Remember tonight, Planning Board meeting and the EIR for Alameda Point. The levels of housing studied in particularly important in light of the recent discussion at the City Council last week about the possibility of rent control in Alameda.
So, just to catch you up, Alameda has no rent control, which can be seen as both a positive (if you are a landlord) and a negative (if you are a tenant with a shitty landlord). The only tool the City of Alameda has is the Rent Review Advisory Board and that really only works if the landlord is willing to participate. In the case of 1514 Benton Street, I guess the new landlord didn’t want to participate and make it work.
The landlord (or rather the landlord’s attorney) who attended the meeting on Tuesday night essentially said: look, yeah she raised the rents but even the new rents are below market rate. Which would typically be a compelling argument, but when it’s a 50 or 60% hike, it’s a little less compelling. While still the units may be below market rate, a jarring jump doesn’t necessarily allow for a family to readjust their budget accordingly.
Essentially what the City Council said was this: if this becomes a pattern of behavior for landlords in general, there might be some cause to consider instituting some form of rent control in Alameda.
While I think the proposal is worth consideration, I would caution against going to some major extreme like San Francisco where, around this time last year, the Bay Citizen published a piece about how San Francisco’s rent control laws subsidized the super wealthy when, the whole point of rent control, was to protect folks like the families of 1514 Benton. From the Bay Citizen:
Voters approved rent control in 1979 to help preserve communities by limiting rent increases, a threat to working class and lower-income tenants. However, a new city analysis shows that for the first time upper-income households (annual incomes over $107,000) outnumber the poor (incomes under $35,000), 29 percent to 27 percent. And rents for vacancies average $2,600 a month, a record high.
…
But just trying to determine the exact number of rent-controlled units — and their tenants’ finances — is difficult. The city’s last comprehensive research, undertaken in 2000, found that one-fourth of households in rent-controlled apartments earned more than $100,000 a year — a revelation that prompted I-told-you-so rhetoric from some landlords.
Perhaps in lieu of rent control instead there can be greater teeth within Alameda’s own laws governing the Rent Review Advisory Board, perhaps if there were sanctions against a landlord who refused to participate in the mediation process that would be a more equitable process of punishing landlords who attempt that sort of shenanigans.
If the city doesn’t like what the landlord’s charging, the city should move the tenants into their own housing.
Comment by Jack Richard — February 25, 2013 @ 9:35 am
Since 4Q 2007 – the unofficial beginning of the economic crisis – through 4Q 2011, more than 1.5 million Californians received notices of default on their homes.
More than 785,000 California families actually lost their homes to foreclosure during the same period.Most of these houses were all purchased by Hedgefunds and Investors.
We have Rental Problem because so many people have lost their house and many have moved back in with their families.
Just because Household Incomes have risen might mean we have more people living and working in a household. Looking at the traffic in Alameda and parking on streets it appears were to the rafters in many houses. Percentage of Students receiving free meals at school and living in poverty don’t match with the Cities study.
The demand for Low Income Housing is off the charts in the bay area and the waiting lists for Section 8 Housing are over 100,000 just in Oakland.
Regarding Benton you probably had a previous Landlord with a much lower cost base for the house and much lower tax base. Is it fair to RAISE his TAXES 700% because he just purchased property. If your paying 40-50% under market for years for rental and you have someone who just purchased property and paid 7 times more than previous owner maybe 40-50% onetime raise is not out of line.
I certainly don’t have all the answers.
I don’t know if the Answer is punishing present landlords and new investors buying property and make them look like villians in this Rental Market.
Comment by Interesting times — February 25, 2013 @ 9:51 am
Another Solution would be to only raise the New Property Owners Taxes 10% a year from the Previous owners Tax base and that might help everyone handle transitioning for everyone.
Comment by Interesting times — February 25, 2013 @ 10:02 am
My understanding is that the person who purchased the building did so by crunching the numbers and figuring that in order to make a profit (remember, the property taxes for the new owner are likely to be considerably more than they were for the previous owner) she would have to make a significant raise in the rent. While I sympathize with the shock the tenants must have received, they had to know that they have been on to a really good thing for a while now and the largesse of the previous owner is really the reason they are upset, not because the new owner is some kind of heartless monster. I am radically liberal in many ways but I draw the line at this one. It is the renter’s lot to be subject to the landlord’s financial reality. If they are unwilling or unable to accomodate the change in the weather, they can move. Yes, they will probably not find another deal like the one they had, they will have to accept less for more but that, my friend, is the way of the world. It’s not fair that the previous owner had such a good deal on the property tax and the new owner has to pay so much more, either. Sometimes things are going to suck and it’s nobody’s fault. We all have to deal with it.
Comment by Denise Shelton — February 25, 2013 @ 10:20 am
The new owner of the Benton St. property is on record as stating that the reason she bought the property was because Alameda had no rent control, and the Rent Review Advisory Committee had no teeth. She could do what she wanted in Alameda. That is what she said. Remember those were seniors on limited income who were essentially evicted. I see some heartless comments above, comments from people who obviously have no compassion or empathy. And THAT is what upset the mayor most — the fact that the new owner had the gall to never even sit down with the old tenants and explain her position. Alameda has a small-town feeling, a feeling of community rarely found in cities of its size. I see none of that in the comments above.
Years ago, I asked a previous council to give the RRAC some teeth, yet nothing happened. In June of 1996 the Alameda Times-Star died, and we all lost our jobs. I was sports editor. That night my landlord called and gave me two weeks to get out because I lost my job. I went to court and got a three-month stay by the judge, enough time to find a new place to live. That would be impossible today since our courthouse moved out of town.
The question before council today is all about integrity. Will Alameda stay with its small-town, community feeling? Or will we go the way of Oakland or Hayward. Violent streets, hoodlum, people without feeling for their fellow citizens — that is what follows if we lose our sense of community. The solution is some sort of ordinance to protect renters from ruthless landlords.
Compassion is always the watchword for community.
RS
Comment by Ron Salsig — February 25, 2013 @ 5:52 pm
What could be more compassionate Ron, in your time of need, than to place you and each of all the other unfortunates with rent problems in the care of the community by placing them in one of the city structures, as I suggested in # 1, and leave the free market operate normally instead of placing the burden of care on the one citizen who purchased the property?
Comment by Jack Richard — February 25, 2013 @ 7:16 pm
Ron this is a Town Built on Compassion,
The Resident pay only 12 times the average contribution to our Firefighters Retirement Fund and pay them 2 times as much as a Federal Firefighter. And still owe them 50 plus million in underfunded retirement.
The regular city employees only receive 4 times as much to their retirement fund.
The City Manager through his Compassion gave the Mayor and City Council Members fair size contribution to their Election and Received his Job.
Some of these compassionate ones watched Mr Zack drown at Crown Beach in plain view with hands in their pockets and probably more than 100 plus years of Water Rescue Experience.
Compassion is always the watchword for community.
Comment by Interesting times — February 25, 2013 @ 8:28 pm
7. Is that you “John”? way to obfuscate the real point, GREED, with lateral distractions to try to denigrate somebody making a sincere point. But none of your glib examples undermine Ron’s point about compassion because he’s compassionate and you’re a poseur. God didn’t create the free market.
Jack will like this one too, because he’ll always likes to use a Harvard academic as an excuse to jump through his asshole. watch those hemorrhoids on the way out, dude.
http://www.theatlantic.com/magazine/archive/2012/04/what-isnt-for-sale/308902/
http://www.guardian.co.uk/books/2012/may/17/what-money-cant-buy-michael-sandel-review
I had moments when I wanted What Money Can’t Buy to be more charged, to use more of the language of right and wrong and less of the bloodless vocabulary of “norms”. But Sandel, I came to realise, is doing something very specific in this book. It’s a work of political philosophy more than it is a polemic: he wants to make it unambiguously clear that markets have a moral impact on the goods that are traded in them.
“Democracy does not require perfect equality, but it does require that citizens share a common life. What matters is that people of different backgrounds and social positions encounter one another, and bump up against one another, in the course of ordinary life.”
Comment by M.I. Again — February 25, 2013 @ 9:32 pm
Unfortunately, greed is the driving force behind most business enterprises–the desire to have more “stuff” than you have now, to have more than the next guy, to have the power to make choices based on want rather than need. Much lip service is given to the idea that by providing certain goods and services one is “contributing to the quality of life in the community” but, with the exception of SOME non-profit organizations (how many times has one of those august institutions been warped into a personal ATM by some unscrupulous character?), to be successful in business involves turning a blind eye to the needs of others in favor of the needs of oneself. Even if you’re selling Girl Scout cookies, to do it well, one must not worry that the buyer would be better off without because they might be one Samoa away from a heart attack. The ones who the troop rewards with the top sales prizes make it a point to target those among us with weak resistance and they do that by targeting the obese with extra vigor. Those with a modicum of decency console themselves with the thought that it’s for a “good cause.” For profit folks console themselves with other thoughts like “I’m contributing to the tax base” or “my kid needs braces” or “the more money I make, the more I have to contribute to charity.” I take issue with Ron’s suggestion that I am heartless. On the contrary, I said what I did because it’s a fundamental truth. I don’t celebrate it or say that it’s the way it should be, I simply point out that it’s the way it is. I wish it weren’t, but in lawmaking, too often one evil is supplanted by another. Our property tax law was changed in the 1970s to protect those on a fixed income and now the wealthy sit on property being taxed at ridiculously low rates and the overall economy suffers as a result. Any change in the law should be carefully considered and not made in reaction to the mercenary practices of a few, because there can be consequences unforseen that will come back to bite us all in the ass.
Comment by Denise Shelton — February 26, 2013 @ 7:37 am
Denise, there are good and bad landlords. We rented out our first home in Oakland when we moved here and we might have profited if we had not sold it after a year because property in North Oakland did appreciate quite a bit in the decade which followed. Hard to find good tenants that respected the property. It was a pain in the ass to rent the place. I’ve known a number of people who have built wealth by methodically accumulating and maintaining properties. I’ve seen others who are pretty mercenary about it, and slum lords. The point is that if you own rental property you are literally choosing to “lord” over people and to a degree you hold their welfare in your hands. I listened to the author of What Money Can’t Buy on the radio yesterday and the sub title The Moral Limits of Markets is what hooked me. Many free marketers act like there are none, or should be none. Sandel was very articulate about putting that aspect in perspective. Posts 6 and 7 were so glib about this, post 8 was for their benefit.
Comment by MI — February 26, 2013 @ 8:04 am
Tenants have landlords’ welfare in their hands as well. In the case of a small property owner, tenants can really “lord” it over the owner. Damage, non-payment, etc can ruin a small timer.
And isn’t the tenant’s staying for years at below-market rent greed also? Should he not be as motivated by altruism & charity as the landlord, or is that only a 1 way street?
Comment by Rilke — February 26, 2013 @ 9:23 am
8. For mark
I like Michael Sandel. However, when you say the real point is ‘GREED’ you’re doing yourself and any discussions of the Benton St property a disservice.
Here’s a clip of one of Professor Sandel’s lectures at Harvard where he and his students attempt to deal with the fundamental conflicts between Utilitarianism and Libertarianism. Or more plainly; what’s wrong with government coercion on one hand and the discussion of the fundamental belief we own ourselves on the other, both of which are germane to the Benton issue.
http://www.justiceharvard.org/2011/02/episode-three/#watch
Comment by Jack Richard — February 26, 2013 @ 10:25 am
I hope we can turn our focus to building more affordable housing in Alameda, which I believe is the answer to this age old problem.
I’ve had some valuable discussions with landlords all over Alameda to get their ideas and input on this issue. First we need to stop the name calling. Landlords aren’t greedy or immoral because they need to raise rents to cover their rental operations expenses. They operate like any other small business who must cover their operating expenses in order to stay in business. Increased property taxes including the numerous parcel taxes are just some of the rising costs of owning rental property.
Large developers are seen as prundent businessmen doing their due diligence when they invest in real estate, while small time landlords are seen as heartless when they do their due diligence. Why not provide landlords with no interest or low interest loans to do repairs on their properties in exchange for keeping their rents below market? Large developers get incentives like bonus density awards to provide affordable housing, small time landlords get no incentives. Incentives like this could give the rent review board more tools to work with landlords to help solve the problem of the lack of affordable housing.
Let’s stop the finger pointing and name calling and get to solving the underlying problem.
Comment by Karen Bey — February 26, 2013 @ 10:59 am
Karen: Alameda does have programs that you refer to specifically the rental rehabilitation program,which:
The Benton property would have more than qualified for such loans unless the intent of the new owner was to push out existing tenants in order to bring up the property to market rates.
I think this case is particularly objectionable because of the amount that was raised in one fell swoop. I know you mentioned in your public comments to the City Council that the same rent increase could have been achieved via annual 3% increases and I believe we wouldn’t be having this discussion had the rent increase been gradual like that. I don’t think anyone is objecting to cost recovery, but I did some quick calculation of how much the rents were bringing in and how much the purchase price (and therefore the projected mortgage) is and it appears that the rents could cover the mortgage and property taxes depending on the interest rate. Personally, my philosophy is that it’s better to retain a tenant at a lower rental rate then have a vacancy for an extended period of time where the delta between the lost rent and the rent increase disappears.
Comment by Lauren Do — February 26, 2013 @ 11:23 am
I’m not sure of her intent other than what it appears that was to cover her rental operation expenses. In addition to the monthly operation expenses, the property had deferred maintenance as mentioned by the current tenants. Most landlords include a budget line item or a reserve for repairs and maintenance and capital improvements in their rental operations budget — like a roof replacement and electrical and sewer upgrades. The previous landlord collected rents for 17 years and did very little to no repairs to the building.
Regarding the rent being raised in one fell swoop, the previous landlord raised rents a total of $150 over a 17 year period, thus the reason for the large rent increase. Had the previous landlord raised rents 3% per year which amounts to $24 – $30 per month, the rents would be closer to market.
I would love to see the rent review board offer financial incentives as part of the tools to intice landlords to keep their rents below market – is my point. I’m not one to point fingers — I’d rather focus on solutions.
Comment by Karen Bey — February 26, 2013 @ 12:13 pm
8.
“Democracy does not require perfect equality, but it does require that citizens share a common life.”
One thing you should be made aware of, Mark, the quote you copied from Sandel (above) was copied (plagiarized?) by him from Matthew J. Gibney’s “The Ethics and Politics of Asylum: Liberal Democracy and the Response to Refugees” in which he discusses removing sectors of one culture and placing them into another through asylum. Really has nothing to do with the discussion at hand.
Comment by Jack Richard — February 26, 2013 @ 12:25 pm
Karen: As I pointed out there are programs available in Alameda for just that purpose if the new owner had wanted to become part of the program. However the trade off would be that she would have to keep her units below market rate.
This owner clearly did her due diligence regarding inquiring as to whether Alameda had a rent control law so that she could pass her purchase costs on to the new tenants. If she were interested in financial incentives such as the rental rehabilitation one to not spend out of pocket costs on deferred maintenance she could have phoned the City much like she did to inquire about the status of rent control in Alameda.
Regardless of what repairs were done before she purchased and how much rents were raised over the years does not wash away the fact that this owner decided to raise rents in excess of 50-60%. That sort of rise in a family’s budget is not easily absorbed despite the fact that their rent rates were below market to begin with. It is, in essence, a de facto eviction without needing to serve any papers
Comment by Lauren Do — February 26, 2013 @ 1:06 pm
“…, a de facto eviction without needing to serve any papers.”
Kinda like the assessor prior to Prop 13.
Comment by Jack Richard — February 26, 2013 @ 3:22 pm
The property would have sold for a lot less if there was Rent Control and they had to rent at 50% below market rates and could only increase at 3% per year. That would effect the tax base for the property, transfer tax when purchasing the property and now you may have a new owner who isn’t exempt from all the parcel taxes.
If a Renter saved 30 – 40 thousand or more in rents the last eight to ten years. how long and how much should we punish the new owner to recoup their investment to keep benefiting the renter. Multiple that by 3 units and you have a Totally Different value for the Property.
Comment by Interesting times — February 26, 2013 @ 4:11 pm
Here is some Recent Foreclosures In Alameda on Multi Unit Properties that are Going up for Auction in the Next Few Weeks.
473 HAIGHT AVE, ALAMEDA, CA 94501
Event Item #: E435-1084
Property ID: 1365146
Asset Type: Residential
1821 CHAPIN STREET, ALAMEDA, CA 94501
Event Item #: E512-1179
Property ID: 1343419
Asset Type: Residential
1105 OAK STREET, ALAMEDA, CA 94501
Event Item #: E534-1125
Property ID: 1377239
Asset Type: Residential
2166 BUENA VISTA AVe, ALAMEDA, CA 94501
Event Item #: E534-1126
Property ID: 1423257
Asset Type: Residential
1523 LAFAYETTE STREET UNITS A; B AND C, ALAMEDA, CA 94501
Event Item #: E534-1127
Property ID: 1340406
Asset Type: Residential
543 PALACE COURT, ALAMEDA, CA 94501
Event Item #: E457-1076
Property ID: 1307742
Asset Type: Residential
2032 SAN JOSE AVE # 2034, ALAMEDA, CA 94501
Event Item #: E512-1106
Property ID: 1388081
Asset Type: Residential
Comment by Interesting times — February 26, 2013 @ 4:28 pm
I thought you two left to pursue your private bromance. This place was sort of ok w/o you.
Comment by sigh... — February 26, 2013 @ 4:55 pm
sigh. If you don’t like what you read you can always sayonara.
Comment by Sayonara Sigh — February 26, 2013 @ 11:17 pm