Court says landlord must pay SF $2.4 million for bad evictions

Dale Duncan and his wife Marta Munoz and 6-year-old daughter Emilia are seen in their Mission District apartment in San Francisco in June 2015. Duncan, who had lived in the same unit for 21 years, eventually moved. His landlord was Anne Kihagi, who has lost a lawsuit over evictions filed by the city in a tentative ruling. less Dale Duncan and his wife Marta Munoz and 6-year-old daughter Emilia are seen in their Mission District apartment in San Francisco in June 2015. Duncan, who had lived in the same unit for 21 years, eventually ... more Photo: Paul Chinn, The Chronicle Photo: Paul Chinn, The Chronicle Image 1 of / 1 Caption Close Court says landlord must pay SF $2.4 million for bad evictions 1 / 1 Back to Gallery

Citing a pattern of “bad-faith harassment, retaliation and fraud” against rent-controlled tenants, a San Francisco Superior Court Judge has ordered a landlord to pay the city nearly $2.4 million in penalties for violations of state housing law.

In a tentative ruling, Judge Angela Bradstreet said landlord Anne Kihagi and her associates had “purposefully destroyed their tenants’ quiet enjoyment and any sense of sanctuary through their long, continued and unrelenting campaign of harassment, reductions in services, and unlawful and fraudulent evictions.”

“Their reprehensible conduct had a terrible effect on the lives of multiple San Francisco citizens,” Bradstreet stated.

The judge’s tentative decision also voids pending evictions, including at 1135-1139 Guerrero St., where Kihagi is in the process of evicting several elderly tenants. The ruling bars the landlord from having contact with past, present or future tenants. Instead, she must hire an independent property manager, who must be approved by the city. Kihagi must also reimburse the city for all legal and investigation fees related to the case, which will top $2 million.

“I’ve gone after a lot of lawless landlords in my time, but Anne Kihagi has a special place reserved for her in San Francisco’s abusive landlord hall of fame,” said City Attorney Dennis Herrera, whose office sued Kihagi in June 2015. “You can’t come to this city and lie, cheat and steal your way to massive wealth on the backs of residents. We’re not going to allow it.”

Kihagi, a native of Kenya and a former investment banker, started buying properties in June 2013 in Noe Valley, the Castro, the Mission and North Beach. She had previously invested in multifamily properties in West Hollywood, where she was also sued by the city for violating rent-control regulations. In April, a judge in West Hollywood ordered her jailed for five days for violating state housing law, a decision Kihagi is appealing.

Defense lawyer Karen Uchiyama did not return phone messages Tuesday. In court she said the case against her client was manufactured by “a tenant-activist group that influenced the city to (make) a scapegoat of Anne Kihagi.”

Kihagi’s business model consisted of buying buildings with longtime, rent-controlled tenants paying below-market rents and then using a wide range of methods, both legal and illegal, to get rid of them, according to the city’s lawsuit. Typically she offers to buy out tenants, and if that doesn’t work, the city’s lawsuit alleged, she threatens an “owner move-in” or a “relative move-in” eviction, both of which are allowed under state rent-control laws. If that doesn’t work, she has resorted to threats and harassment, the city’s suit contended.

In total, Kihagi and family members invested $24 million in San Francisco real estate, assembling a residential portfolio with 50 units. An expert witness for the city stated that by evicting rent-controlled tenants and replacing them with tenants paying much higher rents, Kihagi was able to add $8.8 million in value to the properties.

The Department of Building Inspection documented widespread violations at Kihagi’s properties, and the court found another 1,251 violations of the state’s unfair competition law.

“It’s been a long journey,” said Dale Duncan, who moved his family out of a Mission District apartment building that Kihagi owned after months of fighting eviction. “I really appreciate how much work the city attorney put into this, and I hope that it sends a powerful message. We live in a society of laws, and it’s nice to see it functioning.”

J.K. Dineen is a San Francisco Chronicle staff writer. Email: jdineen@sfchronicle.com Twitter: @sfjkdineen