Early last year, the 15 tenants of a two-story Victorian in San Francisco's Mission District thought they would face an Ellis Act eviction. The real estate market was hot, and their landlord wanted to sell.
But with the help of the San Francisco Community Land Trust and their landlord, they were able to purchase the building. Now the land trust is helping the residents convert the property into a cooperative.
The 14-bedroom blue-and-white house on 23rd Street is affectionately known as the "Merry-Go-Round House." The 114-year-old building was an international travel hostel for almost 30 years before BSGS Guesthouse purchased it in 2006, at the height of the housing bubble.
“When we bought it, we immediately changed the purpose from a travelers' hostel into renting rooms, one by one, hoping that [a] community would develop.” says Brian Streiffer, former managing member of the BSGS Guesthouse and the primary owner of the house before he sold it in May.
A community of artists and creative types did develop. Praveen Sinha is the only tech worker in the house, and he loves his living situation.
“We just all felt that this house has had such a long history, first this international youth hostel and then this artists’ house, that we want to just preserve it,” Sinha says.
Streiffer's company hit a financial rough patch in 2012 and 2013. When he expressed interest in selling the house, the tenants worried an investor would purchase it, evict all the residents and flip the property.
Juan Hernandez has been living in the house for 12 years. He was the hostel's last manager and is now a math and English tutor.
“I think it would have been hard. I live on a low income, so it would have been really hard for me to find a place,” he says.
Sinha and Hernandez learned about the the San Francisco Community Land Trust through a friend who put them in touch with Tracy Parent, the organization's director.
The land trust is a small nonprofit that buys property to ensure permanently affordable, resident-controlled housing -- especially for immigrants, artists and low- to moderate-income workers.
“It really comes down to money. And we need money from private lenders, the city and other private individuals to help make this happen,” says Parent.
Sinha and Hernandez decided they would try emailing Streiffer to ask if they could work out a deal.
"As soon as I saw it, I thought, 'OK, let's do it. This is something worth my time,' " says Streiffer, “There were some bumps in the road in the negotiations and financing and everything, as typical with real estate, but I always felt like it was a slam-dunk."
The land trust purchased the Merry-Go-Round House last May for $1.7 million. Streiffer provided a short-term loan of $390,000, and the rest of the financing came from the Boston Private Bank & Trust Company, a community development lender in the Bay Area.
So, how does ownership of the the Merry-Go-Round House actually work?
The land trust owns the building and will grant a 99-year lease to a nonprofit cooperative formed by house residents. Residents pay rent, an average of $800 a month per room, to the land trust. The land trust, in turn, is helping the residents get set up to manage the co-op's budget and take care of all the details that a property management company might typically handle, such as bookkeeping, landscaping and repairs.
Land trust stewardship coordinator Val Zekas says that because of the land trust's success with the Merry-Go-Round House, "We’re getting a lot of phone calls from people that are getting Ellis Act-evicted, probably three or four a week. So, we’re trying to see how many properties we can help purchase -- or at least help the residents figure out what their options are."
She says it's really helpful when tenants come to them after doing some of their own research.
“We’re seeing a lot of residents that, when they get their evictions now, or think they might get evicted, they’re doing a lot of the education themselves," Zekas says.
"They’re going to and talking to the [San Francisco] Tenants Union and talking to the tenants rights groups, so they can be knowledgeable about their situation. And a lot of them are hiring lawyers, too, so they kind of know how they can either work with their current owner or find out how to purchase the building.”
Merry-Go-Round House resident Ben Turner says he's grateful for the skills he’s learned from the land trust.
“It feels nice to just be able to live here and not worry about getting bought out or buying or selling," he says. "We can live here as artists and still afford a bedroom and afford to do our work.”
Turner says he’s been watching the Mission District change, and now his house feels to him like a small island of community in a sea of tech money. He just hopes others can do what the Merry-Go-Round House did.