SRO’s Shift to Housing Foreign Students

by Randy Shaw and Rio Scharf on December 3, 2015

Photo from the Converse International School of Languages website

If you wondered whether San Francisco’s housing crisis was impacting its SRO housing stock, the answer is yes. Today there are fewer opportunities for working people to gain access to permanent SRO housing than at any time since the city’s SRO Hotel Conversion Ordinance was strengthened in 1990 (the original version passed in 1981).

The problem now is less illegal conversions—the Tenderloin Housing Clinic has stopped these in the past and is filing multiple new lawsuits against new violators— than the completely legal practice of SRO’s exclusively renting to foreign students.

The Foreign Student Market

In 2012, San Francisco passed a law preventing educational institutions from leasing blocks of SRO rooms for their students. I strongly opposed the law because I saw it as denying permanent housing to students who needed it. I moved to San Francisco to attend Hastings Law School and nobody claimed that the school’s then over 1500 students should not be living in San Francisco housing. San Francisco has so many important educational institutions that demonizing fulltime students struck me as wrong.

Instead of an outright ban, I supported regulating SRO student housing through the conditional use process. This would enable SROs serving longer term student residents to go forward while applications for shorter term stays could be denied. But the planning department, mistakenly believing that the Academy of Art was acquiring Tenderloin properties, insisted on doing it their way. Since the student restrictions were tied to a popular measure encouraging the building of student housing, it passed the Board and became law.

This 2012 law has done nothing to maintain the SRO supply for working San Franciscans. If anything it has encouraged a shift from SROs renting to year-round students in major educational institutions to renting for shorter terms to primarily foreign students in smaller specialty schools. Consider the following.

In October, the Central City SRO Collaborative received a call from a tenant who has lived in the Balmoral Residence Club at 1010 Bush for decades. He wanted to alert CCSROC that the new owners (Structure Properties) had entirely transformed his hotel from one that had once housed only SF residents to now attracting a transient student population.

Private and common spaces were converted to student use. After leaving nearly half of the hotel’s units vacant for months, the owners welcomed into their building over two dozen students from the Make School, a college replacement program geared towards those on the fast track towards software development and tech start-up jobs.

CCSROC organizer (and co-author of this article) Rio Scharf visited 1010 Bush to see the changes. The community room where older residents once relaxed together either watching TV or talking amongst themselves was now outfitted with a ping-pong table and a pile of games. The owners recently notified residents that they must give up their storage space in the shared kitchen, leaving them to store food in their room or no longer cook (Note: this is a decrease in services under the city’s rent law and tenants should get rent reductions).

rsz_balmoral_#4

It’s common for longtime SRO tenants to feel unwanted and alienated from their homes once management targets a different type of resident. The arrival of The Make School students has had this impact. The culture of the building has changed, as almost half of their units now house young adult students, the property owners have reduced the number of units available to SF residents and have substantially shifted the culture of the building, making it nearly uninhabitable for older, longer-term tenants.

The Balmoral, whose target population is not foreign students, is just one of many SROs marketed for exclusive student use. The Columbus, the Spaulding, the Sheldon, the Kenmore, Vantaggio Turk, Twin Peaks and the Monroe are all SRO hotels being advertised by foreign language schools as student housing options. In traveling around to these buildings, it became clear that the owners feel no need to hide their new business strategy. The lobby in most of these buildings contains a standard rack overflowing with tourist brochures, inviting newcomers to enjoy cave adventures, kayak trips, and plane rides.

Some of these hotels also offer guests complementary breakfasts and weekly maid service, giving these hotels the feel of a tourist establishment not a residential SRO. This is all standard fare at the Vantaggio Turk, a 112-room SRO building off Van Ness (formerly the Gotham) that is supposed to house only permanent residents.

In the shared kitchen at the Vantaggio, two Spanish travelers, studying English in San Francisco, explained to Scharf that the hotel management picks roommates for guests, so people can afford the rent. At the Vantaggio, guests may find themselves sharing a standard SRO room with two strangers and paying $2,055 combined monthly rent. All signs indicate that the owners of the Vantaggio Turk have essentially removed 112 units of relatively affordable SRO housing and replaced them with a cramped and transient, dorm-style set-up.

Short-Term Student Stays

As noted above, students have long lived in San Francisco. Student occupancy of SRO rooms when they cannot obtain affordable apartments is an understandable consequence of the city’s housing crisis. It is also understandable that foreign language schools would make informal deals with SROs to ensure that their students arriving in San Francisco have a place to live.

But the problem with this new practice of exclusive rentals to foreign students is their short-term presence. For example, the manager of the Sheldon Hotel told Scharf that not one tenant in her 62 residential units has stayed in her hotel for more than six months. Not one.

This is far different from the law, medical, and even Academy of Art students who at a minimum stay in places for an entire school year, and often much longer. The difference is between students who identify as San Francisco residents, and those who are essentially longer term tourists.

What Can Be Done?

I’ve been involved with the city’s Hotel Conversion Ordinance since its inception. Nobody contemplated that an SRO could financially survive renting residential rooms on a three to six months basis. This may still prove true for the foreign student hotels, but for now there is nothing the law can do about this practice. I don’t see how San Francisco can prevent schools from advertising the availability of legal rentals (i.e. those over thirty days), and they will do so until this economic model fails.

Mayor Lee has joined his predecessors, Mayors Newsom and Brown, in recognizing that the best SRO preservation strategy is to lease buildings to nonprofit groups who will keep the housing affordable. Lee is committed to funding an additional 1000 SRO units for nonprofit leasing in 2015 and 2016, and from his own background with SROs understands the importance of this housing resource.

But this new short-term rental industry targeting transient students makes it more imperative than ever for San Francisco to vigorously protect its SRO stock. This is particularly vital for SROs primarily housing long-term residents or whose unit usage requires that the vast majority of its units remain residential.

In the coming year, San Francisco will have many chances to defend SRO housing against those seeking new schemes to eliminate this vital housing resource. Stay tuned.

Randy Shaw is Editor of Beyond Chron. To learn more about San Francisco’s SROs, read his new book, The Tenderloin: Sex, Crime and Resistance in the Heart of San Francisco.

Rio Scharf is an organizer with the Central City SRO Collaborative.

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