether the massive project will proceed.

Details of the Development Agreement, including rent control and relocation issues, will be presented by Planning Department staff at the Planning Commissions meeting next week. For meeting and agenda information, visit www.sfplanning.org.

If the Planning Commission approves the project, residents could appeal to the Board of Supervisors. Commissioner Sugaya spoke after the public testimony, noting that in the end, "it is a political process" and community members should organize and go to their supervisors.

The Planning Commission deserves credit for having this hearing at San Francisco State University, located right next to Parkmerced.  This was highly unusual and allowed many tenants -- including seniors and persons with disabilities -- who may not have been able to come to City Hall the opportunity to participate.  The Commission should consider hosting future key meetings concerning the project at the same location given that Parkmerced is so far from City Hall.

Notably absent from the meeting were any politicians.  The District's supervisor, Sean Elsbernd, was not present and has been largely silent about this massive redevelopment project proposed in his district. Despite the large number of tenants affected and the city wide implications of the proposed project, not a single mayoral candidate attended the hearing. Expect this to change as the rest of the city realizes the importance of this fight.  In the meantime, Supervisors should be urged to tune in to SFGTV this evening at 8:15 to watch the powerful testimony against this project.  

Tenants Together opposes the demolition of over 1500 rent controlled homes, particularly given the inadequate tenant protections.  Until state law changes to guarantee that demolished rent controlled housing can be replaced with new rent controlled housing, it is hard to see how responsible city officials could approve such a project.

If you are interested in learning more or getting involved, please email info@tenantstogether.org.

Tenants Defeat Ellis Act Eviction in San Francisco

Tenants at a six-unit building in San Francisco prevailed in an Ellis Act eviction case when a San Francisco Superior Court Judge granted summary judgment for the tenants.

As reported earlier this week by Paul Hogarth of BeyondChron.org, the tenants' prior landlords, Kip and Nicole Macy,

had made local headlines for their battle of intimidation that included hacking into the tenants’ e-mails, cutting out the floor boards, and breaking into their units – after failing to get them out with an Ellis eviction. The Macy’s landed in jail and foreclosed on the building in April 2010, but the new owners tried to add themselves as plaintiffs in the dormant Ellis case. But in the meantime, three of the units had been re-rented – proving the Macy’s didn’t intend to go “out of the rental business.” The Tenderloin Housing Clinic’s Steve Collier represented the tenants in successfully fighting the Ellis eviction.

This is Collier's second major Ellis Act victory this year. In another closely watched case, he represented Chinatown seniors who refused to vacate when a speculator bought their home and used the Ellis Act to try to evict them. As part of the resolution of that case, the tenants will remain in their homes.

Collier, a staff attorney at Tenderloin Housing Clinic and an expert on Ellis Act evictions, also serves as President of the Board of Directors of Tenants Together.

We congratulate Steve Collier and the tenants he represents for their determined and successful opposition to abusive Ellis Act evictions.

Fresno Paper Publishes Story on Hall of Shame

Since 1996, Community Alliance has served as the voice of the progressive movement in Fresno. The front page of their December issue features a story written by TT Organizer Giti Dadlani about the Landlord Hall of Shame.


From Community Alliance:
For years, tenants have tolerated landlord harassment, illegal evictions, hazardous living conditions and other forms of abuse with little recourse. Irresponsible landlords get away with these wrongful actions because of a lack of oversight, transparency and accountability. The lack of public information about these bad actors leaves tenants with no way to learn, in advance, if they are entering into a contract with an unscrupulous landlord, and no way to expose unethical or illegal behavior after the fact.

Visit Community Alliance's website for the full story.

Hall of Shame of Nomination Sparks Media Exposé on Fresno Mega-Landlord

After years of neglect, Fresno-based mega-landlord, JD Home Rentals sent a maintenance crew to one of its dilapidated rental properties after a nomination to Tenants Together’s Landlord Hall of Shame landed it in local evening news.

The story was covered by two local TV channels: KSEE 26, NBC and KMPH 24, Fox.

JD Home Rentals, owned and operated by father-son pair John and David Hovannisian, is notorious for renting substandard homes to Fresno’s most vulnerable tenants, including immigrants and low-income residents. The Better Business Bureau of Central California has given JD Home Rentals an ‘F’ score for receiving and failing to respond to a high number of complaints.

Afraid of retaliatory evictions, many JD Home Rentals tenants don’t complain about their substandard living conditions. When they do, their complaints generally go unanswered.

In response to the media spotlight, JD Home Rentals sent representatives to address complaints at one location. See video



It remains to be seen what repairs, if any, the mega-landlord will actually make.

Tenants Together will continue to keep the public pressure on JD Home Rentals and work with local tenant leaders and advocates to make sure that JD Home Rentals brings all its rental properties up to standard so its tenants can live healthy and dignified lives.