Brian and everyone,
Brian, I will still assume you don't dislike me but what I represent as a landlord but just a landlord but if overnight you owned a 2 unit building in SF, would you become bad?
I urge you to look at everyone as people first and then as landlords or tenants. No on needs protection - new or old. But as a landlord, do not make it hard for good landlords to remain good. We can all defend ourselves. If it became easier to be a landlord, many young and nice people would also buy rent controlled properties in SF. This is will create opportunities for the the nice people also to become landlords and change the landscape of the the landlord-tenant mix in SF and we will all benefit. Not all landlords are bad and when you start with looking at landlords in bad light, it creates inequality. Since this is such a neutral forum, if you know that a landlord was being abused due to rent control, would you step in? Or are you so brain-washed by the media that a few half-baked stories which are one sided is enough for you to form an opinion.
The more the government interferes with private enterprise, the greater the arbitrage opportunity for potential landlords. As I write this, please note that I benefit from rent control because not everyone wants to deal with, what I deal with but it also means limited supply for folks and a gross abuse of the legislation by tenants unions. Any of the properties I have purchased have been because of bankruptcies/trust sales and tenant abuse of oler landlords. Stories that you will never read because it doesn't even further the journalist who writes them.
Why are the new landlords evicting? And who are these new landlords? These new landlords are people who chose to deal with the tenants when the old landlords gave up. Who were the old landlords, lets say for the sake of this eg, in Chinatown? The old landlords in Chinatown were 65-70 year olds who came in SF in the 30's and cannot deal with rent control. In almost all cases of properties sold to new landlords, the old landlords walked away from the inequality in the market and said, I'll sell my $2 m home for $1.2 m and let someone else deal with it because with the $600 /month rent, I'm paying out of my pocket for people to live there and now who are suing me for housing issues, isn't worth it. Did you all know that rent control does not even allow landlords to recover operating expenses for properties? Which means that if the costs of maintaining the property/property taxes/mortgage is $10,000 a year and the tenant pays $6,000, the landlord has to cough up the differential. The government has made a landlord subsidize housing for the tenant, which is great, but at the expense of the landlord. Do they do that to restaurants or other businesses? Why do you pay $3,000 for a studio today in downtown SF? Clearly, rent control failed and the supply got so restricted.
If there was a legislation, that allowed landlord to merely recover costs, no profit but just break-even, this dynamic in SF would change completely. The current recovery of operating costs at 10% of the tenants rent doesn't do anything for a landlord and that's why buildings are in disrepair. Here are my specifics on the legislation:
1. prohibit, with certain exceptions, rent increases based on the addition of occupants even where a pre-existing rental agreement or lease permits such an increase; - Increased tenants means increased operating costs. Rent control doesn't allow for recovery of operating costs. More electricity usage, higher water bills, higher wear and tear and overall higher maintenance costs. So, if this were allowed, the numbers would multiply dramatically. People illegally do sub-letting and its detrimental to a landlord. When my property had illegal tenants moved in, my water bills were through the roof. The three bedroom which was supposed to have 5 people was housing 14 and the poor toilets couldn't even handle the toilet paper from 14 asses. Imagine if this was a restaurant with a buffet where you pay $8.99 per person and what if I got more people to eat from the same plate at the fixed price, would the overall consumption not go up?
2. prevent evictions based on the addition of occupants if the landlord has unreasonably refused the tenant’s written request, including a refusal based on the amount of occupants allowed by the rental agreement or lease - Unreasonably is not defined. Call it a technicality but tenants will sue landlords like mad if unreasonably is not defined because landlords are considered unreasonable to begin with.
3. require landlords, after certain vacancies, to set the new base rent as the lawful rent in effect at the time of the vacancy - That is a precedent of a dictatorial regime and SF claiming imminent domain. Really, do you think the government should do that to private property owners? I also think this is anti Costa-Hawkins. What is lawful rent - someone please explain?
4. require that there be a substantial violation of a lawful obligation or covenant of tenancy as a basis for the recovery of possession; - Sure that is already the case, saying it twenty times and in twenty different ways will not change the dynamic.
5. require a landlord, prior to seeking recovery of possession, to provide tenants an opportunity to cure the unauthorized addition of the tenant’s family members to the tenant’s unit; - I had a 100 sq foot room which I rented out to a single guy who was desperate for housing. One week later the neighbors complained of noise. I find out he has moved his wife and two adult kids into the unit. Now instead of 1 there are 4 people and 2 pigeons as well. My legal costs are already in five figures and the guy was paying $800 a month and had already been staying there 12 days when he moved his family in and stayed a total of approx 19 days. Moving 4 people in that little space is also a housing violation ( remember we talked about the number of people per sq feet ). Its a different matter but I've already been a victim of this scenario. One person moves in and then later moves his family of 4-5 members in. Its rarely the single guy who got married and his wife/gay partner moved in. Its always a family of 4-5 to offset living costs.
6. Prevent a landlord from seeking recovery of possession solely because the tenant is occupying a unit not authorized for residency; - I will not explain this one. Why ever have a lease? This is insane. If this goes through, basically anyone can move in with their friend in SF and wreck havoc. And even if you forcibly moved into someone's unit, no one will be able to get you out. If a friend moved in temporarily , lets say for 2 weeks while they were visiting SF and paid you $200 to stay on your couch, they have created a sub-tenancy. Now if they refuse to move out, its the landlord's headache to get them out and their cost to bear.
7. require landlords to state in notices to vacate for certain good cause evictions the lawful rent for the unit at the time the notice is served - I didn't understand this. The tenant pays the rent. What is the need to state this? I'll tell you exactly how this will play out. Do you all realize this redundant technicality is created to create more issues. The day the notice is given, tenants call SF DBI or the rent board for fake or real housing violations and stating that there should be a decrease in rent due to decrease in housing service and that will annul the lawful rent because the calls will determine the new lawful rent to be determined by the rent board or in fact it will invalidate the eviction notice, the day it is served. Ellis will seem like an only option.
8. require the Rent Board to prepare a form in English, Chinese, Spanish, Vietnamese, Tagalog, and Russian stating that a notice to vacate may lead to a lawsuit to evict and stating that advice regarding notices to vacate is available from the Rent Board - It doesn't matter but why stop at these languages?
9. require landlords to attach a copy of the Rent Board form in the primary language of the tenant to each notice to vacate; - Many of the landlords do not know their tenants esp ones that are new landlords. How do you know what the primary language is. Many tenants don't fill out estoppels or refuse to provide information. In one segment, you state that new occupants should be allowed to move in, in another we should know the tenants enough to know their primary language. If your tenant refuses to state their primary language, will you invalidate the notice? If the last name is " Lee" can you assume they are Vietnamese or Chinese or infact even American. Are restaurants required to serve Menus in all languages?
10. require landlords to plead and prove in any action to recover possession that at least one of the grounds of Administrative Code, Section 37.9(a)-(b) stated in the notice to vacate is the dominant motive for recovering possession. - That is already the case.
PS: I just used the restaurant example in a few cases to make a point on the operation of businesses. Many landlords prefer to keep their units vacant because of draconian laws and constrict housing supply. Like any other business, there should be limited interference of the government else the consequences will be unintended as was the case of the condo-conversion moratorium.
I've been a tenant for 10 years and landlord for 4 .
As a pro-housing supply organization, my friends, our support of rent control which restricts housing supply is a double edged sword. I'm not fundamentally opposed to rent control to create reasonable living accommodations for our residents but the magnitude of energy, time and money this has taken, not to mention the loss of housing units from the market-place, makes it a cause that has lost much of the mission it was set up for in the first place.
Ritu