Rent Control: Glendale, Pasadena, San Mateo, Santa Ana, Alhambra

[Susan O.]

https://caanet.org/glendale-tenant-activists-launc...

There's tons of Tenant unions

It's important to get the word out to SINGLE FAMILY Home owners too

 Rent control usually leads to lower Single family house values especially if the houses are located near rent controlled housing. It's like subsidized wellfare housing. you don't want to be close by as good tenants usually leave and the 'bad' tenants you know the ones who are loud, pack rats, or criminal types stay. Also Julia they are trying to change rent control to affect single family homes. It's sad because if you do an ounce of research you can immediately see that Rent control does more harm to communities than good.

Instead of new quality affordable housing that is newer and nicer buildings, we get slums, with landlords having no incentive to keep up the property but just get minimal rent and have trash filled, broken windows, bad tenants, druggies etc who just pay the minimal amount of rent. This trickles into houses and condo prices leading to ugly neighborhoods.

Rent control usually leads to lower Single family house values especially if the houses are located near rent controlled housing. It's like subsidized wellfare housing. you don't want to be close by as good tenants usually leave and the 'bad' tenants you know the ones who are loud, pack rats, or criminal types stay. Also Julia they are trying to change rent control to affect single family homes. It's sad because if you do an ounce of research you can immediately see that Rent control does more harm to communities than good.

Instead of new quality affordable housing that is newer and nicer buildings, we get slums, with landlords having no incentive to keep up the property but just get minimal rent and have trash filled, broken windows, bad tenants, druggies etc who just pay the minimal amount of rent. This trickles into houses and condo prices leading to ugly neighborhoods.

Share the below studies and articles with your local leaders, city council, California state reps etc.  I've compiled this list straight off bigger pockets postings! 

https://www.buildium.com/blog/ab-1506-threatens-re...

https://www.mercurynews.com/2017/11/02/rent-control-policy-likely-fueled-the-gentrification-of-san-francisco-study-finds/

https://www.bloomberg.com/view/articles/2018-01-18/yup-rent-control-does-more-harm-than-good

https://web.stanford.edu/~diamondr/DMQ.pdf

standford study recent showing rent controls do not work for economy nor do they help who they're inteded to

https://mises.org/library/unintended-consequences-rent-control

Rent control is as ad as bombing neighborhoods

https://mises.org/wire/rent-control-makes-good-politics-and-bad-economics

Good politics bad economics

NYTimes

http://www.nytimes.com/1989/05/30/opinion/how-rent-control-hurts-the-poor.html

[Susan O.]

https://www.pasadenastarnews.com/2018/04/03/pasade...

In Pasadena as well.  This is very bad for home owners too as rent control leads to run down housing and not being able to control bad people in good neighborhoods.  For instance it would be near impossible to evict gang members and hoarder bad elements.  I know I managed a bad rental in South Central in the day before we just had to sell it.  We couldn't evict these gang members and they took over the building under protection of the Los Angeles Housing Department and RSO.

They don't seem to understand that rent controls don't work in the free economy.  They are more for getting votes from low income renters and not about actually improving neighborhoods

https://mises.org/wire/rent-control-makes-good-politics-and-bad-economics

This article explains the politics behind rent control and how even though it doesn't work politicians still keep pushing for it.

[Jo-Ann Lapin]

Susan thank you for your well written post. 

[Susan O.]

• PROBLEMS WITH RENT CONTROL
• It discourages investment in rental properties. When your rent is limited you are certainly going to invest a LOT less in new construction or the renovation of rental units.
• Lower rents mean lower investment property values and, combined with fewer rental units, means lower property tax revenue for the city of Chicago. Of course, Chicago doesn't really need more tax revenue, right?
• Landlords will be caught in a double bind between restricted rents and rising property taxes. That will further depress prices.

Share this with your government officials. Same thing is happening in Los Angeles, San Francisco, Sacramento, Houston, Seattle, Portland, Boston, New York City etc

[Manolo D.]

When there are people out there who are considered activists for rent controls and fighters for the low income, there are also the opposite, investor activists who want to get the best bang for their buck. This will be one of the main reasons why I will not be a househacker or be a landlord in general. My take on this will be, just be rigorous on your screening and letting your guard down is not what you can afford. With regards to price points, it will be the same story, it will be a low entry when you buy and low exit when you sell, if you bought high, then that’s on you, if you already bought and feel that didn’t see it coming, maybe you should sell today. Government officials will always side the lower end of the spectrum as they are
more pain in the behind rather than those people who can afford to lose a little or big, versus than that of them if they lose a little, will lose everything and government will have to spend for them, the government will try to avoid this cost if there is another alternative.

[Amit M.]

yes, the ballot initiative in November's 2018 election in California will be very important for SFH owners to take note. They're trying to overturn costa-Hawkins, which will allow local governments to put SFH's and condos under rent control.

As we get closer to elections, we should be *active* on BP to help defeat that terrible measure!

[Susan O.]

@manolo d

It's just getting too extreme. Usually in the short run changes in new rent controls hurt real estate investors. In the long run it can actually boost appreciation because supply is so limited. Its counterintuitive but a quick google search will show why these liberal areas have high appreciation and under supply.  Where other areas like Texas Florida where it's easy to build have over supply and prices reduce in downswings

I keep investing in these areas because appreciation tends to be really good due to limitted building.  Usually areas like Los Angeles, New york that are under rent control have the HIGHEST appreciation.  So it's often good for long term holders.  Not necessarily the best for developers or short term holders.  I've actually benefitted from rent control in some ways because the more rent control there is it LIMITS the building of housing.  Just google search economists takes on how market caps lead to reduction in suplly it's all over

From the Boston small property owners alliance SPOA:

RENT STRIKES: Are we exaggerating?"The Jim Brooks Act" HB4142 We have repeatedly said that the "Jim Brooks Stabilization Act" (House Bill 4142) will produce RENT STRIKES throughout Boston?!?!! Think about it:RENT STRIKES. No one pays rent until you promise no more rent increases and no more evictions (unless the tenants approve; they become the bosses in your property). If the Jim Brooks Act, a home-rule petition, is approved by the State Legislature and made law in Boston,then other cities and towns across the state, especially Cambridge and Somerville, will be able to adopt it. Here's how the Jim Brooks Act would create RENT STRIKESwithout ever mentioning "rent strikes."The critical provision is: The Jim Brooks Act would require landlords to submit copies of all rent-increase and eviction notices to the city within 48 hoursafter the notices are delivered to a tenant household. THE CITY WILL THEN PUBLISH THE ADDRESSES in these notices(they have said so publicly -- see FAQ at Boston.gov Office of Housing Stability). These addresses would give tenant advocacy groups like City Life/Vida Urbanathe exact locations of all evictions and rent increases occurring in the city, just as those legal actions are starting up (assuming that all landlords comply with the law if it gets approved). With this information, tenant advocacy groups can target their efforts to tenants under stressand organize RENT STRIKES -- until the landlord stops all rent increases and/or evictions. Small landlords will be hit hardest because they won't have the funds to repair all the code violations their tenants would find (or create). And not enough funds to evict so many non-paying tenants all at once. Small landlords will fall to their knees and promise no rent increases and no evictions just to get tenants to pay their rents - or even pay reduced rents, if the tenants demand lower rents. Once RENT STRIKES happen often enough throughout Boston, all landlords in Boston will fear them and will never raise rents or raise them only minimally. And not do any evictions that tenants might strike over. The Jim Brooks Act, as you can see, is a very drastic form of rent control and eviction control. SEE BELOW To prove to you and everyone that RENT STRIKES are what tenant advocacy groups like City Life/Vida Urbana are doing now and will continue to do even more widely under the Jim Brooks Act, please skip down below for summaries of two Boston RENT STRIKES in 2016 that have been followed and carefully documented by SPOA. WE MUST FIGHT NOW! We must fight the "Jim Brooks Act" very hard. RENT STRIKES would give tenants the super-power to bring landlords to their knees. HERE'S WHAT YOU CAN DOTO FIGHT THIS DANGEROUS JIM BROOKS ACT (HB4142), pleasecallor email the members of the Judiciary Committee.SEE CONTACT INFO BELOW. THE JIM BROOKS ACT IS ILLEGAL in three ways State law prohibits rent control that "in any way requires below market rents" (M.G.L. Ch. 40P). Thus, RENT STRIKES are illegal under state law, but that may not stop legislators.RENT STRIKES,moreover, are also illegal because tenants areviolating their legal obligations to pay rentwhile they inhabit their apartment. Finally, asking for copies of a landlord's notices to tenants, without a search warrant and without a good cause to believe a crime has been committed, violates the privacy rights of owners under the Fourth Amendment of the Bill of Rights, which guarantees that: "The right of the people to be secure in their persons, houses,papers, and effects, against unreasonable searches and seizures, shall not be violated, and no [search] warrants shall issue, but upon probable cause, supported by oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized." The Jim Brooks Act's demand that all legal notices regarding eviction or rent increases be sent to the city in no way stands up to this test of privacy rights. BUT LEGISLATORS DO NOT CARE A WHOLE LOT ABOUT LEGALITIES. THEY WANT VOTES TO GET RE-ELECTED. THAT'S WHY YOU AND EVERY LANDLORD MUST EMAIL OR CALL THEM AND URGE THEM NOT TO PASS THE JIM BROOKS ACT (refer to House Bill 4142). THE MYTH OF A HOUSING CRISIS In 2014, Boston mayor Marty Walsh and his housing chief Sheila Dillon reported that Boston had52,000 high-quality, subsidized unitsthat provide shelter for 126,000 residents (calculated at the city's official 2.4 average number of residents per unit). To this 52,000 units must be added 1,000 new subsidized units that have come online in the past four years since Walsh's 2014 announcement. To this new total of 53,000 subsidized units must be added the subsidized units that will be built with the new Boston Community Preservation Fund, approved by Bostonians in 2016. It is funded by a 1% surtax on all residential and commercial property tax bills and will bring in about $20 million annually, to be spent primarily on subsidized housing. Based on the 2014 figure, 53,000 units comes to 20% to 22% of all rental units in the city, an amount of rental housing that the city boasts about as so unusual that Boston is recognized as a superior national model of success. But they never mention this outstanding success when talking about anti-landlord proposals such as the Jim Brooks Act, since it would undermine the FALSE NARRATIVE that there is a housing emergency. A senior legislative aideand policy advisor at the State House said: "We know there is no housing emergency. Home-rule petitions always start off their preamble with that 'boiler-plate' language." RENT STRIKES: Read two stories showing how they do it Below are stories of two horrendous RENT STRIKESin Boston in May and October of 2016. They were organized by City Life/Vida Urbana (CLVU). SPOA followed theseRENT STRIKES and reported on them in detail in the SPOA Newsletter. You can read the complete reports by clicking the links below. Boston RENT STRIKE # 1 The Cruz brothers, elderly immigrants in Boston, lost $400,000 from a RENT STRIKEby just four tenants, organized by CLVU. They were forced to sell their six-unit building in Egleston Square to a nonprofit housing group, at far below market value.One of the brothers lived in the six-unit building in Boston and did the repairs; they were not high-class investors.Planning to retire, the brothers agreed to sell for $1.3 million to a private party, on condition of a vacant building. The brothers moved to evict all the tenants. When CLVU got wind of it, they organized four of the five tenants to do a RENT STRIKE. They all stopped paying rent at once. CLVU hireda deliberately biased inspector,who cited oodles of code violations, many trumped up, like "faulty wiring" and "loose windows." And something regular inspectors never do, he assigned anexaggerated rent-reduction dollar value for each violation from the start of each tenancy, with the goal of devaluing the building by hundreds of thousands of dollars for any prospective buyers. No way could the brothers afford an attorney to evict them all, so they were forced to sell it to a nonprofit housing group at a price of $900,000, losing $400,000 from their retirement. BostonRENT STRIKE # 2 This Boston landlord, who wishes to remain unnamed, isan African immigrant with a family of five. He lost $10 million when a RENT STRIKE by his tenants forced him to sell his Dorchester property.All his tenants were formerly homeless men or families, who now had Section 8 subsidies to pay their rent and live in his 40 one-bedroom units. This landlord was doing a public service by renting to the homeless.Like many smaller owners, he self-managed from a basement office and hired two handymen to help on maintenance and repairs. CLVU organized a RENT STRIKE in order to grab this landlord family's property -- cheap -- for nonprofit "affordable housing" -- at the cost of this one family's huge financial loss. The owner tried to evict all the striking tenants, and went bankrupt instead. A coordinated attack was launched against him. Inspectors from various city agencies, including Boston ISD, BHA, and the BRA, plus the same hired, biased inspector used in the Rent Strike # 1 above, constantly cited code violations, some trumped up, some nitpicking, many of them exactly the same violations cited in Rent Strike # 1. The city even ordered the owner to do an impossible, irrational thing -- to restore the one-bedroom units to their original two-bedroom configuration -- which would have required ripping out walls, kitchens, and bathrooms, and displacing all the tenants, at a huge cost that would actually reduce the future rental income. How could the city do this? Allegedly because the units had been subdivided long ago without a permit, long before the owner bought them. In court, three free attorneys for the tenants told the judge the property was in "appalling, deplorable, and squalid" condition. Skip Schloming of SPOA inspected several units and the common areas, and took photos. Hallways were clean, trash barrels neat, no litter, and only a couple of cosmetic violations inside (small hole in thebackof a closet, a torn window blind, a small patch of damaged plaster).But here's the clincher: Because his tenants received section 8 subsidies, every unit was inspected annually by BHA inspectors, because annual inspections are mandatory for all Section 8 subsidies. Schloming has a foot-high pile of about half of the owner's annual inspection reports. Some units were code-perfect on first inspection. Others had only a few minor violations, which were repaired, made code-perfect, and re-inspected for the rent subsidies to continue being paid.HERE'S THE BIG QUESTION: How do code-perfect apartments once a year become "appalling, deplorable, and squalid" in less than a year, apparently over and over again, year after year? They don't.The tenant attorneys flat-out LIED to the judge,who subsequently ruled against the owner based on false testimony.Including huge capital gains taxes from a forced sale that the owner tried to avoid, the owner lost $10 million. The buildings were sold to a nonprofit "affordable housing" group, far below market value. "Affordable housing?" Affordable to whom? NOT TO THIS LANDLORD! --------------------------------------- CONTACT YOUR LEGISLATORS WE MUST FIGHT HARD AGAINST THE JIM BROOKS ACT(HB4142). The Legislature's Judiciary Committee is expected to vote on this bill by May 2, the deadline for action. Please contact them immediately and repeatedly. WHO TO CONTACT: Use the list of email addresses below for all Judiciary Committee members. They are clickable links if you want to email each one personally. Alternatively, copy all of them at once and paste them into the "TO" box of your email. One message will then reach all of them at once. It's easy! or mail checks toSPOA, P.O. Box 398115, Cambridge, MA 02139.MassLandlords no longer processes our donations. Thank you! "SPOA gone digital" is a deceptive name being used by MassLandlords. It is a MassLandlords invoice,NOT a SPOA invoice. Thank you for your support! Check out City Life / La Vida Urbana's (CLVU) Facebook site to see what kinds of action CLVU took against landlords.

Eternallyvigilant, fighting for your small property owner rights. Multi-unit apartments, condos, and singles.

[Manolo D.]

Susan O. Sorry, I won’t be reading your long post nor do anything that will “fight” for anything. One thing that I know is, if it is a law, it must be followed - your opinion will not matter, they are laid out in black and white. I apologize but I hate activists both for and against anything. You can go ahead and submit your concerns but other than that, why not keep it to yourself, and maybe to your closest friends, i mean, why bother anybody else when say for people like me, find it a waste of time.

[Scott Mclaren]

Those stories are outrageous! It only took a few minutes to read.  I hope that kind of crap doesn't spread

[Susan O.]

Update on LA City This will spread in California.  Call and write garcetti and city council that you're against it.  There will be no development and investment in LA housing

Garcetti needs to be voted out. He jumped onto this last minute when they started getting the signatures for expanding rent control.

Garcetti supports California state wide rent control expansions and LA city

[Dave Pockets]

Why don't they just build more affordable housing to meet the demand?

[Susan O.]

http://www.latimes.com/politics/essential/la-pol-ca-essential-politics-may-2018-california-landlords-say-they-ll-back-1527887009-htmlstory.html

[Amit M.]

thanks for posting this @Susan O.

Looks like there will be a lot of money thrown against the costa Hawkins repeal initiative. That’s good to know :)

As for that alternative, I don’t think it’s a good idea to initiate anything limiting rents. Maybe it will work for large property owners, but it will be bad for small landlords throughout CA. 

[Susan O.]

Make sure to vote NO on Prop 10. Prop 10 would allow really invasive rent control and repeal the Costa Hawkins act which prevents invasive rent controls