January 15, 2010

We’re Still At A Loss For Words (Unfortunately The Attorney Wasn't)

In the words of a tipster: "I happened to see this on the news last night -- and was so deeply offended by the haughty attorney..." Ditto.

SF Low Income Seniors May Soon Be Evicted [CBS]

First Published: January 15, 2010 3:30 PM

Comments from "Plugged In" Readers

In this case, I side with the building owners. Nothing in life is free, and the owner owns the property. The fact that they are older has nothing to do with it, there is no need to give extra biased sympathy based upon their age (or race, religion, sexual preference, etc.).

Do you really think if the situation was reversed, and one of the tenants own the building, that they wouldn't do the same thing?

Posted by: Idea at January 15, 2010 5:09 PM

This is the sort of thing that Jon Stewart pointed out once about former Governator Gray Davis:

"On the one hand, he's right. On the other hand, he's a d**k."

Seriously, this guy has a good point. Is he going about saying it in the right way? Absolutely not. But the laws here in the People's Republic of Yerba Buena (nee The City and County of San Francisco) are truly insane and only serve to keep property values and rents higher.

Posted by: JimBobJones at January 15, 2010 5:22 PM

Eating their own.

Posted by: 45yo hipster at January 15, 2010 5:29 PM

Urg. This guy is little over the top. Broad strokes is right.

Posted by: Ryan at January 15, 2010 5:59 PM

This stupid man plays right into the hands of the advocates of the People's Republic.

Posted by: Conifer at January 15, 2010 7:02 PM

I've said it before, I say it again: San Francisco is no city for old men, or women. If you're a renter, and a senior, move out before the Lembis of The City kick you out, wheelchair and all... never rely on the charity of strangers!

Posted by: Sun City Living at January 15, 2010 7:31 PM

Ugly 152-162 Jasper Alley story. I posted something about it a few days ago: a Realtor tried to push me to visit the place last week-end. No way!

The owners bought the place in 2007 (chasing rare deals right at the bubble top?) really "cheap": a bit over 200K/unit. A 1.35M gamble. Now there's no bigger sucker for the whole building. I think they tried to sell it some time ago for 1.78M, there's a Google trace here.

I wonder how it will turn out in the end. McDonald in his full interview talks about a 500Ks per unit target, but with the (potential) parking and (real) renting dead-ends, the limitations to condo-conversion (I think a protected tenant eviction comes with restrictions) plus the nasty exposure, in this unforgiving market flawed situations have a very hard time. Add to that the 25K+/unit + legal costs and so on. The numbers keep adding up. I think they'd break even easily though.

Myself, if I can't rent out, I won't buy. I am buying a property, not a liability. There has to be a potential income attached to a property. What if I have to live out of town for whatever reason and I can't sell? This is a restriction of my personal freedom.

About the elderly, well, most of us will scale down at some point. It's really sad they have to do it in their 80s instead of their 60s. Blame it on rent-control that gave them the illusion they would be safe forever.

Posted by: wow at January 16, 2010 12:04 AM

what is the status of protected tennants? one year to vacate?

Posted by: kurt7 at January 16, 2010 3:01 AM

You people are insane. These tenants are paying a few hundred dollars of month a rent. The owners are LEGALLY evicting them. The tenants are getting $15,000-$25,000 cash to leave. And they're complaining. hahahahahahahahaha. Only in SF, truly.

it isn't "their" domicile. They don't own it. Somebody else does.

They can't afford to live in SF anymore? Well I guess that $25,000 can pay in part for relocation to a cheaper locale. "But they've lived there all their lives!" Yes, they've been getting subsidized rent for a long long long long long long long long time. I'm not sure why that means that THEY in particular deserve continued subsidized rent over some other demographic group. (should legal Ellis act evictions not apply only to 80 year old asians? what about 80 year old Mexicans? two 40 year old asians with 4 kids? or mentally handicapped 23 year old caucasions?)

If San Franciscans want to provide a cheap place to live for these seniors then THE LOCAL GOVERNMENT can do it. Build a publicly owned Asian Senior Home in that area.

I don't see why it's immoral for a property owner to want to LEGALLY evict tenants.

The lawyer on the other hand is a racist stereotyping idiot.

(FWIW: I have no sympathy for landowners who buy a rent controlled place and then complain that they can't raise the rent. they knew what they were getting when they bought. In this case though the owner has followed all the rules. So why the lawsuit?)

I think I'm going to bring a lawsuit against stupid lawyers who say stupid racist things, and also against idiot 80 year old tenants who think they have the god-given right to stay in rent controlled apartments their entire lives despite legal eviction, both of whom raise my cost of living by increasing my taxes to pay for their imbecilic court costs.

Posted by: ex SF-er at January 16, 2010 6:31 AM

Racist, or merely stupidly candid? Was he talking about the owners, or the potential progeny of the evicted? If he was talking about the owners, who they identify as Asian American, what if one was a brain surgeon? Then he was stupidly candid. If he was talking about the seeds of the evicted who he has never laid eyes one, then yeah, racist. Don't be so quick to judge an edited soundbite. In this city especially. But anywhere, for that matter. The news is the news. It isn't called "the facts." Not anymore.

Posted by: anonn at January 16, 2010 9:19 AM

That's what I thought, too, when I read that "idiot" 80 and 90 year olds were being evicted from their homes of many years. "But, but, they are raising ex-SFer's cost of living by challenging this in court!"

Perhaps the rent control system that set up this situation is problematic, but it is still generally a bad thing to be thrown out of your home when you are 90. It is hard on a 90 year old to have to move, and has significant costs to society as well. Compensation for the serious expense of relocation of the elderly is a good thing, but even better would be waiting until the 90 year old there died or went to Laguna Honda before fixing up his unit to sell as a TIC.

Posted by: Dan at January 16, 2010 9:19 AM

This article was oddly written, with an obvious bias towards the tenants. The inflammatory quote reads a bit strangely or was edited to sound even more race-baiting. The last line makes no sense given the context - "addicted to the acquisition of real estate" - huh?

I don't think we're getting the big picture here. Why did the previous owners sell in the first place? Did they lose the property in foreclosure? Did they die? Why sell a RC building now? I don't know who would be crazy enough to actually purchase an RC building in SF, but the line saying something like, "the only way to make money was to [evict the tenants]" seems a little one-sided. The building might be a dump, with the old people living in squalor in violation of any number of safety and health codes.

Anyway, this is what exhaustive pro-tenant legislation has wrought. The city really only has itself to blame for these situations. The renters are trapped/addicted to cheap rent, and once their landlords die or are forced to sell, the tenants immediately become a liability. You can't maintain a building in SF on a few hundred dollars a month. It has nothing to do with "compassion."

Posted by: sleepiguy at January 16, 2010 10:50 AM

anonn, the full interview of the lawyer can be watched on the CBS5 site.

He said a lot a things that right true. Then he slipped on the Asian thing.

I posted this earlier, but a Realtor proposed me to visit 152 Jasper, saying the key was lining up buyers for the TIC. I remember the owners tried at some point to sell the whole place for 1.78M earlier last year. They purchased for 1.35M in 2007. With the publicity the only thing they can do is push all the way ahead. I think the tenants know the louder they are the bigger the buy-out.

Now, in the full interview the lawyer says the units could be sold in the 500s. Parking will be an issue if there's an upcoming 10-Year ban on parking transformation for Ellis-ed property. Then there's the rental ban. Then there's the impossibility of condo conversion when a protected tenant has been Ellis-evicted. Then there's the social stigma of buying a place that will show up every time in a Google search. They'll be lucky if they get low to mid 400s. But I think they'll still break even and even make a buck at that price. Each unit cost them low 200s.

Posted by: wow at January 16, 2010 11:41 AM

Here is the video where the attorney is interviewed by CBS5: http://cbs5.com/video/?id=60369@kpix.dayport.com

Posted by: mkk at January 16, 2010 3:08 PM

another great example of how rent control perpetuates ABOVE market rents in the city.
these tenants enjoy their subsidy-new comers pay the price.

Posted by: [kid char] at January 16, 2010 3:57 PM

once the politburo (board of supervisors) and the head of the secret dwarf police stassi (peskin) get a hold of this we'll make sure these seniors have great BMR units in Stalin's (Daly's) district.

I'm sorry that they guy who rented an apartment when he was 32 was to stupid to buy a place or at least save some money during the 50 year period where he was getting a free ride.

My god... I've got to get out of this town.

Posted by: Jimmy C at January 16, 2010 4:06 PM

Where did they get this lawyer? A booth in the Serramonte Mall?

Posted by: sleepiguy at January 16, 2010 5:07 PM

I'm sorry that they guy who rented an apartment when he was 32 was to stupid to buy a place or at least save some money during the 50 year period where he was getting a free ride

Who is to say some of those tenants didn't buy all sorts of things? Or how many of them managed to buy their children houses elsewhere because of the subsidized rent, especially throughout the late'90s and on? It's likely that they did just that.

Posted by: anonn at January 16, 2010 6:23 PM

Just because something is legal doesn't mean that it is right. I would never buy a building and kick out a bunch of 90 year old tenants. The guy who bought this place deserves all the condemnation heaped upon him.

Property rights are not absolute anywhere so the idea that "I own it so I can do what I like" is silly. You can't build a coal fired power plant in the middle of a residential neighborhood anywhere in the world. I don't know what the tenancy laws are exactly like in Europe, but there are plenty of places where these people would not be able to be evicted, not just in San Francisco. In fact, before the Ellis Act, these people would not have been evicted at all.

Posted by: NoeValleyJim at January 16, 2010 6:28 PM

This guy Steven MacDonald isn't that different from any other attorney that specializes in evictions, in my experience. Hence the joke that starts, "What's the difference between a catfish and an eviction lawyer?"

No, I am not a landlord and never will be, but for a few years of my life I had to sit through more than one unlawful detainer trial, because when one comes up on the court's docket it takes priority over your regular, run-of-the-mill civil litigation.

Anyway, it seems to me that lawyers who specialize in evictions have to develop a very thick skin, over and above the fact that being an effective lawyer in general means that you have to zealously represent your client's interests, and if that means coming off as "haughty", then that's what you'll have to be. You also constantly have to listen to a tenant sob stories and still defend your paymasters. I'm not defending either him or the owners for being so callous in the case of the Jasper Alley building tenants, but that's the way it works in general, usually.

This thread, though, will come in handy as an answer next time someone on socketsite asks: "Buying doesn't make economic sense. Why not just rent?"

Posted by: Brahma (incensed renter) at January 16, 2010 6:42 PM

"Property rights are not absolute anywhere"

au contraire, if you bought it and are assessed prop tax on it then you should be allowed to utilize it (subject to its zoning designation). at the very least the party that paid for it should have priority over the party that rents it.

rent control=illegal taking of property rights w/out just compensation. if the state wants to subsidize some housing then they should pay for it
(perhaps in the form of tax credits to the owner/operator).

Posted by: [kid char] at January 16, 2010 6:54 PM

If the city of SF wants to subsidize housing for seniors, then the city should pay the costs of providing such housing for seniors. However, the city should not be shifting the burden of subsidizing seniors on property owners via their draconian anti-landlord policies. It's not the property owners' fault that they want to be paid a fair market value for their property, it's the city's fault for putting most of the burdens of subsidizing seniors on property owners instead of shouldering these burdens themselves.

Posted by: g at January 16, 2010 7:35 PM

If the current owners bought after 1979, then the market value of the property at time of purchase was based on it having rent-controlled tenants. The property owner is trying to increase the market value of the property by evicting longtime tenants in their 80's and 90's.

Posted by: Dan at January 17, 2010 12:09 AM

Property rights are not absolute anywhere so the idea that "I own it so I can do what I like" is silly.

True. But this owner is NOT doing whatever they like. As example, they're not building a nuclear power plant there, nor am I suggesting that they should be able to do so. They are simply exercising their right under the law.

I will counter your claim with an equally valid one: TENANT rights are not absolute anywhere either.

I'm not sure why the tenant's rights supercede the owner's rights in this case.

would you feel differently if the owner was 80 years old? what if these 80 year olds have bought properties for their children in other cities? what if these 80 year olds had 2 Million in the bank? what if they were only 79 years old? what is the EXACT age where it is no longer "decent" to evict a person?

I have no tolerance for owners who bought after 1979 that then whine about their "depressed" housing values. they knew what they were getting into when they bought, AND they bought the property at depressed levels due to this situation.

However, I have equally little tolerance for tenants who refuse to obey the law. They law is very well written and easily understood here. These people have been Ellis'ed (sp). Deal with it.

If you don't like it, change the law. Make a new law that nobody over age XX can ever be evicted for any reason, or word it however you feel would be "decent".

or better yet: if the citizens of San Francisco care so much about the elderly, then let them develop a social program to deal with it. As example: there could be a new tax on San Franciscans and the proceeds would go towards building senior housing in Soma. You could build 10-15 towers in SoMa as example. it is centrally located, convenient, and in the city. The units could be new and well maintained. It is near the new UCSF medical center. Basically: it's perfect. why not do that?

reason: because instead we can use a very flawed rent control system to pretend that we are doing something, and we can use other people's money to do it.

Posted by: ex SF-er at January 17, 2010 5:40 AM

The reason people are buying these idiotic situations is that there's nothing else for sale at a decent price. Or if it is for sale it is at a price where you cannot make a living at landlording.

Whenever I see an apartment building with a price that has decent return, there's at least 2 major major flaw. These flaws have a cost - or a risk (moral or financial) and they're priced in.

Why is there such a scarcity of decent deals? Mainly because of all the disincentives built into the system. Prop 13, rent control, renter's protection, limitations in development. All those laws that prevent fluidity in the system and make a very few very rich and the rest running for the doors.

This is no city for average investors. Commies have created a capitalistic wet dream where only the ruthless have their way.

Posted by: wow at January 17, 2010 10:36 AM

In the channel 5 report Supervisor Chiu is quoted: "We have had a very marked increase in Ellis Act evictions," said David Chiu, the President of the Board of Supervisors who represents North Beach.

From the rent board's published reports, there was a 24% DECREASE in Ellis Act evictions compared to the previous year (the latest report covers the period ending February, 2009). In fact, three out of the last four years show a decrease in Ellis Act evictions compared to the previous year. From a high in 2005 of 282, Ellis Act evictions have steadily declined to the most recent 2009 report of 192.

Unless Chiu is privy to information that hasn't been published, the facts don't square with his justification for further restrictions on property owners in the hope of reducing the economic incentive to use the Ellis Act.

Posted by: jw2200 at January 17, 2010 11:56 AM

I know that you don't have the naive and extreme view of property rights ex-SFer, but plenty of posters on this thread do. You are correct of course that tenancy rights are not absolute either.

If I were King, rent control would be means tested, which means that people who made too much money would not be able to exercise tenancy rights, except for a much more limited form of them in line with the rest of California. While I was it, I would overturn Prop 13, severely restrict the initiative process, remove the idiotic requirement that writing a budget requires a 2/3 vote of the legislature and bring our social welfare state more in line with the Dutch model, so that we would spend money on helping people instead of locking them up.

But alas, I am not King, so I will have to stick to my limited efforts at trying to elect good candidates to the Board of Supervisors and Mayor and push them to Do The Right Thing. Given the current political climate in San Francisco, anything that might be seen as rolling back Rent Control is pretty much a non-starter.

San Francisco already does spend hundreds of millions a year housing and taking care of low income seniors, by the way. We are spending $593M on rebuilding and expanding Laguna Honda and just approved a $900M bond to rebuild General Hospital.
On top of this, there are a thousands of subsidized housing projects for seniors only, which are paid for a by a combination of local and federal money.

There are plenty of things that are legal that are still not right, but that doesn't mean I think there should be a law against them.

Posted by: NoeValleyJim at January 17, 2010 3:37 PM

Means tested?

Maybe. As long as the government doesn't victimize one group of the public to make up for its shortcomings. SF doesn't want to tax more, but they are OK to spend/promise more. Their undeclared solution: take the backdoor of rent control and all the extreme powers local governments have (permits, zoning, etc...). If the landlords find a way around it, change the rules as many times as is necessary.

Why would anyone want to be a landlord in SF? If the Supervisors could find sufficient financing, they'd eminent-domain all property in SF. They haven't got the 200 or 300Billion to do that, therefore they go after the easy targets: the mean evil landlords who see no benefit to any of those new rules but have nothing to defend themselves against both renter-hugging politicians and heart-breaking-story-loving-media.

If only this system had some kind of evenness or equality of treatment built into it. But no! It is totally chaotic and unfair. In one building you can have someone paying 300 in rent and the next one 1500 for similar units. This is ridiculous and probably un-constitutional in some way. Why penalize newcomers? Is that a newcomer tax we haven't heard about? Is there a tax for the young too? What's next? How much further can they screw up this city? I know they are working on it really hard.

A better way to fix what's broken would be local governments to subsidize rent wherever it sees it fit, on an equal fashion. An extension of section 8 rentals to all property, if you wish. A family earns 5K gross but pays 2K, you'd have the government give 500 to the landlord and the renter pay 1500.
That would be much better than the current landlord-financed social housing that sends landlords towards slumlording or Ellis evictions.

Let the City pay for its ambitions, not the private citizenry.

Posted by: wow at January 17, 2010 11:41 PM

remove the idiotic requirement that writing a budget requires a 2/3 vote of the legislature

Yes. The reason of reasons why California is so messed up. It doesn't stop at the budget. That 2/3 rule is in the way of every change that might ever come.

SF doesn't want to tax more

The thousands of people who had their property taxes RAISED, yes RAISED last year, finally prompting them to pursue an informal review, would disagree.

And then there's the fees. It isn't a "tax" per se. But those of us waiting to see what the city is going to gut us for, with scarcely an improvement in sight, for public space usages this season know differently. So screwed up, man. So screwed up. Disheartening.

http://www.sfexaminer.com/local/SF-soccer-teams-seek-greener-pastures-81069147.html

This city is gouging people in a very unfair manner, all in the sake of "not raising taxes." Don't be fooled.

Posted by: anonn at January 18, 2010 8:37 AM

I don't know man, who should be paying for the upkeep of the Parks? The users or the taxpayers? That fee doesn't seem like such a ripoff to me. The San Francisco Soccer Football Club should just reform as a non-profit.

wow, California has all kinds of rules favoring tenured residents over new comers. It is part of the nativism that is so strong in California.

Posted by: NoeValleyJim at January 18, 2010 10:13 AM

It is a nonprofit. That's its main problem. Paid officers would lobby harder.

Posted by: anonn at January 18, 2010 10:24 AM

Also, what is this mysterious upkeep that you are referring to? Oh, I think I know. I concur. Out at the Polo Fields they do an absolutely wonderful job of maintaining the endangered California Park Gopher's native habitat.

Posted by: anonn at January 18, 2010 10:27 AM

Let me see... The owners bought it knowing that it was rent controlled, thinking that they could flip it for a quick profit. That failed, so now they figure they'll make money by ellising the seniors. Speaking of PR disasters. I'd swallow the loss and move on if I were them.

The city could do one of the two things to prevent this kind of fiasco: A) make it harder to ellis, or B) provide low income housing themselves. A will remove the speculators like these owners out of rent controlled properties and make that market more stable for the tenants.

Posted by: Fish at January 18, 2010 10:39 AM

They likely had Ellis as plan b the entire time. The city will probably try to do something stupid to mess with a state law and cost us all money for nothing, agreed.

Posted by: anonn at January 18, 2010 10:44 AM

The original rent control law excluded owner occupied 2-4 unit buildings, and was thus less intrusive for homeowners with a rental unit or two. I think each expansion of rent control has been more questionable in its benefits and in changing the rules in the middle of the game. Large landlords get a break from Prop 13 and speculative buyers know what they are getting when they buy a rent controlled building, so neither get much sympathy from me when they whine about rent control. Businesses trying to maximize profit are often regulated by government-- rent control is no different, as long as the rules stay consistent.

Posted by: Dan at January 18, 2010 11:13 AM

The thousands of people who had their property taxes RAISED, yes RAISED last year, finally prompting them to pursue an informal review, would disagree.

They're due to the prop 13 resets after a purchase or another type of assessed value re-alignment, right?

The govt has its hands partly tied, but is trying to extract as much as it can with whatever leverage it has. The soccer team story is ridiculous. Thanks for the link.

I'd swallow the loss and move on if I were them.

I am pretty sure they'll fight it as much as they can. If someone thinks the local government is abusing their rights, should he cut his loss and move on? Just give them a chance at a fair fight without media interference and politician grandstanding. These rent control laws are purely and simply confiscation of private property by a government. Prop 13 partly compensates for this but not in the case of a landlord buying an existing long-term renter situation. Pre-1979 landlords are getting older. Many will sell in the future. Their offspring cannot subsidize renters like their parents did. We will have more Ellis evictions. This has to be sorted out otherwise we'll have a very nasty situation spreading all over the city with generational standoffs and class warfare by proxy.

The question has to be asked whether the new landlord has to inherit rent control rules but not the low taxes that came with it or if there has to be some sort of waiver on reassessment. The mechanism would be complex but this is the logical consequence of an idiotic law. With the City gross overspending/overpromising that's not gonna happen, imho.

Posted by: wow at January 18, 2010 11:27 AM

Sort of. Under prop 13 they can raise your property taxes 2 % per year. And they'll stick you with it regardless of market value unless you are proactive.

Posted by: anonn at January 18, 2010 11:41 AM

To all the whining landlords:

if you want a free capitalistic RE market how about (1) abolish prop 13 and (2) no more mortgage interest deductibles? Then let's talk about government giveaways to renters.

Posted by: anon at January 18, 2010 11:52 AM

Which whining landlords are you speaking to, first. Secondly, how should the whining landlords go about abolishing prop 13? Thanks in advance.

Posted by: anonn at January 18, 2010 12:04 PM

Prop 58 allows legacy transfer of tax base to children. It looks like there is a 1m+1m = 2m limit to non-primary residences:

http://www.boe.ca.gov/proptaxes/faqs/propositions58.htm#1

I think prop 58/193 is the real problem in CA, not prop 13. Loyal readers recall prop 58/193 is the loophole that SATCHEL allegedly exploited as a bay are perma-renter (but he often incorrectly credited prop 13).

I think you could modify rent control and prop 13 somehow (without abolishing them) and make things an awful lot better, but of course nothing like that will happen.

Posted by: dub dub at January 18, 2010 12:12 PM

RE: "if you want a free capitalistic RE market how about (1) abolish prop 13 and (2) no more mortgage interest deductibles? Then let's talk about government giveaways to renters."

If we had said free capitalistic RE market and prop 13 were abolished, along with rent control being abolished, rents would be sky high as landlords pass the cost of property taxes on to renters in order to stay afloat. Imagine if the tens of thousands of multi unit buildings in SF were bumped up to current market value and the owner's taxes were bumped up 3x, 4x, 5x, 10x accordingly -- what that would do to rents in the city. You'd even have RENTERS calling to turn back the clocks to the days of prop 13.

Posted by: marco at January 18, 2010 12:14 PM

It's pretty comical that somehow landlords are the ones whining. How is it that renter advocates are not the ones whining? Amazing.

Posted by: anonn at January 18, 2010 12:50 PM

Marco, the situation you project is correct I think (skyrocketing rents), but that would not really be a true "free capitalistic real estate market" as one would also have to eliminate nearly all zoning and land use restrictions. All things being equal, it's really all of the building and entitlement resrictions that keep property in coastal CA (and SF, and CA in genera;) more expensive than other areas. There are some great papers by Edward Glaeser and Joseph Gyourk (sp?) on this subject. Restrictive zoning and permitting is probably the largest property owner subsidy given.

Posted by: dude at January 18, 2010 3:15 PM

If we had said free capitalistic RE market and prop 13 were abolished, along with rent control being abolished, rents would be sky high as landlords pass the cost of property taxes on to renters in order to stay afloat.

Not necessarily. IMO there are too many moving parts to predict what would happen with prop 13/rent control abolition...

on the one hand owners could charge whatever they wanted for rent. On the other hand renters can only afford so much. (can't charge more than renters are able to pay) as example, owners of non-rent controlled units can't charge whatever they want. they can only charge what the market will bear.

But abolition of prop 13 could cause many people's PITI payments to skyrocket and thus they'd have to sell (couldn't afford their taxes), which would shift the supply curve to the right... and the higher PITI payment would mean there would be less buyers willing/able to buy... so overall housing valuations could/should come down.

which would lead more people to try to buy instead of rent, which might reduce the renter demand, which shifts the rental demand curve to the left.

not to mention, if landowners could charge whatever they wanted eventually the city would probably allow more supply to be built, which would increase supply and put pressure on prices.

and so on...

in the end, I doubt there is much argument about the following ideas
1) rental control laws cause an artificial shortage of rental properties. (decreased supply of rentals) you get a two tiered system. a shortage of cheap rental properties, but a bigger glut of more expensive properties.
2) prop 13 slows down housing turnover substantially (you have 90 year old people holding on to houses due to the tax consequences) and decreases housing supply.

there are other artificial restrictions to housing supply and rental supply in SF as well.

but it's hard to predict with certainty what would happen if we elminated prop 13 and rent control laws simultaneously due to some of the factors above.

I would rather that SF loosened its ridiculous "planning" laws. Much of this problem would go away if SF built 200,000 units as example, and if they allowed people to take their old home and remodel it they way they liked.

Posted by: ex SF-er at January 18, 2010 3:25 PM

anonn wrote:

It's pretty comical that somehow landlords are the ones whining. How is it that renter advocates are not the ones whining? Amazing.

What's next? I'm waiting with baited breath for the post complaining that the "Commie" federal government has placed so many disincentives into the system that one cannot make a living at flipping.

Posted by: Brahma (incensed renter) at January 18, 2010 5:02 PM

"The question has to be asked whether the new landlord has to inherit rent control rules but not the low taxes that came with it...."

The value of the property is reduced if it has longterm low-rent and/or protected tenants. With this lower purchase price, the new landlord's taxes are lower than an equivalent building that is vacant or has higher paying tenants.

Posted by: Dan at January 18, 2010 5:31 PM

ex SF-er wrote:

in the end, I doubt there is much argument about the following ideas…2) prop 13 slows down housing turnover substantially (you have 90 year old people holding on to houses due to the tax consequences) and decreases housing supply.

The argument about this idea is that ninety-year olds don't have to hold on to houses due to the tax consequences, because that scenario was what voters in this state passed Proposition 60 and Proposition 90 specifically to prevent. If housing supply is being suppressed for some reason, it's not due to low turnover due to elderly people not having an economic incentive to move.

Posted by: Brahma (incensed renter) at January 18, 2010 7:39 PM

"They likely had Ellis as plan b the entire time."

More reason to make it more difficult to ellis then. Speculators turning rent controlled properties into TIC just defeats the purpose of rent control. Make it illegal to invoke Ellis for converting rent controlled properties to TIC/condo.

Posted by: Fish at January 18, 2010 8:14 PM

if landowners could charge whatever they wanted eventually the city would probably allow more supply to be built, which would increase supply and put pressure on prices.

New construction is already exempt from rent control, to encourage developers to build more housing. This is why we saw all the new construction recently. Well, that and all the easy money floating around.

Posted by: NoeValleyJim at January 18, 2010 9:20 PM

More reason to make it more difficult to ellis then.

That's a very logical step towards ultimate absurdity. Then again, this is SF-SSR.

The last resort: Buildings will be worth nothing for all the restrictions. Landlords will let the tax bills pile up and let the government seize the buildings. The Government will tear down the places, build soviet-styled blockhauses for the perfect little commie world: 100% BMR/subsidized rent. The Gave will have achieved his total homeless reduction program.

You guys are ridiculous. You want something for nothing and change the laws without thinking at the consequences. Then you balk when the opposite camp becomes heartless and ruthless. The Jasper Alley mess is YOUR creation. No decent civilized person would have bought this place in 2007 because of all the restrictions. Now you're left with sharks that will tear people apart for a profit. Welcome to your worst nightmare come true.

Posted by: wow at January 19, 2010 7:26 AM

Nothing wrong with offering safe affordable housing to the elderly. If that's what the citizens want then let the government pony up. Let's tax renters for services not just property owners. Then see what happens to the peoples republic of you pay.

Posted by: Kathleen at January 19, 2010 7:53 AM

I like the idea of a renters tax to pay for dirt cheap housing for the elderly. Once that happens, we can gauge how much sympathy there is for this cause. Until then, transferring the responsibility for the elderly housing subsidy to the owners will just have to be. Its unfortunate, however, there should be no special treatment (burdened by the public) for people based upon their demographic, that is just irresponsible.

Speaking of irresponsible, and of all those people who follow the SOMA Grand, or the areas around Market/Mission between ~ 6th-8th, one of the homeless just killed a guy walking with his girlfriend. Yep, nice "up and coming" area. In fact, I drove around that area around 8:30pm last night, and it looked like the holding cell of the county jail. Here is the article:

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2010/01/18/BAIH1BJSV3.DTL&tsp=1

Posted by: Idea at January 19, 2010 8:48 AM

"Make it illegal to invoke Ellis for converting rent controlled properties to TIC/condo."

Impossible. State law (Ellis Act) preempts any local attempt to do this. Believe it or not, SF is not a sovereign nation and is subject to the laws of the U.S. and the State of California.

Posted by: anon at January 19, 2010 8:56 AM

There is a lot missing in this tale... A buddy lived next door and we used to always joke about how many people we could spot in each unit. There were probably about a dozen people in each of these units, and if they are paying a matter of only a few hundred dollars that's, what, $50 per person?! I am sure the units are maybe 2-3 bedroom units. I have zero sympathy. Stop holding on to a unit for 50+ years, illegally moving your families in, and not maintaining the place at all. It was a complete dump from what we could see...

Posted by: get them out at January 19, 2010 10:49 AM

"If the city of SF wants to subsidize housing for seniors, then the city should pay the costs of providing such housing for seniors. However, the city should not be shifting the burden of subsidizing seniors on property owners via their draconian anti-landlord policies."

Maybe if we got rid of Prop 13 too, the raised tax values alone could help subsidize housing for seniors. This would be much better than the current system which penalizes newcomers instead of just helping the people who we think should be helped.

FWIW, I like a lot of NoeValleyJim's suggestions here.

Posted by: JimBobJones at January 19, 2010 11:22 AM

I hate these debates, but there are a half dozen families on my block that would immediately be forced to sell their homes if Prop 13 was repealed. Some of these houses have been passed down from their grandparents (!). Is it fair that their tax burden is so low? No, but penalizing them doesn't make it better.

I'm loving the idea of a "renter's tax" to care for the elderly and the homeless. People would lose their sh*t if anything like that was ever proposed. At some point I really want to figure out how much of SF's operating budget is funded just by property taxes from SF's wealthiest residents. I've kind of figured out that about 100 properties fund almost 1% of the city's annual budget.

Posted by: sleepiguy at January 19, 2010 12:40 PM

"I hate these debates, but there are a half dozen families on my block that would immediately be forced to sell their homes if Prop 13 was repealed. Some of these houses have been passed down from their grandparents (!)."

And since when do we have a vested interest in staying in our grandparents' houses? They could sell like many other heirs do. I'm not really sympathetic to these sorts of stories -- they just don't happen in almost every other state, and society hasn't crumbled as a result.

Posted by: JimBobJones at January 19, 2010 1:14 PM

penalizing them doesn't make it better.

It's not penalizing. It's restoring an equality of rights that was revoked 30 years ago.

Posted by: wow at January 19, 2010 1:24 PM

This discussion brings to mind a thread from last year regarding Asians and real-estate. Particularly elderly FOB Asians. Hmmm ...

Posted by: Jimmy (No Longer Bitter) at January 19, 2010 3:39 PM

Who cares about the ethnicity of the people in question. Yes the attorney referred to it, but the principal transcends the demographic.

Posted by: Idea at January 19, 2010 3:41 PM

Post a comment


(required - will be published)


(required - will not be published, sold, or shared)


(optional - your "Posted by" name will link to this URL)

Remember Me?

(you may use HTML tags for style)


Continue Perusing SocketSite:

« A Tip Of The Hat To That New MLS Rule: 2140 Jefferson Closes Escrow | HOME | New Designs For Dwellings (And Retail) At Market And Sanchez »