The future of a giant landlord

In the past few years, tenant organizing has brought attention to CitiApartments' aggressive tactics and put a kink in the company's plans.
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OPINION The business model of CitiApartments is in crisis. The local landlord giant faces an avalanche of foreclosures, with almost 20 percent of its units being returned to lenders and dozens more properties in danger. A recent article in The Wall Street Journal blamed the credit market for the losses — but tenants standing up for their rights were a factor, too.

San Francisco renters have complained for years about the company's practice of buying rent-controlled buildings then driving out tenants in order to re-rent their units at higher rates. In the past few years, tenant organizing has brought attention to CitiApartments' aggressive tactics and put a kink in the company's plans.

For years, CitiApartments has been accused of harassing tenants, with tactics ranging from illegal buyout offers to physical intimidation to intrusive surveillance. Tenants report living for months without walls and elevators, struggling with leaks and health hazards, with CitiApartments refusing to make repairs. Such problems are no accident: CitiApartments success depends on getting long-term tenants to move out.

Yet tenants are not sitting idly by. A campaign of tenants and advocates, CitiStop, has been educating new CitiApartments tenants about their rights. Over time, tenants have become less afraid and increasingly in touch with tenant advocates and lawyers. Tenants have pursued hefty private lawsuits and are also working with City Attorney Dennis Herrera, who is suing the company for numerous violations.

This campaign has had real results. Tenants are refusing to let CitiApartments force them out. And the organizing effort has helped defend rent control for all San Francisco tenants — CitiApartments owns such a large share of the apartment rental market that it is able to artificially raise rents citywide.

Normally foreclosures are bad news for tenants who have to deal with large banks unfamiliar with San Francisco tenant law. But in the case of CitiApartments, even bank ownership is an improvement. However, UBS, CitiApartments' lender, has already made its first serious blunder by allowing CitiApartments to continue managing the buildings the bank now owns. UBS should seriously reconsider this decision, given CitiApartments' track record.

The long-term fate of the buildings is an open question. An ideal solution would be for the city or a nonprofit to take over ownership of the buildings with the goal of providing permanent, affordable housing.

Though CitiApartments' distressed mortgages are ideal candidates for federal aid, this option must be pursued carefully. It would not be helpful for the government to invest in these buildings based on CitiApartments' claims that the company can recoup the money using the same flawed model that caused the problems in the first place. But as long as we avoid that trap, we have a great opportunity to meet the city's pressing need for affordable rental housing.

CitiApartments' business model has not been working for tenants for a long time, and now it is not working for CitiApartments. It is time to abandon speculative rental schemes and start prioritizing fair, equitable housing. *

Jane Martin is vice chair of SF Pride At Work and an organizer with the CitiStop Campaign.

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