Families forced out of low-income Healdsburg apartments as new owners plan renovation, rent hike

Five families in a low-rent Healdsburg apartment complex that recently changed hands have had their leases terminated by the new owner, triggering impassioned pleas from neighbors that the city find more immediate ways to address an affordable housing crisis they say is deepening, pushing out the local workforce, including ethnic minorities.

Community members, including four of the tenants at the eight-unit Piper Street complex, packed the City Council chambers Monday night and demanded Healdsburg take stronger action to protect the affected renters and sustain the city’s affordable housing stock.

Some questioned how the city has been spending a tax hike approved by voters three years ago on hotel stays, with the revenue dedicated to preserving and adding to Healdsburg’s housing for local workers.

“It seems the bulk of that money was spent on staff salaries, which I would say ... was poorly misappropriated,” said Ari Rosen, a Healdsburg chef and restaurateur who has lived on Piper Street across from the apartment complex since 2005. “If affordable housing is the No. 1 issue, then let’s treat it that way. Let’s keep neighborhoods diverse. Let’s keep the housing stock diverse.”

City officials contend, however, that the tax money has been spent properly, and that they’re making headway on the complicated issue. They cite the hiring of a new housing administrator to take on the challenge, development of an updated long-term housing action plan and the completion and planning of several new affordable housing projects.

The Piper Street apartments are the latest Healdsburg housing complex to generate public scrutiny amid concern about gentrification and displacement of low- and middle-income residents. In 2015, the 21-unit Prentice Apartments sold to a Larkspur investment firm, resulting in the eviction of all of the tenants, most of whom were Latino.

The new dispute follows a Marin County landlord’s purchase of the apartments at the corner of Piper and Brown streets, northeast of the Plaza, for $2.96 million, according to Compass real estate agent Chad Verbish, who represented the buyers in the deal. The property also includes a single-family house used by a live-in tenant for a small preschool.

Three of the units are vacant after renters left when it was announced the building was up for sale. The remaining renters, all of whom are Latino, have lived there for years, according to the longtime property manager Gail Ryan of Healdsburg Realty.

The tenants were initially told the change in ownership would not result in their leases being terminated, according to notices issued by the new landlord through Ryan. But buyers Vikram and Juhi Dutt opted to reverse course after seeing the extent of renovations needed during a final inspection, according to the last in a series of notices to tenants. The five families were given 90 days to vacate last week.

“I don’t know what I’m going to do. I keep looking, but it’s too expensive,” said Francisco Arguelles, 38, who has lived in the complex for five years with his wife and two young children. “I’ve lived in Healdsburg for almost 20 years. This is home. My two jobs are here. My life is here.”

Arguelles is a line cook at two restaurants in town. His wife, Silvia Diaz, 40, works part time as a hotel housekeeper between watching their kids. They pay $1,595 per month for their two-bed, one-bathroom unit.

For a new rental, Arguelles estimates he needs $10,000 for the required deposit and first and last months’ rent, an amount the family does not have.

The four other tenant families, including at least one resident of more than 20 years, are in a similar situation - with no place to go in Healdsburg’s tight rental market, which includes some of Sonoma County’s priciest real estate. The preschool operator on the property has been told she’ll be allowed to stay on a one-year lease at a rate that’s $200 more than her current $2,035 monthly rent. After that year, she doesn’t know what will happen.

A phone message left with Vikram and Juhi Dutt went unreturned Wednesday. The complex was built in 1977 and is in need of refurbishment, said Verbish, who represented the couple in the purchase.

“I don’t know exactly what the game plan is, but my understanding is they want to remodel the spaces and obviously cover the cost of the project because it’s an investment property,” Verbish said. “The units need to be updated, as they’re all original.”

Once completed, the units will rent for prevailing market rates, Verbish said, without specifying an amount.

Friends and neighbors of the affected tenants have started a GoFundMe campaign to help with rental assistance, raising $5,975 since Sunday. Housing advocates, including former Mayor Brigette Mansell, have called on the city to intervene in the housing market, spending taxpayer money to preserve existing affordable units and speed the construction of new units. Some have also pushed for the imposition of local rent control.

“This is our town, this is our identity. We have to take care of our workers,” Mansell told the City Council on Monday. “We’re not doing enough for housing.”

Rosen, owner of Healdsburg’s Campo Fina restaurant and a neighbor of the Piper Street apartment renters, said he plans to cancel the annual July 4 block party he holds for the neighborhood in protest of the displacements.

“It’s incredibly disheartening,” he said. “There are a lot of streets in Healdsburg and Sonoma County where gentrification has taken hold, and where the market is at a level that the middle class and lower-middle class can’t obtain. This is the last stronghold of that old community.”

Rosen and his wife, Dawnelise Regnery Rosen, co-founded the nonprofit Corazón Healdsburg to offer education, health and aid programs for the Latino community. They have joined the push to safeguard housing for the city’s most economically vulnerable workers, including farm laborers, and hotel and restaurant employees.

Regnery Rosen called them the “backbone of the community.”

“It’s the story of the soul of our neighborhood starting to get lost,” said Ariel Kelley, a six-year Healdsburg resident who also serves as board chairwoman for Corazón. “There is literally nowhere else to go. And I think this is the next frontier in real estate speculation that we’re going to see in our community.”

Mayor David Hagele said he feels for the Piper Street tenants, and relates to the housing struggles of Healdsburg renters. His own family’s lease was terminated in 2014 so the landlord could move back in.

He dismissed claims the city has delayed acting on affordable housing and that it’s misspent money from Measure S - the 2016 voter-approved tax fund for affordable housing. He cited as an accomplishment the recent hiring of new housing administrator Stephen Sotomayor to bring more workforce units into the fold.

“There’s been comments made about, ‘Oh, the city is not doing anything, they’re just taking forever and they’re dragging their feet,’ and I flat-out reject that 100 percent,” said Hagele, a financier for commercial real estate. “There are a lot of seeds that have been planted over the last two years that are going to start popping up.”

He pointed to 25 new affordable units developed on city-owned property on Grove Street set to open next week, and eight more income-limited units built as part of the construction agreement with Hotel Trio. New city rules also require housing developers with projects of seven units or more to set aside at least 15 percent as affordable units.

The city in 2017 tapped Measure S funds for the $1.85 million purchase of eight apartments off Center Street to preserve those low-income units. Healdsburg officials are in negotiations to purchase another 23-unit apartment building off Prentice Drive. The asking price is ?$5 million, according to the real estate agent representing the owner.

Meanwhile, Arguelles and his family are in a race to find new housing, with a deadline to be out of their Piper Street apartment by the end of April. Even if offered a chance to return, it’s unlikely they could afford their current unit at a significantly higher monthly rate.

“I’m looking, because I have my family and I need a house or apartment - something for my family,” Arguelles said, with an eye on keeping his 10-year-old daughter in the city’s public school system. “I love Healdsburg. It’s beautiful country, but it’s too expensive. The rent is too much.”

You can reach Staff Writer Kevin Fixler at 707-521-5336 or kevin.fixler@pressdemocrat.com. On Twitter @kfixler.