I-Team Investigates the Largest Landlord in San Francisco

Friday, February 2, 2018
Dan Noyes
ABC (San Francisco)

Chaos erupts after a measure that would have strengthened rent control failed to pass the State Assembly Housing Committee three weeks ago -- a major setback for tenants in the midst of the housing crisis.

Dozens of those protesters live in buildings owned by the largest landlord in San Francisco, Veritas Investments. I-Team Reporter Dan Noyes has been investigating complaints about the company.

Veritas is quite open about their target audience -- it's high-tech workers from out of state. And that leaves some long-time tenants feeling left out and worried about their future.

Forty-nine-year-old Yat-Pang Au founded Veritas Investments in 2007 -- you see signs for the leasing arm of his company, RentSFNow, all over San Francisco. He explained in a Pension Real Estate Association profile that millennials are his target demographic.

"About 70 to 80 percent of them are those young techies," Au said. "And more often than not, they are not from the San Francisco Bay Area and they're moving into San Francisco."

Veritas now owns about 240 buildings across San Francisco -- more than 5,000 apartments -- and just bought its first building in Oakland.

"A lot of the stories are heart-wrenching stories," San Francisco Supervisor Aaron Peskin told Dan Noyes. He's been hearing complaints about the company.

"They're buying these buildings at extremely high prices," said Peskin. "And under San Francisco rent control laws are passing on the debt on those buildings to their tenants."

With rent control, landlords are allowed annual increases tied to the rate of inflation. This year, the approved rent increase is 1.6 percent.

But, Peskin explains San Francisco allows landlords to pass on their loan debt to tenants, along with operation and maintenance costs. He has co-sponsored a measure to stop these so-called "pass-throughs."

Retired hospice worker Pat Magee has lived in the same rent-controlled Powell Street studio for 37 years. Veritas bought her building and in December, with pass-throughs, her rent climbed from $383 a month to $818 -- a 114 percent increase.

"I couldn't believe it at first," said Magee. " I was just kind a like, yeah, OK, sure."

Her rent will settle in with a 34 percent increase for this coming year.

Dan Noyes asked, "How hard was it paying that extra amount of money for you?"

Magee answered, "It was hard because I'm still kind a like -- the money had to come out of my little savings, I've been trying to save up for my teeth."

Yat-Pang Au declined the I-Team's request for an interview, but provided his Vice President of Asset Management.

Dan Noyes: "It was a huge shock to her, what do you say to Pat Magee?"

Joan Cress: "So, I can't talk about specific renters."

Cress cited privacy concerns, even though Noyes explained Pat Magee agreed to have her story told. Cress emphasized that pass-throughs are currently allowed under San Francisco law, and that tenants can apply to the Rent Board for an exemption.

Cress said, "What I can tell you is that we make every effort to work with every single resident in the buildings that we own."

"They don't see the relationships, the community, the contributions these tenants have made," Brad Hirn of Housing Rights Committee of San Francisco told Dan Noyes. "They see dollar signs."

Hirn says, while Veritas concentrates on renovating vacant apartments to attract new clients, some long-time tenants paying below-market rents feel neglected. "We see tenants fed up, tired, exhausted and angry."

Take three examples:

Doris Johnson is disabled, uses a walker. She says her old landlord kept the elevator running, but after Veritas bought the building, the elevator was out 65 days in a row, essentially trapping Doris in her apartment.

Doris: "I could not schedule any of those appointments due to the fact that I couldn't get out of the building."

Dan: "You missed doctor's appointments?"

Doris: "Hmm-mmm."

Dan: "She was trapped in her apartment for two months straight. How does that happen?"

Joan Cress: "It's a very unusual situation, it is a very unfortunate situation."

Cress explains that the company had to have custom parts made, and that perhaps in the future, Veritas should have replacement parts standing by for these old elevators.

"We're not perfect," Cress says. "So we take instances like this to heart."

Example number two: Greg Lawler says his old landlord used to fix the trash chutes when they got clogged, but the same week they took over, Veritas just closed them off for good.

"Immediately we noticed a change in this building as far as amenities being taken away from us," Lawler said.

Dan Noyes: "Why block over trash chutes?"

Joan Cress: "Why block over trash chutes? That is not a question that I was anticipating, Dan."

Cress says tenants sometimes stuff too much into the trash chutes, blocking them and causing a fire hazard, but that Veritas may consider reopening the trash chutes because of feedback from tenants.

Example three: water damage in Amina Rubio's apartment.

Amina: "It came down through here. That was the first thing."

Dan: "Just coming down?"

Amina: "Yeah, it was just like being in a storm."

She was concerned about mold setting in, and asked Veritas for repairs.

Rubio said, "I asked for it to be looked at and they didn't start looking at it for approximately six months."

The apartment is now repaired. Joan Cress wouldn't comment on Amina's case specifically, but said they sometimes have to prioritize repair calls.

"If it's something that may not be life/safety related, then our goal would be to respond to that within 48 hours," Cress said.

One other note -- Veritas chose this furnished apartment across from the Ritz Carlton Hotel as the setting for our interview.

Joan: "So, somebody could come in and rent this for a month or two months or three months."

Dan: "So, a corporate rental."

Joan: "It is a corporate rental, yes."

Veritas confirms they have 200 apartments they rent for short-term corporate housing. Supervisor Peskin calls that "deeply concerning," and that the units should for people who want to live and work here. Veritas insists they want all their tenants to remain as long as they want, no matter what they pay.

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