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Condo Seller Gives Up Half a Million Dollars to Help Save the Neighborhood She Loves

A teacher offered her Mission district condo for $500,000 under market value. The only catch: The buyers had to pass her cultural litmus test.

 

Catherine Lee, a film school instructor who has lived in the Mission district for over 20 years, had a real estate dilemma. She owned two places in the neighborhood—a condo that she was renting out and a two-unit building where she and her ex had lived until they split up. The breakup had catapulted her into a financial dilemma: To keep the two-unit building, she had to buy out her ex; to buy out her ex, she had to sell the condo.

Lee hated to think of losing her first bit of San Francisco—a two-bedroom Edwardian railroad flat on Alabama and 23rd Streets with beautiful hardwood floors, high ceilings, a marble fireplace, garage parking, a great backyard, and location, location, location. She’d bought it in 1993 for $90,000; 22 years later, with the market on fire, it would likely sell for at least 10 times that—in a matter of days, if not hours.

But despite that potential windfall, Lee feared what might come with it. Her beloved, once-gritty Mission neighborhood was becoming a playground for wealthy tech workers and a haven for foreign capital, and she didn’t like the idea of being party to the changes. She wanted to sell to someone who loved the Mission the way she does, as a community, someone who saw her condo as more than an investment in a trendy location. She’d heard that some recent transplants had filed serial noise complaints against local events like the Dia de los Muertos festival, and the thought of bringing people like that into the neighborhood pained her. “Dia de los Muertos has been here more than 20 years,” she says. “It’s not our part to judge.”

Many longtime San Franciscans talk a similar talk, but few put their money where their mouth is. Lee did. In July, she posted her condo on Craigslist for $650,000. The price, she announced, was fixed: She would not take any more. “Normal people can’t get in a bidding war,” she says. Comparable condos were selling for over a million dollars, but that didn’t matter to Lee. “I had a certain number I needed to extract,” she says, and $650,000 would net her that number.

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.

And so the competition began.


Nothing makes
San Franciscans—at least those who don’t own property—as agitated as the local real estate market: the great riches it promises, then the closed fist it presents; the sense that all the housing is being snatched up by plutocrats, kleptocrats, or, at best, tech millionaires who consider themselves global, as opposed to local, citizens. Walking down Valencia Street, or past the luxury fortresses rising on Mission, it’s hard not to feel that the entire city is being sold to the highest bidder.

Lee launched her condo sweepstakes to challenge this profit-at-all-costs paradigm, and she hoped that her example would inspire others to do the same. “I feel terrible that people feel besieged,” she says. “We have to figure out a way to pass these houses back and forth, to find new paths for people to do this together.”

Not surprisingly, Lee’s decision drew considerable skepticism—and some downright derision. “You’ve got to listen to a lot of people telling you that you’re stupid,” she says. “Sometimes even your mother.” Beyond the obvious “How could you walk away from half a million bucks?” some questioned whether the deal could actually work. Real estate experts cast doubt on the legality and enforceability of a 10-year cultural promissory note.

Even some natural allies in San Francisco’s progressive community were critical of Lee’s offer. Spike Kahn, a landlord who advocates “ethical landlording” and has preserved dozens of artists’ studios in the city, doesn’t think that housing for artists or people who contribute culturally should be the only priority. “I worry about newer immigrants,” she says. “I worry about schoolteachers. I worry about the laborers building houses who can’t afford to live here.”

While Lee doesn’t disagree with Kahn’s big-picture criticisms, the point of Lee’s strategy—and the reason she hopes it could be a model—is that it’s not big-picture. It’s not a ballot measure or a foundation grant or a city initiative. It’s a condo sale that works within Lee’s financial realities. If she can find a way to preserve the richness of the city while looking after herself financially, she reasons, so can other property owners.


Then again,
it doesn’t seem likely that a whole lot of owners will follow her lead—certainly not ones in her tax bracket. Lee is not rich. She loves her work—teaching film production to developmentally disabled adults—but she’s not socking it away. “I’ve never made more than $52,000 a year,” she says. When she and her ex were working through their breakup, she left her two-unit building and moved into the only housing she could afford: a room in a stranger’s apartment. She ended up living there for three years before she and her ex agreed that she would buy him out of the condo. Her retirement balance “is less than prudent,” she says wryly, and she’s not looking forward to a large inheritance—she helps her mother financially. “I’m from working-class Palo Alto,” she says, raising a finger against my incredulous glance—“It did exist!”

Lee fits a recognizable San Francisco profile, at least of yesteryear: a politically active Mission dweller whose vocation delivers more meaning than cash. Like most homeowners of that profile, she got in early: In 1993, her boyfriend at the time persuaded her to go in with him on a condo. She borrowed the down payment from her mother, telling the bank it was a gift. The monthly mortgage was $570, which was just about what the couple had been paying in rent. “It was a different era,” Lee says. “We were the only bid.”

The market in 2015, Lee found, was radically different. Her posting received such a flood of responses that she had to hold four open houses. Not everyone believed that her price ceiling was sincere. “I had a couple of real estate agents come by—you know, long, clicky nails and stiletto heels,” she says, “who told me they had clients who would go way over asking price. I said, ‘OK, so what’s their cultural contribution?’ I never heard back.” And buyers who did express interest in her application process were not exactly the sort she had envisioned: “The people showing up were maybe more professional. I was really thinking, like, the doorman at Slim’s.”

Applicants promised, among other things, to create a choir in the Mission; to give pro bono legal help to recent immigrants; to donate to Acción Latina; to do volunteer journalism with the newspaper El Tecolote. An aspirant whose family owns a winery promised 30 bottles of wine a year to the nonprofit of Lee’s choice. “What nonprofit doesn’t need wine for fundraisers?” Lee asks.

Wading through such eclectic, albeit worthy, proposals wasn’t easy. To the perennial real estate question—how much is a bid worth?—Lee had added a twist: Which bidder is worthiest? One offer even gave her the chance to have it both ways, fulfilling all of the requirements she had laid out but also offering, “very respectfully,” $100,000 on top. “I have holes in my clothes,” Lee laughs, “but there was no way I could change the rules.”


In the end,
Lee sold her condo to Malena Watrous, a writer, and Watrous’s husband, composer Matt Shumaker. Both native San Franciscans, they, like many others, had soured on the city, put off by the influx of a seemingly alien population and the menacing reality that if they lost their rent-controlled apartment, they’d have to leave town. When a friend forwarded them Lee’s Craigslist proposal, they had doubts. Who was this person? What was her motivation? And, most important, what was wrong with the condo? “It’s crazy to say this,” Watrous confesses, “but at $650,000, there had to be issues.” There weren’t: When the couple dropped by the open house, “the place was great.”

Watrous and Shumaker realized that they were within reach of a rare opportunity to gain stability in the city for themselves and their eight-year-old son—but discount or not, $650,000 was a tooth-rattling sum. And that 10-year promissory note was a little daunting too. 

In the end, the couple came up with a cultural offer that was a Mission cornucopia: a yearly free writing conference at Modern Times bookstore; a “bestseller visionary” membership to Litquake; tickets to cultural events of Lee’s choosing to the tune of $660 a year; a course at Stanford Continuing Studies, where Watrous teaches; and a donation to La Cocina, a Mission nonprofit that helps low-income women open food businesses.

Their home run cultural promissory note aside, Lee says, she chose Watrous and Shumaker for a variety of reasons. “The length of time they’ve lived here played a role,” she says. So did a serendipitous moment at the open house: As Lee was saying goodbye to the couple and their son, a woman waved at them and called out the boy’s name. As it turned out, she had looked after their son at a day care center across the street. “I knew then,” Lee says, “that they were a family who really lived in the Mission.” Although the bank refused to accept their 10-year promissory note, which remains informal, Lee trusts their intentions.

No one—Lee included—believes that her approach to home selling is going to become a trend. It’s not easy to ask someone who’s not out-and-out wealthy to voluntarily give up hundreds of thousands of dollars that could pay for retirement or go to their children. Still, the gold rush mentality that has always been part of San Francisco is not its only ur-story: A second one is of idealists who buck the tide. The first may appear to be all-conquering right now, but Lee’s condo sale is a small but potent reminder that the second tradition is still alive. And there are others—landlords and commercial property owners who refrain from squeezing every penny from their tenants. Certainly, if we care about the big picture Kahn mentioned, we will also need institutional solutions, such as city hall’s new housing assistance program for teachers and—crucially—a lot of new affordable housing. It’s a complex problem, but not unsolvable. In fact, if you have a condo or house to sell—and you don’t need to get top dollar—you can post it on Craigslist, set a fixed price, and…


Last week I visited
Watrous and Shumaker in their new condo. All the good things described in the Craigslist ad are there. It’s in terrific shape, a bit small, but with good bones. To make the down payment, Shumaker and Watrous marshaled every penny—their hard-earned savings, a small inheritance, the proceeds from Watrous’s novel. When two large appliances died the week they moved in, creating a plumbing disaster, Watrous “wondered if I’d bought my own tomb.” But any initial regrets passed after the stress of the move and the first mortgage payment were over. Now Watrous and Shumaker feel nothing but incredibly lucky. “That fear that we would be pushed out of the city was getting to us, even if we didn’t admit it,” Watrous says. “Now we can’t wait to get home—and stay home.”

 

Originally published in the December issue of San Francisco

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