Comments on: Vicious Cycle: How Long Can SF’s Renters Continue To Live Beyond Their Means?

By: Ukin

Ukin — Tue, 06 May 2014 02:16:00 +0000

Great idea on making it closer to fair for the land owner. I know a man who bought a house outside San Francisco. He no longer lives in his apartment but rents it out on AirBnB to cover the cost of his mortgage. He can charge as much as he wants to charge for his rental units but his landlord is restricted in what he can charge.

Take into account a major repair needed to the building. If the property requires a new roof or new stairs, the landlord is often put into a negative income for the property. Until the rental agreement between land holder and tenet becomes more balanced this problem will only get worse.

By: verso2

verso2 — Mon, 10 Feb 2014 23:21:00 +0000

Thanks, Ray, for the response. I’ve concluded from this discussion that withholding units from the market is more common than I would have thought. Even if we discount some of the withholding as being diverting potential rental units to more profitable markets such as tourist rentals (and thus they are not really “vacant” though they show up some accountings that way), it’s clear from the various responses that a number of people are worried abut the hassle of dealing with various tenant problems and conclude that they would rather not deal with it despite the potential income. Some of this has to do with non-rent-control protections, as you cite. And this makes sense from the examples: owners who themselves live on the property are understandably concerned about who they might be sharing their home with. I’d add, though, that this is not necessarily a San Francisco concern. Although SF tenant law is certainly tougher than many jurisdictions, there is usually some difficulty in officially evicting troublesome tenants, so in practice someone in, say, Des Moines, might well draw the same conclusion. Nevertheless, it’s clear that plenty of SF landlords draw a different conclusion–witness the proliferation of in-law units (and the recent discussion about legalizing them). The classic SF landlord position in, say, the Sunset or Richmond, is: “I want to rent out my in-law unit (to make some money): but I’m against my neighbors doing the same thing (because it would add more cars/parking problems, etc. to the block).”

By: ray

ray — Sun, 09 Feb 2014 18:38:00 +0000

Last year the city allowed third parties to police landlords who rent out as corporate rentals. So, the idea that it interferes with privacy rights of tenants to require those getting a landlord based subsidy on their rent, to show they actually need to get it, should hardly be an infringement of privacy rights. section 8 requires it for govt subsidy of rent. and, it could test for all the other tenant abuses, which now the city even allows – tenants to own an unlimited of their own real estate, have huge assets, have high income. If you’re concerned with freeing up apts, this would open up tens of thousands of apts. for rental

By: ray

ray — Sun, 09 Feb 2014 18:29:00 +0000

I live in Noe and just there, every single homeowner I know – ones there for decades, mostly from moderate means, mostly retired – no one will rent their inlaws, or second apartments or even bedrooms. Even if they really need the money. The idea that they might not be able to get some crazy tenant out who lives with or adjacent to them, makes it not worth it. And, SF has laws like: one can rent to a master tenant who can rent out three other bedrooms in a four bedroom flat and get rid of any and all three roommates, with 30 days notice. No cause. But an owner with a four bed flat, if he rents more than one bedroom out, all roommates become tenants the landlord cannot evict remotely so easily: those tenants are under rent control. With laws like that, what owner would rent out a room or apt, if they can scrape together somehow their mortgage payment?

By: Remy Marathe

Remy Marathe — Fri, 18 Oct 2013 17:57:00 +0000

I’m going to drop off this thread because arguing on internet forums is about the least productive use of my time I can imagine.

You seem like a sort of reasonable and well-intentioned person, but honestly you have no idea what you’re talking about. It’s just incredibly annoying to be smugly told what my business is by someone who heard something from their lawyer friend.

So, goodbye, then.

By: Remy Marathe

Remy Marathe — Fri, 18 Oct 2013 17:46:00 +0000

Also, when you say that units are vacant because

“they have been made into vacation rentals, they are pied-a-terres, or the landlord would like to deliver them empty to new owners, or similar strategic reasons”

Why exactly do you think that those options are more appealing to owners than having a regular tenant?

HINT: It’s because of RC.

In cities without RC, you don’t see nearly as much of this kind of behavior. Because it’s expensive and a pain in the ass.

But RC tips the scale away from offering the units as regular rentals. Which ultimately hurts tenants. Which is the point that you don’t seem to get.

By: Remy Marathe

Remy Marathe — Fri, 18 Oct 2013 17:43:00 +0000

You aren’t answering my question. Do you think the laws are in any way sensible?

By: verso2

verso2 — Fri, 18 Oct 2013 17:35:00 +0000

Remy, it certainly seemed from the wording of your previous post that you were not aware of all your options as a landlord in SF. The original discussion keyed on to what extent the vacant units in SF were vacant because they were being held off the market because of landlord dissatisfaction with rent control. I think it’s clear from the discussion and evidence cited that most are “vacant” because they have been made into vacation rentals, they are pied-a-terres, or the landlord would like to deliver them empty to new owners, or similar strategic reasons. That doesn’t mean that a few people like yourself are not in a position to decide to hold units vacant for the reasons you cite. However, the economic cost of doing so means that there cannot be very many—mostly they will be people who are longtime owners or inheritors who do not have a mortgage and have low Prop. 13 property taxes. And, by the way, according to my tenants’ rights attorney, you do have that option; though, yes, there are costs and time involved. Over a five-year time horizon, most people would, I think, conclude that the income from the unit would more than repay any such costs, but perhaps you place a higher economic value on the hassle involved than most would do.

By: Lisa

Lisa — Fri, 18 Oct 2013 17:15:00 +0000

I’m totally with you Remy. Especially with a pair of flats. It’s your home, you own it — goodness help you if you got a renter you did not get along with! There is virtually nothing you can do, particularly if they became a protected class along the way. Worse yet, now if you do an OMI on your building [there are a bunch of new OMI rules as of 2006 I think], that unit becomes the only one you can ever do an OMI on. So if you went to sell it, that condition [the golden unit, something like that, I don’t remember what they call it] would come with the building.

And of course the Rent Board doesn’t even allow you to make a different arrangement with a tenant — say a limited stay. Tenants are not allowed to sign away ANY rights. San Francisco law succeeds any other agreements. Sure, a tenant can SAY they will only live there five years, but if they change their mind, you have no recourse.

By: Remy Marathe

Remy Marathe — Fri, 18 Oct 2013 16:42:00 +0000

Sorry if I’m taking it the wrong way, but I detect a whiff of condescension in your reply that I don’t really appreciate. Given that you’ve already demonstrated substantial ignorance of the rent ordinance and to whom it applies, your assurances don’t carry much weight.

I’ve had rental units in SF for three decades now; I know exactly what I’m doing and exactly which risks I’m managing. I already know that it will work out as I would like, thanks very much.

To be clear, this isn’t about me; it’s about SF’s rental shortage that everyone is so upset about. I’m just here to give you a real example of someone who has made a very rational decision to pull a dwelling unit from the rental market due to SF’s punitive laws. And I’m not alone.

My downstairs unit would be on craigslist tomorrow if SF would simply give me the option to remove the tenant from my property when their lease expires. I don’t even care if I had to submit it to vacancy control in that case; I just want the peace of mind of knowing that I can recover my property if I need it for other purposes or the tenant turns out to be a nuisance.

Do you honestly think that it makes any sense whatsoever that I don’t have that option?