herrera suit against short-term rentals

City Attorney Dennis Herrera News Release 

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ForImmediateRelease:April23,2014Contact:MattDorsey(415)554‐4662

Herrera sues short‐term rental scofflaws for illegal conversions, unlawful business practices 

Two cases target ‘egregious offenders’—both involving Ellis Act evictions of  disabled tenants to illegally convert residential apartments into tourist lodging 

SANFRANCISCO(April23,2014)—CityAttorneyDennisHerreratodayfiledtwoseparatelawsuitsagainstshort‐termrentalscofflawsforillegallyconvertingresidentialapartmentsintocommercialtouristlodging,whichthepropertyownersthenmarketedthroughsuchonlineplatformsasAirbnb,Homeway.comandVRBO.com.Inbothcases,thedefendantshadpreviouslyevictedlong‐termresidentsfromtheirapartmentsundertheEllisAct,astatelawthatallowslandlordstoevicttenantsandwithdrawtheirpropertiesfromtheresidentialrentalmarket.Twooftheevictedtenantsweredisabled,accordingtoSanFranciscoSuperiorCourtandRentBoardrecordscitedintoday’spleadings.“Inthemidstofahousingcrisisofhistoricproportions,illegalshort‐termrentalconversionsofourscarceresidentialhousingstockrisksbecomingamajorcontributingfactor,”saidHerrera.“ThecasesI’vefiledtodaytargettwoegregiousoffenders.Thesedefendantsdidn’tjustfloutstateandlocallawtoconducttheirillegalbusinesses,theyevicteddisabledtenantsinordertodoso.Today’scasesarethefirstamongseveralhousing‐relatedmattersunderinvestigationbymyoffice,andweintendtocrackdownhardonunlawfulconductthat’sexacerbating—andinmanycasesprofitingfrom—SanFrancisco’salarminglackofaffordablehousing.I’mgratefultothecitydepartments,includingtheSanFranciscoPlanningDepartment,andcommunityadvocateswhohaveworkedwithmyofficetohelpuspursuethesekindsofscofflaws.AndIencouragetenantsandneighborstoreporthousing‐relatedwrongdoingonlinetomyofficethroughourUp2Code.orgwebsiteortheUp2Codeapp,orbycallingourCodeEnforcementHotlineat(415)554‐3977.”Herrera’scomplaintsfiledinSanFranciscoSuperiorCourtthismorningdetailpervasiveviolationsofthecityPlanningCodeandstateUnfairCompetitionLawatthreeaddresses:3073‐3075ClayStreet,ownedbydefendantsDarrenandValerieLee;and734and790BayStreet,whichisowned

City Attorney Dennis Herrera—Page 2 ormanagedbydefendantsLev,TamaraandTatyanaYurovsky.Ifsuccessful,thelitigationcouldresultinpermanentcourt‐orderedinjunctions;civilpenaltiesofupto$200perdayforPlanningCodeviolations;upto$2,500foreachunlawfulbusinessact;disgorgementofillegallyobtainedprofits;andattorneys’fees.ThoughtheEllisActitselfdoesnotprecludethecommercialuseofpropertiesfortouristswherelong‐termtenantshavepreviouslybeenevicted,Herrera’slitigationemphasizedlongstandingcitypolicythattouristconversionsofresidentialpropertiesbeaggressivelypoliced“inordertoprotecttheresidentsandtoconservethelimitedhousingresources.”AccordingtooneofHerrera’scivilactions,defendantsDarrenandValerieLeepurchased3073‐3075ClayStreetin2004,andinvokedtheEllisActin2005toevicttheirtenantsfrombothoftheproperty’sresidentialunits.Oneoftheevictedtenantswasdisabled.EvidencepresentedinthecomplaintfoundthattheLeeshavemarketed3075ClayStreet,afour‐bedroom,three‐bathroomproperty,fortouristlodgingonsuchvacationwebsitessuchasHomeaway.comandVRBO.comsince2009,describingitasan“exquisitelyrenovatedhome,inprimePacificHeights.”TheLeeschargedtheirguestsbetween$395and$595pernightforaminimumstayofthreenights.Butindoingso,theownersfloutedthecity’srequiredconditionaluseauthorizationprocess—deprivingneighborsandcityplannersoftheirroletofirstdeterminewhethertheconversionisnecessaryordesirable;compatiblewiththeneighborhood;detrimentaltotheCity’shousingstock;orconsistentwiththecity’sPlanningCodeorPlanningDepartment’sGeneralPlan.AccordingtoHerrera’scomplaint,SanFrancisco’sPlanningDepartmentrepeatedlycitedtheLeesfortheirillegaluseofthepropertyforcommercialtouristlodging,evencollectingpenaltiesofasmuch$250perdayforviolations.TheLees—whoatonepointassuredPlanningDepartmentofficialsthattheirillegalconducthadstopped—thendefiantlyresumedmarketingandrentingtheirpropertytotourists.In3073ClayStreet,theLeesevictedadisabledtenantwhohadlivedintheunitformorethantenyearsand,untilevicted,waspaying$1,087permonth.ByinvokingtheEllisAct,theLeeswerelegallyrestricteduntilAugust25,2011,fromre‐rentingtheunitatmarketrate.ButevidencepresentedinHerrera’sactionshowsthattheLeesadmittedtothePlanningDepartmentthattheyhad,infact,re‐rented3073ClayStreetandchargedtheirnewresidentialtenantsbetween$5,000‐$7,038permonth.Herrera’sothercivilcomplaintagainstLev,TamaraandTatyanaYurovskynotesthatthey,too,usedtheEllisActtoevictlong‐termresidentialtenants—includingonewhowasdisabled—fromoneoftheirproperties,at734BayStreet.TogetherwitharesidentialunitatanotheroftheirpropertiesownedbyLevandTatyanaandmanagedbyTamara,at790BayStreet,theYurovskysillegallyconvertedtheirapartmentsintotouristusebeginningin2010.TheymarketedtherentalstotouristsonAirbnb.comand“greatsfvacation.com”forratesofbetween$165and$320pernight,withthree‐nightminimumstays.ThoughtheYurovskydefendantsboastedonsocialmediathattheyhadhostedseveralhundredtourists,accordingtoevidencedetailedinthecomplaint,theytoofloutedthecity’sconditionaluseauthorizationprocess,violatingtheSanFranciscoPlanningCodeandstatelaw.Thecasesare:CityandCountyofSanFranciscoandPeopleoftheStateofCaliforniav.DarrenLeeetal.,SanFranciscoSuperiorCourtNo.538857;andCityandCountyofSanFranciscoandPeopleoftheStateofCaliforniav.TamaraYurovskyetal.,SanFranciscoSuperiorCourtNo.538854.AdditionaldocumentationfromthecaseisavailableontheCityAttorney'swebsiteat:http://www.sfcityattorney.org/.

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