SF sues landlord over state of housing for once-homeless vets

1270 Fitzgerald Ave in the Bayview neighborhood in San Francisco on Aug. 30th, 2016. 1270 Fitzgerald Ave in the Bayview neighborhood in San Francisco on Aug. 30th, 2016. Photo: Amy Osborne, Special To The Chronicle Photo: Amy Osborne, Special To The Chronicle Image 1 of / 20 Caption Close SF sues landlord over state of housing for once-homeless vets 1 / 20 Back to Gallery

A San Francisco landlord illegally crammed dozens of formerly homeless veterans into overcrowded dwellings across the Bayview-Hunters Point neighborhood, while collecting millions of dollars in federal subsidies aimed at helping vets and the poor, a lawsuit filed Wednesday by City Attorney Dennis Herrera claims.

Judy Wu, along with husband Chuan Zhu, allegedly chopped up residences — mostly single-family homes — into multiple-unit buildings and then rented the units to tenants possessing vouchers from Section 8 and the Department of Veterans Affairs’ Homes for Heroes program, which is designed to end homelessness among veterans.

The lawsuit identifies 12 buildings with 15 legal units divided up and rented to 49 individual tenants, two-thirds of them veterans. The leases are bringing in $80,031 a month in rent, or $960,372 a year. Herrera’s lawsuit alleges that the 49 units “do not comply with San Francisco zoning requirements and subsequently endanger the occupants and neighborhood residents.”

In a letter sent to the property owners Monday, Herrera said tenants have been “fully informed of their rights and available services.” Herrera added that the city would “move aggressively to halt and punish any efforts you may undertake to retaliate against your residents.” It also orders the property owners to bring the properties into compliance with the law.

The case came to the city’s attention after Supervisor Malia Cohen, who represents the Bayview, noticed a pattern of complaints about properties owned by Wu. Neighbors said the single-family homes seemed overpopulated, noisy and overflowing with trash. Sidewalks filled up with cars and backyards became littered with mattresses, discarded furniture, stray cats and mounds of old clothing. The buildings had just one mailbox for all the units, resulting in stolen checks and heaps of unopened envelopes littering common stairways.

“It was a situation where overcrowding was making it impossible to provide trash service, which leads to illegal dumping,” Cohen said. “It makes parking virtually impossible.”

Again and again, according to the city, Wu obtained permits for minor alterations — a new bathroom, bedrooms, storage or laundry room — and then undertook much more extensive renovations than allowed, adding multiple units.

At 1351 Revere Ave., a single-family home purchased for $260,000 in September 2010, the landlords sought a permit to add a laundry room, family room, three bathrooms and three bedrooms, according to documents from the San Francisco Department of Building Inspection. They proceeded to lease it out to seven separate tenants, collecting $11,830 a month in rent. The home is 1,493 square feet, which works out to 213 square feet per unit.

At 1050 Gilman Ave., the 1,180-square-foot home was broken up into five units, for which the property owners have been collecting $10,104 in rent per month, according to Herrera’s office. Wu and her husband bought the building in 2009 for $200,000, city records show.

Wu said she is “cooperating with the city and trying to protect my tenants.”

“My tenants are very low-income and some have mental problems. I am trying to house as many veterans as possible,” she said. “I am complying with what (the city) asks me to do. They are not supposed to be filing a lawsuit against me. What can I do? They want me to get rid of my tenants?”

Wu bought most of her properties in trustee sales in 2008 through 2010, when the Bayview had the highest rate of foreclosure in the city. While she owns the business with her husband, tenants said they deal exclusively with Wu, who uses a real estate office in a Daly City strip mall as a business address.

Visits to Wu’s properties and interviews with her tenants create a picture of a landlord who, while allegedly violating the city’s zoning codes, also cares about housing veterans with few other options. She regularly leases to tenants whose eviction records made other landlords see them as off limits, and apparently is not quick to throw out those who fall behind on their rent, some tenants say. On the other hand, tenants complained of everything from broken stoves to lack of heat to Wu’s unwillingness to get rid of residents who are disruptive or engaging in illegal activities.

Eric Clark, a Vietnam veteran who lives in one of Wu’s buildings on Fitzgerald Avenue, said he was referred to her through a nonprofit after a stint in a temporary unit on Treasure Island.

“She provided me with a new apartment. She didn’t have to do that,” Clark said. “A while ago my bank messed up and I owed her $3,000, and she didn’t even send me an eviction notice. She does really good work.”

Another tenant in the same building, who asked that his name not be used for fear of retribution, said Wu “gave us a nice place to live, but she’s been slacking.” He said two tenants have already vacated units in the building — one because the stove didn’t work — and left behind piles of garbage and old clothes.

“She’s a slumlord who needs to step up her game or the city is going to shut her down,” he said.

Cohen said tenants, most of whom have faced evictions in the past, are too afraid to speak out. “Mrs. Wu targeted these people because she knew they were the least likely to complain in a tough housing market,” she said. “The way she has been able to capitalize on other people’s misfortune is disgusting.”

For city officials, the case has been a tricky one. San Francisco has been a national leader in housing vets through the Veterans Affairs Supportive Housing program, or VASH, under which veterans receive rent vouchers through the federal Department of Housing and Urban Development. Since October 2013, the program has housed 1,163 formerly homeless vets in San Francisco.

Colleen Corliss, spokeswoman for Swords to Plowshares, which works with veterans facing homelessness, disability and unemployment, said Wu has been “wonderful to work with and has housed hundreds of vets over the years.”

“A lot of our veterans are not ideal tenants, and getting them off the street is the first priority,” she said. “All we know is that Wu has helped us do that.”

Jason Elliot, deputy chief of staff for Mayor Ed Lee, said the goal is to bring Wu into compliance with the law while protecting her tenants.

“From the start, our primary concern has been the safety and stability of the residents, especially the formerly homeless veterans — some of whom were homeless for years and only recently came indoors,” Elliot said. “Our commitment to the stability of the veterans doesn’t end when we put them in housing.”

Several Wu tenants said they are scrambling to find alternatives in case they have to leave their units. At 1351 Revere Ave., tenant John Brown, a veteran who said he used to be a San Francisco firefighter, said he was “proud when I got this place,” but that it is too cramped to accommodate his belongings.

“I don’t have any place to keep my linens,” Brown said. He has applied for units in several other buildings. “I’m worried the city is going to terminate my tenancy,” he said.

Debra Rodriguez, a disabled former grocery clerk who lives in a bright, tidy unit Wu owns on Gilman Avenue, said she had had enough of Wu.

“At first I liked her — she’s feisty,” Rodriguez said. “But now everything’s a mess and she doesn’t attend to anything. I told her, ‘When you do something wrong, it catches up to you.’”

She has applied for housing in other subsidized buildings. “I just want someplace I can live peacefully,” she said.

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

Twitter: @sfjkdineen