ABC News 7, Getty Images
A California startup that has gone viral for renting out $700-a-month sleeping pods in downtown San Francisco is now facing eviction after allegedly falling behind on rent.
A lawsuit filed by the landlord, 12 Mint Plaza LLC, earlier this week in San Francisco County Superior Court accuses Brownstone Shared Housing of failing to pay 12 months’ worth of rent totaling $153,999.96, according to the civil complaint reviewed by Realtor.com®.
An eviction summons filed last month states that between August 2024 and July 2025, Brownstone failed to pay the owner of the building $12,833.33 per month.
The housing startup was given three business days to either come up with the rent money or surrender the building to the landlord.
Realtor.com reached out to the company and the landlord’s attorney seeking comment on the lawsuit and is awaiting a reply.
In a recent interview with ABC7News, Brownstone CEO James Stallworth would not say whether his company has been keeping up with its rent payments, but acknowledged some missteps.
“I think that ultimately it’s just about communication. We definitely could have done better,” he told the outlet. “There were some issues where we may have missed some notices from the landlord where we could have addressed it without it having to get to this point.”
Affordable housing breakthrough
(ABC 7)
Brownstone has been in business since 2023, offering more than two dozen bunk bed–style nooks for rent on a month-to-month basis as a cheaper alternative to San Francisco’s staggeringly expensive traditional rental market.
As of July, the median asking rent in the Bay Area city was $2,747, one of the highest among the top 50 U.S. metros, according to the latest monthly rental report from Realtor.com.
Situated inside a former bank building at 12 Mint Plaza, just a block away from Union Square, the affordable housing commune offers each tenant a sleeping berth measuring about 3.5 feet by 4 feet by 6.5 feet. The snug pod comes with lights, charging ports, and a small storage cabinet. Utilities and internet service are included in the rent amount.
Tenants also have access to a shared bathroom, kitchen, and workspace.
On its website, Brownstone claims that its pods install in days, “letting bustling owners generate residential income almost immediately.”
The startup pledges to “handle furnishing, fire safety compliance, and layout optimization, transforming underused commercial square footage into safe, livable, income-producing housing.”
(Google Maps)
City cracks down on pod commune
But contrary to the startup’s marketing materials portraying it as a simple, straightforward venture, its path has been anything but easy.
Not long after Brownstone began renting out its first pods, generating a flurry of media attention in the process, city officials inspected the site and clamped down on the business. They found that the company violated building codes because it was not authorized to convert a defunct bank into housing.
Speaking to CBS News last year, Stallworth said it took about nine months to ultimately achieve compliance.
But the plucky startup’s troubles did not end there.
According to San Francisco’s Planning Department, Brownstone is currently racking up penalties of up to $1,000 per day for allegedly violating multiple city codes, including operating without a building permit, continuing to advertise the pods online, and failing to provide an updated list of leases.
Stallworth seemingly does not blame the city for Brownstone’s continued woes.
“The city, ultimately, they just want to make sure it’s safe,” the CEO told the local ABC station. “And it’s new, and it’s very difficult to try to do anything new. And so, in hindsight, we should have expected a lot of the difficulties.”