San Francisco

San Francisco Fines Landlord $2 Million For Renting Out Dwellings to Low-Income Veterans that Violated Zoning Codes

Many of Judy Wu's tenants remain at risk of eviction.


San Francisco
Svetlana Day/

For the past two years the City of San Francisco has been doing everything in its power to dismantle low-income housing units that run afoul of the city's laborious zoning codes.

Over the past decade, San Francisco landlord Judy Wu (real name Xiaoqi Wu) converted some 12 properties she owns into 49 housing units which she and her husband, Trent Zhu, have rented predominately to low-income veterans, many of whom are disabled, or previously homeless.

These units, however, were only zoned for 15 dwellings. And in 2015, the city's Planning Department first became aware of the excess units, ordering her to obtain permits to dismantle many of them. In 2016, as she was working to bring her units into compliance, and while her tenants fought to preserve their homes, San Francisco City Attorney Dennis Herrera sued Wu, claiming that her unauthorized dwellings "substantially endanger the health, welfare, and safety of individual tenants, the residents of the City and County of San Francisco."

Many of Wu's tenants dispute this characterization, saying they are perfectly happy in the units Wu provides them. The most immediate effect of the city's actions against Wu will likely not be to improve her tenants' "health, safety, and welfare", but rather to kick them out of the only homes they have.

Wu's trial began on Monday. Facing mounting legal fees and the prospect of $8 million in fines, she decided to settle on Tuesday.

"The basic reason for settling is it's too expensive to fight city hall," said Ryan Patterson, an attorney that represented Wu. "This will allow the owners to move forward and focus on legalizing these properties and working to ensure that as many of these veterans as possible can remain in their homes."

The city's lawsuit notably came before the administrative process that would allow Wu to maintain her current units had run its course, and yesterday's settlement does nothing to settle their legal status.

Throughout the entire process Herrera's office has sought to paint Wu as a slum lord, cramming poor tenants into barely livable tenements just to make a few bucks. "Defendants' motive for flagrantly violating the law is simple: profit," reads the city's 2016 complaint against Wu. "They rent out units to the most vulnerable members of our communities…as such, they have a guaranteed stream of income."

San Francisco Supervisor Malia Cohen—who represents the district many of Wu's properties are in—echoed these sentiments, saying when the lawsuit was first filed, "Mrs. Wu targeted these people because she knew they were the least likely to complain in a tough housing market."

Those who have actually rented from Wu paint a far different portrait of her.

"Judy Wu is offering veterans housed in these units a chance to rebuild their lives in a way that is respectful and humane to them," says Fred Bryant, a 79-year-old disabled veteran, and tenant of Wu's for the past four years.

He tells Reason that he has had an exclusively positive relationship with Wu, who has been very attentive to the needs arising from his disability, installing a handicap-outfitted shower, and letting him store his electric scooter in her garage.

"Whenever I needed help of any kind in the apartment, checking the smoke alarm or something," Bryant says, "Judy Wu has been extremely responsive." Bryant is not at risk of eviction, given that the unit he rents from Wu has been brought into compliance with San Francisco's zoning codes.

Many of the other veterans Bryant has spoken to may not be so lucky. Of the 34 units Wu rented out without permission from the city hall, some 12 are still at risk of being dismantled, and the tenants forced to find another place to live.

The 2016 complaint filed against Wu accuses her of such offences as renting out a three-bedroom single-family home as three separate rental units, or maintaining seven units at a property that is only zoned for four.

However federal veterans and housing aid programs which paid the rent for many of Wu's properties require that dwellings are kept "decent, safe, and sanitary," with federal inspectors conducting biannual inspections to ensure this standard is met. Units rented to tenants using federal housing vouchers must have separate and working bathrooms, a separate kitchen area complete with a refrigerator unit and stove, and separate sleeping quarters. Violations can result in reduced rent payments.

Patterson tells Reason that Wu's units met these standards time and again. So does Bryant, describing both his unit and those of the other veterans Wu rents too as nice, remodeled units "with all the amenities of a well-outfitted apartment."

Bryant says the other veterans who rent from Wu share his view of her "without exception" and that they are concerned about the prospects of having to find another place to live. "They don't want to move. The unanimous opinion is that we don't want to move. We like where we are. We are in the process of rebuilding our lives," he tells Reason.

Others have similar opinions. "There are a lot of homeless veterans that Judy Wu helped. She's a good landlord as far as I'm concerned," John Brown Jr., another tenant of Wu's told The San Francisco Examiner in July of last year.

Former San Francisco Mayor Lee even publicly lauded Wu at a 2013 press conference for her efforts to house homeless veterans.

Positive opinions of Wu are not unanimous.

A San Francisco Chronicle article written about Wu when she was first sued by the city includes a number of tenants who were critical of their landlord. One anonymous tenant referred to Wu as a "slumlord", another complained that she was falling behind on maintenance. Neighbors complained about noisy tenants, and piled-up trash.

That article concluded, however, that "visits to Wu's properties and interviews with her tenants create a picture of a landlord who, while allegedly violating the city's zoning codes, also cares about housing veterans with few other options. She regularly leases to tenants whose eviction records made other landlords see them as off limits, and apparently is not quick to throw out those who fall behind on their rent, some tenants say. On the other hand, tenants complained of everything from broken stoves to lack of heat to Wu's unwillingness to get rid of residents who are disruptive or engaging in illegal activities."

Whatever the condition of many of these units, Wu's tenants have been insistent throughout that they do not want to move, testifying in favor of legalizing their dwelling units at Planning Commission hearings, and expressing fears that they will be forced into shelters or back onto the streets.

That is not an uncommon place for veterans to find themselves in the city. Leon Winston of the San Francisco-area veteran's advocacy group Swords to Ploughshares says that his organization works with some 700-800 veterans who are in need of housing assistance.

More broadly, San Francisco has a homeless population of roughly 7,500 according to a 2017 "homelessness census", with 4,353 unsheltered. The city is hardly an easy place to live on a budget, with almost all estimates of median rent placed at $3,200-$3,400 for a median single-bedroom apartment. Vacancy rates are exceedingly low as well, sitting at 2.8 percent for the second quarter of 2017.

An undeniable contributor to the linked crises of homelessness and housing affordability is San Francisco's zoning code—described by Patterson as both "onerous and byzantine"—that stifles new developments, while restricting the number of people that live at existing ones.

Often these costs are unseen, paid in the number of units that are not built, or the number of people not moving to or staying in the city. Wu's case is so striking it shows even in the midst of a housing crisis the city government would demand the rigid enforcement of its zoning code even at the cost of destroying housing for low income tenants.

To make matters worse the City Attorneys' office sued Wu while she was in the process of trying to legalize her units, extracting now $2 million in fines. According to court documents filed by Patterson, the City Attorney's office even actively lobbied San Francisco's Planning Commission to not permit many of the units that Wu was trying to bring into compliance.

Reason reached out the City Attorney's office multiple times for comment, but received no response.

City officials have said that they will not allow the eviction of any of Wu's tenants to go forward until alternative living arrangements have been made. Even still, the city is kicking tenants out of homes they are perfectly content to stay in, putting yet more strain on San Francisco's already low stock of housing.

Discussing the possibility that the city might force some of his fellow tenants out of their homes, Bryant says, "To put these people at dire risk by displacing them is a great mistake."