For $1,590 a month, all Anna Chase wanted was a room in a shared San Francisco home with six other young professionals, which would spare her the ordeal of commuting to her executive assistant job in SoMa from Santa Clara (oof) and living with family as a gainfully employed 34-year-old (double oof).
She got this. But the people at HubHaus, the third-party online platform that operated the sprawling 10-room house owned by a family trust, wanted more. They wanted to foster a community. In the lease for 255 Maywood Drive, in the exclusive Monterey Heights neighborhood — none too far from the tony St. Francis Wood — there’s actually a section titled “Be Good To Each Other.” The young professionals paying HubHaus a purported total of around $9,200 a month were expected to “be an active member of their community” and “encouraged to participate in, and help organize, house dinners, housemate hangouts, community events, etc.”
Chase says the company, to its credit, took this community-building ethos seriously. There were, indeed, house dinners, housemate hangouts, community events, etc. with HubHaus residents from this and other Bay Area cities. They took this more seriously, she bemoans, than fixing the oven, which was unusable for months, or repairing the heat, which was essentially on the fritz from November until April.
Complaining about maintenance problems actually became a bonding experience. But to really galvanize that community bond between Chase and her six roommates, HubHaus had to evict them.
In June, this happened. And, now, the tenants have banded together and lawyered up.
Monterey Heights is a realm of labyrinthine streets lined with stately stucco manses. It’s the sort of place where the neighbors would notice the installation of a garden gnome absent the proper permitting. They certainly noticed seven young people being shoehorned by a for-profit tech platform into a single-family home, in a neighborhood exclusively zoned for single-family homes.
Complaints were registered. Unnerving notices from the city were tacked to the home HubHaus christened “Ophelia Haus.” And it soon became evident that one group HubHaus had failed to foster a community relationship with was San Francisco’s planning and building departments.
After several months of inspections and written and verbal communiques, the city in May ruled that, whatever legerdemain a tech platform and its attorneys may employ, seven strangers paying above-market rent to a third party operator do not constitute a “family.” And, in this neighborhood, “Group Housing uses are not permitted.”
One month later, the residents of Ophelia Haus were informed by HubHaus, in writing, they would have to vacate the premises within 30 days. Planning Department officials confirm the home was subsequently “vacated” and is, apparently, vacant still.
But, says Joe Tobener, an attorney for all seven former Ophelia Haus residents, this isn’t over. HubHaus, he says, either cavalierly ignored or knowingly violated a bevy of legally enshrined San Francisco tenant protections in summarily ejecting Chase and her roommates. He objects to this.
But, more deeply, he objects to a corporate outfit “undermining the notion of roommates” and driving up the already parodic cost of housing in San Francisco. His fair market value expert, Gavin Coombs, pegs the rental value of this home at around $7,000 a month — at least $2,200 less than the cumulative total the Ophelia Haus denizens handed over each month to HubHaus.
HubHaus’ business model, it would seem, is dependent on exacerbating the already onerous cost of housing in San Francisco.
And, in this case, that’s illegal, Tobener says. HubHaus, he claims, is a de-facto master tenant. In this city, master tenants can’t legally profit off the arrangement.
Obviously we had many questions for HubHaus CEO Shruti Merchant, who surely must see things differently. But she would not consent to an interview without the ability to approve her quotes before publication.
While this is not an unusual ask in the tech, business, or celebrity press, it’s not something any self-respecting mainstream journalistic outfit would consent to. Mission Local would not grant this courtesy to any CEO, politician or Christ descended from heaven.
Merchant agreed to submit written answers to our written queries. On Thursday afternoon we sent nine questions. She subsequently responded with an anodyne statement that didn’t really address them. For full transparency’s sake, here’s the complete interaction.
Thursday was a busy day for HubHaus. At around the same time we emailed it our questions, Tobener’s firm sent a “demand letter,” the legally mandated precursor to litigation regarding alleged unfair evictions.
In it, Tobener’s firm requests HubHaus participate in mediation — as, he notes, requesting mediation prior to litigation was a stipulation in the leases between HubHaus and its former tenants.
Chase and her former roommates, the lawyer continues, are entitled to redress and moving costs and emotional distress and whatnot. If the company agrees on mediation, this will be hammered out there. But what Tobener seems to really want to do is put this highly capitalized tech company — with its $10 million in Series A funding — into a courtroom.
He talks like Conor McGregor spoiling for a fight — a fight he’s sure he’ll win (and bombastic moves may not hurt in a settlement chase, either).
“They really stepped in it in this case,” he says. “This is a slam dunk for us.” Noting HubHaus’ deep pockets, he adds, “You can see why we’re super excited about this.”
The erstwhile Ophelia Haus residents’ potential legal case comes at a time when this city’s tenant activists — and elected officials — are growing increasingly agitated over the proliferation of so-called “corporate rentals.”
“Corporate rentals convert housing that should be available for people who want to live in San Francisco as residents into housing for business travel or other uses basically for non-residents,” says Gen Fujioka, the veteran policy director for the Chinatown Community Development Center. “The scope and scale of it seems more significant now.”
Fred Sherburn-Zimmer, the director of the Housing Rights Committee, claims that, along with sub-30-day short-term rentals like Airbnb, lengthier “corporate rentals” are “spiking radically lately.” Monetarily, it’s not a complicated equation: Short-term occupants in de-facto company housing or Airbnb users are more lucrative than tenants who might live in those units for decades to come — with rent control in pre-1979 structures.
The recent revelation that a nearly complete 62-unit structure at Market and Church will nearly entirely be leased over to a company providing lodgings for extended-stay business travelers helped prompt Supervisors Hillary Ronen and Rafael Mandelman to order a comprehensive analysis of “the proliferation and impact of corporate rentals in San Francisco” from the city’s Budget and Legislative Analyst. Simply by combing through online rental sites, Ronen estimates at least 100 such units in the Mission alone.
“The threat is, we’re cannibalizing housing stock for something that isn’t truly housing,” explains Mandelman. “This isn’t housing for San Franciscans. It’s an amenity for businesses.”
HubHaus is, if anything, merely a cousin to these types of outfits. You can draw your own conclusions about what manner of renter will blithely fork over $150 or more for “heat” and “window screens” — the sort of thing a landlord is required to provide — or use of a microwave, which can be obtained for a pittance off Craigslist or from any thrift store.
But people like Anna Chase definitely wanted to live in San Francisco and be San Franciscans. Merchant writes that “we believe San Francisco and other communities will benefit from progressive housing situations such as we offer our members.”
And, to an extent, this is true. It’s hard to get too apoplectic about the introduction of density into the Westside. In some neighborhoods, informal boardinghouses and flouting of quaint single-family zoning are already commonplace. Your humble narrator, in fact, resides in the Excelsior, where there are so many people living in the house next door, they don’t even know the exact total.
This is, incidentally, our neighborhood polling place.
It’s safe to say, however, that the handyman and the Uber driver and the retired Navy vet who fixes his Trans-Am all day long and the hairstylist with the cute toddler who loves Batman aren’t paying $1,750 a month — as HubHaus dwellers are — plus extra for a window screen, WiFi and heat.
“We had an unfortunate issue in the City of San Francisco, where as you know, the City believed our housemates did not fit in their definition of a ‘family,’” wrote Merchant. “We disagree with the City’s position and appealed.”
She places the blame for Ophelia Haus tenants getting the boot on the city and the property owner.
A tech CEO attempting to disrupt the dictionary and legal definition of “family” with its own highly selected group of young professionals paying above-market rent is something that would be a bit too on-the-nose for even Silicon Valley. As would a tech platform professing to provide “progressive housing situations” using a business model that extracts profit by goosing the rental costs of the nation’s most expensive rental city.
You can’t make this stuff up. But why would you?
“Is this a way to provide housing?” asks Fujioka of HubHaus. “Or is it a way to extract more dollars and exploit the fact we’re in a housing crisis?”
The answer appears to be “Yes.”
Tobener’s legal strategy is multifaceted. As noted above, he claims HubHaus, the de-facto master tenant, was illegally “rent gouging” by charging the tenants more than it presumably paid the home’s owner. And, in dividing a single-family home into seven units — and signing seven leases with seven residents in seven bedrooms — Tobener says HubHaus inadvertently triggered rent control protections.
This would mean the Ophelia Haus denizens were covered by “just cause” eviction protection, and could only be given the heave-ho for one of 15 legally defined reasons. And, no, we failed to square our business model with the city and now you all have to leave is not one of those reasons.
And yet, this is only the case because the structure formerly known as Ophelia Haus was built in 1940; post-1979 structures are, by and large, not covered by rent control, and tenants there are entitled to far fewer protections and remedies.
“If this was a building built in, say, 2000, they wouldn’t have rent control,” says Tobener’s associate, Jim Lucey. “They wouldn’t have eviction protection.”
Merchant did not answer any of our questions regarding San Francisco tenancy laws. She did, however, concede that “We are working to revise our off-boarding policy based on feedback to create a better experience in the event something like this ever happens again.”
If Tobener has his way, it will.
Chase, meanwhile, managed to find another shared living situation. She now has six new roommates. And she’s now paying her rent (“about the same”) to a different third-party platform that acts has her de-facto master tenant.
She laughs at the ridiculousness of it all.
You can’t make this stuff up. But why would you?
I live in a “haus” managed by HubHaus. The management is now rent-gouging me and my housemates as retaliation for exercising our rights and speaking up about their misconduct and negligence, and our attempt to form a tenants union to protect ourselves from their unfair and dangerous practices. After months of back and forth with them, asking them to follow the law and perform to our contracts, major security and physical safety issues due to their negligence and misconduct, (negligence and misconduct that seems to be happening across the board at the other hauses we’ve spoken with), and resulting police involvement- they’ve raised my rent 458% plus removed all utilities and services that were previously included in our leases. They are forcing us to start paying for them out of pocket on top of the major rent increase or face eviction for being in breach of the new rules they keep making up – to encourage us to stay silent or move out. We are good tenants. We get along well with our neighbors and community, and all we want is to live safely in our home without discrimination by HubHaus. We hope HubHaus corrects their practices before someone is seriously hurt in one of their homes. We survived a dangerous situation they willingly put us in for their own convenience, but now we are facing an extreme rent increase and service decrease for addressing our safety concerns with them. Thank you Mission Local for sharing this story- you are providing hope and information to the rest of the tenants of this unethical company who are still fighting for peace in our homes!
everyone dealing with hubhaus, which is in fact a scam company. Stop wasting your time going back and forth with them. They are not interested in following the law or living up to any of the expectations for services stated in your lease. Their business practices involve manipulation, creating distractions, blaming tenants or landlords and stringing members along in meaningless communications to no avail.
1) file a formal complaint with your state attorney office.
2) contact local news and journalist to continue to bring truth to light
thank you for this thorough article,
It’s easy for long-time residents to underestimate the cost of housing here. Still, I’m surprised that a fair market value of $7k/mo was reported so uncritically. If that’s a real number, then I want in.
Thank you for this article! Very informative and hilarious how people think they can pick and choose which laws to obey.
The author Joe Eskenazi seems biased and as if he wrote this from a place of vengeance rather than any actual research or understanding of the topic. Co-living companies are actually creating housing stock which would normally not be available…. And is a city like SF this is a huge positive to counter-act units being taken off the market for corporate and short-term housing to companies like AirBnb. Master tenant / sublease agreements are fully legal there is just a few disclosure requirements the master tenant (or HubHaus) in this case are required to make to their subtenants. First and foremost a master tenant is required by the San Francisco Rent Ordinance to disclose the actual full rent paid to the owner. Secondly most sublease agreements I’ve seen in SF have the subtenant waive just cause eviction protection (to protect the master tenant and owner). If Hubhaus included such clauses in their leases there will likely be no recourse for Tobener. Also good luck trying to argue what a family is.
Aren’t single family homes in SF exempt from control?
If this is considered group housing, wouldn’t the tens of thousands of roommate / share apartments in the city be considered group housing?
*Gavin Coombs* estimated $7k for a 10 bedroom apartment? That’s sincerely hard to believe since he’s well known for contacting every for rent posting on Craigslist and getting top dollar when he takes on the listing. Standard share rates now are At least $1600-2,000 per bedroom so $7k seems downright cheap and $9200 does not seem excessive at all.
What I really don’t get is why the city would set a precedent to disallow roommate / shared housing since it’s so common in the city.
Ooops I see now that it’s not a 10 bedroom, but a 10 room (later mentions 7 bedroom), but $9,200 / mo for a 7 bedroom still seems way more than reasonable, and anyone who’s recently rented an apartment in SF can tell you that Gavin Coombs’ estimate at $7,000 (or $1,000 per room) is extremely low. This place at just over $1,500 per person is quite affordable. I would suspect any “standard” family rental of that place would have at most 4 people (2 adults and 2 kids) living there.
Really there are several issues here and the author is jumbling all them together. So I will break them down one by one and tell you what’s really going on:
1) **Stuff in the house was broken** – This is obviously on Hubhaus and/or the owner, whatever their agreement was. There are state laws that protect tenants from their units becoming uninhabitable, and even if something isn’t functioning that doesn’t cross the habitability threshold, they may have a shot to file a decrease of services petition with the rent board (interpreted liberally) or even a case in small claims.
2) **Hubhuas evicted everyone when it couldn’t/shouldn’t have** – It’s true that in certain circumstances just cause protection applies for single family homes. As all the subtenants had individual leases, this is a huge gray area – but eviction law is interpreted very liberally so Tobener will probably have good leverage to get a settlement on this. Also relevant is the history of the house (ie: what it was used for before hubhaus took over, and if the previous tenants were evicted too – if so, then just cause would be automatic)
3) **Type of use for the house** – The fact that the neighbors rallied against a bunch of roommates living together in a single family house is pure NIMBYism at its finest. The truth whether this type of house use is allowed lies in the State Supreme Court Case “City of Santa Barbara v. Adamson”. Sometimes the junior planners only know city law, not state case law. This article doesn’t provide enough info whether they would actually qualify as a family under the law, but my guess is that if the subtenants controlled the makeup of the house (ie: they picked the roommates) it would qualify as a family under the supreme court ruling. If Hubhaus placed people in there without anyone having any say, it would likely not qualify. Either way, SF has bigger problems – way bigger fish to fry than policing this sort of stuff. Get real.
4) **On Hubhaus making a profit** (rent board topic no 154) – the author totally misinterprets the point of the law. The law was actually intended to PROTECT landlords from a bad actor tenant that is rent controlled in for a very long time who subleases the property for a substantially greater rate they are paying (usually unbeknownst to the landlord). In a bad actor master tenant case like this, the master tenant should not be profiting when the landlord is subsidizing the rent due to rent control which aims to make it more affordable to live. That’s not what’s happening at all in this case – the owner is obviously on board (technically Hubhaus is acting more of a house manager, and theoretically they could just switch around their contract from a master lease to a management agreement with identical terms so there is no ambiguity in this law). But even so, that same law makes exceptions for master tenants that furnish and provide extra services (which obviously Hubhaus is doing so they are entitled to more than the base rent – and of course ). BTW if Hubhaus can’t fill a room, Hubhaus takes the loss, not the subtenant. But don’t take my word for it – it’s been addressed multiple times by the rent board before, going back to at least 2013; the ALJ’s will not take a case like this up. I’ve dealt with Tobener before (and even worked with him once a while ago) – he’s a fantastic lawyer and it’s his job to gain leverage by coming up with as many scary complaints as possible to get a better settlement, but any lawyer that has dealt with the rent board will know this is pretty baseless.
Lastly, pure opinion (and I know this is an unpopular one for most of the mission local readers), but it’s likely Hubhaus is a value added to the SF housing market by providing this type of service – putting seven middle class long term tenants in there who would have otherwise just eaten away other units in the housing stock, which would have put more upward pressure on market rents. Certianly an “F” for execution though.
Dear “John Doe” —
You seem knowledgeable. You should try writing articles. And signing them.
I appreciate the breakdown. I would take exception that what you consider “jumbling” is indicative of a narrative article and not a bullet-pointed list breaking down a pre-existing article.
Wow JE! Are you this condescending with everyone who has a comment on one of your articles? Maybe try engaging in a dialogue with your readers rather than putting them down? Just my “two cents”.
Maybe try not putting people down and actually engaging and creating a dialogue with your readers to help prove whatever point your trying to make with your one sided article?
I’m constructive with people who want to be constructive and condescending to people who want to be condescending. If it appears people haven’t read the article, we shift quickly toward Door No. 2.
By the way, the anonymous dude is wrong on much. I would not read his articles
Informative. It was only a matter of time, before one of these companies messed up and got into the radar of the news and city. Airbnb users had at least a five years before this happened and today, many are still skirting those rules.
I encourage everyone reading this article, tenants and landlords alike to look at this with a wider lens…What is amazing, is EVERYONE says we need more affordable housing. So, this being said, why can’t we get on the same page? Instead of spending our time demonizing products and services which are temporary solutions to a larger problem, a problem caused by us, lets solve the problem..
1) Stop The Inflow! If we’re really serious about shoring up housing we need to STOP creating jobs.. Why in a city, which cant build new residential housing, allow so many new jobs to be created? Look at the cranes downtown, look at the Salesforce Tower… Where are those people going to live? I know, this is a bit more complicated of a subject but its critical that everyone evaluates our situation more broadly.. Sure, if we stop the production of jobs, employers will leave and the city will be less desired by business. Fewer jobs/people and the rents will go down.. Is that what we want? If the majority want this, lets start here.
2) Increase Housing. If we allow commercial buildings, we need to allow for more housing- In all neighborhoods- even the Excelsior 🙂 .. Woah… more housing in my neighborhood? What . Not Way!!! Yep. If we are not fighting for #1, then we shouldn’t block increased density. This is similar to a dam breaking and everyone needing to help shovel and sandbag.. The time to help repair the dam is before it breaks , not when the water is rushing toward you.. This is a city issue and it should have been solved years ago when the building was first approved. Instead, as one supervisor once told me, we expect the people to come and since we cant build home, we expect more people to live in the ones we currently have. At this juncture, city, the planning department and its citizens need to realize we have a serious problem, and everyone needs to step up, acknowledge the larger problem and makes sacrifices to solve.
Just a few notes for clarity
1) Large apartment buildings will lease many of their units to a national company such as Synergy or to our local Academy of Art University. The owner may not get top rents from either, but by leasing quickly, the developer can satisfy the bank which loaned the money for the construction. These two companies exists only because the the city has allowed for so many jobs and students. Companies need temporary workers with specific skills and universities need students- In both instances these people are here only a short period of time. Since we allowed this, we need to allocate a certain amount of housing to support.. I guess another option would be to mandate that any company or university operating in SF seek their temporary housing outside the city..
2) Corporate Rentals- Two types of corporate rentals in SF. Ones which are run by national companies /large entity and then individual owners. The national companies mostly focus on new construction. This keeps them from of rent control and perhaps peripheral neighborhood news articles. The nationals are doing well but the individual owners are not. With the increased number of buildings downtown, fewer companies want their employees far away. Hence many individual owners are renting their furnished homes for about the same price that one would get unfurnished. See the market, when allowed to work, will work. Supply and demand.
3) Co-Living Space. Millennial’s want to live together. Its a fact. Lots of articles written about this phenomenon. In their search for this co-living experience, the gravitate toward homes run by a third party, such as HubHause.. They get the social experience they want on steroids. Come on.. dinners, socials, and other group activities are organized by a social planner. Less expensive apartments are on the market but these kids piled into what is online listed as a 4 bedroom for the experience, not its affordability. Shared housing is what people are increasingly wanting and its a great way to mazimize current housing.
4) The handyman and the Uber driver and the retired Navy vet who fixes his Trans-Am all day long and the hairstylist with the cute toddler who loves Batman… Why are these people being forced to live in a single house as roommates (if I understood correctly) .. Why not elevate the conversation and lets get each into their own condo. If we reduced the red tape, streamlined the building process and encouraged/supported new construction, each of these people could afford their own condo..
So… This was a long winded response, but this is a serious issue which due to its complexity remains unfortunately focused on subjects which can more easily be discussed. Lets find a away to collectively look and consider the BIG picture.
As someone that just moved to a similar house I’m sharing with 5 other young professional, I sympathize strongly with HubHaus. If my roommates and I had seen a 7k house on the market we would have certainly snatched it, heat or not. Windows or not. Seriously. This place is so expensive and it’s because of these arcane laws. I hope this situation does not discourage other companies like hubhaus from trying to set up shop. Let’s stop discriminating against young professionals just trying to start a career in this innovative and beautiful city we all share.
>> Let’s stop discriminating against young professionals just trying to start a career in this innovative and beautiful city we all share.
LOL. So calling out HubHaus for their obviously illegal operation is now “discriminating against young professionals”?
Seems to me that the only young professionals getting screwed were the tenants and you’re carrying water for the middlemen who did the deed. Pathetic.
Who says HubHaus was needed for 7 roommates to get together and lease the house despite the zoning. This is always an option. It just needs to be a single lease. In fact apparently 5 could have afforded ironing does not make sharing illegal. This was settled in the 1970s.
The government attempting to define what constitutes a “family” for any reason — much less for the purposes of inhabiting dwelling space — is bogus and I sincerely hope that HubHaus is able to prevail in court on this issue.
Now, if HubHaus is guilty of the property management lapses as described in this article then they should be held account — big time — on this aspect.
MOAR LIKE HUBRIS HAUS
take em to the cleaners. Tobener
If ALL hubhaus did was to connect people wishing to live this way, fine… But that is NOT what they are doing. They do that and THEN continue to function as the landlord… And then proceed to ignore business licensing and zoning regulations that apply to landlords, housing protections that apply to landlords and protections required be offered to tenants, making up what ever rules they choose.
HubHaus is a criminal enterprise, just as the developer at Market and Church is and both should be treated as such.
I did read the full article, and I appreciate the good reporting. But I also agree with the commenter above. The article is slamming the company for breaking the rules. But without this company, that house would just be a 7 bedroom single family home that only someone like HubHaus’s CEO could afford, because of “neighborhood character.” At least this company made it affordable for people to live there.
As noted in the story, the expert assessment of the house’s “fair market value” is $7,000 a month. The amount the HubHaus tenants were paying was $9,200 a month, and I don’t think that includes the money for the heat (which did not function), window screens and a microwave.
How is that “making it affordable”? If the homeowner chose to rent without a middleman (and could legally do so) the cost would be less.
As noted in the article, group housing situations exist elsewhere in the city, regardless of official rules. I’m not giving HubHaus a hard time because it violated the sanctity of RH-1 zoning — though, maybe, it should’ve done more work before tenants signed leases and moved in. Rather, as spelled out in the article, the profitability of this business model is dependent upon adding costs to an already costly process.
Adding middlemen to procedures doesn’t lower the price. It adds to it.
Thanks for the reply. I was noting the line in the article “Group Housing uses are not permitted,” and the part of the article that led me to believe the neighbors informed the city government about the situation. So it seems like it was the neighborhood, along with city zoning laws banning group housing, that are working together to make this house (and all others in the area) only available to the rich.
Certainly, having the middleman is more expensive than just renting the rooms straight up (though I think under $2k a month to live in a house is still SF’s version of “affordable”). But if neither option is available, a single family owning a 7 bedroom house is certainly not anywhere close to affordable. So I’d still prefer the silicon valley solution to what the neighborhood is fighting for.
As clearly stated in the article, the rent paid to HubHaus was $9,200, not $2,000. It’s possible to chafe against snooty neighbors and single-family zoning and also concede that profiteering off such a situation is not ideal. If the owner of the house was able to directly rent out to groups of people, the cost of housing would have been far less.
I don’t think anyone in this thread is defending the gouging & I read the $2k comment as a per-person rent. You seem particularly defensive about several people pointing out that using this 7bed for 7 people instead of a single family with presumably fewer than 7 people is actually not a bad thing. That can be true at the same time as illegally making a profit off the rent and the rise of non-residential use — I don’t see anyone arguing that those are good things.
Sir or madam —
You’d be surprised. People defend lots of things. Re-reading the gentleman’s comment, I think you are right: He was referring to $2k as a per-person rent. Other people had, either willfully or mistakenly, screwed up the math and thought the $2,200 over the so-called fair market value was the total rent or a deduction or something. Not an addition.
I’m a bit confused why people feel the need to focus only on one of several points in this story to the exclusion of others. We can rail against exclusionary single-family zoning and still expect that companies renting out houses to people nail down the rules before leases are signed and people move in. That way, folks don’t get evicted.
We can also simultaneously be against single-family zoning and oppose companies from using this self-imposed scarcity to make a buck. If RH-1 zoning was eased or done away with, homeowners could more easily just rent to groups of people on their own without a middleman driving up the cost and taking a cut. Which, in fact, you can already do to an extent, if there’s a single lease and not a conglomeration of them.
A tech “solution” to the housing crisis that raises the price of housing is only a solution for those willing and able to pay.
I’m not defensive about comments regarding single-family housing; as noted — a bit indulgently — in the article, I live in the Excelsior where this is commonplace. The Excelsior is a great place to live. I’d rather be there than Monterey Heights any day. Rather, I’m defensive about people selectively reading stories, cherry-picking facts, and justifying unjustifiable behavior just because it’s a reaction against other unjustifiable behavior.
So the work and risk someone takes on to provide this option should be for free? Do you think no time went into preparing the home, Coordinating interviews? Running and supplying the community events and dinners? The employees and other service staff that need to look after these homes shouldn’t get paid either… cause they are evil for wanting to make money, like any job, because its service of the housing market? This attitude that somehow its a ‘for profit’ company makes it evil harms so much. You think non-profits don’t still have to find a funding source to go after their mission? Everyone working there still needs money to live too…. even if sadly many working on important causes in non-profit are paid terribly.
Like just really. Who makes anything happen with no reward? Being so obtuse as to only point to the base lease cost, seems intentionally so. So home now sits empty… and how many ‘real roommates’ will get to to live there now? Ya think 7 people going to really to come together and equally share the work and risk on setting up the house themselves? Which one of them eats the extra rent when on roommate turns out to be a dead beat?
I know nothing about the people running this company, and maybe they don’t really care about providing real solutions to the housing crisis, but we hardly need to scare others who may really want to provide fair value for fair pay away from trying. Guess telling that side of the story would be too balanced and rational tho.
I guess we all have to say we’ve read the article in order to disagree with the author.
The Zoning laws have not kept up with growth in the City and that inaction has led to housing, traffic, and homelessness issues in our city. Any argument Zoning laws are sacred is at a minimum flawed. What follows is that the “market rates determined by an expert” is not the true market rate. Market rate is what someone will pay. Period. I only know of HubHaus what’s described in this article but the Company is offering housing to people at a price point people need it and that house is now sitting vacant (removing supply at the prices needed and driving up prices everywhere else). It’s clear the author doesn’t agree with a company (presumably only housing companies) profiting from providing a service and, by the way, every for profit business is an exploitation of something.
I also appreciate the reporting but respectfully disagree with the conclusions.
I agree with Mike here. I think you missed the point. The neighbors want one rich family who could pay $7,000+ a month for the house, not middle class people who could pay $1,500 for a smaller space. The fact that SF’s zoning law only allows the former is problematic and what got us into this housing mess.
Tenant activists need to start fighting single family zoning.
Hi Max —
I don’t think I missed the point, because that’s one of several points made in my column. There are many points, and we needn’t focus on one to the exclusion of others.
It’s clear that the neighbors would prefer the house be for a family (or empty). Say what you will about the neighbors, but one thing they haven’t been is ambiguous.
The legal definition of a family, however, can include a number of boarders, etc. It’s not so cut-and-dried. But, writ large, yes, the city would be better off without exclusionary zoning. Tenant activists are already fighting this.
And we can, as I’ve noted elsewhere in this comment section (and the column) chafe at exclusionary RH-1 zoning and also concede that profiteering off this is bad, flouting the rules leading to evictions of your tenants is bad, and driving up the cost of housing to make money during a housing crisis is bad.
Andrew has stated (very clearly) that the market rate you have come up with is not correct, because on the open market people were in fact willing to pay more to live there than what you quoted.
We need more housing. We need fewer laws protecting the home equity of millionaires. That’s the real issue here.
Sir or madam —
There is such a thing as “above market rate” and that is what these tenants were paying, per the contracted expert.
Thank you! Living in a big house with several roommates is nothing new in SF!
What is new is a tech co getting into the middle and charging people money for nothing.
And in this case, I hope they have to pay all the tenants they evicted a big settlement!
How is this solving the affordability crisis? (a) What is the studio or one-bedroom rent for that neighborhood? and (b) you just put seven would-be apartment dwellers in a home that would normally only house one family. That’s at least a 200-300% increase in density for that home. Imagine if this were done at scale and people were, for their administrative costs in setting up the house, were actually able to profit from it? I realize the latter part is too tough for some to stomach but consider the fact that we have a supply problem, not a regulation problem. From 2013 onward we’ve created 7 jobs for every 1 (1-7) housing unit built. A market is considered supply-constrained if hitting a 1-3 mark. So we’re double that.
I own a co-living in Los Angeles. There are three simple protections they could have utilized that would have circumvented the entire legal case, or least made it extremely unappealing to any lawyer:
1. Maintain the property! People want to get what they are paying for and by being a bad owner, you create bad feelings.
2. Have a Sober Living Clause. In California, a sober living is created by simple agreement, NOT by any particular activity.
a. Binding Arbitration clause: these are supported by law as a “sober living” is ‘providing a service’, (technically).
b. Sober Living is Federally protected.
3. EVICTING seven people at the same time (who are paying) is just stupid and bad business. Of course they joined forces.
4. Limit the company’s liability for legal fees & costs to $300.00. This last one takes the wind out of ambulance chasers.
I have ALL of these but I NEVER have to use them, because I focus on NUMBER 1. With 17 years in operation, never been to court that didn’t get thrown out or dismissed. But I also never let it get that far. People will settle if you are nice, mean well and give them the opportunity.
The other thing the owner got WRONG is forcing the community participation….nobody wants that crap. Mostly, people want a nice place to live and to be left alone.
Anybody can be sued, but the gleeful attitude of the attorney involved is disgusting and exactly why everybody hates attorneys. The owners made some miss-steps, but they will survive and renew their deal. With a housing crisis, they and others like them are providing a great benefit to many people who would otherwise not be able to stay in the city.
Thanks for punishing! Hubhaus is doing some crazy stuff to us as tenants in their Los Angeles houses.
Most SF residents want to keep everything as is to not disrupt their “neighborhood character”. We need more housing, so it isn’t so expensive to live here. More supply and less restrictions.
You should read the article.
Tldr: zoning in SF is antiquated and perpetuated by rich people to protect their interests, mainly rich whites and Asians. The article is an anecdote about some dumb tech model to skirt zoning laws.