SF landlord will pay $1 million to residents of burned-out illegal units

1441-1451 Stevenson Street is seen on Thursday, October 19, 2017 in San Francisco, Calif. 1441-1451 Stevenson Street is seen on Thursday, October 19, 2017 in San Francisco, Calif. Photo: Lea Suzuki, The Chronicle Photo: Lea Suzuki, The Chronicle Image 1 of / 4 Caption Close SF landlord will pay $1 million to residents of burned-out illegal units 1 / 4 Back to Gallery

A landlord has agreed to pay more than $1 million to tenants who were evicted after a fire swept through their illegal apartments in a warehouse space in the Inner Mission District in 2014, the first legal settlement related to the rash of fires that have displaced residents in the neighborhood over the past four years.

Property owners Albert Joseph and David Kimmel, who own the warehouse at 1441-1451 Stevenson St. in the north end of the Mission District, have agreed to pay $1,050,000 to eight tenants who found themselves homeless after a predawn fire damaged part of the structure in January 2014.

The settlement could have implications for others who have been kicked out of their homes during a widespread crackdown on illegal living spaces in the wake of the fatal Ghost Ship fire in Oakland in December, said attorney Joe Tobener of Tobener Ravencroft, who represented the displaced tenants.

“We have seen so many tenants displaced from warehouse spaces since the Ghost Ship fire because worried landlords or city officials have served notices,” Tobener said. “The Stevenson Street fire award is critical for these warehouse tenants because it shows that these tenancies have significant value under the law, even if they are unpermitted.”

The Stevenson Street fire, which damaged only a handful of the units, was less severe than blazes that destroyed entire structures at 29th and Mission streets and 22nd and Mission streets. Yet for those living there, the result was just as bad as the more extensive fires: Residents were not able to move back into the building and found themselves scouring Craigslist for a new place in one of the nation’s most expensive rental markets.

While the building had been filled with residents, largely artists, since the 1970s, it was not zoned for residential use. After the fire, the property owners filed Ellis Act evictions against the tenants, stating that they planned to convert the building back to a commercial use. The Ellis Act allows property owners to evict tenants if they plan to take the units off the rental market.

The complaint against the property owner alleges negligence, breach of contract, wrongful evictions, nuisance, and intentional inflection of emotional distress. “As a result of the fire, Plaintiffs suffered personal injury, property loss, lost wages, medical expenses, emotional distress, moving costs and loss of their rent-controlled units,” stated the lawsuit.

Like many illegal warehouse spaces, the Stevenson Street building was riddled with code violations that tenants were reluctant to complain about out of fear of eviction, according to the suit. Tenants had to put up with vermin infestation, including rats and mice. There were leaky roofs, skylights and pipes. Many of the units lacked smoke detectors. At one point, there was a flood caused by broken plumbing. The complaints were not addressed by the landlord, the lawsuit charged.

“The Stevenson Street building was not unsafe because tenants were living in a warehouse space. It was unsafe because the landlord did not manage the property, allowing years and years of illegal construction to go unchecked,” Tobener said.

Rents in the building ranged from $897 to $2,650 per month, but the lawsuit argued that the actual value of the units on the open market was between $3,000 and $8,000.

Jeff Woo of Cooper White Cooper, who is representing the property owner, declined to comment on the settlement. After the fire, Woo said: “We have no interest in developing the property as residential, and the building in its current state is not appropriate for residential in any way.”

Supervisor Hillary Ronen called the settlement “a great victory.”

“Irresponsible landlords who are taking advantage of the housing crisis and renting out substandard spaces shouldn’t be let off the hook,” Ronen said. “I wish this was an isolated incident, but it’s not. There are cases in my district where people are living in dangerous conditions or in illegal units at risk of eviction. We must continue to hold these landlords accountable.”

Graphic artist Erik Van der Molen, a party to the settlement, said he is just getting back on his feet nearly four years after the fire. He spent five months couch surfing after he was displaced before finding a live/work space on McCoppin Street, a block from the Stevenson Street building. The fire disrupted his business because he worked out of the unit. He was forced to take a full-time job rather than continue with his own freelance business. Making matters worse was the fact that his unit was not harmed in the blaze.

“There wasn’t a scratch,” he said. “I thought I’d have to crash somewhere for a few nights at most.”

He said the settlement, which was based on the size of his apartment, “makes up for what happened, more or less.”

“It did end up being fair,” he said. “I feel like the money I got was comparable to most of what I went through — almost.”

Tommi Avicolli Mecca of the Housing Rights Committee said it is hard to say whether the settlement will have any lasting impact for others in similar situations. He said the city needs to put a policy in place that will make it easier to convert illegal residential buildings. He said settlements provide “another tool for getting justice.”

“People are living in fear,” he said. “There hasn’t been any policy change on the part of the city in term of how we deal with these spaces.”

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

Twitter: @sfjkdineen