San Francisco settles with landlord who rented ‘substandard housing’ to veterans

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SF settles with landlord who rented ‘substandard housing’ to veterans

By J.K. Dineen

A Bayview district landlord accused by City Attorney Dennis Herrera of banking millions of dollars by squeezing formerly homeless veterans into cramped illegal dwelling units has agreed to pay the city a $2 million fine and bring all the buildings she owns into compliance with the law.

The terms of the settlement, which was reached last week on the eve of a trial of a city lawsuit, requires husband-and-wife landlords Judy Wu and Trent Zhu to bring 12 properties up to San Francisco building, fire and planning codes.

In a statement, Herrera said that Wu and Zhu “trafficked in substandard housing that endangered their residents and neighbors alike.” 

“There is a reason we have building codes,” Herrera said. “They exist to prevent dangerous situations, like an improperly installed stove exploding and starting a fire that tears through a neighborhood.”

The lawsuit against the property owners identified 12 buildings with 15 legal units that were chopped up into spaces for 49 individual tenants. The leases, which brought in about $1 million a year in rent, contained jerry-rigged natural gas and water lines. Neighbors complained of over-crowding, noise, and sidewalks and backyards that became littered with mattresses, discarded furniture, stray cats and mounds of old clothing.

The city charged the landlords with exploiting the Department of Veterans Affairs’ Homes for Heroes program, which is designed to end homelessness among veterans. Currently, a veterans housing voucher pays up to $3,132 for a one-bedroom apartment in San Francisco. That means the landlords could have collected more than $20,000 a month from one of their properties, 1351 Revere Ave., which was illegally chopped into seven units. The house was purchased for $260,000 in 2010.

The case was tricky because the city wanted to force Wu and Zhu to follow the law while ensuring that the tenants, about two-thirds of whom are previously homeless veterans, did not end up back on the street. To that end, the city worked with the property owners and city planning and building staff to reconfigure the 12 buildings — 10 single-family homes, one duplex and one three-unit building — to create 37 legal residences.

A total of 10 households will have to be relocated. The city has hired supportive-housing nonprofit Brilliant Corners to help find housing for those tenants — five have been relocated or are in the process of moving.

“This settlement ensures that no one is put out on the street,” Herrera said. “These veterans have sacrificed a lot for all of us.”

While neighbors complained of overpopulated and dangerous conditions at the buildings, Wu and Zhu had supporters among veterans and affordable-housing advocates who credited them for renting to people who might otherwise be shut out of the housing market.

In September 2016, Wu told The Chronicle: “My tenants are very low-income, and some have mental problems. I am trying to house as many veterans as possible.”

Tommi Avicolli Mecca, director of counseling for the Housing Rights Committee, said his group will continue to monitor the case to make sure all tenants end up in “comparable” units.

“It’s not over yet,” he said. “At the end of the day, we don’t care about about the settlement with Judy Wu. These are human beings facing displacement in a housing market that is brutal.”