Saturday, May 14, 2016

Bay Area Real Estate Operator Milks California Ellis Act's Tenancy-In-Common Loophole To Buy Rent-Controlled Rental Properties, Boot Long-Time Tenants, Do Quick Fix-Up, Then Flip For Huge $$$

In San Francisco, California, Beyond Chron reports:
  • San Francisco Ellis Act displacement as a profit-making scheme has become such a convention, that family trusts may now be increasingly funding the rip-off. The following case illustrates the triple whammy rip-off that affordable housing advocates have been trying to curb: (1) the City loses valuable rent-controlled housing stock, (2) the City loses artists, dancers and musicians who have contributed to the cultural beauty of the community, and (3) long-term contributors to the unique fabric of San Francisco are expelled. Meanwhile, gluttonous speculators, including family trusts, profit hugely, never bearing the true societal cost of their Ellis Act exploits.

    On August 19, 2015 affordable housing raider Shun You Sun, (aka Danny Sun), purchased the 2820-2824 Folsom Street building, located in the heart of the Mission where Folsom and 24th Streets intersect. Sun is described as a flashy bejeweled little man, who drives fancy cars. Barely 7 months after gaining title, Danny Sun served eviction notices on all 12 long-term residents, 9 of whom are San Francisco-based artists.

    Whereas the Ellis Act was intended as the means for legitimate landlords to go out of residential rental business, Danny Sun never intended to be a landlord. Rather, his history is to acquire rent-controlled buildings, expel the long-term tenants, perform a quick rehab and sell the operation as a tenancy-in-common at a huge gain. The Steven Adair McDonald law firm routinely cranks out the paper for these serial evictors.
    Danny Sun is a serial Ellis exploiter. Last year Sun completed the same kind of Ellis exploit, removing three long-term households at 642 Natoma Street, followed by sale as TIC units, which will bring about $2.7 million. [...] The ground level at 642 Natoma Street is now selling for $869.000.00, the other two TIC units having been sold at over $900,000.00 each.