After the ruins of the pandemic, is the push for more stringent tenant protections like a dog chasing his tail that will end up only aggravating the housing crisis?
As reported by the San Francisco Chronicle, Antioch is only the latest city in the Bay Area to enact stronger rent protections by capping rent at 3% or 60% of the Consumer Price Index (CPI), whichever amount is less.
Our earlier article discussed some of the forces at play in the spread of rent and tenant protection measures being digested and approved in suburban areas with less history of activism. People are more receptive to the door-knocking of tenant advocates, and it comes down to dollars and cents. Californians who were once silent about the rent control debate are getting mad. They are paying more for groceries and at the pump. There is sticker shock for just about everything, so it's only natural that people are more empathetic to the calls for increased regulations.
Whenever we across one of these articles about reforms to landlord-tenant law, it usually opens up with a story of a tenant's hardship. The Chronicle article at hand began with the tale of a cockroach infestation, the foul odors from laundry room pipes, and the indignity of broken toilets. Stories rarely open up with the travails of landlords.
In 2018, we were amused to come across an SF Curbed article inviting tenants to share their worst apartment stories, from bed bugs to paper-thin walls. Instead, the thread generated horror stories told by landlords about nightmare tenants.
Let's face it - there are good landlords and bad landlords. Good tenants and bad tenants. No one should be painted with a broad brush. A rental agreement comes with covenants between two parties. If someone fails in fulfilling their end of the bargain, these lease breaches need to be addressed for sure, but there are already mechanisms in place to air out these differences.
In a recent interview, Daniel Bornstein says that housing is fraught with tension. While there may be a difficult but necessary conversation to have with tenants about a chapter change in their housing, landlords should consider the optics of displacing a tenant as we deal with the residue of the pandemic. Our state needs to build more housing and the politics will dissipate but until then, we have a housing crisis and landlords are seen as being on one side of the problem.
Landlords have already been asked to bear the brunt of a global housing crisis by providing free housing. Although having a roof over your head is a necessity, so is having food on the table. The analogy we have used is walking into a Safeway, stocking up a grocery cart, and heading to the door without paying. If stopped on the way out, the shopper says food is a necessity and that the meat, cheese, bread, and milk will be paid for at some far-flung date in the future.
Try that stunt and you might get arrested. But this is what happened to housing providers during the long, dark winter of COVID, and continues to happen in Alameda County. Our community is the only sector of society, to our know
ledge, that has been tasked with providing a service without compensation.
We are in this together.
All of us have felt the pain of inflation, the likes of which we have not seen since we were watching Dallas and the Jeffersons on television. As we observed earlier, the CPI takes into account certain consumer staples but does not adequately reflect the climbing costs of operating a rental business. Costs for building materials, hiring contractors to make necessary repairs, taxes, and so forth.
Existing laws already protect tenants from squalor.
At first blush, anti-harassment ordinances like that recently enacted in Concord come across as solving the problem of tenants living in a subterranean dungeon with no running water or heat.
In fact, the responsibilities of landlords to provide a safe, secure, and sanitary dwelling are already spelled out in local ordinances and state law, which sets the minimum standards to comply with California's implied warranty of habitability.
Whether through making complaints to the city and building inspectors, reaching out to a local rent board, or consulting free legal counsel, there is plenty of recourse available for tenants to voice any concerns about the inhabitable conditions.
Not long after we posted the Chronicle piece on social media, a tenants’ attorney celebrated the groundswell and imparted his take.
“Rent-Control and Just Cause will spread throughout California, and not as a result of ‘left wing’ organizing. Skyrocketing rents, the mass renter exodus from the Bay and LA Areas, and, sadly, landlord retaliation in the face of over-extended eviction moratoria are driving the demand for increased tenant rights.”
We might take exception with the retaliation part. If the landlords resort to “self-help” evictions, the tenant can and will use these heavy-handed tactics as a defense in an eviction action. It is entirely possible, as well, that retaliatory acts will invite a lawsuit. In the words of the Delta Association of Realtors President James Britto in a City Council meeting in the summer, “There’s always a few that ruin it for everyone… we don’t really need more regulations.”
Ironically, efforts to keep properties out of the hands of corporate landlords will ensure that these pariahs scoop up housing stock as smaller landlords are driven out of business.
Lawmakers have a natural distrust for ownership when the owners are corporations, REITS, or LLCs when at least one member of the LLC is a corporation. These types of entities strike as "greed-fueled" investors.
While larger rental housing providers have been able to weather the storm, many smaller operators that own duplexes, triplexes, fourplexes, and the like have been decimated.
When a small, mom-and-pop landlord wants to sell their property because they are hemorrhaging money, who has the wherewithal to buy the property? The so-called greed-fueled investors, of course.
Never in our careers have we encountered so many landlords with 10, 25, 40, and 70 thousand dollars in rent debt.
Alameda County landlords have been especially hard hit, in some cases obligated to provide housing services without receiving rent for 2+ years. Our office has been fielding more calls from cash-strapped landlords looking to avail the Ellis Act to go out of business. It is saddening.