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This landlord sued San Francisco over homeless encampments. Now they’re selling

A person walks past a large tarp used as a tent and staked in front of 725 Van Ness Ave. on Tuesday. | Source: Jeremy Chen/The Standard

A San Francisco building at the center of a pandemic-era lawsuit that aimed to induce the city to clear a major homeless encampment has gone up for sale.

The six-story, mixed-use residential building located at 725 Van Ness Ave. hit the market for a cool $6 million—or $255 per square foot, a price likely well below what it might have fetched a few years ago.

It’s roughly half the average price-per-square-foot for a building with more than 10 units, said Brad Lagomarsino, the realtor with Colliers who is listing the property.

Blame the location: The apartment building on the corner of Van Ness Avenue and Larch Street is situated on the edge of San Francisco’s rough-and-tumble Tenderloin neighborhood.

In 2020, Larch Street—an alley that stretches for just one block between Van Ness Avenue and Franklin Street—became the site of a major homeless encampment. 

The tents and open drug use have made it extremely difficult to rent out apartments in the building, said Denise Hart, who manages the property for her father and uncles. Today, a third of the units and the first-floor storefront in the historic 1925 building are vacant.

“The neighborhood has changed,” Hart said. “Between the tents in the alley, the crime, the break-ins and the open drug-dealing, it’s almost impossible to deal with.”

Lagomarsino agrees.

“I think with what’s going on in the streets, it’s almost made the building illiquid,” he said.

A homeless encampment on Larch Street is pictured on March 30, 2023. | Mike Kuba/The Standard

During the early months of the pandemic, the situation on Larch got so bad that, in June 2020, three trustees of the Giosso Children’s Trust, which owns 725 Van Ness, and the owner of a neighboring building filed a lawsuit in hopes of compelling the city to do something.

“Open-air drug sales and other criminal activity, plus crowds of drug users and sidewalk-blocking tents, pervade and threaten the health and lives of all of the Tenderloin’s residents,” they wrote in their legal complaint. 

They alleged that the city was using the Tenderloin as an unofficial containment zone for homelessness and drugs, a policy that violated their rights.

They eventually dropped their lawsuit, after the city cleaned up the alley for a time.

Despite that, Larch remained a trouble spot, with homeless residents lighting fires, engaging in vandalism and using drugs, one building owner told The Standard earlier this year. In July, building residents had planters placed on the sidewalks of Larch Street, making it far more difficult for homeless people to camp there. Many of the tents have since moved to Van Ness.

The residents of 725 Van Ness say they’ve borne the brunt of the area’s problems.

Salvador Trejo moved into the building in 1996 and says it’s the best home he’s ever had. But, in 2020, the property faced a string of break-ins. Trejo says he was harassed and threatened by people camping on Larch. He called San Francisco police, but officers did not respond.

Trejo said he’s had to call San Francisco Fire Department several times over the fires outside the building—including the day he spoke with The Standard. The smoke had a noxious, chemical smell that he couldn’t seem to shake even hours later.

“I survived the Oakland Hills fire in 1991. I still feel traumatized from that experience,” he said. “Now, with this, it’s not only the smell; it’s also the fear I may wake up one morning and the building is going to be on fire.” 

He says he wants the city to relocate the encampment—particularly a large tarp directly in front of the building.

Under a 2022 court injunction, San Francisco city officials are temporarily barred from enforcing laws against sitting, lying down or sleeping on public property, except in limited cases.

Given the challenges that the Tenderloin faces, converting the building into supportive or homeless housing would seem like a natural solution. But Lagomarsino said that, when he reached out to nonprofit organizations about purchasing the building, none of them expressed any interest.

“The challenge is that the buyer is going to be someone who has long-term faith that San Francisco is going to recover,” Lagomarsino said.

Hart said that she feels particularly bad for the tenants, who have to deal with the problems day in and day out. 

Her family has owned the building for over 65 years, and many of the residents know her parents and knew her grandparents. 

“It’s very sad for our family to have to let the building go, but we can’t keep up with it anymore,” Hart said.