Rent Control Concerns?
By an Edhat reader:
I am about to continue a lease for a home rented by a friend of many years. The rent is approximately h-a-l-f - the "going rate," for a three bedroom, two bath, two car garage home near the Upper East side. My concern is if/when rent control happens I don't want to be stuck with a baseline rent this much under the market. Then it might be difficult to increase the rent?
Any insights on what I should be aware of in this situation? Your input is appreciated.
20 Comments
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Oct 07, 2018 09:28 AMI would be so infuriated I would move away from SB! Oh wait, I did! And I'm still thriving! Signed, Born, raised and educated in SB
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Oct 06, 2018 10:31 PMVery late to the party, but half of market value?! my family never charged THAT little. You should raise the rent, negotiate with your great tenants. You have too large a temptation. We rented 2 bed/1 bath, over decades, from $1,000 to $1,400. Got up to $1,600 after owners died. Buyers raised by hundreds; every tenant moved out. I mourn about this.
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Oct 01, 2018 08:44 AMThe reason that rent control keeps coming up is that the current system appears to be broken. It doesn't make sense that anyone who purchased their home 10 yrs ago now pays less for their mortgage than they would for rent. And when you add in the mortgage interest deduction, it is a really good deal for homeowners. Combine that with the fact that commercial properties owned by landlords can pay very little in property taxes because Prop 13 included them, it is a really strange system that we have. The last thing is, forcing people to move to Ventura and drive to SB for their work is a poor solution to this problem. I don't know what the good solutions are, but desperate people will pass desperate measures like rent control whether it works or not.
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Oct 07, 2018 08:47 AMsee this is where the problem really lies, someone will get screwed no matter what. the point of "this is how much I paid for this, I should get this no matter what" idea is a loose idea to stand on. Just because someone paid ( or OVERPAID ) for a particular item, doesnt meant everyone else will pay the same price or more for it. Its like cars, cars can depreciate the moment you drive out the driveway at the dealership. is the car any less material? any less metal? any less rubber and plastic then when you haggled with the dealer 10 minutes before driving off the lot. nope not at all, its all the same. it hasnt changed its weight/ material/ color/ size/ smell. but it is not worth 10% less than what you just wrote a check for. YOU will not find someone to buy your previously brand new car for the brand new price, you will take a loss. So to tie this to housing, Just because someone else bought a property for $XXXX doesnt mean you have to rent for $XXXX. that argument is bunk and needs to stop. sadly someone will lose out in this situation, renter or owner. someone will lose in the current environment we have if we shift the value of property. its sad but true, and the saddest part of it is the landlord are the ones making the rules. there is little hope for a change when the people with the power to change are the ones holding the keys to the door. and a debt in there wallets.
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Sep 30, 2018 05:10 PMWe have been tenants and later purchased property and became landlords. I agree with A-1538328815 I have cried many tears when we had great tenants that left. They treated the apartment like it was their own and there was a mutual respect and open communication and it was a win/win for both landlord & tenant. Also, it automatically morphed into a great friendships. If prop 10 passes it will open the door to rent control in Santa Barbara because tenant rights groups like "Cause" will think they have enough support to get rent control passed in Santa Barbara. Rent control is bad for tenants and landlords! Look at what is happening in Santa Monica and Greater Los Angeles! It was not good for the property owners or tenants. It created an underground market for rents and it actually took rental units out of the rental stock since there was less incentive for property owners to be landlords. The people who are expressing how awful not having rent control is and want rent control need to stand up for the tenant rights they already have and empower themselves and do something about it. They have a lot of protection, rights and resources right at their fingertips here in Santa Barbara. They can learn about the resources available and use them, no one is going to do it them. As far as the so called threats that landlords are telling these people they will report them and get them deported, it is illegal. Again, we encourage tenants to empower themselves and exercise their rights to live here in beautiful Santa Barbara, and have good open communication with the landlord and feel safe they you rent.
NO on Prop. 10
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Oct 07, 2018 08:55 AMno one wants things done for them, the fight for reasonable rents consist of constant arguments over worth and debt. "I bought for this, I have to rent for this" and the renters say " I only make this, I have to pay this" but in the end you ( landlords ) need tenants just as much as tenants need landlords. I wish we were in a different economic times where all the renters here could walk out and say F you. The exploitive nature of this renter/landlord environment is sickening to say the least. we have people that cant afford to eat, yet we have landlords (with multiple homes) crying that they will lose money. These people are crying that they cant eat! cant have electricity! cant have hot water! your upset cause you cant buy your second BMW. there is a difference here, a distinct difference between what you need and what you want. we have people here that NEED housing, and NEED it to be affordable, we also have people that NEED a new iphone every year. so do I have a fix, nope. but dont tell me this is not something to work on and discuss options, because as of right now....... this system is BROKEN. only a few are benefiting from the pain they are inflicting on others, in the name of capitalism.
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Sep 30, 2018 04:20 PMA veritable bonanza of housing-related initiatives on the ballot in November! Props 1, 2, and 5 in addition to 10. Prop 5 is an interesting one and includes a constitutional amendment related to tax assessments ... on the surface, it looks to be advantageous to well-to-do baby boomers (possibly why it was crafted to add the "severely disabled" to those who would benefit).
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Sep 30, 2018 03:50 PMSome misinformation in this thread. Prop 10 aims to repeal the Costa-Hawkins Rental Housing Act of 1995 which places restrictions (not outright ban) on local rent control ordinances. So first understand what Costa-Hawkins is, then look at possible outcomes on local rent control laws if repeal passes. Ballotpedia has a nice overview. San Jose Mercury News also has a decent overview ........... https://www.mercurynews.com/2018/09/27/california-and-rent-control-what-we-can-learn-from-berkeley-and-santa-monica/
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Sep 30, 2018 02:14 PMThere must be far more renters than owners of properties; it would seem at some point rent control would happen here. (Am not a renter.)
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Sep 30, 2018 01:55 PMMaybe you could have an agreement that on paper you raise the rent, but accept whatever friend has been paying? Or friend pays you new amount and you write a check back to him/her? If that's not illegal...
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Sep 30, 2018 11:17 AMWhy not contact the writers of the bill and see what it entails?
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Sep 30, 2018 07:54 AMSanta Barbara is like it's own country it only honors the laws that the powers that be want.
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Sep 29, 2018 11:43 PMAs a landlord what caught my eye was "friend of many years." I don't know what other rental properties you have, but my experience has been that once you get a good renter-----it is like finding 24K GOLD. You can't beat having someone who is amenable, pays the rent on time and doesn't give you a ton of b.s. constantly. I have a renter now that when she leaves I will cry for a week solid. I will never again find such a gem and let me tell you: If you have a good renter you must do whatever it takes to keep that person. It's worth it to avoid the pain of interviews and applications and weirdos and demanding jerks and slackers that will come knocking should you have to replace that "friend of many years."
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Sep 29, 2018 11:06 PMAs someone wrote, Prop. 10 will allow cities to have rent control. It doesn't specify that they should or what kind. Santa Barbara City would have to have a city-wide vote for it to pass (and once before it failed) -- and no one knows what conditions there would be: for instance, could rents rise to a new baseline level when the present tenant(s) leave? Does it apply to single family residences or only apartments? etc. I appreciate your concern but if things are working well for you now, I'd relax but keep a careful watch on things and not jeopardize a presently good situation.
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Sep 29, 2018 09:54 PMIt is very doubtful that the prop will pass. MtMan is right. My family used to be landlords; rent was hundreds of dollars below market. But they made money. I wouldn't worry about the logistics of what happens if it passes. Review your rent; raise it by $50 if necessary. Keep your good tenant, and make the world a better place -- assuming you're making a profit.
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Oct 06, 2018 11:00 PMBut if you have a bad tenant (yes, there are many) what do you do to get them out if you can't raise the rent?
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Sep 29, 2018 07:46 PMYou, Sir, are what is keeping the humanity in this area. In my opinion, there are two types of rentals - one is the market which is advertised asking for ludicrous amounts of money for a less than equitable space. The other is the local (shadow, and very hard to find) market, which asks for a reasonable (affordable) amount. You are looking for good people, long term, not trying to squeeze every penny out of someone, or a family, that is just trying to exist in this town. Growing up here, it is known, that unless there is some family property - if you leave, you will NEVER get back in. Most of the people that you see at CVS, grocery stores, etc. are all driving from Buellton, Ventura, , Lompoc, or Oxnard where the rents are more reasonable. You have to ask yourself who you want to be, and who you want to provide for. Do you need ALL the money? or are you okay/happy with solid, long term tenants who will love your property as much or more as you do?
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Sep 29, 2018 06:26 PMNo doubt that if Prop 10 passes, SB will be quickly under rent control. Beware.
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Oct 06, 2018 10:25 PMI hope you carefully read the voter guide that came in the mail -- twice. Think before you vote for anything.
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Sep 29, 2018 05:05 PMProp 10 isn't automatic, my understanding is, if it passes, the city can then impose rent control which I don't know if SB will. More importantly, you need to ask yourself if you are willing to lose a good long term tenant over money. My family had renters, and they too were at half the market rate and were fine with it b/c the tenant was excellent, which is hard to find often. So, if you do raise your rent, make sure you are prepared to lose your tenant and possibly end up renting to a nightmare, or possibly even 1 or 2 families b/c people cannot afford these rents anymore. I'd say, if you are ok financially, keep your tenant and don't raise the rent. UP to you, remember everything has its consequences.