"They own 6,000 units."
Daly pointed to a May 9 New York Times article that reported on the rising phenomenon of "predatory equity," in which private investment funds bankroll the acquisition of a large number of rent-controlled apartments in New York anticipating higher-than-usual vacancy rates. But tenant advocates say achieving such rates requires a concerted effort, either through offering one-time buyouts, finding nuances in the law that allow for an eviction, or harassing tenants until they grow exasperated and leave.
The significantly higher revenue generated from market-rate rental prices then enable building buyers there to repay the equity firms that gave them the huge loans to buy the properties in the first place. Daly wants to find out if CitiApartments is deploying a similar "business model" in San Francisco.
According to the Times piece, developers backed by private equity firms have purchased nearly 75,000 rent-controlled units over the last four years in New York. One company that bought a group of buildings in Queens subsequently filed around 1,000 cases against tenants in housing court during an 18-month period.
A lawyer for CitiApartments, Tara Condon, promised the committee members that the company would investigate the complaints made by tenants at the May 12 meeting. She added that the company increases tax revenue for the city when it improves the conditions and appearances of buildings it purchases. She also declared that the company makes local charitable contributions and has reached out to financially troubled tenants.
"We are a business, but we try to work with [the tenants,]" Condon said. "We want to make sure they can stay in their apartments."
One former tenant, Donna O'Brien, testified that CitiApartments helped her and her husband find a more affordable apartment after the company bought a previous building she lived in at 516 Ellis St. last year. She said CitiApartments also paid for her moving expenses. "Quite honestly, CitiApartments has been very good to us."