I suspect I have the unpopular opinion, but I don't see this as an especially big deal. Yes, I understand this is an especially sensitive issue for SFers. And yes, it sucks for the guy. Renting has its perks, but this is part of the risk of renting; you're living on someone else's property. Repeating that--it's THEIRS, not yours. If you have no current contract (lease), why should they be required to rent something to you under terms you like? Where else does this occur? When some business raises rates, it is the exception, not the rule, that you're "grandfathered" in to a previous rate.
I get that having to move and find a new place to live is a bigger deal than if McDonald's raises the price of a cheeseburger by a dime, and that's why there are some protections in place (requirements of notice, an eviction process, etc.), but there is no indications that those aren't in play here.
Then you are clearly underestimating the effects of housing on the rest of society. Where you live (and how much you pay) is one of the biggest factors that determine how you live your life. So whatever your opinion on the topic, it is a "big deal".
"Renting has its perks, but this is part of the risk of renting"
No, having your rent quadrupled over night shouldn't be part of the risk profile. Again, whatever your opinion it is a shitty situation. It's not like you aren't taking a risk by buying.
Mobility (i.e., not being tied down to the property).
Either a) not tying up a lot of money on housing (assuming outright purchase or large down payment) or b) cheaper monthly payment than a mortgage (small down payment).
Outsourced maintenance (although there are good and bad landlords in this regard).
If there weren't advantages, renting wouldn't be as common as it is.
I agree it has some advantages, but citing commonality seems weird when it's increasingly unlikely for new to be homeowners to afford a home in cities like London, SF, etc. I doubt most people waste thousands of dollars each month for the ability to relocate quickly?
This appears to be a case where the landlord wants the tenant out, perhaps to live in the unit himself, or perhaps to sell it as a vacant unit, but for various legal reasons it's impossible or unattractive to take the simple path of saying, "I decline to rent to you anymore", and the landlord instead is going with the effectively equivalent option of raising the rent to approximately infinity.
I don't believe they expect the current or a future tenant to actually pay $8000/month. It's conceivable that they might lower it to far below $8000 as soon as the current tenant is gone, and then rent it out to someone else -- maybe the landlord just doesn't like this tenant.
Of course, none of this is allowed in a rent-controlled unit, and all pre-1979 apartments in San Francisco are rent-controlled, so my guess is that this hundred-year-old multi-unit building is actually a set of condos, and the owner of one had been renting it out to this tenant; in such a situation, rent control is generally not in effect, for the same reasons it's not in effect when one is renting out a single-family house.
Hmm yes my first question was "does the rent contract stipulate he can raise rents? or is it month to month so he can change it whenever he wants"? (assuming its a male landlord, sorry ladies)
In no way am I defending the landlord, and I know nothing about the rents in that area of SF, but the news clip fails to state when the last increase was. It also doesn't mention how large the apartment is, or what a comparable rental in that area would be.
The renter says he's been living there a long time. If the rent hasn't increased in 20 years, there may be an expectation of an increase at some point. That doesn't mean it needs to be 400%, but if the renter has been 'saving' on rent while the rest of the market increases, this may have been inevitable.
At the same time, I'm surprised that there are no limits to rent increase amounts.
San Francisco has a rent control ordinance that caps the rate at which rent can rise. The problem is that about 50% of units in San Francisco no longer qualify for rent control (newer units, rebuilt buildings, and certain types of residences do not qualify).
It has become extremely competitive for those rent controlled units and those units distort the rental prices for the non-rent controlled units (the market prices are forced upwards while the rent controlled prices are fairly stagnant).
Also, landlords would obviously like to be able to collect more rent for the same unit if that's what the market would allow, thus there is financial incentive to find/create loopholes in that ordinance.
In California if you raise rent by more then 10% you have to give 60 days notice. This article didn't mention if the landlords notice was properly done.
But even still, a 60 day notice on a 400% increase isn't much if you've been living in the residence for 20 years.
I'd find it interesting to have a 60 day + 2 weeks per year of residence or something like that. The longer you stay in a place, the harder it can be to leave.
My landlord recently put up a rental for $9,500/mo. The backstory is interesting: he told me someone had been staying at the place paying $700/mo. He cut a deal with that tenant where the tenant moves to a much smaller unit and instead of paying $700, only paying $300/mo. So overall, tenant gets to pay less and the landlord has a chance to make additional 5-6K/mo.
Wow, seems something's a bit "out of whack" or "outdated" when a landlord wakes up and realizes "wait, I could charge 10x the rent!" :) I assume he could't just evict the tenant because of some kind of tenancy laws or something?
Yup. Rent control laws in SF don't allow that. That's the flip side of rent control: you have people paying a lot less than market price. Or another way to look at it, people moving into the city are subsidizing costs for existing tenants resulting in higher market prices--which depending on your perspective, could be seen as unfair to new tenants or fair for old tenants.
The costs of being a landlord don't change that much from year to year - especially in SF where property taxes are capped by prop 13.
New tenants aren't "subsidizing" anything. Whats happening is that landlords are making a killing on rapidly rising rents, with relatively fixed costs.
The rent increase to $8000 will not happen if the property was built in 1979 or older.
The city leaders will nail this poor owner like Hitler for pulling that.
"people moving into the city are subsidizing costs for existing tenants"
Actually, rent-controlled property owners are doing the subsidizing.
The majority of those who can afford post-1979 rental properties (post-1979 properties are not rent controlled (yet!)) avoid owning rent controlled properties like the plague.
Those who can afford to purchase the newer, post-1979 'free of rent control' properties are collecting market rents. Their tenants pay them those market rents. None of that money subsidizes the rent controlled tenants.
In order to say "payers of market rate rents subsidize rent controlled tenants' way-below-market rents" -- the subsidy would have to make it into the hands of the rent controlled landlord who is being financially injured, being unable to set prices for his business's services.
A landlord gets a subsidy from the government -- a cash payment -- if they rent to a Section 8 tenant paying a far-below-market rent.
Rent controlled landlords in San Francisco get no subsidy.
Not only do rent controlled landlords sustain financial injury, with the government micromanaging their personal property to benefit complete strangers -- the rent controlled landlord's property TANKS IN VALUE.
People with enough money to purchase a rental property will NOT purchase a government-controlled property and that lack of demand also financially injures the owner when they wish to sell.
Government theft of your personal assets is never fair. If the government said to you "we have a car shortage, you must let anyone who needs it borrow your vehicle and only pay you 20% of what a taxicab costs"....
... or if the government came to you and said "there's a shortage of software engineers in San Francisco, here -- you're going to only be allowed to charge $20 an hour, you know damn well you were gouging everyone at $100 an hour...."
Those are UNFAIR. It's YOUR CAR. You PAID FOR IT.
It's YOUR PROGRAMMING EXPERTISE. You worked for YEARS to attain it.
Any time the government is allowed to seize control of your assets in financially injurious ways -- CAN NEVER BE FAIR.
An owner of a 4-plex built in 1974 in San Francisco is not PG&E -- the electric company is a monopoly and it's huge and it's regulated.
The owner of the 4-plex is a "mom and pop" owner. They are GRIEVOUSLY, unFAIRly injured -- financially -- by government seizure of that personal asset.
Even more unfair -- if the SF government truly wanted affordable housing, they would say the following:
"The Costa-Hawkins Act allows us -- the government of San Francisco -- to impose rent control on ALL MARKET-RATE PROPERTIES that were built between 1979 and 1995 - state law, for now, prohibits us from going past 1995.
"Effective tomorrow, all market-rate rental properties from 1979 to 1995 that till now have not been regulated -- are rent-controlled."
After all -- if the citizens in SF are perfectly okay to have the government cause financial injury on mom-and-pop owners -- why stop at 1979, when Costa-Hawkins allows up to 1995.
We socialize certain types of goods in the United States - roads, police, schools and mostly (though not always) the fire department. Other goods, like healthcare, while not socialized in the United States, are regulated (in many other countries of course, health care is in the same column as police/roads/schools).
Singapore is an interesting example of a country where they've mostly socialized housing to great success.
You can still buy property if you are very wealthy, but 80%+ of the population lives in a government (heavily) subsidized "HDB" - Housing Development Block - basically massive apartment blocks, that the government builds by the 10s of thousands. You then get a "99 year lease" to the property, though, by the time the property starts to get around 40-50 years old (HDBs have only been around that long) - the government will usually build much nicer, newer buildings, and give the occupants of the old building first right of refusal of (collectively) moving out of the old one and signing a new 99 year lease (Known as Selective Enbloc Redevelopment Scheme) - it remains to be seen if there will be any leases that ever expire.
As a result, property is affordable to all citizens, though if you are less well off, there is a good chance you will be living with other family members sharing rent - Singapore is a much more family oriented country, so this is normal and accepted. Also, if you are price sensitive, you might chose to live in a somewhat more distant property (known as New Estate, as compared to Mature Estate that has lots of shops, transit, built up around it).
And, then if you strike it rich - and don't like the HDB lifestyle, you can go buy a Condo (has lawn, pool, security, gym, usually nicer architecture) for 2x what a similar HDB would have cost you.
Singapore is a fabulously expensive country for expats to live in - but they've done a great job (amazing job) of keeping it very affordable for citizens. Transportation, Food, Housing, Healthcare Insurance - all of the essentials have had a lot of work put into them to keep everything cheap, cheap for the citizenry.
Singapore is able to socialize apartments by taking only 20% of their citizens' money. If you think about it, their 20% top bracket:
- pays for all their roads, schools, bridges, etc.
AND
- pays for huge apartment communities
There is absolutely no way our state will ever be efficient enough to socialize housing. We're taxed at almost 3X what Singapore is and we cannot even manage paying for all our roads, schools, bridges, etc.
Fair point about taxes - but, to be clear, I'm sure the HDBs are sold at a profit compared to the cost of building them - but there is no land speculation (they are 99 year leases), and housing speculation has a zillion dials to reduce it from happening with HDBs (you have to live in them for a while before you can sell them, you have to pay extra taxes if you are not a citizen)
And all this came about because in the 1950s, the housing situation in Singapore was abysmal, possibly one of the worst in the world. Government decided to take a leadership role in ensuring that their citizens had housing.
When I was at school participating in a legal clinic I had lots of clients facing eviction and we had plenty of tricks to use. Most popular was to demand a jury trial, which could take a month or two to organize, during which time the tenant wasn't paying rent and so could save enough to move.
Kind of shocked to hear about this happening at a "legal clinic". I'm familiar with the business structure behind these types of programs and they're invariably seedy characters involved with a paralegal group and lots of cold calling. Clogging up the courts so you can avoid paying rent...shrug
Who said anything about going to court? It's a simple delay tactic to give the client time to save enough money for a deposit on a new place. By the time the court date is even set, they have already moved. Know that the client by this point is probably locked out of their apartment. Not all landlords act legally. By initiating legal proceedings the client can get back in, getting a place to sleep so that they can continue working.
As for seedy, this isn't ambulance chasing. This is law students helping the poorest of the poor. Nobody ever cold calls anyone (Where did you see that?). There is no profit to be had. Most legal clinics are funded by law schools and similar institutions. And I say "funded" as in they give them a place to meet clients. Our clinic moved around, seeing people in church basements and community centres after hours. The licensed lawyers we worked with all acted pro bono. This is poor people being treated very badly and needing the help of lawyers they cannot afford.
The business pitch is usually "delay evictions now". The cold caller will get a list of properties that have recently gone into foreclosure. They call and offer to delay your eviction by 3-5 months as long as you pay them $400/month. Then they have paralegals file paperwork with the courts to contest the eviction. Basically they're using due process to delay being evicted and instead of paying their landlord they're paying the cold caller. I first saw this scam being run by a group of former drug dealers.
I would complain to the state bar about your legal clinic behaving unethically. The whole thing leaves a bad taste in my mouth.
That's not a legal clinic. That's a law firm or, i suspect, a referral service (a clearing house) that farms cases out to cutthroats. Legal clinics don't take fees. Clients don't pay and cash settlements almost never happen. Clinics are generally staffed by law students. Complain away. Every local bar promotes clinics as a means of serving indigent communities. None would consider the assertion of a client's right to a jury trial as any sort of wrongdoing.
"The bulk of the clinic’s work consists of litigation in the Boston Housing Court, defending evictions and prosecuting affirmative cases to improve housing conditions and to prevent utilities from being shut off."
I could see applying for a jury trial if you need time to...gather evidence to get ready or something but...just to be able to keep living there "rent free" ??? I guess if the landlord has done something awful and you want to get back at them maybe but...
Or to prevent the client becoming homeless for lack of money to pay a deposit, a cycle that does no good for anyone.
Americans have a right to a jury trial in these situations. A jury of you peers, as opposed to a bench trial by a judge, is a civil right. A trial you are going to loose is a bad idea, but the act of asking for one is always a reasonable assertion of one's rights.
We don't need highrises. We could cut the cost of housing in half by increasing the supply by 30% (i.e., around 110,000 units), and we could do that by converting 6% of the city's single-family houses into six-story apartment buildings. The other 94% of the houses could stay the same, and no other plot of land would need to change. No buildings taller than six stories would be necessary.
> The real trick is convincing the families in those 6% single-family homes to move.
No way; that would be a piece of cake. The only reason it's not happening now is that zoning law forbids it. If that were changed, homeowners would be falling over themselves to sell their land to apartment developers; it would be a giant windfall for them. In fact, you'd have to charge a steep development fee to reduce that windfall to something modest in order to ensure that only 6% volunteer to do it.
Based on what I've seen, people will fight tooth and nail over any development whatsoever. This is true in any city.
Want to knock down a burned out building full of crack addicts? No way, pal, that's going to make the property taxes go up when house values aren't depressed!
But one of these is the market functioning correctly - people moving to places with good jobs. The other is the market being manipulated to serve the interests of a relatively small group of people - restricting housing supply.
No, the market is not functioning correctly. The SF housing situation is making it increasingly expensive to get workers in SF. In a functioning market this would cause businesses to set up elsewhere. This isn't happening, in part because funding is coming from a relatively small, tightly-connected group of SF-centric VCs.
So what do you suggest the companies do that already exist in the area when they need more employees? "Tough shit"? That likely won't work in a free market :)
Finding a place to live there absolutely sucks and I hope someone eventually makes progress towards fixing it but I'm not sure telling people to stop taking good jobs is going to fly.
Open offices in other locations? Move to other locations? Allow remote work? The notion that companies just have to setup shop and maintain a primary presence in SF is ridiculous.
Safely building giant skyscrapers in earthquake zones is a solved problem. Many of the tallest buildings in the world are in the most seismically-active parts of Asia, and have successfully demonstrated their resilience after being exposed to powerful earthquakes.
- It's in the best interest of the city because it brings more people there and they get more taxes (only X amount of people can live in the city if they're not building anything new).
- It's in the best interest of the existing / new businesses because they gain access to new talent pools and they can, eventually, spend less on them.
It's really only NOT in the best interest of the properly owners who want to milk people for as much money as possible. Honestly the government just seems really corrupt or downright stupid to me. They could make SF into an amazing city but right now it's a bit of an eye sore in many ways.
To summarize: it sucks for anyone to lose their home, but in this particular case the details are a bit confusing (what about rent control? doesn't eviction take a while? etc.).
Could I ask why HN crowd supports rent control? It seems we are going against our own interests. 90% of flats are not on market, that makes remaining 10% very expensive.
My impression is that most people on HN moved to SF recently and do not qualify for rent control. And it is not the same as your examples, I dont see a campaign that EVERYONE should get rent controlled apartment.
I honestly wonder if anyone will pay that? If the landlord ends up having to rent it for something less, isn't this basically just using the rent to force out the tenant?
Or on the other hand, maybe the landlord has someone lined up already to pay $8000 a month. Either way, this is pretty insane. That kind of insanity is what just made me leave California entirely.
That's a just-remodeled 3-bedroom fully-furnished unit with high-end appliances and all utilities included -- even TV and broadband. It's hardly comparable.
In Germany, private rent contracts (i.e. the renter is not a business) can be raised max. 20% over three years, and the new rent may not be over the average rent in the area ("Mietspiegel").
I get that having to move and find a new place to live is a bigger deal than if McDonald's raises the price of a cheeseburger by a dime, and that's why there are some protections in place (requirements of notice, an eviction process, etc.), but there is no indications that those aren't in play here.