All the homes looked the same at the gated community that opened during the pandemic.

Two dozen square foundations plotted in an orderly grid, each with easy access to the waterfront.

Neighbors mingled at a tennis court, caught up over beers and gossiped about who was feuding with whom. Some had workshops to tinker with reclaimed wood or North Bay essentials like generators. At least one person had a meticulously trimmed cannabis plant.

It was just the type of community Sarah Gossage had long sought — a reprieve from a life unsettled after her mother’s sudden death.

“My mom always said, ‘Make it to the end with the best memories,’” Gossage said. “Sausalito is where I like myself the most.”

But she knew it wouldn’t last.

In this gated community, the houses were tents bought with taxpayer money. Neighbors who paid property taxes wanted back the public tennis courts transformed into a COVID-era tent city. Local officials grew impatient with a situation that would soon unravel.

The conflict at Sausalito’s Marinship Park grew out of local authorities’ long-running battle with “anchor-outs,” people who for generations have lived aboard small boats in nearby Richardson Bay. The authorities argued that many boats were in poor condition, and that their presence beyond a 72-hour time limit harmed the environment and made the water less welcoming for tourism and recreation. Anchor-outs countered that the water should still be under the purview of higher-ranking federal officials, that environmental damage has been overstated, and that many who live on boats have nowhere else to go.

The grudge match spilled ashore during the pandemic, when more than a dozen anchor-outs said in interviews or lawsuits that their boats were seized and they were left homeless. Many then squared off with the city that moved to corral them and other unhoused people at one park encampment.

What followed was a nearly two-year odyssey that made the wealthy ex-bohemian suburb an unlikely epicenter of California’s homeless crisis — and fueled a debate about the degree to which local authorities may have driven people to tents in the first place.

In August, after the city said it had spent more than $1.5 million to manage the encampment, Sausalito announced what appears to be an unprecedented $540,000 settlement with 30 homeless people: about $18,000 each to test if it’s possible to buy your way out of a humanitarian crisis.

Through more than three dozen interviews, analysis of public data and a review of thousands of pages of court records and planning documents, The Chronicle found that the conflict also resulted in other significant human and financial costs:

• Informal detentes between anchor-outs and authorities crumbled in recent years, as city, regional and state officials moved to clear dozens of people living on boats. From May 2019 to July, the Richardson Bay Regional Agency destroyed 111 boats judged to be “marine debris” amid efforts to clear anchor-outs from waters off Sausalito. The number of vessels plunged from 192 to 71 — a decline mirrored in nearby waters controlled by the city, from 90 boats to nine as of last year.

• The sharp drop in boats coincided with a spike in homeless people living in cars and RVs in Sausalito, from two people in 2019 to 71 in 2021. Though updated official estimates for unsheltered homelessness aren’t yet available, residents say as many as 150 people passed through pandemic encampments.

• Sausalito officials have spent nearly $1.6 million on pandemic encampments, not counting staff time, including six-figure legal bills to fight encampment lawsuits, contributing to a projected $3.2 million city deficit.

• Allegations of mismanagement at the city-run encampment, plus complications of homelessness, like trauma, illness and substance use, coincided with a loss of life: At least five people from ages 24 to 84 died after cycling through Sausalito encampments since last year, according to interviews with family members and neighbors.

Sausalito officials and the Richardson Bay agency deny that their actions contributed to the surge in local homelessness. Each told The Chronicle that they have started new programs, enlisted social workers and invested money to find alternatives to living on the street.

Still, the city acknowledged a rapid increase in people living in tents.

“The encampment site was a major challenge all around,” the city of Sausalito said in a statement. “The fact is, dozens of people arrived in a short period of time and were living outdoors on the ground.”

Like other cities struggling to address encampments, the conflict also divided housed residents. Some complained of lawlessness, safety concerns and small businesses bearing the brunt of a strained safety net. Others viewed it as a symptom of a broader identity crisis.

“There are people who want the Sausalito waterfront to be the next Newport Beach,” said 20-year resident and accountant Jacqueline Amrikhas, who has donated supplies to encampments. “It’s gonna determine what Sausalito’s about, and its character.”

The mutiny

One blistering August morning at the San Rafael Yacht Harbor, Michael Ortega-Haas climbed up on his Kendall 32 sailboat, the Silver Bow, and refused to come down.

It had been a month since the Richardson Bay agency seized the boat that Ortega-Haas, 31, co-owns with the mother of his two children, fellow Sausalito houseboat-kid-turned-anchor-out Kaitlin Allerton, 29. He occupied the boat while she fought in court to prevent it from being crushed by the agency.

A police officer was called in to negotiate. He, too, was stumped after Ortega-Haas pleaded his case about why the boat — which was labeled “marine debris” while a pregnant Allerton temporarily moved ashore — should not be destroyed.

“I don’t see any way I could talk you off there,” the officer said. “I mean, it’s your property. If it was my house, I’d do the same thing.”

Sausalito’s waterfront has lived many lives. The Coast Miwok fished for halibut here 3,000 years ago. In the 1800s, new ferries facilitated summer retreats for San Francisco’s elite. By the time Ortega-Haas’ grandparents moved to a houseboat at the height of 1960s counterculture, there was also a “working waterfront” full of boat builders, artists and industrial businesses.

Ortega-Haas’ grandmother had already given birth to his mother on her boat when an inflection point arrived in 1971, testing the tension between rich and working-class Sausalito. New waterfront condos were approved, and the sheriff started houseboat evictions. One person on a boat pulled a knife, news reports said. Officers drew their guns.

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