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They crammed veterans into unsafe housing. It cost them $2 million.

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A $2 million settlement has been reached between the San Francisco City Attorney’s Office and two landlords accused of cramming veterans into illegal and unsafe housing, the city attorney’s office announced Monday.

The settlement was reached on Feb. 5 before a trial was set to start the next day.

Bayview District landlords Judy Wu and her husband Trent Zhu have agreed to pay the sum, which will be used to bring 12 buildings up to safety codes, pay costs for enforcement and for relocating some tenants.

But attorney Ryan Patterson, who defended Wu and her husband, said the case was “a paperwork problem” and that the issue is that there are more units than the zoning laws allow.

Patterson also said that the reality is that his clients were in the process of legalizing most if not all of the units and the city attorney filed a lawsuit prematurely.

But City Attorney Dennis Herrera’s office said Wu and her husband were stalling and hired a lobbying firm to get a city law changed to benefit them.

Herrera said in a statement:

“I’m pleased the Planning Commission saw through the games these defendants were playing. … This settlement has real teeth to ensure that these veterans, their neighbors and taxpayers are protected.”

Ten tenants will have to be relocated permanently because by bringing the buildings up to code, the number of units will shrink.

Wu and Zhu had allegedly illegally converted 12 buildings — 10 single-family homes, one duplex and a three-unit building — into 49 units.

When the buildings are brought up to code, the end result will be 37 units.

One tenant has been already relocated. A second is in the process of moving, three have had units identified for them and five are still having units identified for them.

The city attorney’s office said anyone displaced will have a place to go. Herrera said:

“These veterans have sacrificed a lot for all of us. … Those who would be displaced by legalizing these buildings are being relocated to alternate housing with the city’s assistance.”

The city attorney’s office alleges that the living spaces contained makeshift, dangerous natural gas and water lines that were not permitted.

For example, a single-family home at 1351 Revere Ave. was allegedly chopped into seven units, with gas lines rigged to stoves in each unit.

Still, veteran Fred Bryant, who for three years has rented from Wu in one of the units unaffected by the settlement, said many of the veterans are in the process of rebuilding their lives and everyone appreciates the housing Wu and her husband have provided. Bryant said the veterans she houses speak very highly of her.

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