Repulsed tenant group wonders whether to continue ‘debt strike’

The company widely recognized as San Francisco’s largest landlord has rejected requests from more than 1,200 tenants to help all tenants in the business recover from the hardships of COVID-19.

“It seems like a dead end to me, and I don’t want it to be,” said Brad Hirn, lead organizer for the San Francisco Housing Rights Committee, which has helped the Veritas Tenants Association attempt to negotiate with the company. .

The association has been trying for over a year to bring Veritas Investments Inc. to the negotiating table. About 50 member households ultimately resorted to a “debt strike” – a coordinated effort in which tenants pledged to delay their applications to California’s rent relief program. They are effectively holding their combined rent debt of $ 5.7 million hostage while making themselves vulnerable to eviction. If tenants do not enroll in the program, Veritas cannot receive reimbursement from the state.

The group won a few key concessions in December, but reiterated additional unfulfilled demands the company turned down late last week, leaving the future uncertain for tenants who have taken on debt to cover rent over the years. past two years – often referred to as ghost debt.

“I find myself pretty desperate,” said Derek Hena, a member of the Veritas Tenants Association who racked up heavy shadow debt after losing his job in early 2020, and who has met about 50 other Veritas households in similar situations. “They are just terrified. We’re talking about $ 20,000, $ 30,000.

Veritas declined the association’s request to co-design a shadow debt repayment program for all tenants. Although he offered to help individual tenants resolve this debt, he did not explain how the process will work despite inquiries from the tenant group, Hena said.

He also turned down at least one tenant’s request for help with phantom debt, said Hirn, who shared an email exchange between that person and staff at GreenTree Property Management, Inc., which is owned by Veritas and manages the conditions and concerns of tenants in buildings.

“Unfortunately, we are not refunding residents for rent already paid during the rent relief period,” the GreenTree staff member wrote in a response to the tenant in late August. Hirn did not share the tenant’s name.

Veritas declined to comment for this story.

Veritas buildings in San Francisco are subject to rent controls, which regulate rent increases to protect tenants from fluctuations in the housing market. A company spokesperson previously told the public press that the company does not own or act as the owner of its buildings. Rather, it “manages the assets of the apartments on behalf of owners and investors,” he said. Veritas has not disclosed its entire portfolio of properties, which are owned by various limited liability companies and similar entities.

Veritas makes concessions

The Veritas Tenants Association has members living in over 100 Veritas properties in San Francisco, Oakland, Alameda, and Los Angeles. The association has spent more than a year trying to get the company to negotiate on how to reduce the financial hardship associated with COVID-19. In September, around fifty households that are members of the association started the debt strike.

On December 14, Veritas responded by offering significant concessions to its rent-indebted San Francisco tenants who requested the government’s rent relief program by the end of January 2022 – not all tenants, like the association had requested it. Veritas said it would write off any rent debt that the state has not paid, rather than requiring tenants to cover the difference; and in 2022, it would not implement the annual rent increase that the city allows rental-controlled property owners to charge to keep pace with regional inflation. The rate for 2022 is 2.3%.

The tenants association met two days later to discuss its acceptance.

“It wasn’t an easy meeting,” Hirn said. “Solidarity was tested when these concessions were on the table.

The group voted unanimously to continue the debt strike until January in hopes of securing more financial relief for all Veritas tenants.

A brush with death, then buried with debts

“I was so touched. I’ve never felt anything like this before, ”said Hena, who knew the Veritas offer would be a godsend for members without her shadow debt level. “I’m so used to people just thinking about themselves, especially considering what people are facing now. “

Hena rang the bell. Just months before the pandemic hit San Francisco, he sought treatment for Legionnaires’ disease, a form of pneumonia. He thought he would walk away with antibiotics, but doctors persuaded him to intubate. He was placed under general anesthesia and medical staff inserted a tube into his throat to help him breathe. He will later learn that in the three weeks he spent unconscious and connected to medical equipment, he nearly died three times.

Derek Hena and other members of the Veritas Tenants Association met at the downtown Veritas headquarters in October to draw attention to the stalled negotiations. Courtesy of Brad Hirn.

Then, when COVID-19 gripped the city, the professional event organizer saw his income wipe out as gatherings became banned. Unemployment assistance failed to cover Hena’s monthly rent and living expenses, and it would be a long time before the state created its rent relief program. So he started spending his savings to keep paying his rent.

“I have never paid my rent in all my life. And I’ve been renting for over 20 years, most of my adult life, ”Hena said, explaining the decision. “And I didn’t sweat because of what I had been through, because hey, that’s nothing compared to what things could be.” I have my health, my life.

He also believed government help was on the way. “In the United States, and in one of the biggest cities in the world, there’s no way they’ll let us hang,” he said, he thought at the time.

He now owes approximately $ 22,500 to his family, friends and financial institutions.

A new law could correct the communication failure

In its response to Veritas’ December concessions, the association urged the company never to impose the rent increases it delayed for the past two years, as well as the 2022 increase – taken together, they could increase rents by 4.8% in San Francisco. The company should also withhold “passthroughs” – fees the company is allowed to charge tenants to recover certain tax expenses, and which would increase rents.

Veritas responded to the association on Friday with an email ignoring the additional requests.

“We are proud of our existing commitments and will continue to do our utmost to ensure that residents of Greentree remain safely housed,” wrote Jeff Jerden, chief operating officer for the company.

The Veritas Tenants Association will meet later this month to decide whether to continue the debt strike beyond January 31, a deadline set by the company for tenants to request rent relief or face a financial crisis. potential eviction.

Hena has her eye on the legislation from Supervisor Aaron Peskin, who represents North Beach. If passed, the law would protect the formation of tenant associations that might raise concerns with landlords, who should engage in good faith conversations. If landlords don’t participate, the city’s rent commission could penalize them by forcing them to lower rents.

The legislation would make it harder to fire the Veritas Tenants Association, Hena said.

“It couldn’t have come at a better time,” he said.