Buying entry-level housing is considered a safe play in the real-estate world because there will always be people who need homes. But what happens when the business play on cheap housing impacts those living below the poverty line? In affluent places like San Francisco, that is precisely what’s going on.
Wealthy executives have the investment know-how to spot a profitable housing investment, and recently, they’ve turned to non-profit housing operations as a source of income. The problem is that when affluent owners turn a blind eye to tenant problems, living conditions can suffer.
Under New Ownership
You probably think of property management companies controlling suburban low-cost housing developments, but with such properties typically generating narrow profit margins, owning them is more of a PR play than a cash flow generator.
Non-profit companies, however, can put their name on housing for the poor and benefit from the perception that they are doing good works. It’s a small thing for an investment banking executive to set up a non-profit and invest in section eight housing, and when they do, they often overlook the conditions of people who live in these properties.
Organizations like San Francisco’s BRIDGE and Mission Housing Development Corporation are examples of investors overlooking tenants. With no board members from the community itself, these organizations can force inhabitants out without their even knowing it.
What motivates these executives? The potential for more developments. By controlling the majority of low-cost housing in the area, it is believed that investors are helping move progress forward on other new projects. These new projects aren’t necessarily low-income, but by gentrifying low-income areas, executives can turn properties that yielded little profit into cash cows.
Fighting for Tenants
The situation for renters isn’t entirely without hope, though. Groups like the Housing Rights Committee are working to give tenants a voice and create affordable housing solutions that benefit tenants. These groups have sought the attention of their surrounding community by leading protests, speaking to city officials and building relationships with people and organizations who want to preserve functional, low-cost housing for San Francisco residents.
For those living in existing developments, the threat of being uprooted is very real. Executives can call them “affordable,” but places like the 16th Street BART station, where a new 10-story complex is set to redefine the neighborhood once it’s completed, are already occupied by people who can’t afford to live in these new developments.
You can make the argument that, technically, what is taking place in San Francisco and other places like it is just savvy business operation — but is it ethical? The answer is an obvious no.