SAN FRANCISCO — When a fire destroyed an affordable housing complex in San Francisco's SoMa district in 2011, it forced the tenants of the building's mostly occupied 48 units to look for a new place to live.

According to the city's rent ordinance, they were to be offered their old home back at the same rent within 30 days once the building was restored. But tenants never heard from the building owner.

Instead, former tenant Patricia Kirkbride was visited by Danny Haber, who had leased the space to launch a co-op for "young professionals" and offered her $500 in cash to waive her right to return,the San Francisco Examiner first reported.

Now six of the building's former tenants are suing the property owner, Nasir Patel, and the housing operation, headed by Haber, that has taken over their former building, for failing to notify them and give them their right to return after the repairs were completed recently. The lawsuit was filed late last month by Tenderloin Housing Clinic attorney Steve Collier.

Collier also said the owner took out a $100,000 interest-free loan from the Mayor's Office of Housing and Community Development in 2008. The loan stipulated that 10 units must be kept affordable to people making 40% of the area median income or less for 15 years, but Collier said this was never fulfilled, which caused the the mayor's office to issue a notice of default last month.

Before the fire, the building had housed a Single-Room Occupancy hotel called the Park Hotel, which catered to long-term residents, often with fixed or low incomes, and offered rents of around $600 per month for a one bedroom apartment. In its place, Haber has installed communal housing for between $1,200 and $1,500 and retrofitted the space with renovations that make it physically impossible for the tenants to re-occupy, Collier said.

The Negev LLC, which is named for the desert in Israel and runs the property, is a small chain of co-ops that encompass two other properties in San Francisco's SoMa District, a tech industry hub within the city. In a Quora post titled "What is the Negev?" software engineer Alon Gutman describes it as a "frat house for geeks after college." A Craigslist ad for a $1,250 bedroom at the former Park Hotel site calls it "a place for entrepreneurs, engineers and creative people of all types."

"It's [a] great alternative to finding a comfortable room in SOMA with either unpredictable roommates or outrageous rent costs," the ad reads.

Haber did not respond to multiple requests for comment from Mashable, but he told the Examiner that he wants to do anything he can to settle the issue and continue running the co-op.

"The Tenderloin Housing Clinic is pretty powerful in this town," Haber told the Examiner. "I don't want any more pressure from Steve because he's a scary guy."

The lawsuit is not the only legal problem involving SRO hotels in San Francisco this year. In September, a class action suit was filed against Airbnb for allowing SRO units to be rented out to customers, a violation of a city code that generally bars stays of less than seven days at SROs.

In May, the city sued the owners of 15 different hotels for various violations including a practice called "musical rooms" where tenants are forced out before living somewhere for 30 consecutive days, the span of time needed for rent control and additional rights to kick in.

"San Francisco's response to our affordable housing crisis must include aggressively protecting our most vulnerable residents — and that's exactly what this case is about," city attorney Dennis Herrera said in a statement at the time.

SRO hotels are one of the last vestiges of low-income housing in a city that is one of the least affordable places to live in the country. San Francisco regularly tops lists of most expensive housing and rental markets in national reports compiled by real estate services Trulia, Zumper and Apartment List.

Last month, Zumper reported that median rent for a one bedroom apartment in the SoMa district was $3,530, making it one of the most expensive neighborhoods in the city. That means that even The Negev's rents are relatively cheap compared to the surrounding area.

A Zumper map showing median rents for San Francisco neighborhoods. Image: Zumper

When tenants are paying around $600 a month for an apartment in an area where median rent is upwards of $3,000, landlords and property owners will do anything they can to push out tenants paying below market-rate rents, according to Mairi McKeever, director of pro bono legal services at the San Francisco Bar Association's Justice and Diversity Center.

Some displace tenants by finding loopholes in renting laws or exaggerating small infractions while others blatantly disregard the law and hope that tenants will not know their rights well enough to press the issue, McKeever said. She said the Park Hotel lawsuit is likely a case of the latter.

While tenant displacement is always a problem when rent controls are in place, McKeever said her office started seeing these kinds of cases grow more rampant over the past 18 months to two years. What's even worse, she said, is that many more tenants are displaced illegally but never speak up about it.

"We’ve been doing this for many, many years, and it is a different time. It’s amazing how aggressive some property owners are being, and how the bottom line seems to be what’s motivating so many people," McKeever said.

Experts say the high rent market is in part due to the fact that growth in the number of housing units available has failed to match pace with the city's explosive influx of population, largely driven by the economic boom it has seen in the past couple years.

"There is always efforts to displace, but with the high rent market and also the tech boom, it’s gotten a lot worse," Collier said.

Charley Goss, government and community affairs manager for the San Francisco Apartment Association, said that while his organization, a trade association that represents city rental owners, does not defend the actions taken at the Park Hotel, fires amount to huge monetary losses for property owners and there is a clear incentive to try to up the rent.

"When a fire occurs it’s bad for everybody," Goss said. "[The owners] might have just poured a ton of money into the building and they are not able to receive any benefit for potential upgrades they might have done. To a certain extent it incentivizes people to keep buildings in not the best shape."

Still, McKeever said the fact that the landlords are targeting renters who already faced the ordeal of their home being destroyed is "heartless."

"It was a double whammy," she said. "What stands out is these people lost their homes in a fire. In terms of being heartless, I think it’s fairly heartless who they are choosing to on-the-sly try to prevent them from maintaining an affordable residence in San Francisco."