Thursday, April 15, 2021
Uncategorized Debunking the myth of the poor landlord

Debunking the myth of the poor landlord

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48hillspoorlandlord

By Tim Redmond

DECEMBER 30, 2014 – If you haven’t heard the one about the poor struggling landlord who has a millionaire tenant with a cheap rent-controlled apartment, then you’re not reading the comments section on 48hills. We are reminded constantly about this sad soul who suffers from the horrors of rent regulation.

But it turns out, as many of us pretty much knew, that this character, like Santa Claus, the Easter Bunny, the 100th Monkey Phenomenon and Spontaneous Human Combustion, is largely a myth.

Yeah, you can always find a counter-example. There are, I suppose, Magic Bullets, and there are probably landlords in San Francisco who make less money than their tenants. Ronald Reagan found a “welfare queen” who had a Cadillac. But they are very much the exception and not the rule.

That’s the conclusion of a new study by the Anti-Eviction Mapping Project, which compares the median income of renters and property owners by census tract in San Francisco.

Let’s take a few examples. In Census Tract 176.01, South of Market, people who owned property had a median income of $111,330 in 2013. Renters had a median income of $17,396.

Let’s move to the Mission, where there are increasingly wealthy renters. Median income for tenants? About $80,000. For landlords? About $154,000.

There are places where it’s close – one Castro/Upper Market district had property owners at $119,000 and renters at $103,000. I found exactly two tracts where the pattern was reversed, one in Portola and one around the Presidio; in those cases, tenants made just a little more than property owners.

But in the rest of the city? Rich areas, poor areas, areas with gentrification, areas with more stability … it’s all the same. People who own property have more money than people who rent.

Now: Median income is of course an imperfect metric. There could be tenants who inherited vast wealth, or made it on their own, who are now retired from working and have lower incomes. There could be landlords who work all the time but have massive debts. There’s always a welfare queen somewhere.

But if we learned anything from the Reagan Era, it’s that you don’t make public policy on the basis of one example. You have to look at the overall data, which shows that most people on welfare are really struggling to get by and don’t own multiple Cadillacs – and most landlords have a lot more money than most tenants.

Rent control makes it possible for people to establish lives and raise families and stay in this city, even as economic changes that have nothing to do with them ravage the affordable housing stock. It keeps the city vibrant and diverse.

And overall, if there’s an impact on wealth, it’s a shift from those who have more to those who have less. Which this country believed in, once upon a time.

 

Tim Redmond
Tim Redmond has been a political and investigative reporter in San Francisco for more than 30 years. He spent much of that time as executive editor of the Bay Guardian. He is the founder of 48hills.

180 COMMENTS

  1. When buying a property, buyers feel proud about owning their own home and achieving independence. Some people see it as an improved status to own a property rather than rent one.Great read!

  2. Could it be that the potential housing stock for Ellis evictions towards condo conversions has been consumed and speculators are scraping at the dregs just as all two unit buildings that could convert to condos without the lottery were consumed?

    Here’s a “new” progressive idea: cap the amount of market rate housing entitled per year at 1% of existing housing stock plus the number of affordable units produced in the previous year. Have developers compete for the right to build units under the cap by bidding with a package of community benefits, open space, increased affordability, transit and street improvements and the like, with the best offers making the cut.

    Dedicate all affordable housing dollars to purchasing whatever rent controlled housing remains at risk of evictions for conversion into CLT.

  3. Your poster child here is one ‘Jon Doe Jr,’ currently suing the city for Section 8 housing subsidies. Videlicet http://webaccess.sftc.org/Scripts/Magic94/mgrqispi94.dll?APPNAME=WEB&PRGNAME=ValidateCaseNumberSHA1&ARGUMENTS=-ACPF13513331

    Mr. Doe Jr has a $6k monthly disability payment he diverts into a sham trust that has never paid out benefits and now is worth over a million dollars, and yet week after week (just click above) he is in court, suing the city for more benefits.

    He doesn’t have much to do with your point, but he is a much, much better story.

    Plus, what a fucking asshole.

  4. I argue with Sam (more than) occasionally but articles like this are way too simplistic. It most US markets, a landlord takes risks that the author chooses to totally ignore. Who is going to pay for that 30k new roof? Who will still pay the mortgage/property taxes/upkeep when the unit is empty? I watched my parents lease my childhood home in Texas during a downturn since they refuse to sell at a loss (we’re talking a house under 200k). They struggled breaking even on the costs and any repairs came directly out of the family savings/kids’ college funds.

    Even though it’s baffling to some of the commenters here, yes there are financial risks inherent in being a landlord. Just because someone may be wealthier than their tenants doesn’t make them upper middle class with a bankroll to pay for repairs/downturns.

    If there is ever a downturn, will you force the renters to pay above-market rates to the landlords during a recession since they pay below-market rates during other periods? Oh wait, ALL the risk falls upon someone wealthier because “we think they can afford it”. Stuff like this is why being affiliated with progressives unpalatable.

  5. Wow! What a shock. You mean to tell me that people with more assests (wealth) make more money than people with less wealth? Maybe the next map will be “People with jobs have higher incomes than the unemployed!!” How unfair!!!!

  6. Just went and looked at her site, she’s got stuff from AJ+ which is AL JAZEERA….yeah the Qatar people who also disparage Israel on a daily basis & talk about Jews & “blood libel”. Just incredible. And read this link to see what AJ+ really is, they hate gays, Jews, HIV people should never visit Qatar, etc – but I guess it’s ok to accept $$$$$$$ from people from Qatar, since they’re not, you know JEWISH, because that’s a whole ‘nother ball of wax and the entire BDS left hates Jews/Israel.

    But it keep her in her rented apartment in Bernal!!
    http://www.theblaze.com/stories/2013/01/05/who-really-owns-al-jazeera-and-whats-to-become-of-current-tvs-hosts/

  7. The Eviction Mapping Project is one person, Erin McElroy, who is someone from back east, who came here “to make a point” imho. And she’s the one that created this job for herself since Feminist Studies pays nothing. Like so many others that came and went before her, she is getting probably $100k in grants from SF, and the POOR, yes the POOR, whom she claims she wants to “help”. It’s all nothing but a scam to take from the poor and take from the city coffers and enrich herself…with digital graphics and faulty data.

  8. So What? The vast majority of American wealth is in real estate equity. The attitude currently in America is that those that made the decisions to acquire this wealth should somehow be responsible to share it with those that didn’t. That means you TIM. What you you have, $1m in equity in your home by now? Break some of that off for someone else who needs it why don’t you, cause it’s just not fair that you succeeded in creating wealth for yourself and others didn’t.

  9. @ Sam –

    No! Obviously such a deal would needs be passed as legis. There is a precedent in the Good Samaritan legis where people affected by calamity like fire are offered rents below market for a certain period whence the LL can later increase to market.

    However, this proposal is a bit different in re-claiming the eviction right (by trading below market rents). Its likelyhood of passage by tenant-friendly pols is not good, as Eviction-control is more prized than Rent control. However, I hold out the hope that maybe in the future the potential of being in SF for a cheap rent for limited time will envolk larger appeal.

  10. Pete, your offer is entirely reasonable IMO but there would be nothing to stop a tenant agreeing to your terms and then turning around and claiming rent and eviction control anyway.

    A tenant cannot waive his rights under rent control, so any agreement you had with him to waive those rights would be unenforceable.

    I am afraid your good intentions would be sucker punched. “No good deed goes unpunished” is the most common phrase I hear from other landlords..

  11. LR, I have no idea where your diatribe comes from but it certainly isn’t from me. Even a casual read of my oeuvre here reveals that I am a passionate supporter of home ownership for everyone.

    In fact I believe that SF’s alleged housing crisis is caused because the city’s policies were chosen in a misguided attempt to help tenants when the city should instead have focused on helping more people to buy their own home and get a foot on the housing ladder.

    Nothing would make me happier than for tenants to stop feeling trapped in their rental home for decades and instead take a risk and buy a home, even if it is only a modest abode. In a nation with over 60% home ownership rates, SF’s rate is pitiful.

  12. @Gary…
    “If you don’t want to own a liquor store, don’t buy a liquor store. If you don’t want to be a landlord, don’t buy a multi-unit building, or do so and don’t rent the units. But if you choose to not rent, don’t whine about it.”

    Guess I left out the part about Rent Control landing on ME (I’m pre-’94), not me buying into an RC sitation.

    There are still plenty of us around (high four figures to low five figures). Alot of Ellis evictions stem from our group who pass away or pass it on, being good to the tenants we have, but others coming in find a hopeless and unprofitable situaiton. RC started as a temporary fix. It really needs to change to take into account all the complexities of a permanent situation. That would include those tenants, who can pay, to be paying so that those who can’t pay aren’t dumped; and giving those who provide that housing a bit of an incentive to continue to do so. But I suspect no one wants ot pay any more than they have to. Its human nature. But it also leads to bad outcomes when no one wants to only eat meat and desert and not to eat thier vegetables.

    So, maybe mine’s a bad business situation. OTOH, this is my HOME. So, sorry if my personal needs take precedence over my business needs. However, I am not alone in keeping units vacant (though stats aren’t avaialbe), just dismiss me at your peril. Thats not to say I don’t engage in business. I rent out three garage/parking spaces — because they aren’t controlled.

    And I have a standing offer to let out my two empties at HALF price of the going rate IF you allow me to terminat those tenancies according to state standards (30/60 Day Notice). So, how about $1250 for a 1BR in a desireable neighborhood?

    Downside is you may be gone in 2015 or ’18, or ’22 -at ,my discretion not yours. IOW, most likely
    you are getting not-permanent housing (but not necessarily). If you want definite, buy your own multi unit bldg. You say you get along with your LL. I’ve let my tenant store stuff for 7 yrs – no charge. So I’m not unfamiliar with generosity. I jsut don’t like to be forced to be generous. But then you understand; you send IRS, FTB and City Hall extra money every year, right?

    They say the first step to solving a problem is to stop “digging”. Prop G and so many others like it are in the ‘Big Dig’ tradition. So … just stop!

  13. “Hoarding by the Rent Controlled Royalty”?

    Why stop there? Let’s also target lower income homeowners and evict them too since they’re moochers just like tenants. Just because some worthless, slacker family could afford their home 20 years ago when it was $200,000, but couldn’t afford the current price of $1.5 million, they shouldn’t have any right to live in SF either. Let’s round them up and evict them from SF so that more high-performing, ambitious and younger, sexier families favored by Mayor Lee, Willie Brown and SF politicians can live in these houses to be part of the glamorous, privileged elites that SF bureaucrats currently favor.

    Low-income homeowners are just as despicable and smelly as low-income tenants, so let’s be fair and banish both groups from the city. The most beautiful, dynamic and sexiest city in the world has no place for these lower-income, worthless homeowners. Ending Prop 13 can’t come soon enough so that these tens of thousands of homeowners can be finally banished from the golden shores of SF’s promised land.

  14. Gary, I don’t think Pete was “whining” about not renting out his units. I read him as simply opining that it is a shame for the city, and for people looking to rent, that he feels that the rental laws are too restrictive and punitive for him to risk doing so.

    But I am glad to see that you do not support any new laws to try and deter or punish property owners who, for whatever reason, decide to keep their units off the market. Personally I might support something like a property tax break for landlords who put units onto the market that have been kept off the market for a while. But I don’t think that would be enough to motivate someone in Pete’s situation.

  15. Gary, your true colors come out. You’re not interested in debating the issues and certainly not of being corrected. And you’ve got some nerve complaining that I never admit it when I’m wrong because I cannot recall you ever proving me wrong and, moreover, I cannot recall you ever admitting to being wrong yourself either.

    Seriously, if you cannot debate with someone without getting angry and hateful, it would be much better for your mental health if you demur. I’m only interested in the issues and not in petty squabbles.

    And since you made no factual on-topic comments , there is nothing more for me to refute. I wish you a calmer and more reflective new year.

  16. I like the idea of means testing landlords who are going broke “providing housing.”

    Any landlord that is a SF resident who receives less than $25,000 a year in total rent from their property(ies) AND whose total assets are less than $100,000 can qualify for city provided food stamp vouchers and a free MUNI pass. Of all the predicable comments above (thanks again 48 Hills for providing this landlord-centric website!), means testing the numerous(?) poverty-stricken landlords to qualify for city assistance is the best idea I’ve heard so far.

  17. Interesting. I’ve lived in my building for more and a few decades. In that time, I’ve seen many tenants come and go. I’ve learned that “good tenant” (meaning pays rent and doesn’t create problems for the owners) does not mean “good neighbor” (meaning someone you can trust in your building) and good neighbor does not mean good tenant.

    But in all of that time, there has been only 1 BAD tenant/neighbor and maybe 2 other tenants who weren’t awful, but did create problems for the landlady by not following all of her rules.

    The rest have all been great for the landlady (and now her son) and pretty good neighbors. Most of us have worked to help the landlady. Most of us work to keep the building expenses down. But you know what? The landlady created the environment for this to flourish. It doesn’t just happen – it needs to be cultivated.

    And FYI, while technically I am covered by rent control, I have a separate agreement with the landlord. It is a mutually beneficial agreement and if either of us wants to change it, we actually talk with each other.

    It is your right to keep your units off the market. But it isn’t good business and I don’t think laws an policies should consider your situation.

    If you don’t want to own a liquor store, don’t buy a liquor store. If you don’t want to be a landlord, don’t buy a multi-unit building, or do so and don’t rent the units. But if you choose to not rent, don’t whine about it.

  18. @Sam “Oh, and there is no need to be rude just because I hold different views from you.”

    Don’t lecture me about being rude. Your rude dominance of every conversation on this blog, your obsession with having to have the ‘last word’ in every ‘conversation,’ your dismissive attitude, your racism and your gross generalizations eliminate your standing to lecture anyone about rudeness.

    You never acknowledge that you are wrong and you create a partisan atmosphere with your flippant bullshit. Many of us are very open to being incorrect and learning from others here. But most of us cannot get beyond your ugliness, your obsession and most of all, your arrogance to hear what you and others are saying.

    And then we have your penchant for changing the topic when you clearly are wrong or losing ‘the debate’. You demand stats and data from others and almost NEVER supply your own when you are challenged to do the same.

    55 of the 135 posts on this thread are yours.

    Aidos and happy new year.

    PS: Developers lost in the last 2 elections.

  19. Guest, I agree the study is flawed. It’s author admitted earlier that only five minutes work went into it, and it shows.

    I’m not sure I agree that the “vast bulk” of tenants benefit from rent control. For a start, about one third of SF renters live in units that are not controlled e.g. post-1979 build, SFH’s, condos, live-work lofts and government owned rentals. Not only do they get no benefit from RC but they may resent those who do.

    Second, anyone who has rented recently, or who is currently looking for a place, is paying far more because of the degree of hoarding of rental units by the established RC royalty. It’s really a transfer of wealth from younger renters to older renters and boomers. Rents in SF increased overall by 14% in 2014. Almost all of that increase is borne by the two classes of renters defined above. Again, resentment.

    Then there are the tenants who were evicted via Ellis or OMI who would not have been but for rent control. And the ones who suffer harassment and poor upkeep because their landlords resent them and want them out.

    Is that more than half of all SF renters? Maybe not. But it’s a good number and, when you throw in the one third of San Francisco households that are owner-occupied, then it’s not hard to see where the majority of voters needed to repeal rent control at some future point might come from.

    Again, you need to define the term “undue hardship” for landlords. Getting a return of maybe 3% a year when the market is at maybe 8% a year is certainly an imposed loss. And may help explain why we saw over 200 Ellis evictions in 2014. Hardship is not something to be inferred by others but rather something one feels and acts on oneself.

  20. This analysis makes no credible claims about landlords, rather about property owners in the aggregate versus tenants.

    I am sure that you can find cases at the margins where a few landlords are suffering undue hardship or where a few high income or wealthy tenants are benefiting from rent control protections. So what? Rent Control is beneficial to the vast bulk of renters and does not impose undue hardship on most all landlords in the general case for which public policy must be crafted.

    This analysis by the AEMP sheds no light in the problem at hand.

  21. Y, data about individual property sales and their prices and rents there are available via Zillow and other RE sites. So it isn’t hard for you to discover those for yourself.

    In my case, I follow the local RE market, monitor what is for sale, and so I often see the real-life numbers. They are of course all over the place but there are definitely some buildings that sell for low rental yields.

    In those case, the old LL might have been OK if he bought a long time ago, but the new buyer has a much bigger loan and property tax basis, and so the building is no longer viable. In that case, the only path is Ellis/TIC. That’s why that law exists.

    The banks will lend based not only on the rents but also based on the LL’s other income, so it’s possible to get financing for a low-rent building. It’s just really hard to make a viable return on it, because they are not valued just on their cashflow, but also on their upside potential.

    This situation is caused by rent control because prior to that. SF rental buildings sold almost entirely on cashflows. Rental yields are much more consistent in place with no rent control – in SF they can vary from 2% to 10% or more. Insane.

  22. Wrong. I asked a specific question to jjfieber and he/she evidently could not answer it. Nor can you, evidently.

    The original point is therefore refuted until such substantiation is provided.

  23. Yeah, if we accept for the moment that landlords are financially very comfortable, which is what Tim wants everyone to believe, then it ought to be clear to folks that those same landlords can easily afford to keep their units vacant if they no longer want the hassle and risk of getting a “lifer” tenant.

    My solution to the same problem is to go with short-term lets. Ideal is one to six months as that escapes all the rules about short-term lets and Airbnb. I’ve been successful in finding tenants who move on after a few months – usually people temporarily visiting SF or in the process of relocating here.

    But every time one leave, I do think about leaving the unit vacant. It’s good to regularly have that option.

  24. Oy.
    You, Sam, are the one ducking arguments, is what I meant. You say you ‘refute’ arguments, but you don’t. You just type something to have the last word, which usually means changing the subject, or making an unsupported claim. Having the last word is not refutation, it’s just annoying.

  25. @Gary SFBCN
    “I’d love to see credible statistics regarding the ‘thousands’ of rent controlled units that are left vacant due to rent control.”

    Again, if you look back – I think it was the Zombie Neighborhoods piece (12/16 ish), there was the SPUR paper and other comments. “Cred. stats” are difficult; so that whatever comes up is fodder for partisan parry. As a proponent of the ‘numerous vacancies’ (and having two myself), I’m prone to favor a large number.

    But if I look at the Census stats, and compare them to places around the country – both of similar size (Boston, San Diego), with similar policies (NYC), and then other communities of differing size and laws, it’s hard to find definite trends. Boston, which *used to have* RC (but state law proscribed it) has a similar % of vacancies. (and of course it depends on whats defined as ‘vacant’ by the Census: in-btw occupants, pied-a-terres/vacation, purposely held off, renovation, …). So any attempt at something definitive is bogged down in a morass of poor boundaries and labels.

    What the Census sez is that SF has btw 25-30K “vacant” units (rentals?, homes?) which is about 7-10% of all units. Best guess (and it is a guess) is that somewhere around 7000-10000 (maybe less) units are recused due to owners reluctant to letting them out. Some may have that unit where the tenant moved out and the owner is waiting (sometimes several years or more) for the other tenant to go so he can sell “delivered Vacant” which fetchs a pretty price.

    But that is still a ‘vacant unit’ held off due to RC laws. (otherwise, it would be relatively easy to rent for a few months or years and discontinue the rental when its sales time.) Just saw a listing on Linden where the Sales Price was about 8% lower than Listing Price – probably cuz both units were occupied by medium term tenants. $550k per unit (2Br w/ pk), so quite low for the area.

    Sadly, I think that there are relatively few units held off for a long time (though there are some). Mine have been vacant for more than 10 yrs each, because I live there and have no other recourse to nasty or bothersome tenants. Probably forgone about $1/2M, but … peace of mind is priceless. And this is something tenant advocates can not grok. They think its all about the money (well, for most LLs, probably). But for many of us small prop owners, its OUR HOMES. I’m hoping you can understand this a bit. Say Junior grows up and moves out (yeah, young people these days move back in all too frequently). Well, you leave his room vacant. Sure you could make money by getting a stranger. But the risks aren’t really worth it. Complicate the rules, and its even less likely mom-n-pop are gonna let that room to someone. Peace-of-mind trumps funny money.

    I look forward to seeing what can be done with the new AirBnB rules. But, rent to long term tenants? Not a chance. I’ve got enuf as it is.

  26. Taxes are not “frozen” by Prop 13. They automatically increase by 2% a year – more than the rate of inflation, and at twice the rate that rents are allowed to increase by in SF.

    Moreover they increase upon every sale, and by any voter-approved increase in ad valorem or parcel taxes.

    To the other, the entire tenor of the article is anti-landlord, the implication being that if landlords make any profit at all, then rents could and should be lower.

  27. “inadequate returns”—so why did they buy the building? And how did they get a bank to finance them?

    As to “buildings that are not economically viable… with long-term tenants paying low rents” and “landlords who have inadequate returns … who bought their building recently”, as you say, do you have any numbers for either of these classes? The whole point of the AEMP study is to replace such anecdotal claims with a concrete estimate.

  28. That’s a whole different argument. This article talks about whether landlords are suffering hardship at the expense of freeloading tenants, and argues that landlords are overall richer. What you’re doing is changing the subject, starting with “what really matters…” to what you think the market wil do.

  29. Mike, aren’t taxes frozen anyway by prop 13?
    Really, I haven’t seen anyone demonizing landlords here, especially not small landlords. I personally have had some very nice landlords, and have a few in my family. The consideration here is how to find a balance with no excessive hardship to either landlords or tenants, that’s all.

  30. I agree, Pete, but would go further. Even if Tim can prove that landlords have higher incomes, so what?

    That does not imply that it is OK to reduce those LL incomes to subsidize tenants unless you believe in wholesale redistribution of wealth, which most Americans do not.

    If Tim wants to see a vibrant rental sector then he should declare that means landlording should be profitable and viable in SF.

    His idea that as long as a LL can cover his costs he isn’t entitled to any more than that defies the obvious fact that LLs also take on considerable risk by tying up their capital in a business so susceptible to political risk. Why take on more risk for less return?

    To me that shows that his argument is based more on envy than on the desire to truly see a rental sector that is growing rather than declining.

  31. I will agree on the (no) ‘revenue problem’. If you look at taxes in CA, we have some of the highest across all the different classes of anywhere in the nation (except, gasoline, iirc).

    While Prop 13 holds down RE taxes for some, plenty of others (new purchasers) pay extraordinarily high taxes. The much-touted “million dollar home” in SF requires monthly payments from the new owners of $1000/mth – just for the tax. Add your mort., ins. HOA, utilities and its not for the faint of heart. Or even the middle class.

    Even an “affordable” unit – without any mortgage component – will have HOA and RE taxes that are on a par with many rent controlled rents. No wonder many RC recipients are loath to go to ownership; they’ve got it ‘in the bag’ with their landlord holding it.

    But lets get back to the topic of how all this “data” proves that renters are poor and LLs are rich.

  32. Jennifer, how does illustrating income disparity between tenant and owner debunk the myth of the poor landlord?

    Neither tenant income nor owner income are the same thing as landlord income. If you don’t have the data than don’t draw the conclusion.

    Very sloppy work, almost desperate.

  33. A vote on a single building in a low-turnout election is nowhere near as significant as a vote in a high-turnout election for a city CEO who supports growth and development.

  34. Gary, of course not. The viable buildings will continue to be run as rentals. The buildings that do not flow will likely suffer a change of use. Surely you understand why?

    Oh, and there is no need to be rude just because I hold different views from you.

  35. Yes, I saw the pro-growth vote that voted against the 8 Washington project and voted again to reinforce height limits on the Embarcadero. Keep dreaming.

    Have a good evening.

  36. @Sam “They sell because they can be upgraded via Ellis/TIC if they have low-value tenants. ”

    Yes, because you have interviewed every buyer over the last 5 years and they all say this is why they bought.

    You are so full of shit.

  37. PS: This is a “real discussion” because there are opposing points of views being expressed. Your idea of moderation is to suppress and censor any dissenting voices.

    But then no progress will be made because you will be nodding in agreement with a very small number of people.

    If you cannot convince me that you are right, then you cannot convince the silent majority of voters who are happy with the current pro-growth olicies and who will re-elect Ed Lee again next year for more of the same.

  38. But we have been trying your solutions for 40 years and they have failed. Why do you think another 40 years of such policies will change that.

    Here is my prognosis. The absolute number of rent controlled units will decline forever for obvious reasons. The percentage number will decline at an even higher rate because of all the new build.

    At some point there will no longer be a critical mass of SF voters who benefit from rent control and, at that, point it wil either be repealed or it will fade away.

    You are correct that we also need to lose the NIMBYness, which is an opposing policy to affordable housing. But that again is a gradual process and not a revolution. If you think long-term enough, most of the old buildings will go away and be replaced by denser structures.

    SF will become more affluent and moderate as a result, but many of them think that is a good thing.

  39. They sell because they can be upgraded via Ellis/TIC if they have low-value tenants. Their intrinsic value as owner-occupied units way exceeds their value as a rental.

    Some buildings sell for a rental yield of 2%-3%. Such a purpose only makes sense if the new owner has a plan to either turnover the tenants or exit the rental business.

    I’m not talking right-wing anything, nor even politics. I am explaining economics to someone who appears to be too ideologically blind and biased to understand.

  40. “There is no way around this. Rent control crimps profits and therefore makes SF rental buildings less attractive as an investment class.”

    Yes, I’ve noticed how many buildings have languished unsold for years with no interest from buyers.

    Just because you want to believe your own right-wing talking points doesn’t make them true.

  41. I don’t believe rent control is the problem, other than it doesn’t cover all rental units in San Francisco.

    I have lot’s of reasonable solutions. I believe that with deliberate, controlled growth, we can double the population of SF. There is plenty of land to build upon, but not exactly in areas where people want to live.

    But what we need is a long-term vision – not episodic variances every time a developer wants to develop something.

    We also need for developers to pay for all necessary infrastructure upgrades upfront.

    We also needs to implement laws and policy that hinder speculation.

    And every time I begin to discuss solutions, Sam and others spam the discussion with “can’t be done, progressives need to grow up, etc,” and never offer alternative solutions, other than we have to get rid of rent control.

    If Tim would like a real discussion, he needs to have some type of moderation on this blog. Because now we get right-wing talking points in most of the posts (40% from Sam’s) and not much else.

  42. Nowhere in the Bay Area is going to be cheap. But you can still get a one bedroom for $1,000 to $1,2000 in various parts of the Bay Area. Just nowhere with rent control.

    And of course part of the reason why rents are higher outside of SF is because there are no vacancies in SF (because of rent control) and so people have to rent elsewhere, driving up rents there as well.

    This article is wrong for two reasons. First because the data doesn’t say anything about the profitability of landlords, although it claims to.

    And partly because even if landlords are doing OK (and many are if only because they get turnover) what really matters is whether there are superior risk-adjusted returns available elsewhere. If there are, then it makes sense to close down the SF rental business and start up another one some place else.

    There is no way around this. Rent control crimps profits and therefore makes SF rental buildings less attractive as an investment class.

  43. Gary,

    Did you even read my post? Did I demonize tenants? Did I call for the repeal of rent control?

    You can’t see it, but you are part of the problem. You refuse to consider any reasonable solutions to our housing problems and instead, reject any ideas to make the existing laws more equitable and effective.

  44. No rent control in Palo Alto and they have high rents. No more rent control in Manhattan and they have high rents. There are two cities in the SF Bay Area with rent control. The rest of the Bay Area is free from these controls and yet the rents across the Bay Area are high.

  45. Standard garbage reporting; skewing facts to make them fit the paradigm you want. What more can you expect?

  46. As always you miss the point. The fact that a LL covers his costs and perhaps makes a small profit is irrelevant to whether that LL is happy with his returns. If I can get 10% a year from stocks and just 3% from a rental building, then it is obvious I am going to Ellis, sell and invest in stocks instead.

    And that is why we had more than 200 Ellis evictions in 2014 and countless other no-fault evictions – because returns are inadequate, the game is rigged, and so landlords leave. Not all of them, of course – some may not need the money. But enough to cause a crisis.

    And that ignores the total lottery nature of this situation. Some tenants and landlords do great, and some do lousy, and there is no logical rationale behind it. It is mostly luck, although a shrewd LL can do well by avoiding certain classes of tenant who statistically are more likely to linger around forever.

    Again, why do you support policies that cause rental units to be converted to owner occupation, thereby driving up rents?

  47. Its humorous to listen to Rent Control supporters talk about how great it is when it is the exact cause of why the cost of living in the city is so exorbitant right now. Its really a very simple formula, let me help you: rent control means less turn over for available apartments. Less turnover means less supply on the market, which in turn causes the demand for what is available to sky rocket, thus the high prices you see today. The new construction you see around the city would never have happened if rent control was never put into place; the only way developers are making these projects work is because there is no supply and they can charge what they want.

    Class dismissed.

  48. As long as you are willing to let a couple of strange people move in with you Soviet Style, I say have the city send some folks over to test things out.

  49. So because you’re losing this debate you want to start a different one that you think you stand a better chance of winning?

    But you reminded me that there is another class of people the left hate – people who aren’t overbearingly politically correct.

    Oh, and cops.

  50. “Instead, all of the progressive solutions involve demonizing the providers of housing. There is nobody trying to propose reasonable solutions.”

    LOL! You all demonize rent control as if it is the cause of all problems in San Francisco. You demonize tenants who have paid rent for years as being freeloaders or worse because they entered into a contractual agreement with landlords, landlords who knew full well what the laws were. My landlord, who is a saint, has a building under rent control. He is happy with the rents he is getting. Ditto for most of the other landlords I know.

    Businesses that have been successful for decades are demonized as being incompetent when they have to close because they can’t pay rent that is quadrupled.

    Because you all can make a lot of money from artists, musicians, etc, they are seens as being as bad as the homeless in your eyes.

    And the ONLY solution you put forth is dumping rent control and whine that we are demonizers.

  51. Nancy, not everyone who works hard will succeed. But nobody who doesn’t will. It’s also about how you work, what you understand about the world, the risks you take, and the effectiveness of your ideas.

    If it were easy to be rich, we’d all be rich.

  52. not dealing with reality and the facts, Sam: your profile of the landlord doesn’t exists nor does your “vision of America” where hard work is rewarded, etc etc etc

  53. The left needs scapegoats, and that is not a new thing. Marx had to postulate an evil class of people (capitalists) in order to ferment socialist revolution, and that is no different today.

    It’s just that the class of people that SF progressives hate grows every larger i.e. white people, old people, Christians, landlords, bankers, techies, business owners and now even, apparently, anyone who is moderate politically. They are all the anti-christ and, taken together, they are a majority of voters, which drives the progressives ever more aggressive, hateful and irrelevant as they rant and rave at the silent majority who have no time for their antics

  54. Tim, the thing with utilities is that they represent necessities: water, heat, light, energy and (these days, evidently) cable TV and phones. Your point is presumably that shelter is also a necessity. And perhaps it is, but living in a leafy, desirable, affluent, expensive zip code most certainly is not a necessity. It’s a luxury.

    I’d like to live in Aspen, but I cannot afford it. Should Aspen subsidize me to live there just because I want to?

    Your mistake is regarding SF as an island when, in reality, it is just one neighborhood in the Bay Area. There are many much cheaper places to live elsewhere in the Bay Area, many of them as close to downtown SF in terms of time as many areas of SF.

    Another mistake. Utilities are regulated because there is a single monopoly supplier. That is not the case with housing where there are thousands of landlords to choose from in SF alone, and tens of thousands in the Bay Area. None of us have a monopoly – you are free to switch from one to another if you do not like the deal you have. You cannot do that if you are unhappy with PG&E or SFWater. And switching landlord is routine in laces without rent control – it is your laws that making switching undesirable and traps people in their homes.

    And the issue with LL profitability is a red herring. It is the disparity between similar LL’s that is the issue. I’ve had a lot of turnover and have done well. Another LL down the block has been stuck with the same lifers for decades and barely scrapes by. Don’t you think that is every but as unfair as two tenants, one of whom has long-term rent control and the other who is fighting in the open market?

    And of course when you make landlording less profitable, what happens? They quit. And thousands of rent-controlled units leave the rental market every year to become TICs, Airbnb homes or even to lie fallow and unused. If you disincentivize landlords they will stop being landlords. Your policy eats its own entrails. LL’s seeks the best return they can get and not just to cover their costs. And if we do not, we Ellis, because the voters have supported that as a state-wide policy and limit on over-regulation.

  55. If progressives were really concerned about housing solutions they would think outside the standard punish the small landlord proposals. How about a property tax freeze for pre-79 multi family property transactions where tenants are not evicted? Or how about allowing for capital improvement pass throughs even where the tenant is deemed to have a financial hardship (the city can pick up the difference)? And how about allowing for realistic increases (CPI) instead of below inflation increases?

    And most importantly, how about some sort of means testing. You could even structure it such that the difference between market rent and the rent controlled amount for well off tenants could go to the city and used to build affordable housing.

    Instead, all of the progressive solutions involve demonizing the providers of housing. There is nobody trying to propose reasonable solutions.

  56. “it is an irrelevant argument. That is not policy makers concern. It is just you trying to stir up resentment towards landlords; not so productive.”

    Exactly. This is why, after being involved to various degrees in progressive politics my whole adult life, I’ve found myself drifting away from it in the past couple of years in SF (if only at the local level; the Republicans will certainly never have my vote). It’s governed by a very specific group with much, _much_ more interest in venting wrath towards their less preferred demographics than with actually achieving results for people through policy.

    I remember when being on the left made you part of the reality-based community. It’s really disappointing to see it reduced to this.

  57. Melvin, you misunderstood. I made no comment about the relative worth of anyone, not least because no two people could probably ever agree on what the standard is.

    My point was limited to the economic choices people make in terms of their ability and desire to live in SF which, as we all know, costs a lot.

    And by that standard it is clear that some people make better decisions than others, and therefore can more easily afford to be here.

    Which leaves this question. If you made choices that are not conducive to living in SF, then how much should the rest of us enable you to do so anyway on our dime?

    And why? So turn the question around. What is the value to the rest of us that you are in SF? Why should we subsidize you?

  58. Ofcourse there has to be regulation, however rent control is only one tool and is exacerbating the issue here. There has been a housing crisis in SF for 20 years, and the current policies are making things worse. I haven’t seen any new ideas from progressives in those 20 years, just laws to try and fill a hole made by a previous law.
    Your rhetoric is just dividing communities; we need to hear from leaders with solutions, not the same old voices pandering to their supporters.
    As for presenting a landlord losing money who cares either way, it is an irrelevant argument. That is not policy makers concern. It is just you trying to stir up resentment towards landlords; not so productive. But highly predictable.

  59. I’ll refute your meme. You speak of risk takers and people who study hard and work hard. So teachers and college instructors don’t study and work hard. Nurses and other health care providers don’t work hard or didn’t study, aren’t worthy unless they are doctors in the high pay specialties.

    What you are really saying is that a) Those of us who just happened to study computer programming or finance are more worthy than others. I would say you were just lucky to have the right skill set at a specific moment in time. b) That other folks like myself with white collar skills don’t deserve to live here and provide services because I didn’t luck out or choose to learn to code or had no interest in being in finance.

    I don’t need to insult you to remind you how insulting your self-rationalization is too so many other people who studied hard and work hard.

    My satisfaction comes from the good work I do as a journalist for society, not on how big a pile I was able to squirrel away to buy a big house or tell others how lazy they are.

  60. I haven’t yet heard from anyone who can present a landlord in San Francisco who is losing money. They say the worst thing that can happy to a person is for his or her best friend to get rich; before that, you never knew you needed a yacht and a fancy car. Now your best friend has one so you feel bad. Landlords in SF were making money before the housing crisis;now some of them are making a lot, lot more. There’s a difference between losing money and making less than someone else in the same business.

    I could argue that in a crisis like this, and it’s getting worse in American cities (where the federal government refuses to have a real urban housing policy, one that would cost real money), housing should be treated like a public utility and regulated the same way. How’s about that, Sam?

  61. But the problem here is that this analysis is as flawed as the libertarian arguments against rent control are because all homeowners are not landlords and the income of homeowners does not correlate to the income of landlords.

    I like it when libertarian arguments are flawed, it impedes their case, but flawed arguments are not beaten with flawed arguments.

  62. “Luck didn’t come into it.”

    Pompous ass, there are millions of people who work hard, some holding 2-3 jobs, make huge sacrifices and never get ahead.

  63. Chris, he’s made half a dozen comments on this thread. They are all off-topic and abusive. Best to just ignore the troll and respond only to those interested in the topic and in real debate.

  64. Asking for credible statistics is reasonable, but you should also be asking for credible statistics for the thesis being expounded in this article. And for the prior article here claiming that one third of new condos were vacant. Because I have seen none supporting either.

    Seems to me you are very selective about what theories you want to see credible statistics on.

    I am not thankful for what I have because I worked very hard, took risks and made sacrifices for it. Luck didn’t come into it. And I want more because I will reinvest it to provide more housing, investment and employment opportunities for others.

  65. I’m really sick of hearing about financially successful people complain about rent control. Instead of being thankful for what they have, the whine about not being able to have more.

    I’d love to see credible statistics regarding the ‘thousands’ of rent controlled units that are left vacant due to rent control.

  66. Y, I asked for evidence for the claim made and he could not provide any. That’s as close as to a refutation as needed.

  67. It’s easy to tell you have no refutation when all you do is insult the other party. Why make that so obvious to readers?

  68. Really; are you kidding me Sam? Don’t you have any more imagination than this tired old meme above? You know, there are doctors who can help with this kind of neurosis. Or perhaps if you study hard you can figure it out all by your lonesome.

  69. Translation: “I cannot refute any of their points or arguments, nor make any salient ones myself, so instead I will disrespect Tim’s civility imperative and just throw out some insults and personal attacks”.

  70. If you are being crushed it is because you decided to regard as an enemy the person who gave you the most precious thing possible in SF – housing.

    If you bite the hand that feeds you, then you can expect to be bitten back. Landlords did not start this war but they will end it by pulling the rug from under you. And you will only have yourself to blame.

  71. They claim to have used census data which means the figures are self-reported and therefore very unreliable. Those fiddling their taxes may under-state their income while others will give a big number to stoke their ego.

    They don’t even indicate if the income is gross or net of costs, or whether it is pre or post tax. It’s a hopeless piece of “work” and in fact the author admits above to putting it together in five minutes.

  72. I’d characterize much of tenant victimhood in the exact same way. So what if you can no longer have a bargain basement rent after decades of cheap rent? Who cares if maybe once or twice in your life you have to find a new place?

    What makes you so special that someone else should subsidize you?

  73. You say: “Rent control makes it possible for people to establish lives and raise families and stay in this city”
    I think there is some evidence of the exact opposite, Rent Control ensures Landlords look for and hold off renting until they find a tenant who are not likely to stay in the city more than 2 or 3 years. PHD students are very popular tenants as our young tech workers. Other cities without rent control landlords look for stable long time tenants.

  74. Who cares, Sam/John? The point is that landlord victimhood (and property-owner victimhood, if you must split hairs) is totally overblown. Your endless whining about the (mythical) harried landlord is risible in the face of (real) mass displacement.

  75. Just a question, I really don’t know the answer…but, isn’t everything a renter pays in rent counted as “income” the landlord? In other words, if a renter is paying $24,000 a year in rent, wouldn’t that boost the landlord’s “earnings” by the same amount? And out of that, the landlord has to pay a mortgage and other business expenses for upkeep and maintenance of the property, in addition to putting a roof over his/her own head.

  76. Yep there are numerous negative effects of rent control, I have given up listing them or even engaging in arguments on line as there is no getting through to some people. Happy New Year 🙂

  77. “The purpose of rent control isn’t to ensure low rents. It is to provide the opportunity of long-term tenancy in rent-controlled units. ”

    But see, the purpose has morphed. It started out – as the name of the legislation states – to “STABILIZE” rents so that renters weren’t clocked with exorbitant increases. Only later, with additions like rent-increaase-below-infation has it changed to a policy of holding people in place. The purview for long-term occupancy is called “homeownership”. Renters come and go. The City made a mistake in not providing policies for those that couldn’t purchase the means to do so.

    But, political considerations I guess were paramount to good policy, or even the ultimate benefit of poorer residents.

  78. No high pressure here. The sad thing is you are admitting the map is worthless as it omits many data points. Not sure how you can draw any conclusions other than it is a poor piece of journalism

  79. That’s a good way of putting it, Chris. In theory, rent control is supposed to help build stable communities. But in reality it massively incentivizes landlords to rent to the kind of people who do not plan on staying here.

    It also pollutes the relationship between landlords and tenants, who often live in the same community and even in the same building.

    And it creates divisions and resentment between different classes of tenants depending on whether they have rent control or not, and between established tenants and new arrivals.

    So the costs of rent control are not merely financial, but social as well. It undermines a sense of community.

  80. Hit piece, yes. Investigative reporting, no. Gut verk, Hermann.

    Kinda goes along with the emotional bait published in the Chron this am, about how Ellis evictions aren’t minutely followed up upon. You know, why we haven’t spent million$ to check and a literal handful of illegalities.

    Not to say that most renters probably make less than their landlords. And some make more. Sounds like a better reason for ‘means testing’ though.

  81. The fact that a Landlord has a larger income should not be relevant to anything. Rent control is unfair to new tenants, It ensures landlords no longer rent to families, the elderly and anyone who they think may establish a life in the community.
    Rent control has nothing to do with income inequality, this is a disingenuous argument.

  82. “Poor Landlord”? Or “property owner”?

    No effort made to distinguish. Isn’t this more typical of a ‘hit piece’ than “investigative reporting”?

    Shame!

  83. Gary, everyone acts to further their own financial goals. That is nothing to be ashamed of and is equally true whether you are rich or poor. I was simply explaining to you why in this case why both re-renting and selling are bad ideas. Best just to leave the unit vacant, even more so since the owner lives in the same building.

    I’d say that low rents are only the third most important problem landlords have with rent control. The inability to get your home back and the way rent control sours the landlord-tenant relationship are both worse factors IMO.

  84. @Sam, I’m not giving financial advice. I’m saying that looking for sympathy about a financial situation when sitting on wealth and having options is hypocrisy.

  85. The 2% figure for property tax increases is written into the law, as I understand it. If we ever had high inflation again, no doubt the state government might want to review that.

    Whereas allowable rent increases are 60% of CPI, and CPI has been depressed for some years now, even though many housing costs have increased by much more than that.

    Incidentally, property tax revenues increase by about 7% a year in aggregate, because of sales and new construction. So when progressives complain about Prop 13 they are really complaining that the government cannot manage with 7% annual increases, as well as the highest rates of sales and income taxes in the nation.

    We do not have a revenue problem.

  86. It seems to me that if Prop taxes can increase by 2% a year, so could rents. But that rarely happens. This year its only 1.0%

  87. That’s incorrect. Control of rents came first. Eviction controls only came along later when LL’s were evicting when they could not raise the rent. In fact Oakland only recently introduced eviction controls but has had rent control for a long time.

    Moreover, it is not possible to control rents on vacant units – that is illegal under state law. And even before that SF never had vacancy control.

    I wasn’t complaining about high rents. I was pointing out that rent control is a significant cause of high rents, and so is bad policy.

    Most tenants do not want to live in the same place when they are 60 that they thought was cool when they were 20. Rent control forces them to give up their ambition, flexibility and mobility, and instead they hoard a unit forever, if allowed to. Not healthy. Sad, in fact.

    You may think it is messy or idiotic to leave a unit vacant, but thousands do. What that should tell you is that landlords do not want to rent out their place because they fear never being able to get it back. Better to leave it vacant, let it short-term, or TIC it.

    I’ve been lucky and had a lot of turnover. Most tenants want to move on with their lives and dont regard hoarding a unit for decades as a real achievement in life.

    Why do you support a policy that creates less places to rent? Why not instead support a policy that encourages owners to let their units? Hurting the people you rely on for a home is the true idiocy.

  88. No, because selling prior to death incurs capital gains tax. That CGT liability is wiped out upon death and the cost basis is re-based to current value. So selling would be a bad move for the beneficiary.

    If you are going to give financial advice here, it would behoove you to learn about things like this.

  89. Cry me a river. Sell the place, rent out the unit or shut up. Most 96 year olds in this world don’t have the luxury of these options.

  90. As a landlord and property owner, why are you complaining about high rents and high home values?

    The purpose of rent control isn’t to ensure low rents. It is to provide the opportunity of long-term tenancy in rent-controlled units. If the objective of the law was to ensure low rents, vacant unit would also be covered by rent control.

    And any apartment owner who keeps their units vacant now is crazy. Being a landlord is messy, with or without rent control. Blaming rent control for vacant units in the hottest rental market in the nation, especially since those vacant units can be rented for any price the landlord wants, it idiocy.

    We make laws to protect people from idiots. We make laws to protect idiots. But we shouldn’t make laws that consider idiocy the norm.

  91. Yeah, it’s 18 years for me and, while I am not going to sell everything. I have refined my method now so that I don’t deal with rent-controlled royalty. I mostly now rent directly to tech companies who rotate new staff through the units. The tech employer is responsible for the rent, upkeep and dealing with the tenants, and I get paid on time every month. And I can get the units back just by giving notice.

    I avoid totally renting to lawyers, activists, artists, and anyone who works for a non-profit or the public sector. Students and illegals are fine, ironically. I particularly look for people who won’t stay long, e.g. visiting academics, corporate lets, longer-term tourists. Don’t bother with Airbnb – too much turnover and work.

    And I’ve been lucky. 8 buildings, 15 units, over 100 individual tenants and only one of my original tenants is still in situ. I’ve only done one Ellis, one OMI, one condo conversion and one TIC formation.

    But I will still sell them all as TICs at the right moment, and have already offloaded some. Easier to make money from stocks

    The Cato Institute had it right – rent control suppresses supply and drives the vacancy rate down and rents up.

  92. If you are 96 years old, the very last thing you want to deal with is a tenant who will almost definitely out-live you. And it will make probate a real mess.

  93. jjfieber, did it ever occur to you that the reason the government gives tax breaks for certain activities is because the government wants to encourage and support those activities?

    We get tax breaks for buying property, saving for retirement, giving to charity etc. because we the people have voted for governments that believe that those values are worth investing in. That they are good values for society to have.

    That is why you don’t get a tax break for hoarding a rent-controlled unit for decades, going on protest marches, or conducted flawed useless misleading studies. Because we the people don’t think those activities are as socially beneficial as working and saving hard to buy your own home.

  94. What is the civic value people hoarding homes, in freezing residential mobility and in artificially making it expensive or impossible for new people to move here?

  95. Yeah, it looks like about five minutes work. Your data is so full of holes I could drive a muni bus through them..

    Your income data is self-reported, incomplete, not classified by type, doesn’t allow for tax and expenses, does not isolate out landlords from regular owners, and has no detail level which means there could still be many millionaire tenants and poor landlords.

    Total waste of space and time, but thanks for admitting it was a throwaway five-minute exercise and not a serious study. Like we didn’t know.

  96. You cannot use homeowner incomes as a meaningful proxy for landlord incomes without doing the higher order math to account for the glaring disconnect between the two.

  97. It really doesn’t take much time and energy to refute most of the arguments here.

    But you didn’t answer the question.

  98. Unlimited rent control would be unconstitutional, and various aspects of it have been ruled unconstitutional and bounced by the courts. Just recently the increase relo expenses were rejected by the court for a very interesting argument that could in fact be applied to all of rent control.

    Again, there are various concessions made to rent control, such as the allowance of passthroughs for various purposes, that are only in the law to pass constitutional muster.

    And of course the Ellis Act enshrines an important right as well i.e. that the government cannot force someone to be in a business that they do not want to be in.

  99. Gary, there are thousands of rent-controlled units deliberately left vacant, and yet very few uncontrolled units left vacant. That alone should tell you that many property owners do not want to deal with rent control even though they can initially get a market rent.

    The real issue for many owners is not the control of rents but the fact that the owner might never be able to get their place back again. And if Ellis is ever gutted that will become an even bigger risk, and more landlords will leave their units vacant.

    Also a vacant unit is easier to sell, gets a better price and can be converted to a TIC or condo. Plus you can do short-term lets with none of those hassles.

    RE prices do well in rent-controlled cities because rent control causes artificial shortages. SF has the highest rents in the nation – how can that be deemed a success for a policy whose purpose is to ensure low rents?

  100. The number of units left vacant does not constitute the entire set of rental buildings that are not economically viable, since that latter group of buildings includes the ones with long-term tenants paying low rents.

    A third class of landlords who have inadequate returns are those who bought their building recently.

  101. I don’t understand. If the 2nd unit is vacant, why doesn’t your mother rent it out for a few thousand dollars or more to a new tenant?

  102. That’s an idiotic response. Rent control does not prevent a landlord from charging whatever rent they want when the unit is vacant, so who would keep their buildings vacant for 5 years? Some idiot who doesn’t understand how rent control works?

    Rent control has been mostly phased-out in Manhattan and I don’t see the rents or home prices falling there.

    There is no evidence that rent control is a failed policy. Actually, just the opposite is true. Everywhere rent control has been implemented, real estates prices have risen and have been more stable in bust economies.

    Why nutcase RE types are against it is a puzzle.

    You people need a hobby.

  103. 2015 is the year I exit the rental business. 3 units will soon become owner occupied TICs. Look for me in the Ellis statistics, Tim Redmond.

  104. My 96 year old mom bought 2 flats in the Richmond district. She is from the generation who retires without pension/retirement/medical benefits — social security only. You will never find my mother picking up free food nor going to a senior citizen’s lunch. She depended on the 2nd flat for income …. but guess what — it no longer works. The 70 year old tenant (a couple)can’t afford to pay $900/month (they now live their son in Minnesota).

  105. I’ve been here for twenty years, and the difference between this and what was then published as the SFBG is that there are less idiots willing to write these “start with a conclusion and write a pretty path” articles.
    You know who is probably making money as a dirty landlord? Chris Daly. Remember him? Owns a bmr in the mission yet lives in Fairfield? Purchased two foreclosed properties to rent out?

  106. The method used in your analysis seemed to be flawed, but let’s assume your premise is true. What then have you proven? That property owners make more $ than renters? That’s hardly news.

    In fact, your whole mapping project seems to lack a point. I don’t see voters being swayed by your information and I doubt anyone with any real power gives a shit about your conclusions. I personally haven’t taken you seriously since one of you pretended to be a Google employee during your “street theatre” fiasco.

    You were warned backed then not to burn bridges in regards to the Tech community, but you were too busy licking your own asses to listen. Now there’s a whole bunch of SF voters who won’t support anything with your name associated with it.

    How about you offer some actual, workable solutions to the housing problem instead of vomiting out this type of class-warfare click bait.

  107. How about the collectively paid subsidies that property owners get, if you want to be fair? Mortgage interest deductions, depreciation, capital pass throughs which are then deducted as expenses although the renter is charged, prop 13, access to water parks, street sweeping which increases property value? Not to mention a racist government history which created the path for whites to amass so much wealth off the backs of others–racial covenants, redlining, slavery, Indian annhilation, all “legal” due to a legal system created by and for property owners. But you’re right…its landless renters who demand too much.

  108. There are no good numbers that I know, but I see claims of “thousands” of units purposefully left vacant. Even if this number is true, it’s a very small percentage of rental units in the city. If there are more, then as I said, that means that there are even more rich landlords who can afford to pay taxes and maintenance on empty units.

  109. IF you’re not getting compensation, then the energy you expend on your one man tirades is just sad and pathetic.

  110. I’m enjoying it. This map took us all of five minutes to spit out thanks to the U.S. census. The sole reason was to bust the myth of the millionaire renter parasite, which we have done. But if the trolls want to have a heart attack contemplating what is or is not included, let them. Higher blood pressure equals less trolling in the long run.

  111. Thousands of rent controlled units vanish each year. No new ones are created. Rent control will die a slow death, and then we can all move on. It is a sad old tired failed policy whose main effect has been to create a shortage of rental housing and ever higher rents.

  112. Where is your evidence and data for the proposition that unprofitable rental properties are “far and few between”

    Cite your sources and explain your working assumptions.

  113. “Rent control makes it possible for people to establish lives and raise families and stay in this city, even as economic changes that have nothing to do with them ravage the affordable housing stock.”

    There are lots of places I’d love to live, but cannot afford. So I don’t move there. All this BS about “everyone has a god-given right to live in SF” even if they cannot afford it is weak, tired and old. Make rent control subsidies the burden of the population; not the landlord. We’ll see how the tax payers like that idea.

  114. jjfieber, you have totally failed to indicate how your date applies to landlords, since the census data does not distinguish them from regular property owners.

    So your data is useless for what is clearly your purpose of denigrating those who take a risk and commit capital to provide people like you with housing services, often for a minimal reward.

    As to the rest, good luck overthrowing capitalism. I won’t hold my breath.

  115. It is census Data, Sam. No complicated math illusions used but thanks for trying to debunk the methods and thanks for the unnecessary personal attacks on our group. Take it up with the U.S. Census bureau if you’re so upset.

    Property owners get a whole host of tax exemptions which we all collective make up for elsewhere..and which we didn’t bring up here. Until you admit that property owners are also subsidized by society at large and that the government is the mechanism which enables it, your libertarian conniption fits over rent control ring hollow and ideological.

    Kisses, the band of merry pranksters.

  116. Philosophically, sure, you can believe that, and I will believe the opposite.
    Legally, no, rent control has been challenged in the past and found not to be a ‘taking’ (2012, Harmon vs. Markus).

  117. Non-profitable rental properties are far and few between. For these, if a landlord can afford an unprofitable property, like one that is vacant, they are richer than the typical ones, who cannot. That reinforces the case of this article, not otherwise.

  118. What is not discussed when people talk about rent control is that it is a “taking” as in eminent domain. Landlords have been deprived of the market value of their property without any compensation. If we as a society think that there is a need for below market rate rentals than we should pay for it as a society and not place the burden on property owners.

    Those who are in favor of rent control would likely not look kindly on a program that assessed the value of their contribution to society and imposed limits on their ability to make a living.

  119. You idiots never learn. Rent control us a failure and it will be your doom at the same time. Rent control only affects poor landlords because the wealthy have the means and knowledge to escape it and never go back. Of course, when I use the term “poor” it is relative. If you cannot afford to leave your buildings vacant for 5 years – you are poor. That is a high standard but idiots like you don’t understand that that kind of wealth is exactly what wealth attracts. I was once a poor landlord and now I am not. I will continue to accumulate buildings and crush the renter base because that is the solution of the math problem that you and the idiots on the board if supervisors have created. Go on, keep supporting rent control because the damage us already done and gentrification is a forgone conclusion of 30+ years of failed policy. Another consequence: a super elite class of landlords like J Paul that play you idiots against small mom & pop landlords and collected super-rents at their expense.

  120. >How can they claim to know what a landlord’s annual income is?

    They claim to have used census data. In addition to income, they probably could have reported on the age of renters vs owners. Or single income vs dual income households.

    You know…lies…damm lies…statistics

    Most people start out their adult lives single and renting, at some point they get older, wealthier find a mate and perhaps buy something. So from that perspective the study makes sense.

  121. That’s only true if their rental buildings are profitable. Tim is trying to use this data to prove that those buildings are profitable, but it turns out that he and you are already assuming that to be true when trying to make that case.

    So it’s circular reasoning. No specific numbers for landlords has been provided. It’s a bogus analysis, and no data for landlords is provided.

  122. Again, there is no explanation given as to how they know which property owners are landlords. they have taken census figures for property owners and applied them to landlords.

    There is no abuse of the Ellis Act. It works exactly as it is supposed to i.e. enabling any and all property owners to exit the landlord business

  123. Except that Prop 13 is state-wide, so landlords who dont have to deal with rent control still get the tax break.

    IOW, we are disadvantaging SF LL’s and then wondering why there are so few vacant rentals available?

  124. Tim’s home is worth almost a million but he pays property tax as if it is worth only $440K or so. Prop 13 saves him about 5K a year in tax.

    But of course if he opposes Prop 13, he is free to make an extra payment to the state for that 5K a year saving.

  125. Sebb, but in order to buy a property, you have to study hard, work hard, take risks and deliver value. So of course rewards come with that. Why would it not?

    The whole reason we invest so much of ourselves into succeeding financially is so that we can enjoy better things and a better life. Otherwise why would we bother?

    Are you saying you want to confiscate the fruits of success and hard work and simply hand it over to those who make less effort and have fewer skills? You want to punish success and reward failure? That’s your vision of America?

  126. Indeed, the arguments for one are pretty well mirrored by the arguments for the other, and anyone who supports one while opposing the other is pushing a nakedly partisan agenda.

    So what’s Tim’s view on Prop 13, then?

  127. “Now: Median income is of course an imperfect metric. There could be tenants who inherited vast wealth, or made it on their own, who are now retired from working and have lower incomes. There could be landlords who work all the time but have massive debts. There’s always a welfare queen somewhere.”

    Translation: “The thing I said was proven to be a myth by this actually isn’t proven to be a myth by this.”

  128. True, they looked at owner-occupied units, not landlords. Most landlords own the place they live in as well as the place they rent out, so the incomes of owners in this study would be an underestimate, and the owner-renter income difference would be even more pronounced.

  129. Not true. And your suspicion of precise numbers doesn’t make them wrong. And the abuse of the Ellis act wasn’t Mister Ellis’ intent. Landlords / owners getting out of the rental market is different than a fake LLC filp-fest and isn’t justified if you find fault with rent control law.

  130. Rent control was the quid pro quo for Prop 13. In other words, you don’t get to increase the rent you collect as much as you want, in return for not having to pay more property taxes.

  131. Of course they did, and renters have insurance, utilities, and expenditures of their own also. No matter how you slice it, property owners (as is the case historically, read “land owners”) have more, get more, and always want more. Those who pay rent usually just want a basic livable situation, and are not freeloaders. The few wealthy renters are usually living here temporarily, saving money, until there’s a downturn, then they take their wealth elsewhere. Long-term, good renters should not be looked at negatively but rather as a blessing. Rent control annual increases should be debated, but doing away with it is a mistake.

  132. no matter what side of the fence youre on, this article is just ridiculous for having been written, and what a waste of time for the group that did the ‘survey’.

  133. How can they claim to know what a landlord’s annual income is? It’s not likely that many landlords will reveal that and Erin and her merry band of pranksters don’t have access to 1040’s.

    The figures given for property owners and not for landlords. How do they or you even know which property owners are landlords? For your vacancy study you admitted that you could not. Why is this different?

    Not that it should shock anyone that those who own property probably earn more. After all, property is expensive. In other news, people who drive Mercedes cars probably make more as well. BFD. But to come up with such precise figures ($111,330) hints at a process that is sophisticated and I’m fairly sure it isn’t true.

    Anyway, the point isn’t that most landlords are poor and therefore we should change policies. Most landlords do OK, but only because we get turnover and can raise rents. But some do not get turnover and therefore get very poor returns, or even make a loss. That is why it is critical to have an exit strategy for landlords in any city that controls rents.

    Mister Ellis provided one, and the quid pro quo for controlled rents is that less property owners wish to rent out their properties, and that drives rents higher.

  134. >”People who own property have more money than people who rent.”

    Wow. Are ya listening, Mr. Pulitzer?

    I wonder if the project looked at the RE tax, interest, insurance and maintenance expenditures of owners vs renters.

    Something tells me that they just skipped that part.

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