Professional Evictors: The Citiapartment/Skyline Reality Scandal

root - Posted on 03 September 2009

by Stefana Serafina/PNN

Homelessness always seems to happen to others: third parties that have nothing to do with the rest of us. Until one is faced with houselessness herself, it is the problem of “those poor people out there” that evoke--depending on the observer-- either pity or disgust. Faced with the tangible possibility of losing my own roof and bed for the first time in my 33 years, this is no longer an issue in the life of others. With unemployment money growing insufficient and unpaid bills invading both my wakeful time and my dream space, homelesness has hit home.

Yet, every Tuesday evening, when I join the circle of POOR Magazine's community newsroom, I am reminded that I have it easy: I am well-educated, with a pretty resume and a by-line, and have access to many privileges that most people in this room could only dream of, including a credit card. The reminder comes as I listen to the poor folks in the newsroom report on their own stories, in their own voices, hoping that by doing that, they can de-construct the media and social stereotypes created about them without them.

One story that sticks with me for weeks after it was told in the POOR newsroom is that of XXXXXX, a single mother of three who was evicted unexpectedly from her “affordable” home and put into the street. As she remembers the chilling reality of eviction night, her voice trembles: the little ones kept asking where they were going, the baby pulled on her shirt ready for a meal, and the world was a vast, hopeless place.

"Who in their right mind would evict a poor mother and her children?" I ask myself, but it is a question I already know the answer to. In fact, evictions continue to happen in San Francisco mostly to poor people of color and ethnic minorities, elderly folks, and migrants. Not because they are breaking the rules, as one might think when reading corporate media headlines; poor people, especially those who are not well-educated, the elderly, or those who don’t speak sufficient English, are the easiest targets for professional evictors like Skyline Realty/Citiapartments. As the second largest real estate firm in San Francisco, it owns and manages about 250 multi-unit buildings housing thousands in the city. It is owned and run by Frank Lembi, his son and grandson. For the last decade, the Skyline “scumlords”, as the Bay Guardian called them in a series of investigative reports, have focused on buying multi-unit buildings in the city (many of which are low-income housing buildings in the Tenderloin and Nob Hill areas) and remodeling them into much higher-priced buildings to be subsequently rented at market prices and thus becoming hugely profitable.

But, in order to pretty up the apartments in which people already lived before the building purchases, the Skyline lords specialized in making tenants leave. Needless to say, their most targeted prey were people who paid low rent: those with Section 8, disability, or elders who had lived in the homes for decades and were protected by rent control policies. As soon as Skyline added another building to their portfolio, their top priority became to get those tenants out of their way to profit. And they couldn’t afford to lose: Their business model was established on the goal to replace at least 75% of the existing tenants within two years of buying a building. With that promise in mind, the company's preferred lenders provided generous loans and Skyline went on to pay skyrocketing prices for buildings-- sometimes as high as 50 % over the market price, thus outrunning all competitors and virtually monopolizing the market. Skyline's success depended on kicking out old tenants and renting out at current market prices.

“They employed a set of vicious practices, many of them completely illegal, in order to force tenants to leave 'voluntarily,'" says Kendra Froshman, a housing rights activist and organizer with the CitiSTOP coalition, a volunteer network of organizations working together to defend CitiApartments tenants. “They would appoint armed guards to bang on people’s doors without notice and 'make sure everything is okay.' They would come to people’s homes with video cameras saying they need to film the condition of the apartment while that is obviously illegal surveillance. They would intimidate tenants, harass them repeatedly with buyout offers they have already refused, and turn a deaf ear to requests for making repairs in the apartments. People are scared and intimidated and often don’t know their rights, so they leave.”

Listening to Kendra, I think about mothers like XXXXX, single and poor, without options to go elsewhere or to hire a lawyer, who become the easy target for corporations investing millions into legal advice and defense, and developing a sophisticated system of abusing tenants while remaining unpunished.

But thanks to organizers like Kendra, who does this work for free, the word has gotten out and in the last few years not only CitiApartments tenants have learned more about their rights and decided to resist the abuses and remain in their homes, but, hearing the pleas, in 2006 the City Attorney filed a mass lawsuit against Skyline. Three years later however, the outcome of the lawsuit is still unclear and the company continues its wrongdoings, although with withering intensity.

Darin Dawson, a 46 year-old man, lives in one of CitiApartments buildings on Guerrero and Market Streets, in a small but elegant studio he rented fifteen years ago. Before I go to visit him, all I know is that he is one of the two remaining tenants in the building after CitiApartments became its owner. While fighting the company’s constant wave of attempts to get him out, Darin has become an activist helping other tenants to know their rights, doing outreach and speaking up.

As I take the stairs toward his place, I think about what it is like to have to live your life trying to be left in peace in your own home, the only one you can afford.

Darin’s dog runs excitedly to greet me. “She is my best friend,” he tells me, “She’s been with me here the few times I was going to die from AIDS related conditions.” It turns out that not only AIDS, but cancer too tried to take him in the same time he had to fight with CitiApartments to be able to stay in his apartment.

“There has been everything,” Darin says while paging trough the thick file of CitiApartments paperwork and correspondence he has collected over the years. “Someone called me when they first bought the building and told me I had overstayed my time here, and asked me if I wanted to relocate.”

During the Silicon Valley boom, CitiApartments offered Darin a twenty-thousand dollar buyout offer to “relocate”. Later, he was “advised” to consider other Skyline buildings. Darin refused each time, but the harassment continued. One time a woman even suggested to him over the phone that he obviously could not afford to live in the city.

Another CitiApartments technique included a fake “customer satisfaction survey” trying to trick tenants to admit lease violation over the phone. If someone answered positively when asked if there had been a visitor in the rented apartment for longer than two weeks for example, that gave the company a reason to come after the tenant for violation. “I know from experience that I have to be really careful about not saying there is something not working in the apartment,” Darin says, “because in those cases they tell you that a 'capital improvement' is needed and they have to temporarily relocate you. But then two months become two years, and you never come back.”

A residential manager who remained on the position after the building he worked in was bought by the Lembis, anonymously admits that the company provided him with a target list of tenants in low-rent apartments, people on disability or SSI for example, and told him to watch for every possible break of the lease. If someone on disability was suspected to work on a side, the “violation” had to be reported.

When all “peaceful” techniques targeting voluntary eviction fail, the company is known to send out 90-day eviction notices asking tenants to find “another suitable housing” without any explanation of the reason why they are requested to so so. When that happened to Darin, he got help from a free lawyer through the AIDS Legal Referral Panel. But what about someone who doesn’t have such access, I wonder? Some Skyline’s victims are known to have ended up on the streets. Many more have been wrongfully, although “voluntarily” evicted.

As the tenant outrage became too loud to contain, a hearing was held in the city in 2008 and dozens came to speak up. “Skyline sent buses with folks wearing 'I support Citiapartments' T-shirts,” Kendra recalls, “one of them even came to me to ask where they get paid, not realizing that I’m not from the company.”

Ironically enough, Citiapartments has adopted the slogan "Restoring San Francisco's Neighborhoods” and Skyline’s publicity strategies are focused on extolling the Lembis as the saviors of the poor and the underserved. “CitiApartments Supports San Francisco AIDS Foundation,” “CitiApartments Provides Apartment for Homeless Father and Son,” “CitiApartments and Benefit Magazine Establish Program To Battle Homelessness,” these are only some of the headlines on the CitiApartments’ press page.

In another paradox, the largest media outlets in the Bay Area have remained strikingly silent about the housing rights abuses that have been taking place. With the exception of the Bay Guardian, BeyondChron, and a couple of other smaller publications from the far left, the Citiapartments scandal did not appear newsworthy enough for others to report on. In 2005, when the harassment of tenants was at its most aggressive peak, The San Francisco Chronicle published a piece profiling the Lembis business empire, touching on Mr. Lembi’s “daily swimming regimen” and his “rip-roaring buying spree,” but not making a mention of the harassment extravaganza, not even in one sentence. The Wall Street Journal, in all its majesty, suffered a similar lack of depth and perspective last year when it published an extensive report about the company’s current financial woes. The article discussed the Lembis’ business model as “inducing tenant turnover through buyout offers and other means.” The nature of those “other means” or the public lawsuit did not receive any attention.

What is true is that, after many years of irreversible success, now Skyline appears to be in a really bad shape. In the beginning of 2009 the company handed over 51 buildings to its biggest lender USB Bank as it couldn’t keep up on loan payments.

“What the media aren’t acknowledging,” Kendra emphasizes, “is that CitiApartments’ financial troubles aren’t the result only of the crisis or the collapsing real estate market. Tenants’ resistance is contributing a great deal because more tenants are learning their rights and making informed choices to stay in their homes. We have to give them credit for that. Skyline’s business model is failing and that’s exactly what we want, so that it isn’t copied by others in the industry.”

Leaving the Mission’s café Revolution where Kendra and I have spoken over tea, I think of how much better protected mothers like XXXXX and other people with a weak social standing are, thanks to organizers and activists who take this work to heart. I think about the power of the little people against the strong-arm tactics of mighty businesses. From the grassroots up, justice eventually makes its way in a predominantly unjust world.

Thanks to the tenants’ outcry and the CitiSTOP coalition efforts, last year language was added to San Francisco’s Rent Ordinance, defining which are considered “basic services” and what is “harassment.” As a result, if tenants are being continuously harassed with buyout offers or of basic repairs are being denied to them, they can file a petition with the City’s Rent Board and are eligible of receiving a rent decrease.

For more on the CitiSTOP campaign or how to take action when harassed by landlords, follow the links below.

To find out more about what is happening with buildings currently in foreclosure and tenants who live in them, look out for the POOR Magazine special report on foreclosures coming soon.

CitiSTOP Radical Designs


Sign-up for POOR email!