After a year of negotiations, the city of San Rafael has decided not to support a nonprofit housing arrangement with the Tesseract Capital Group, a San Francisco-based private equity firm that owns an apartment building located in the heart of the city’s Canal neighborhood.
The Canal is home to a tight community of about 16,000 people, mostly low-income Latino renters. When Tesseract acquired the 99-unit apartment building at 400 Canal St. in 2022, it soon began delivering “buy-out” letters to tenants, eventually evicting some families for renovations. In many of those cases, the tenants demanded and won their right to return, but they came back to higher rents and utility fees. The residents formed a tenants’ union called Voces Del Canal.
Because the building is occupied by a vulnerable low-income population, the city sought a means of protecting them by converting several of the apartments into affordable housing units through a program offered by the California Municipal Finance Authority, a joint powers authority of member local government agencies, nonprofits and businesses…