New residential construction in San Francisco as seen from the Mission District in 2014. Robert Galbraith/Reuters

A San Francisco woman sold her home cheap to a buyer vowing to protect the neighborhood’s character. But the neighborhood needs to change.

A woman who bought her home in San Francisco two decades ago and then puts it up for sale today stands to make serious bank. But a woman who lived in San Francisco for all that time might not want to.

Just such a homeowner is the subject of a fascinating profile in San Francisco Magazine, a story that raises the emerging notion of “ethical landlording.” Catherine Lee owned two properties in the Mission, a condo and a two-unit building; after a breakup, she needed to sell the condo in order to buy both interests in the building she shared with her ex. No problem: The condo, which she bought in 1993 for $90,000 and by all accounts sounds like a gem, would easily fetch 10 times that.

Except Lee didn’t want to profit by an order of magnitude. She wanted to do her part to preserve the character of the Mission District she so loves. So she set a firm ceiling on the price of the unit—$650,000—and listed it on Craigslist with an asterisk. SF Magazine’s Scott Hutchins explains:

In exchange for a chance at her beautiful condo at a 2005 price, Lee asked prospective buyers to submit to an only–in–San Francisco application process. They had to explain who they were and how they would benefit from the condo. They had to swear that it would be their own home—not an investment or rental—and promise to never complain about Dia de los Muertos. Finally, they had to offer a 10-year “cultural promissory note”: a legally binding, decadelong commitment to provide something of cultural value—theater tickets, writing lessons, organic produce from “your uncle’s farm in Salinas”—to the community or Lee herself.

San Francisco being San Francisco, the seller received bids from prospective buyers who promised to put in a decade of volunteer journalism for El Tecolote or donate 30 bottles of wine a year to a nonprofit organization. In other words, value: Buyers were promising their time, skills, assets, or donations in kind in place of cash up front. Had Lee wanted to do any or all of these things, she could have sold the home for $1 million and paid people for their labor. Some of these contributions may have priced for more than the real-market value of the home.

Lee might have simply required a buyer who paid seven figures to use three of them to do something for the Mission. (I say “might” advisedly, to note the dubious legality of this whole contract scheme, as does San Francisco Magazine.) She might have just stipulated in the contract that the winning bid would go to whoever pledged the best package of cash (however much) plus cultural value.

Instead, the point of the exercise was to exclude buyers. Lee aimed to exclude outsiders, exclude people who might complain about Dia de los Muertos, exclude people who don’t fit her vision of a Mission resident. This kind of character screening could bring up some ethical issues or implicit biases. Maybe nothing that rises to the level of discrimination under the Fair Housing Act, but still.

Don’t read Lee as a villain; Hutchins’ lovely story paints her as a conscientious and sympathetic resident. In the end, though, what Lee is doing is exploiting her extraordinary leverage over housing in her neighborhood—in this case, a single individual unit—to achieve a policy outcome. (Plus perks! She got some good stuff out of the winning bid.) It is a small, singular illustration: keeping a two-bedroom flat at Alabama and 23rd Streets the way it is for people who like the kinds of things that Lee likes. But even this one case is a microcosm for the kind of housing priority in San Francisco that’s destroying San Francisco.

Lee has created one unit of semi-affordable housing out of market-rate housing. But the unit rebounds to market-rate housing when the new owner eventually sells it. It isn’t permanently affordable, unless every future buyer follows in Lee’s footsteps. Again, it’s only one example, but the point stands: Price caps and rent controls don’t create permanent affordable housing—they create value for incumbents. Instead, Lee might have sold her home at a high price and used the windfall to support politicians and campaigns that promise to build, build, build. That’s asking more than what is required of her, of course. But it’s a step in the march toward fairness, if not toward saving the Dia de los Muertos parade.

The city needs housing. To keep San Francisco affordable, the city will need to build enough units to satisfy the extraordinary demand. Construction will change the character of neighborhoods like the Mission, yes. Build or don’t, that train has already left the station. At this point, residents need to trust in people to come together and make the city great even through a lot of change.

Letting more people live and work in better circumstances will always do that. Keeping people out is only bound to change neighborhoods for the worse. The change that Lee is right to resist is the change that comes when residents say no to new neighbors.

About the Author

Kriston Capps
Kriston Capps

Kriston Capps is a staff writer at CityLab.

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