MENU

Reason.com

Free Minds & Free Markets

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 FranciscoSvetlana Day/Dreamstime.comFor 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."

Photo Credit: Svetlana Day/Dreamstime.com

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  • Juice||

    Christ, what assholes.

  • Elias Fakaname||

    I'll bet if she was cramming illegals into those properties they would have given her a medal and a key to the city. Progressives are the lowest possible form of life.

  • buybuydandavis||

    Second

  • Finrod||

    Third

  • NaiveLubertarian||

    Where is the "Like" button?

  • Paper Wasp||

    Transgender illegals, and she could have run for governor and won.

  • Don't look at me.||

    No point in asking if it might be possibly to change the more than likely arbitrary zoning law so these poor bastards could keep a roof over their head?

  • Flinch||

    Rewind to the summer of drugs in the 60s: the current situation is proof positive there isn't a city in the world that can't be brought to its knees with a needle - especially when marxist minds get the helm.

  • Sevo||

    SF will make damn sure that those units are up to snuff, and not at all affordable to those folks and it's for their own good!

  • ||

    Holy shit Herrera sounds like a real opportunistic dick head.

    He couldn't care fucking less about the welfare of people.

  • Sevo||

    "Holy shit Herrera sounds like a real opportunistic dick head."
    He's aiming at higher office!
    (and you're too kind)

  • ||

    People like him who prey on citizens like that can fuck off and die.

    Better?

  • Sevo||

    NOW we're talkin'

  • Elias Fakaname||

    Another. Good argument to have Trump put cities like SF under martial law.

  • zazoo||

    Right let's get the Marines to sort out the zoning laws, I'm sure it's what they're trained for.

  • Elias Fakaname||

    CA has problems far beyond zoning laws.

  • ||

    It should be noted that most SF voters to this day do not understand why housing prices in the city are out of control.

  • Social Justice is neither||

    Completely not true.

    If only we had more stringent rent control and greater charges on new building (that you largely can't do) to pay for "affordable" housing then there would be housing enough for everyone (if you define everyone as the top and bottom 2%).

    My neighbors are seriously that dumb.

  • mpercy||

    Economists are virtually unanimous in concluding that rent controls are destructive.

    Gunnar Myrdal, an important architect of the Swedish Labor Party's welfare state, on the "left." Myrdal stated, "Rent control has in certain Western countries constituted, maybe, the worst example of poor planning by governments lacking courage and vision."

    His fellow Swedish economist (and socialist) Assar Lindbeck asserted, "In many cases rent control appears to be the most efficient technique presently known to destroy a city—except for bombing."

    http://www.econlib.org/library.....ntrol.html

  • Paper Wasp||

    Even Prog Krugman has written that rent control is a textbook example of bad economic policy.

  • Rhywun||

    motive for flagrantly violating the law is simple: profit

    LOL, you can practically see the spit stains from here.

  • Eidde||

    Any American who acts like a crazed profit-denouncing Marxist should be ashamed.

  • SQRLSY One||

    We're from Government Almighty, and we're here to help (ourselves get re-elected by the rich and powerful, who want to fence out the poor).

  • Rhywun||

    I bet the neighbors ratted her out - how else do these cases get rolling?

  • Diane Reynolds (Paul.)||

    Meh, probably inspections. If she's a landlord, she's going to be under the constant eye of Sauron..

  • ||

    I wouldn't think so. I don't know how it works in Seattle, which I know has a lot of similar tomfoolery, but in SF-Oakland, where many buildings are in an advanced state of decay due to rent control, there's a bit of a "don't ask/don't tell" attitude toward a lot of maintenance violations, which is essentially how the Ghost Ship Fire happened.

    She got taken down because she caught someone's attention who didn't have the luxury of looking the other way, which leads me to believe it was initiated by neighbor complaints.

  • Scarecrow Repair & Chippering||

    I expect it was neighbors who objected to low life scum living nearby. If they were paying a fortune on rent or mortgage, they sure as shit would be annoyed at riff raff living nearby for cheap.

  • ||

    I imagine you're right. It sounds like the tenants of this building weren't exactly ideal neighbors, and the Richmond District is not exactly a slum. No ways near, in fact.

  • Ron||

    often its a disgruntled renter who rats them out. most of the rental code violations I've worked on have been because of a disgruntled renter

  • Diane Reynolds (Paul.)||

    More broadly, San Francisco has a homeless population of roughly 7,500

    Pikers.

  • Sevo||

    Hey, we pay for every one of them!
    "S.F. spends record $241 million on homeless, can't track results"
    https://www.sfchronicle.com/
    bayarea/article/S-F-spends-
    record-241-million-on-
    homeless-6808319.php

    That was 2016; you can be sure it hasn't been cut.

  • Don't look at me.||

    Wonder how long these morons would last in private industry. Sent home by lunchtime.

  • mpercy||

    $241M for 7500 homeless is about $32,133 per homeless.

    Really?

  • Paper Wasp||

    Which is $2677.75 a month for each homeless person, which is enough to rent each of them either a studio or 1-bdrm in Oakland or another suburb.

  • loveconstitution1789||

    Anyone who is not a diehard socialist and still a Democrat, should wake up.

    This is what the left is now. Local politicians are petty little hacks who cannot get real jobs and go after anyone actually helping Americans. They use zoning laws oppressively, destroy cities like Detroit, and add little local bans like plastic bags.

    Lefty state politicians clearly have zero what they are doing, send residents fleeing for lower tax states, and generally destroy popular states like California.

    I won't even address lefty Congressmen as we all know what those fuckers are doing to wreck the USA.

  • Elias Fakaname||

    The day democrat party is now so intractably Marxist that they have evolved to become an existential threat to the republic.

  • vek||

    Yup. I would have disagreed with Clinton, Carter, LBJ, JFK etc on plenty of stuff... But I wouldn't have said they were an existential threat to the continued existence of our civilization... But the modern coastal Democrats are in fact just that. And from all angles really. Socialism, open borders, destruction of all values (other than their own warped ones), the list goes on.

  • The Laissez-Ferret||

    I would agree on all those except LBJ. His Great Society created a system of welfare that brought on the destruction of the black and poor white family in America.

  • Finrod||

    Don't forget Woodrow fucking Wilson, who resegregated the federal bureaucracy and started a whole lot of this progressive shit in the first place.

  • Longtobefree||

    This is why we need judicial reform so that the loser pays, even if it is the fascist city. If their annual budget was on the line, things would be different. (well, OK, in California, they wouldn't be able to figure that out)
    A few visits to the veterans by Trump, and threat of federal funding cut offs for harassing veterans/disabled, and good ol' SF would pull in the horns pretty quick.
    Maybe someone should offer the veterans a few M1's, which even on California aren't 'assault weapons'. (8 round non-detachable magazines) A good photo op when the city throws out the poor disabled veterans from a nice cozy home. Where are the homeless activists when you need them?

  • Scarecrow Repair & Chippering||

    Why would homeless advocates applaud a private initiative which was showing how useless homeless advocates are?

  • ||

    This is why we need judicial reform so that the loser pays

    That's pretty much how it is in CA and it's not as great as it seems. I'm not intimate with the particulars, as IANAL, but I've been involved in a couple of disputes that have stopped just short of court/arbitration, and a couple that haven't, and you always tell your adversary that you're going after your legal expenses, no matter what, as part of the whole "if not for you" package, but my understanding is that the prevailing party is rarely actually awarded the legal fees.

    For example, you may sue me for $1M, I sue you back for $750k, and you prevail but are only awarded $350k - you're not going to be awarded attorney's fees since your basic claim wasn't equitable and had to be litigated. Had you been reasonable in the first place, we would never have had to sue each other and incur legal expenses, etc.

    In the end it doesn't discourage 'frivolous lawsuits' since few have the hubris to wage a lawsuit that they themselves feel is 'frivolous' unless they're incredibly slimy bastards who aren't going to be afraid of a 'loser pays' law (in no small part because, as noted above, almost no one is ever so victorious as to collect on attorney's fees).

  • Eidde||

    "but my understanding is that the prevailing party is rarely actually awarded the legal fees."

    But I thought that this is what loser pays means - the losing party pays the legal fees of the winning party.

  • Ron||

    In this case considering how many people are suing the city of Oakland and the owners of a building for not having legally converted space to dwellings that then burned down and killed many just last year, I can see why SF is in enforcment mode. As a building designer who has designed fire escape routes I can understand the city looking for corrections on this issue to prevent deaths. the other issue of course is the zoning which is a separate issue and as i always say the government does not like the competition of other people solving the problems of homelessness on their own. Plus the city gets higher property taxes form rich condos than it does from rentals of this sort

  • ||

    I can see why SF is in enforcement mode.

    No doubt - but they're also having to balance it against the homeless problem - we had a high profile fire in Oakland last year in the openly-tolerated encampment on 7th St. out by the West Oakland BART and several died.

    I have little doubt that many, if not all, of the people who lived at Ghost Ship would have been homeless had the city not been looking the other way on them inhabiting that building.

    Although, all things being equal, the exiting plan at the 7th St. camp was a little more safely designed than at Ghost Ship.

    Plus the city gets higher property taxes form rich condos than it does from rentals of this sort

    A city's capacity to issue bonds is also capped by its total property value. I sometimes find myself wondering how much this has to do with zoning and housing policies.

  • Flinch||

    You reveal a problem of how most cities/states are funded: property taxes. Note they don't issue an 'occupancy tax', which would make more sense. Property doesn't need/use services, but people do. So places like SF "solve" their revenue problems by creating massive problems to foment market dislocations, hamstring development and generally drive up real estate prices. This works fine... until banks run out of qualified borrowers, which is where SF finds itself and anyone with money and a brain leaves. Then you have California [uber alles]: the state reigns supreme over the trapped, the duped, and the over medicated.
    I believe some sanity can be restored by doing away with property taxes and replacing with an occupancy tax. After all, property is not a crime... is it?

  • Elias Fakaname||

    It doesn't help that San Franciscans are some of the worst people in the world.

  • Flinch||

    Bad things happen when mean and stupid move in together...

  • Eidde||

    I thought this was about zoning, and as I understand it zoning is about where in the city certain types of housing will be allowed.

    It's not about fire codes, as I understand it, correct me if I'm wrong.

    A fire code is presumably applicable everywhere in the city, not different rules based on your neighborhood. Am I naive?

  • vek||

    SF should be utterly destroyed by another earth quake/fire combo. It would serve them right. I say this as a bay area native.

  • Flinch||

    Let's see. SF city has hacks that are working overtime to increase homelessness, won't clean up the city but have found the money to create "poop" maps to document the health hazard of human feces created by their own leadership. I'm sure that effort used more cash than would be needed to get the offending housing up to code. They have to have a mix of citizens on the street alongside migrant illegals so there is some contrast to create the fog of "racism" democrats love to preach about. Sounds like... hell. I hope the DOJ has an arrest warrant for the entire city council warmed up for service. The city council is a public menace and will usher in bubonic plague within the year if not institutionalized and removed from office. Line them up for tag team action - there are probably half a dozen federal agencies that can find a criminal complaint against the bums raiding the treasury at city hall.

  • JuanQPublic||

    But I thought California was the bastion of progressive, compassionate tolerance.

  • mpercy||

    Too bad those veterans were not illegal aliens. Then SF would be handing out a medal and paying her $2M for providing them sanctuary.

  • T. Busse||

    Dennis Herrera, the elected City Attorney, is a bully, a crony, and a toxic race baiter.

    Currently, he's using taxpayer money to sue Exxon for causing global warming and suing Uber and Lyft for operating a business. Prior to holding office, he represented Cobra Systems and Patriot Maritime (which runs union labor on oil tankers) in a minority contracting kickback scandal that lasted 10 years, and the City Attorney's office basically shilled for Zula Jones who was at the center of the Shimp Boy pay-to-play scandal. The entire office is crooked.

  • Dread Pirate Roberts||

    I used to own a house in San Francisco. When moved away, a lot of people asked if I was planning to rent it out. I'd always reply that you'd have to be out of your mind to be a landlord in that city.

  • Art Gecko||

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

    The veterans violated zoning codes?

  • JuanQPublic||

    "Get out of those unsafe units and find a dumpster or something to sleep in."

  • ||

    Herrera is the consummate leftist ass.

  • guyjones||

    Rest assured, wherever Leftists are concerned, their irrepressible totalitarian and apparatchik urges to control everything under the Sun will trump any good deed that fouls afoul of their statist benevolence.

    Leftists' utterly capricious and Kafkaesque approach to enforcing laws are most effectively illustrated in San Francisco, the place where Illegal alien criminals are welcomed, but, not charitable and well-intentioned landlords.

GET REASON MAGAZINE

Get Reason's print or digital edition before it’s posted online