With 100% of both statewide and San Francisco precincts reporting, Proposition 98 and Measure F have failed while Proposition 99 and Measure G have passed. The margins:
Proposition 98 – Failed (61% voted No statewide, 74.23% voted No in San Francisco)
Proposition 99 – Passed (62.5% voted Yes statewide, 71.01% voted Yes in San Francisco)
Measure F – Failed (63% voted No in San Francisco, 37% voted Yes)
Measure G – Passed (62% voted Yes in San Francisco, 38% voted No)
With respect to Measure G and the development of Hunters and Candlestick Point, it’s now up to the city to negotiate a binding agreement with Lennar and the Planning Commission and Board of Supervisors to approve the plan.
Only 27.82% 40.22% of voters cast a ballot in San Francisco. Our thanks to those who did.
∙ San Francisco Department of Elections: June 3 Election Summary [SFGov]
∙ California Statewide Primary Election Results: Sate Ballot Measures [ca.gov]
∙ Gone Voting (And If You Haven’t Already, So Should You) [SocketSite]
∙ JustQuotes: The Ballot Battle Over Hunters And Candlestick Point [SocketSite]
So what did the CAR have to gain by killing rent control?
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/06/03/BA26110100.DTL
As a renter – I’m ticked off. If only we had ended rent control – owners would have flooded the markets with all of the rental units that they are deliberately keeping off of the market which would have immediately lowered rents and improved the rental stock city wide.
Oh well – sorry landlords. Guess I’ll be driving around in my Lexus and owning my vacation home in Tahoe while paying my 1980 market rents for the foreseeable future.
Better luck next time.
I wish 98 had passed so that rents for my (non-rent-controlled) apartment would have dropped at the expense of Mr. “twowords.” Also I’m in the market for a used Lexus and a foreclosed Tahoe vacation home…
ballortsresults yesterday were good on balance.
hunters point has a chance to go forward – even if its long short whether lennar will ever pull it off. daly can take some credit for upping the affordable percentage.
Rent control will probably never be repealed.
Because a lot of the arguments aginst it are false :
Owners rent assets for the rent that is available to them in the market. very few units are “kept off the market” – it would be self destructive to an investment to do so. investors know exactly what they are getting into with RC and it is simply baked into the proforma, and the valuation of properties.
repealing rent control would probably have two essential results_
1) a HUGE one time asset value windfall for rental property owners
2) an increase in the number of market rate rentals — that means top of the market, whatever it will bear.
anyone who believes the hollow argument that RC repeal would increase the number of affordable rentals is a naive — or just a bit insincere.
Now the real meat and potatoes contests can begin – a majority of the Supervisor seats up for grabs. This is when people getting involved will really count. Will the socialists keep their majority on the Board or will the silent moderates step up and get off their collective asses to volunteer and campaign this year?
I find it funny that louis thinkts that a repeal of rent control is bad because it would bring a “huge one-time asset value windfall to property owners”. But apparently Louis is in favor of rent control despite the fact that it results in a steady, incremental confiscation of property value. Sorry, rent control is bad and merely because some delayed adjustments will take place is no argument against it (though it may be argument for a phase-in of the changes as was proposed by Prop 98).
It is unclear how eliminating rent control would affect rents. Obviously rents on those units that are subject to rent control would go up as they were released from rent control restrictions. However, many people who are staying in rent controlled units just because the rent is so cheap might end up in smaller units or units in less desirable areas or units outside of SF. The net result is that the price for market rate rentals might well go down — simply because there will be more market rate rentals as previously rent-controlled units come onto the market. Overall, renters as a class might be paying more but market rate renters would no longer be effectively subsidizing rent-controlled renters. (Also, landlords would probably spend more money on their buildings so the quality of the rental sotck would go up)
louis,
you wrote
“2) an increase in the number of market rate rentals — that means top of the market, whatever it will bear.”
so what you are saying is supply would increase.
and what about demand?
“anyone who believes the hollow argument that RC repeal would increase the number of affordable rentals is a naive — or just a bit insincere.”
i admit that i naively and sincerely believe in the laws of supply and demand…and their effect on prices.
All the proof you need about whether rents would, on balance, rise or fall if rent control were repealed can be found by looking who is in favor of repealing it: landlords, and who is opposed: tenants.
If landlords really thought rents would, on balance, fall, they would never be for it.
No one really believes their arguments, and no one ever will. Several attempts at repealing it have been completely crushed, time and time again.
If you want to get rid of a rent controlled tenant at an under market rent, you can do it any day you want to: pay them to leave. The voters are not going to tear their rent control rights out from underneath them, and hand them to a bunch of greedy landlords who don’t want to pay for the benefit they would receive, no matter how badly you want them to.
You don’t need to spend millions of dollars on any more Quixotic initiatives. There is a very efficient way to get rid of an undermarket rent controlled tenant: spend that money to buy the tenants out and raise the rent to whatever the market will bear.
If you REALLY believed in the market, paco, that’s what you’d be doing.
yo tipster
you wrote:
“If you REALLY believed in the market, paco, that’s what you’d be doing.”
actually i am aware of the fact that RC keeps rents artificially high and fully understand how that benefits me. i NEVER said
i wanted to repeal RC-i only like to point out how contrary to the interests of renters it is.
RC creates many opportunities and i have learned the multitudes of ins and outs over the years that have helped me to profit from it.
i do believe in market forces and highest and best use calculations.
All you have to do is look at NYC to see what happens when rent control is eliminated.
Affordable rentals? NON EXISTANT
Greedy Landlords? OUT IN FULL FORCE
although I too am overall against rent control (at least in terms of how it is implemented), I was also against Prop 98.
the reason: I see no reason why the State needs to dictate these sorts of laws. leave it up to the municipalities instead. if people are against rent control, then let them fight it out in their own local district.
rent control has been around for a long time now (at least since 1982 which is as far back as my memory goes)… thus I’m sure a fair amount of current landlords bought their places during rent control… they knew the situation when they bought. If a landlord doesn’t like rent control, then they can try to change it in SF, and if they can’t then they can always be a landlord elsewhere.
jd:
not to be a stickler, but NYC has rent control. I don’t know the exact rules anymore, especially since there was a big vote on rent control in NYC in 2007 and I don’t know the results.
it also is an order of magnitude larger than SF. it is also nearly twice as dense. it also has significantly more wealth being arguably the financial center of the world. thus, there are reasons why NYC has insane rents. (not saying they’re justified, just that SF and NYC aren’t in the same league)
rent control website. Put a “w w w” in front of the following:
dhcr.state.ny.us/ora/pubs/html/orafac1.htm
People who constantly compare NYC and SF real estate and rents should go to an open house in New York sometime. San Francisco apartments and flats, let alone houses are at least twice as large as what you get dollar to dollar in NY. And parking? Forget about that. In short there is no comparison.
jd,
Rent Control still exists in two forms in NYC – rent control (where prices are set by the city – mostly pre-war buildings) and rent stabilization (like SF, where a new person pays market rent, but then increases are limited).
The majority of the problems in SF are not the rent stabilization (though that is a small problem, it is very small), but the other tenant protection laws.
Those *greedy landlords* enable you to have a roof over your head. If you don’t like it, go and move back in with your parents and mooch off of them.
Try to imagine a San Francisco where there were no rental units but only units that were occupied by the owner. You should be worshipping your landlord instead of calling them names.
I don’t think you can say landlords are greedy. They are investors, not a charity. Just like any business. If they want to do charity work I imagine they donate or get involved in other projects. I don’t think they have to do it with their investment properties.
Anyway, does anyone have an idea of why the debate is only rent control vs. no rent control and no one has proposed acceptable modifications to rent control? Are there currently or have there been any proposals to modify the current system and if so, why don’t those options get any traction?
I think rent control is a good public policy. Unfortunately as a matter of practicality it is a nightmare.
My firm represents many landlords in the Bay Area in eviction proceedings. I can tell you first hand that rent-control creates a lot of frivilous litigation due to the additional restrictions that are placed on landlords of these units.
It’s mostly the newer and more inexperienced landlords of smaller buildings. They comply with the standard stuff, but often forget the additional notices and extended time frames that are required with rent controlled units.
Not all landlords are greedy, but I doubt that abolishment of rent control would result in a noticeable decrease in rent price. More likely, I think that landlords of units released from rent control will be more likely to fix up (or proactively maintain) their properties to remain competitive.
No, rent control is not good public policy. A government that wants cheap housing and diversity should simply provide this service with the tax payer’s money, not private property owner’s money.
If the constituents want more social or affordable housing, they should vote for it and pay for it with their own taxes.
Imposing rent control to landlords is just a covert land grab. On year 1 of a lease, you own 100% of your property’s revenue. And every year, rent control causes you to lose a small portion of it.
Little by little, you are deprived of what’s naturally yours, just because politicians do not have the guts to raise taxes.
“As a renter – I’m ticked off. If only we had ended rent control – owners would have flooded the markets with all of the rental units that they are deliberately keeping off of the market which would have immediately lowered rents and improved the rental stock city wide.
Oh well – sorry landlords. Guess I’ll be driving around in my Lexus and owning my vacation home in Tahoe while paying my 1980 market rents for the foreseeable future.
Better luck next time.”
=============
I agree and it works both ways. I own a 2br rents for $4200 a month (and is exempt from rent control to boot). It’s ridiculous pricing and is 100% caused by rent control.
Oh well – Thanks for funding my Bentley, renters.
Better luck next time.
A 2br $4200/mo rental. Sure.
Anon, if only rent control were gone the imaginary rent on your imaginary place would imaginatively be less.
“The majority of the problems in SF are not the rent stabilization (though that is a small problem, it is very small), but the other tenant protection laws.”
I agree with this post. Right now, if you have a gun-toting gang member in one of your rental units, you can not evict this tenant. This is very disastrous to neighborhoods and communities. These tenant laws make it very difficult, if not impossible, for landlords to evict tenants that are dealing drugs from their property or housing weapons. Communities look to landlords to help with the neighborhood. Landlords are helpless to do anything as the gang member may be living with his elderly (protected) grandmother.
somuchbs
If you look on craigslist, there are currently over 60 listings in soma/southbeach for a 2 BR for $4200/mo or more. Obviously, you don’t pay market rent and shouldn’t be commenting on other people’s non rent controlled, ‘imaginary rent’.
Thats right – 60 listings…people asking (and apparently not yet getting) 4200 for a 2br.
I guess more people are interested in the ~70 listings for less than 3800/mo in the same area. Or the 20 or so open listings for less than 3000/mo.
Good luck with that 4200/mo though.
I favor rent control but I think there could be changes to allow more folks with single family homes with inlaw apts to rent those apts, with minimal tenant protections and rent control.
I have plenty of space for such an apartment but I don’t put one in because I do not want to be stuck with a renter (in my home!) I can’t get rid of.
If there were more in law apartments, at least there would be more housing.
BigIdea, Boo, and Urban Angst,
I understand the frustration a landlord can feel with laws protecting tenants. But you guys need to remember the unique relationship between renter and landlord. It’s not like the standard business transaction. It’s someone’s home, their dwelling; in fact renters have real property rights in you, the landlord’s property. The reason we have more stringent rules on this business relationship is because we want people to have a little bit of security knowing they will not be arbitrarily booted out of their home. So you better get a little more specific about what tenant rights you want to take away. If you are going to enforce a “no convict can live here” rule you will decimate the communities of Western Addition and Bayview. You will be making it impossible for the African-American people of this City to live here. In effect, you will be telling whole families and communities to leave.
No. As a landlord you have more responsibilities and obligations in this business arrangement.
But . . . .
I’m with those that say rent control artificially inflates rental prices on all units in the City and is not helpful public policy.
Fonzi is right, let’s simply give vouchers and housing to the people that truly need it instead of giving rent control to everyone despite their ability to pay for housing. Why are we subsidizing the 20-something kid working in the Financial district so he can live an apartment complex in the Marina?
Tipster, you are the epitome of the biiter renter. You obviously are very scared that someone will take away your rent-controlled unit even though there is no reason a landlord should be subsidizing your living costs.
Your logic is also perverse. It is not the “free-market” if landlords have to bribe tennants to leave the property they own. And, in any case, offering tennants money to leave is illegal under SFs rent control laws.
You also obviously do not understand the laws of supply and demmand. If there are more market rate units available, rents will go down. Squatters like you will suffer, but people currently paying artifically high market rates will benefit. On the whole, landlords will probably benefit.
Interestingly, though RC is framed as a debate between tennants and landlords, it is really should be a debate between tennants have cheap RC units and everyone else. Why the public is so eager to make sure people like you get undeserved subsidies is beyond me. A much better policy would be to let market rates prevail and then subsidize just those who really need and deserve a subsidy.
Dissent,
If you rented it out to someone else it would be his home too!
Why should he have fewer property rights simply because his landlord lives on the same property as him?
I understand you dilemna. You probably made a wise choice. Being a landlord isn’t simply about cashing the checks. You have to extend to someone else a property right and you have certain duties and obligations. I’m sure there are many a landlord out there that did the opposite of what you did and entered into the landlord/tenant relationship thinking all they had to do is cash the checks.
Can no one tell me why CAR and its members so generously supported prop 98?
twowordshaha,
The CAR is a professional interest group within a capitalistic economy and as such probably favor the freedom of the RE and rental markets instead of the semi-socialistic system SF, Santa Monica et al. want to impose with other people’s money.
Socialism is brain dead but too many people want to keep its body on life support. I say just unplug the darn thing already.
SFHawkguy,
An interesting system of voucher can be found in France (which has a government controlled rental system). Say you make 1500 net and your rent is 700. The rental rules ask for you to make 3 times your rent after standard deductions. The government will give you around $200/month to help you cover the difference. Of course, there are limits. I think it’s around 300 Euros of maximum help.
The result is that not only can renters rent more for their money, but landlords get more rent as well. I’d say in the end it balances 50/50.
On the other end, France also has national rent control, but the increase is based on a sort of RE cost-based (construction cost index) inflation, and not the bogus inflation figures economists throw at us. For instance, last year was about 3%. Also a lease term is 3 years renewed automatically in benefit of the renter (a landlord cannot stop the lease easily) and the landlord can increase rent by 10% at each lease term on top of the regular legal rent increase.
“If you are going to enforce a “no convict can live here” rule you will decimate the communities of Western Addition and Bayview.”
Private landowners can determine who they allow to be a tenant in their property as long as they do not disccriminate based on race. However, in San Francisco, there is no opportunity for reevaluation on the side of the landlord (only on the side of the tenant – who can move anytime).
What about your safety or the safety of your other tenants (if you have a tenant that is involved in criminal activity)? Why is the safety and quality of life of the tenant involved in criminal activities more valuable than the other tenants in the building?
Why should he have fewer property rights simply because his landlord lives on the same property as him?
Um, because he doesn’t own the place? Are you talking about a complete remaking of private property ownership laws in this country?
If you are going to enforce a “no convict can live here” rule you will decimate the communities of Western Addition and Bayview. You will be making it impossible for the African-American people of this City to live here.
I’m sure this simply came out wrong in written form and you didn’t really mean to say the above, but one can certainly have a “no convict can live here” rule and still have African Americans in the city. obviously most AAs are not criminals, and most criminals are not AAs.
also, even if the city allowed “discrimination” against criminals there would likely still be some criminal housing available, run by those landlords who didn’t mind renting to criminals. I would guess it would come at a price premium though.
oops… I should have said, obviously most AA’s are not convicts and most convicts are not AAs.
Big Idea,
Obviously communities have an interest in quelling criminal behavior. And landlords don’t want to rent to criminals. My only point is that there should be a limit on the arbitrariness of a landlord’s dealings with his tenant. The current rules seem fine to me. If someone commits a crime they pay their debt to society in the criminal courts. I understand not wanting to have this criminal in our community but criminals are part of every community. They are part of our families. If some 17 year old kid of color wearing baggy clothes is part of a family that is your tenant and you have a hunch he’s a gangbanger do you think it’s right to evict the family? Or say he gets picked up for possessing (and even selling) drugs do you think it’s ok to evict the whole family? Should we simply run these families with convicts in them out of the City? Because I’m saying it would once again be the wholesale eviction of black people from San Francisco. We did this through private landlord discrimination in the past.
On the other hand, I do understand not wanting to rent one’s place to a criminal. I guess I’m happy with the rules as they stand now.
Ex-SF, no I’m not saying that all African Americans are criminals. But we have imprisoned a huge number of black people in this country. Probably a higher percentage than any group throughout the world. Something like 40% of black men have records. I personally believe the reason is selective enforcement of crimes. White people are just as likely to sell and use drugs (in fact more likely) as black people but we disproportionately enforce these crimes on black people. Plus there are historical and socioeconomic reasons that the black areas of SF have more crime. In effect, it’s the vestiges of slavery.
My problem would be with arbitrary discrimination against criminals by landlords. Specifically, I’m concerned that landlords will enforce the no criminal clause against the 17 year old boy of color with the baggy jeans and not the family with the 17 year old boy that went to St. Ignatius.
The federal government started enforcing “no criminal” policies in federal housing. I just don’t think it’s effective public policy to further punish communities of people by making it almost impossible to find housing.
Anon,
I don’t want to remake property law. Quite the opposite in fact. I’m referring to one of the oldest bodies of law in our legal system. We borrowed property law from the English. And a tenant has always had a real property interest in the property.
You think this is a new phenomenon. It’s not. Hundreds of years ago “bitter renters” were doing battle with “greedy landlords”.
Very touchy subject. As a landlord, I have asked pay stubs, bank statements and proof of ID. And I did my due dilligence to prove all of those were legit anytime there was any doubt. If I knew the applicant well (50% of the time) I had no need to bother.
Someone with a criminal records who is still in trouble is very unlikely to pass the job / credit report tests. It’s a pretty good way to weed out most of the bad apples. And if someone is a former convict but passes the test, good for him. It means he has cleaned up his acts and he deserves to be back among the mainstream.
The only way rents will come down is if supply outpaces demand and the overabundence of supply will lower the market price. I don’t believe that will be the case in an area where supply increases at a snails pace and the demand is as high as it is.
Supply and demand find an equilibrium to determine the appropriate price, in general, but you also have to account for the elasticity of either as they relates to one another (supply and demand). If there is a commodity with very limited supply and high demand, the cost will continue to have upward pressure until people elect an alternative to that product, in this case, moving out of SF.
The concept of subsidizing is only applicable when there is an expense and one party is paying a bigger share to cover that expense than the other party. Landlords that bought property when rc was implemented charged rents to cover those expenses. In time, the market rates increase due to limited supply, but that is a market rate, which is what the market will bear, and not what it costs to cover the expenses of maintaining the units. So to argue that higher rents subsidize lower rents also needs some quantifying as it is not an absolute, but rather a point of discussion that justifies increasing rents as it does not really hit the bottom line.
If RC removed, the rents would rise until supply equals demand. And for all practical purposes rents will not start to go down until vacancies start to creep up. During the dot-com bust there was a reduction in market rates due to people leaving the City, but that still did not lower rents significantly. Did all the young poor people find it affordable? Did the landlords fix up the units in order to make them more appealing? None of this happened, even if the landlords wanted to make improvements, the red-tape involved would have prevented them. BTW, any consideration given to that?
Rent Control is not perfect, but to think that the free flow of commodoties is free flowing is also quite imperfect, and not the first step in addressing the housing problem.
The solution that works is to ensure that our B of S and the planning department change their roles into facilitators for the public good as opposed to the dictators that they currently are. The election results will hopefully pave the way for movement in that area.
You can legally divorce your partner in San Francisco but you can’t divorce your tenant.
Can’t you “divorce your tenant” by selling the property ?
The State of California had no business subsidizing property owners with Proposition 13, which is like “rent control” for property taxes.
The Federal Reserve under Greenspan and Bernanke had no business subsidizing property owners by setting artificially low interest rates, thus conferring great wealth on landlords whose property was suddenly worth much more, through no work or effort of their own.
All the same arguments before and after voting..
I might as well repeat my take..
I am all for free market. But, I voted against prop 98 (even though I am not benefitting from rent control).
I would have voted for it had they included eliminating Prop 13.
Landlords have to be real, if they want more money from rents, they should be ready to pay property taxes according to market rate…..