They stood up to their corporate vulture landlords — and won
And the tide begins to turn on Ron DeSantis
Welcome to a Thursday evening edition of Progressives Everywhere!
To read the news right now is to wade through what feels like an endless fog of misery. Human rights violations are abundant in both the Ukraine and in states across our troubled nation. Ego-mad strongmen and oligarchs have ginned up hate and weaponized dirty money to immiserate hundreds of millions of people, whose suffering is often crowded out of headlines by political theater. But a lack of attention does not mean that people are not fighting back.
Tonight, we’re going to talk about the fierce, scrappy, and inspired resistance from those unwilling to accept what often feel like insurmountable attacks.
Already a political hot zone, Florida has become a cauldron of turmoil ready to boil over at any moment. Over the past week or so, Ron DeSantis’s relentless cruelty and corruption have created a statewide backlash amongst students, women, and people of color, all of whom have been protesting, crowding the hallways at the state Capitol, and getting in the governor’s maskless face in response to his snide and unnecessary remarks.
Even if it does not derail any of the Florida GOP’s most mendacious policies, including the strict abortion ban that passed tonight, the uprising is starting to change the narrative about a nasty prick who has heretofore only received glowing praise as some political savant. Even the late-night TV is joining the pile on.
There’s more good news to report, too: Tonight, we’ve got a story about a very consequential victory won by grassroots activists that could have reverberations felt in cities and suburbs nationwide.
by Natalie Meltzer
Tenants of San Francisco’s largest landlord recently ended a five-month rent strike that produced historic gains for both striking members and significant legislative victories for tenants across the city. Their story demonstrates how people can turn the billions of dollars in back rent owed from the pandemic into a source of power.
Since the 2008 financial crisis, the housing sector has effectively undergone a corporate takeover. After the bubble burst and the housing market crashed, the federal government incentivized private investors to purchase swaths of foreclosed homes to prop up the market, and for the most part, it was private equity that had the upfront cash to buy in bulk.
As a result, millions of formerly owner-occupied homes were converted to rentals, and by 2015, institutional investors owned nearly 50% of rental properties.
The shift in ownership of rental properties has had a range of negative impacts on individuals and communities. It is no coincidence that rents in 20 major cities have increased by over 50% in the decade since the financial crisis. After institutional investors purchase properties, they quickly drive up rents, impose new fees and scale back on amenities, allow buildings to fall into disrepair, and aggressively pursue evictions against tenants.
These dynamics are particularly egregious in low-income and minority neighborhoods. Black homeowners were targeted with subprime mortgages in the lead-up to the 2008 financial crisis and disproportionately lost their homes to foreclosure after the market crashed, leaving their properties to be hoovered up by private equity firms. Once corporate landlords are in place, they evict Black renters at much higher rates than their white counterparts.
As with all areas of the economy, the COVID-19 pandemic has both exposed and supercharged these inequities. Nearly 15% of renters are behind on their payments, any number of states have hardly distributed any federal funds earmarked for renters, and two-thirds of renters in arrears are people of color.
Unable to stay above water, small landlords across the country are selling their properties to large institutional investors that are flush with cash. Meanwhile, those same corporate landlords had the tools to secure $320 million in federal Paycheck Protection Program loans that were intended to support small businesses.
Veritas Investments, San Francisco’s largest landlord, is emblematic of this phenomenon. The company began building its portfolio after the 2008 crisis, purchasing rent-controlled buildings and then harassing tenants and allowing conditions to deteriorate in an effort to get them to leave. Even though Veritas owns 200 buildings, 5,000 apartments, and is worth more than $3 billion, it received a $3.6 million PPP loan—and kept the money even after widespread public pressure to return it.
So it’s no surprise that Veritas tenants were outraged when the company told them that their rent would go up in 2022 and that residents would be responsible to pay any back rent not covered by government rent relief funds.
Instead of resigning themselves to individual shame and fear, the Housing Rights Committee of San Francisco organized what became the Veritas Tenants Association. They refused to apply for the state rental assistance program and went on a rent strike that lasted five months. Their tenacity in the face of intimidation won significant concessions from Veritas as well as groundbreaking city legislation to protect the formation of tenant organizations that, like unions, can collectively bargain with landlords.
Last week I spoke with Brad Hirn, lead community organizer at the Housing Rights Committee of San Francisco, to learn how they were able to organize, the tactics they used, and what it means for tenants across a country where housing prices are skyrocketing.
What should we know about Veritas?
Veritas’s business model is certainly not unique. They buy up multi-family apartment buildings, typically older buildings that have more affordable rents, either because of some form of rent control or rent stabilization or just because the previous landlord was not raising the rents every year or something like that. Then they do everything possible to get those tenants to leave.
Veritas has bragged about their low eviction rate in San Francisco through the courts, but the reality is that they try not to file formal evictions through courts but rather make life so miserable for a tenant that they self-evict. Veritas has also figured out how to raise those rents by oftentimes double-digit percentages. Being priced out is the other major way that they achieve displacement without having to formally evict someone through court.
They are an investment firm with individual and institutional investors, from major hedge funds to pension funds. One of their largest institutional investors is a pension fund based in Canada. So they’re certainly not a small business or mom-and-pop operation. They would claim otherwise, though, since they applied for and received not one but two Paycheck Protection Program loans that came out to nearly $6 million and they argued in the press that they are indeed a small business.
When did the Veritas Tenants Association start?
The VTA has been organizing for about four years. It started with some complaints from tenants in a particular building in San Francisco, and we noticed a couple of things that Veritas was doing that would later on become hallmarks of their strategy. One was the use of what we call “SF pass-throughs,” which are essentially rent increases above and beyond what's allowed under rent control that enables a landlord to pass on expenses that they have incurred to the tenant.
Veritas was raising rents by double-digit amounts by passing on the cost of their mortgage and mortgage interest or by doing cosmetic or aesthetic work on a building and then throwing a 10% rent increase onto a rent control tenant.
The VTA fought back hard against the mortgage pass-throughs in particular, and helped pass a law in San Francisco that has now banned debt service from being passed on to tenants.
So that was the first major victory and showed tenants that they could actually get their landlord to lower the rent and that they had the power to do that. And it wasn't through the government saying to Veritas “You have to do this,” it was purely a combination of tenants marching in the street and using the media.
How did Veritas handle the pandemic?
The VTA has waged a few fights during the course of the pandemic. One of the first fights was around non-essential construction, like remodeling a vacant apartment. Tenants who were sheltering in place at home were enduring really disruptive construction during the day and water shutoffs and utility shutoffs as a result of the construction. And so the VTA helped pass an emergency ordinance early on in the pandemic to limit that kind of construction. And now that ordinance is actually up for consideration to be permanent.
When the news broke that Veritas had received its first PPP loan it was a major news story. It got covered nationally and even Nancy Pelosi weighed in urging Veritas to return the loan. They did not. But it really galvanized a lot of tenants who were seeing small businesses in their neighborhoods shutting down and knew that Veritas was taking this public money and claiming that they were a small business.
That led to some interesting organizing between the VTA and the Small Business Association San Francisco. The VTA was really trying hard through a number of tactics ranging from open letters and press coverage, and even a visit to the CEO's home in San Francisco.
What were the VTA’s concerns about rent debt accrued during the pandemic?
The rent relief issues were centered on three major things.
One was debt relief for tenants with rent debt that minimized Veritas’s reliance on public funds. So essentially saying, “look, we know there's a state program and you all are like moving very aggressively to benefit from that public money, but it's inherently limited. And if you can afford to not use it, then let's talk about that.”
The second is shadow debt, meaning personal debts accrued during the pandemic to pay rent through credit cards, savings, personal loans, borrowing from friends, all kinds of stuff. It's a huge issue and it's totally unaddressed by the existing programs. So the VTA said this is an issue and you need to do something about it.
The third is around rent increases. Veritas did not raise rent from 2020 and 2021 in part because of a local rent increase freeze. But they have always reserved the right to impose those rent increases now simultaneously, which would mean essentially three years where the rent increase is all at once—so a 6-to-8% rent increase depending on the inflation.
How did Veritas respond to these demands?
From the beginning, the VTA was calling for negotiations. The VTA has wanted to bargain collectively with Veritas and Veritas has always said no. And the strike could have been avoided, but a conversation couldn’t even happen because they refused to negotiate.
They made a vague commitment to discussing shadow debt, but had no room for negotiation when it came to rent debt and the state rental assistance program. They said everyone should apply and the state would cover it. Same with rent increases. They said straight up to the VTA in one of the meetings that they intended to bank rent increases starting in 2022.
So that's what members were looking at in the summer of 2021. The California eviction moratorium was ending at the end of September and it was becoming clear that the rental assistance program was going to run out of funds. So during the course of the summer, VTA explored what their options might be and decided we need to publicly demonstrate that we're not going to apply for this program. We're going to leverage our debt collectively in the form of a strike and withhold our applications.
What were the biggest challenges of the strike?
The biggest challenge internally was demonstrating the numbers. We had gotten some information on the number of tenants with rent debt, and it was somewhere in the range of like 300 or 330 in San Francisco, but we didn't have a list.
So during the summer of 2021, a lot of time was spent just door-knocking in buildings throughout the city to meet more tenants with rent debt and to build that list from scratch. And to this day, the VTA does not know everyone who has rent debt. It was not a majority strike. Our assessment, which proved out to be pretty good, was that if there was a substantial enough minority of tenants who were doing this, then it could win some concessions.
It was genuinely challenging to figure out what strike support looks like for a strike that is in buildings all over the city. And so we relied on a few different tactics. We had monthly strike vote meetings that were hybrid meetings, both on Zoom and in person, in English and Spanish, where strikers talked to each other and talked through their own fears. We made sure that after every monthly strike vote, there was some kind of press release sent out.
And in September, right before the expiration of the moratorium, we did a big citywide action that included civil disobedience in the lobby of Veritas where a couple of strikers and I got arrested.
In October Veritas tried their first attempt to break the strike, which was an announcement to tenants that anyone who had rent debt and did not get full coverage by the state would be responsible for paying the rest. That really galvanized people, it was ridiculous. Some of the members who had already applied to ERAP were not getting full coverage, and they were asking tenants to pay the rest.
They also made their first threat of legal action against strikers. Veritas threatened eviction against dozens of tenants and insisted on tenants shouldering all of the debt—Veritas wasn't going to take any kind of cut.
In December, Veritas announced that if tenants apply and the state doesn't cover all their debt, the company would cover the rest. And they waived rent increases for 2022. So those were decent concessions and a lot of strikers saw a path to full coverage of the debt while trying to minimize Veritas reliance on public funds. The shadow debt issue was the only remaining thing that was not worked out in any way and inspired the strikers to continue the strike in January.
And then in late January, one of the strikers got a notice of abandonment saying that she had abandoned the apartment. It was essentially a trap. It said that if she tells Veritas that she is living there, then they'll file an unlawful detainer against her for the unpaid rent—an eviction lawsuit. If she doesn't tell them that she lives there, then they'll consider it abandoned.
That signaled to the strikers that, come February, this is where they're headed. So the vote was 85% to close out the strike at the end of January, claim the wins that they had gotten, and then to pivot to securing something in writing on shadow debt.
In addition to the concessions that were won from Veritas, there are also the new protections for tenant organizing in the city more generally. When did that conversation start and how did the strike play a role in the passage of the protections?
That was very much part of the plan from the get-go. The VTA was in touch with local supervisors in particular, Aaron Peskin, going back to 2020 because Peskin was attempting to mediate some of the conversations.
His legislative aide asked what we need to do legislatively to compel a landlord to negotiate. And we thought it was collective bargaining. This framework already exists for our lives as workers, what's to say we can’t do something similar for our lives as renters?
A lot of that work happened in 2021 before the strike started, but a lot of things that Veritas did during the strike became an inspiration for the bill, and that was the goal. The point was to craft legislation alongside a campaign, so that both were reinforced by each other.
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