McKay Eviction Unmasks Real Estate Speculators Landlords—who place short term greed over their long term interests—will lose in the long run with Ellis evictions.
These days the real estate classifieds are full of ads for buildings which will be "Delivered Vacant!" or "Vacant By Close of Escrow!" At 3967 18th Street, an empty building is being sold apartment by apartment as TIC units, following the Ellis evictions of all the tenants by the real estate speculator who just bought the building. And at 57 Alvarado Street, 84 year old Lola McKay is being evicted by her real estate agent, the John Hickey Brokerage, so her building can be sold vacant as TIC condo units.
McKay's case is classic: she is the only tenant left in the 4 unit building where she has lived for 40 years. She's the classic "little old lady" and her landlord is a real estate company with a shady reputation to begin with. The Hickey company makes no bones about the fact: it wants to evict her in order to make money by selling her unit. They do not claim they want to move into the building themselves or have a son or daughter live there or bring in a caretaker or any other excuse. They want to evict in order to make more money and they don't care that it's an 84 year old living there. Nor do they care that their unquenchable thirst for money may end up killing a senior who has nowhere to go and no family left to turn to. Their profit is more important than her life—and they're perfectly candid about that.
That attitude is replicated in nearly all Ellis evictions: most of the evictions are by real estate speculators who have owned the building for just a few months and these speculators claim no other motive other than to evict and make money by selling the apartments as condo-type units.
That's exactly what they're doing and therefore the plethora of "Delivered Vacant!" ads.
This has created a huge shift in the parameters of the public debate over evictions and "tenancy in common" conversions since real estate investors were stopped from using "owner move in" evictions to create TIC condo units.
With OMI evictions, the real estate speculators could hide in the background. Just as they do now, they would buy a building and sell off the individual units at great profit. But their role stayed hidden. The people buying the individual units did the evictions—not the real estate speculators.
These OMI evictions molded public perception in two ways. First, the people doing the evictions were somewhat sympathetic. Maybe first time homeowners. Yeah, maybe they were Yuppies and maybe it was unfortunate that someone was being evicted. But they weren't greedy real estate speculators (who were hiding behind the "sympathetic" people). Second, via OMI evictions, the conversion of a building was slow—one eviction in February, another in April, a third in July and the final one in September. A 4 unit building could be converted unit by unit over many months and hardly anyone noticed, especially since each eviction was done by seemingly normal people.
Now it's bang! The real estate speculator buys the building and immediately evicts everyone using Ellis. Then the speculator sells the empty units. It's all clear and upfront: evictions for profit—there's no one to hide behind anymore.
And that's all why the McKay eviction has horrified the public, the politicians and the media. Her eviction (real estate broker vs. little old lady) is so outrageous that ABC TV ran a national news item about it. As have all the local TV stations, the dailys and most radio stations. Mayor Brown has asked what he can do to stop the eviction; Supervisors are aghast.
Lola, born in 1916, has lived in her Alvarado Street home since 1960. Her longterm landlord lived in the building and offered her the empty apartment when she was divorced from her husband and living in a residential hotel. The apartment was a shell—she put in the toilet, the bathtub, the heater, stove, refrigerator. She painted it and carpeted it. All these years she has treated it as her own. When something broke, she called a repair person and fixed it. She saw her longtime landlord as a friend.
But then her landlord died—and the John Hickey Brokerage became her landlord. Almost immediately, they issued Ellis eviction notices. Other tenants left until only McKay remained.
When the city passed the rental housing conversion law (requiring a permit to convert rental units into condo-type units), this law threatened Hickey's ability to sell Lola's unit (as well as the other empty units) so Hickey sued the city. In his lawsuit, he claimed the conversion law was illegally preventing him from selling the apartments and making a profit. The court agreed and overturned the conversion law—opening the door to Lola's eviction.
Now the community is coming together to fight the eviction-for-profit of an 84 year old. In July, over 50 tenants and seniors marched on Hickey's attorney's office (Wiegel & Freid, well known landlord attorneys who evict people for a living) and stormed the building chanting "There's no need for Weasel & Greed!" and "Shame, Shame Shame!" Again in July tenants are protesting outside of the courthouse where a judge has already said once that the right to make money is more important than the right of an 84 year old to live her life peacefully. And tenants and seniors promise to protest her eviction every step of the way—even to the point of preventing the sheriff from carrying out the eviction.
What people want is simple: Lola has few years left and Hickey Brokerage could make plenty of money (almost half a million dollars) just by selling off the three now-empty units. Hickey could make more money than most people will see in a lifetime by selling three units and he could easily let Lola live out her life in peace. Hickey's decades younger than Lola and he'll get to sell her unit eventually.
So tenants and seniors are demanding a lifetime lease for Lola. Let her live out her life in peace. There's no reason but greed to evict her now and sell her unit now. Sell three empty units, be happy with a half million dollars, and do the right thing: give her a lifetime lease.
But Hickey is greedier than greedy. And he's also fairly shady. He lost his real estate broker's license once for shady dealings. Now he's under indictment for mail fraud and securities fraud. Clearly he's driven by screwing people for money. So he's not offering her a lifetime lease. And his lawyers Wiegel & Freid (or, Weasel & Greed) live to evict people.
Hickey could end up accomplishing this eviction. But if he does, it will be a pyrrhic victory as this eviction is setting the parameters for the debate over Ellis evictions. In that debate, the real estate speculators will suddenly find they are amongst the least favorite people in San Francisco.