Chinatown hotel next up in S.F. gentrification wars

Tenants and activists protest in front of the Vallejo Emery Apartments in Chinatown who's owner they say is trying to evict longtime residents so that the rooms can be rented to higher paying tech workers, in San Francisco, CA, on Thursday, March 26, 2015. less Tenants and activists protest in front of the Vallejo Emery Apartments in Chinatown who's owner they say is trying to evict longtime residents so that the rooms can be rented to higher paying tech workers, in ... more Photo: Michael Short, Special To The Chronicle Buy photo Photo: Michael Short, Special To The Chronicle Image 1 of / 27 Caption Close Chinatown hotel next up in S.F. gentrification wars 1 / 27 Back to Gallery

The Chinatown single-room-occupancy hotel may be the next frontier of San Francisco’s gentrification wars.

A real estate investment group has served eviction notices to two dozen families at 2 Emery Lane, a 32-unit residential hotel where tenants — a mix of seniors and young families — live in 100-square-foot rooms and share kitchens and bathrooms.

Longtime Chinatown housing organizers say the situation is noteworthy because until now SRO hotels — which make up three-quarters of the neighborhood’s housing stock — have been immune to the displacement sweeping nearly every other part of the city. They charge that the property owner is trying to raise rents and attract young professionals to the building, which is near a corporate bus stop.

“This is the most direct indicator we have seen of gentrification in Chinatown,” said Gen Fujioka, public policy manager with the Chinatown Community Development Center, or CCDC. “This is the bottom of the housing market. This is last-resort housing, where immigrants and poor people live.”

On Thursday afternoon dozens of Chinese-speaking SRO residents assembled in protest outside 2 Emery Lane, which intersects with Vallejo Street on a block where Chinatown bleeds into North Beach. On a bulletin board alongside the protesters were copies of 24 eviction notices that residents have been served since October.

For the most part, the residents are being threatened with eviction for hanging laundry outside their windows, which has long been common practice in the neighborhood. A representative of the owners says that violates the terms of the leases. The tenants held up child-sized shirts on hangers with signs stating: “Hanging laundry is not a crime.”

In a letter to owner Emery Vallejo LLC, tenant advocates from the CCDC and other groups demanded withdrawal of “all notices to quit issued to tenants up to this point as well as rent increase notices in excess of what is allowed under the rent board” regulations. The letter contends the property owner has “grossly exaggerated the seriousness of minor transgressions” and has “engaged in a pattern of harassment — patrolling the halls with cameras and making a range of petty complaints.”

“Your predatory practices constitute nothing less than rent gouging — exploiting the housing crisis in an attempt to charge upscale rents for the city’s shelter of last resort,” the letter states.

Emery Vallejo LLC bought the property in November 2013 for $2.72 million, according to Jennifer Raike at Old Republic Title. The company is registered to West Portal attorney Greg Rocca, although Sterling Heatley, a vice president at Paragon Real Estate Group, signed the eviction notices and operates the property.

Heatley previously worked for CitiApartments, a now-defunct company that was often accused of heavy-handed tactics to clear buildings of tenants paying below-market rents.

He stressed that the owners have cleaned up the property and invested money to improve the bathrooms and kitchens.

“When we took over the property, like a lot of SRO hotels in Chinatown, it was riddled with building code violations and health code violations,” he said. “We came in and upgraded the life safety and got rid of the health code violations. We upgraded the bathrooms. We pride ourselves on being one of the best managers of SROs in the neighborhood. Our facilities are spotless.”

He said that the property owners are within their rights to seek eviction of tenants who continue to violate the terms of their leases.

“(The tenants) were taking advantage of the previous landlords,” he said. “They were making messes in the bathroom and hanging clothes outside. We have spent money making their living conditions nicer. If they want to paint us as the bad landlord, there is nothing we can do about it. Everything we have done has been within our right per their lease and health and building code regulations.”

Through a translator, tenants said they have been harassed with regularity since Heatley took over the building. They say that one of the property management employees — a man who takes out the trash and monitors the building with a video camera — has attempted to buy them out for “several thousand dollars” while keeping close tabs of alleged violations, which have included hanging Chinese New Year decorations in the hallways.

“We are intimidated by the garbageman the property owners hired,” said Xue Yan Dai, who lives in the building with her husband and two children. “He says things like 'don’t you think that you can live here forever because I will get rid of every one of you.’”

Since Emery Vallejo LLC acquired the property, four rooms have been cleared out and rented to young professionals, according to longtime tenants. One of the residents who left accepted a $1,500 buyout while another was scared away when the property owner handed him a hefty rent increase, tenants say.

Neighborhood affordable housing advocates say the property owner is seeking $1,300 a month for rooms that have previously averaged around $550 a month and is targeting technology workers who use a corporate shuttle stop adjacent to the building.

Heatley said the building already had several non-Chinese “professional” tenants when he took it over. Tenants say that it was entirely leased to poor Chinese families. There are about 16 children living in the building.

Each floor has three toilets, two showers and one kitchen with a four-burner stove.

Malcolm Yeung, deputy director of the CCDC, said the situation shows that “every neighborhood in San Francisco is now vulnerable to this crisis.”

“Chinatown has been a resource for low-income families, for immigrants, for people trying to build a life. SRO hotels have been the housing of last resort for these people. It’s where families come to make a life and a place for seniors to age in place. It is a crime that we are now in a situation where the housing of last resort in the city is coming under attack.”

Tenderloin Housing Clinic Executive Director Randy Shaw said the property owners don’t have a case. “If hanging out laundry was an accepted practice by the previous landlord, they don’t have a case,” said Shaw.

J.K. Dineen is a San Francisco Chronicle staff writer. E-mail: jdineen@sfchronicle.com Twitter: @SFJKDineen