Sensible Erection | Berkeley's war against landlords

Wednesday, 15 August 2012

quote [ The sale of property, the expiration of a rental agreement, or a change in the federal Section 8 status of a unit do not constitute "good cause" for eviction. ]

I am considering buying a house in Berkeley, CA. To my surprise I found out that once you rent out your property in Berkeley, it is no longer your own.

If the person living in your property and is paying rent. You may not raise the rent, you may not evict a person if you selling the house or foreclosing on the house. You may buy them out but in Berkeley it is usually >$10K to do so. If you want to move in your next of kin or yourself, you have to pay more than $4500 relocation fees for current residents. If you own any properties in Berkeley you may not move in your next of kin to occupied properties. In San Francisco with similar ordinances you have people living in city center for 40+ years and paying 40 years ago prices. I find that this hurts the little landlords who own a duplex, and does nothing against huge rental companies, who can just eat the losses.

http://www.ci.berkeley.ca.us/Rent_Stabilization_Board/Home/FAQs_Evictions.aspx
http://www.ci.berkeley.ca.us/Rent_Stabilization_Board/Home/Evictions.aspx

http://www.sfgate.com/bayarea/article/Berkeley-Landlord-Losing-Tenant-Cases-2949515.php
http://www.sfgate.com/bayarea/article/Grand-jury-sharply-critical-of-Berkeley-rent-board-3700699.php
http://blog.sfgate.com/inberkeley/2012/06/26/grand-jury-slams-berkeleys-rent-stabilization-board/

http://www.baycitizen.org/columns/elizabeth-lesly-stevens/small-time-landlord-vs-big-time-tenants/

Dissenting opinion, see if this guy has a valid point:
http://www.sfbg.com/politics/2011/05/06/myth-poor-landlord

I rented all my life and it was my understanding that if the lease has expired then you do not have the right to live in the house anymore. Now that I can buy a house I will probably buy it outside of Berkeley, even though I love the area.
I just feel bad for the landlords who got slapped with the retroactive "relocation" fee.

[politics] [by yevishere@2:24amGMT] [+3 Unworthy Self Link]

Comments

-_- said @ 2:36am GMT on 15th Aug [Score:1 Informative]
tenant law in Berkeley is nuts, but not unbreakable.
If you, as the owner(or a family member), are going to move into the house, you can evict a tenant.
At least that's how it was when I was a tenant in Berkeley in the 90's.
Good luck.

yevishere said @ 2:39am GMT on 15th Aug
Sure you can, you can only do it once every 36 months, or once ever, the law is unclear. You have to pay ~$4500+ relocation fees to the tenants. Single family house only, duplexes exempt, and you can forget about it if the resident is 60+ or disabled (drug addiction is a disability btw.) I was considering buying one property, but apparently there is a tenant living in it. Who is section 8, so is impossible to remove.

* (The Asshole FKA Morris) said @ 2:49pm GMT on 15th Aug
The $4500 in ransom only applies to low income renters...

http://www.ci.berkeley.ca.us/Rent_Stabilization_Board/Home/Evictions.aspx#Owner_Move_in

First rule of operating a rental income property. Don't rent to low income folk.

yevishere said @ 3:52pm GMT on 15th Aug [Score:1 Informative]
Low income is not federal but set by Berkeley to be almost double national average.

* (The Asshole FKA Morris) said @ 4:09pm GMT on 15th Aug
According to their website, low income starts at 80% of the area median income, or 65K house hold income.

val said @ 2:37am GMT on 15th Aug [Score:2 Underrated]
Yes, let's all cry a river for the poor, poor landowners.

yevishere said @ 2:40am GMT on 15th Aug
In this case, the poor landowners are the ones who get screwed, the rich landowners can just buy out the tenants.

yevishere said @ 2:41am GMT on 15th Aug
And are they really "owners" if they cannot evict their tenants? They are more like property tax/mortgage payers.

Adam said @ 3:54am GMT on 15th Aug [Score:1 Funny]
Poor landowners? In BERKELEY? What on earth are you talking about? If you own a multi-unit apartment building in Berkeley you have a couple of million dollars worth of non-liquid assets. Only in bizarro land does that make you poor.

anagramophone said @ 2:45am GMT on 15th Aug [Score:1 Underrated]
~~landowners~~ landlords

Ubie said @ 2:45am GMT on 15th Aug
After living in the Bay Area for over six years I can say with absolute certainty I would not want to be a landlord here, and am having an extremely hard time justifying even buying a home.

bruceski said @ 3:14am GMT on 15th Aug
Can't you, as the landlord, choose not to renew the lease when it expires?

yevishere said @ 4:03am GMT on 15th Aug
No you can't.

sanepride said @ 3:22am GMT on 15th Aug [Score:2 Underrated]
For what houses go for in Berkeley those are small prices to pay to compensate tenants in the even of sale. If they have been paying rent and have a lease after all, why should they have to relocate just because the owner decides to sell?
No sympathy here. If you're going to rent out property, properly vet your tenants to avoid trouble and if indeed they are good tenants treat them like human beings. Having been a tenant and a landlord I can attest this is not so difficult.

* (The Asshole FKA Morris) said @ 3:25am GMT on 15th Aug
i agree evicting to sell is a no go. The buyer is buying an income property. But if the new buyer wants to move in, out with the old, in with the new.

foobar said @ 4:47am GMT on 15th Aug [Score:1 Interesting]
I don't see a problem with requiring restitution for that.

* (The Asshole FKA Morris) said @ 11:25am GMT on 15th Aug
I see no reason why the renters need to give restitution...as far as the owner, it belongs to the owner...only contract law and due notice are required.

If I could amend the law, I would require 90 days instead of 60.

* (The Asshole FKA Morris) said @ 3:24am GMT on 15th Aug
In Canada if your lease expires you automatically go to a month to month lease...same rights and obligations as a yearly.

You can evict someone if you or your immediate next of kin are moving in with 60 days notice. Rent increases are yearly. Getting someone evicted is a pain. I know someone who tried to get a deadbeat out...took 6 months. He was in the hole for 4 months rent.

Naruki said @ 3:58am GMT on 15th Aug
Wow, really? Is 1990 that far away that nobody remembers Pacific Heights?

foobar said @ 4:53am GMT on 15th Aug
Someone born in 1990 could have a bachelor's degree today.

sherlock said @ 5:29am GMT on 15th Aug
12 year olds can't have bachelor's degrees! Yes, I believe you are mistaken, sir, with your arithmetic.

soulecho said @ 5:47am GMT on 15th Aug [Score:1 Funny]
You're posting from 2002?

SORCERY!

quaint said @ 7:12am GMT on 15th Aug
Indeed - Sherlock, please share with us the secret of how you manage to post from THE FUTURE!

Everyone knows that 2002 is the future. Come on, by then we'll all be living in space and eating our meals in pill form.

cb361 said @ 9:03am GMT on 15th Aug [Score:2 Funny]
Lots of people in California already eat pills and live in space.

foobar said @ 4:46am GMT on 15th Aug [Score:1 Insightful]
How does this impact you at all if you're intending to buy a house to live in yourself.

Alecz said @ 8:34am GMT on 15th Aug
Say he wants to buy a house that the current owner is leasing to someone else. He can buy the house, but he can't throw out the lease-holder.

foobar said @ 9:46am GMT on 15th Aug
That's like saying you can't purchase a house because you have to pay your real estate agent.

* (The Asshole FKA Morris) said @ 2:40pm GMT on 15th Aug
But you don't require a real estate agent.....and agents provide a service in any case, if you chose to use one.

foobar said @ 7:54pm GMT on 15th Aug
And you don't have to buy a house with an existing tenant.

* (The Asshole FKA Morris) said @ 10:50pm GMT on 15th Aug
Which of course places a burden and hardship on owner who will have a hard time selling their properties because of the price disadvantage that having them occupied brings.

Stuck with a property that is difficult to unload, will the owner be as interested in upgrading? Or will they only perform the bare minimum?

Once again, poorly thought regulations affect the normal marketplace.

foobar said @ 11:12pm GMT on 15th Aug
They won't have a hard time, they'll just have to accept a lower price.

We generally don't want them to upgrade, as that involves displacing tenants. In fact it's usually just an excuse to do that where it's allowed.

* (The Asshole FKA Morris) said @ 11:34pm GMT on 15th Aug
If home A without tenants sells for 450,000
And home B with tenants sells for 450,000

Which one would sell first?

Forcing Home B to lower his price is a hardship. Especially since it would mean lowering far lower than the cost of the ransom. No one wants to evict someone, unless it is a really good bargain

foobar said @ 11:52pm GMT on 15th Aug
Less hardship than being evicted, and directed at someone who can more afford to bear it.

* (The Asshole FKA Morris) said @ 12:08am GMT on 16th Aug
That is an assumption. Not a fact. Just as likely the person who moves finds a nicer home for less rent. In which case, maybe they should be required to reimburse the owner.

flat_michael said @ 12:17am GMT on 16th Aug
find a nicer home for less rent? what universe are you from?

* (The Asshole FKA Morris) said @ 12:58am GMT on 16th Aug
Obviously one where people are pickier if not smarter than the one you hail from.

Shit, I used to live in Yorkville and paid $1000 a month. I moved to Forest Hill and paid $500...simply because I looked.

And if you don't know those neighbourhoods, One is very affluent, the other is 2 miles north and is even more affluent.

* (The Asshole FKA Morris) said @ 12:59am GMT on 16th Aug
Because they can afford to bear it doesn't mean they should.

Ranma_Saotome said @ 3:16pm GMT on 15th Aug
Nonsense. By the plain language of the law, as long as he owns just the one unit (or less than four units) in Berkeley he can evict the tenant even if they are disabled. If they are low income, he would have to pay the $4500 compensation, but that would be a small percentage of the cost of a house in Berkeley.

* (The Asshole FKA Morris) said @ 4:12pm GMT on 15th Aug
from what I have seen, the average price for a 3 bedroom is $450K

Who needs $4500 to move? A rented cube van, 48 beers and two large pizzas is all I ever needed....total cost under $150

Ranma_Saotome said @ 5:20pm GMT on 15th Aug
If you are elderly or disabled, a rented cube van is probably not an option for you. If you are low income, you are probably working several minimum wage jobs just to get by, and where are you going to find the time to do a DIY move? In my area, with property values less than half of what you are talking about, my last move cost $700 just for the professional movers. You also have to consider that the tenant will have to float the security deposit for the next place, plus first month's rent, before they get their security deposit back. That can be $3000 to $4000 right there, and I'm basing that on rental prices for three bedroom units in my area. It's cash flow problems like that that put working families on the streets in cities with less tenant friendly laws. Even if the average price for a three bedroom house in Berkeley is that low, we are talking about 1 percent of the purchase price, which will be one sixth of what gets paid to the Realtor.

* (The Asshole FKA Morris) said @ 6:25pm GMT on 15th Aug
And, so?

Why should what are very basic conditions that every renter must assume be the responsibility of the landlord?

As I said, the simple solution is not to rent to anyone with a low income...if the city wishes to impose these restrictions, let the city house them.

mrklipp said @ 7:26pm GMT on 15th Aug
Newsflash: Most people with a high income prefer to buy rather than rent.

Renters tend to fall into two groups, high income short term, and low income long term. Both have their advantages and disadvantages.

foobar said @ 7:57pm GMT on 15th Aug
Better solution: apply these rules to everybody so that they're just a cost of doing business and not encouragement to illegally discriminate based on income.

* (The Asshole FKA Morris) said @ 10:51pm GMT on 15th Aug
...and watch the vacancy rate fall so low there are no units to rent.

foobar said @ 11:27pm GMT on 15th Aug
We're talking about a tiny fraction of the building and maintenance costs of running a rental property. It's not going to have an impact at all.

* (The Asshole FKA Morris) said @ 10:54pm GMT on 15th Aug
There is nothing illegal about discriminating on income. If I think you cannot afford the rent, and I have another who can, who will gain say me?

Believe me, I have rented out units. I take the applications and tell them we will make a decision next week. I have only once had someone ask, "why didn't I get the apartment?" I said, "because there were others with better applications than yours."

foobar said @ 11:16pm GMT on 15th Aug
Depends on jurisdiction. It is in BC. I'd presume Berkeley would be at least as stringent.

I agree that enforcement is laxer than it should be. Requiring landlords to accept the first offer would be best.

* (The Asshole FKA Morris) said @ 11:46pm GMT on 15th Aug
Again. why the desire to infringe on business? Should we be required to rent to someone with a very poor record simply because they applied first?

I had a family apply last year to rent a 500sq ft one bedroom. husband, wife, two kids. They weren't first, but if they were, I would not have rented it to them.

I had another fellow, quite sketchy. He could barely fill out his application which he insisted on doing in front of me. I called the company he said he worked for (but not the contact name he gave me) asked for HR and found out he didn't work there. He was the first to apply. He called back asking when he could move in...

I have had people claiming to be students (I think though they were just on welfare) And had no job info. I said (and I chose my words carefully) no problem. Get your parents to fill in another application and because they are off site, post dated cheques including a certified cheque for first and last. If the parents show up, fine.

And I have had applications from people whose jobs paid poorly, where the rent would be more than 30% of their income. They do not get in whether they are first or last. And the simple reason is, 9 out of 10 times they will end up in arrears.

foobar said @ 11:55pm GMT on 15th Aug
Either you're arguing that some other landlord should be the one to take them, which makes your argument irrelevant from the perspective of the market as a whole, or you're arguing that they should be homeless which makes you a sociopath.

* (The Asshole FKA Morris) said @ 12:14am GMT on 16th Aug
Indeed I am arguing that someone else should rent to them. Not all rents are the same. There are places for lower income tenants, places with lower rents.

I don't discriminate based on race, gender or sexual orientation. My discrimination is certainly the most fair. It ensures that the tenant will not starve and end up evicted and ensures that the bank and I still get paid.

Why should I assume the liability for your bleeding heart? You want to house the homeless, buy an apartment and let them live there. The caveat is though, buy it free and clear because the banks don't care if you can't make the mortgage because 20% of your tenants are deadbeats.

Which would make you homeless...

* (The Asshole FKA Morris) said @ 12:54am GMT on 16th Aug [Score:1 Informative]
On a side note, in Toronto during the 70s and 80s we had very strict rent controls. Not only couldn't a landlord raise the rents over a prescribed amount to existing tenants, once the unit became vacant the landlord was still not allowed to raise the rent beyond the registered amount.

What happened was predicted and predictable. There was a severe shortage of affordable housing....new low income and moderate income units were not being built. Luxury units were not covered. Vacancy rates were as low as less than 1/2 a %. There was a thriving "Key Fee" underground market where tenants sublet their wonderful apartments to would be tenants would assume the lease and buy the curtain...often for thousands of dollars. I have heard stories of people funding the condo down payment based on the $5K they received..and the poor moved to the outskirts of Toronto.

That ended in the 90s. Since then, the vacancy rate has tripled, market forces have come into play, rents have stabilized new units were built and you don't have to move outside of Toronto to find an affordable unit.

lilmookieesquire said @ 5:22am GMT on 15th Aug
Frankly it's nice to see a university area in California not completely gouging students.

UC Santa Barbara (Actually in goleta) was designed to have an extremely high population density and no parking. The landlords control the city counsel and goleta technically isn't even part of SB because they don't want the migratory students interfering in city affairs. They spend most their time spending tax money destroying the beach by putting up ineffective sea walls to stop the cliff corrosion.

I have very little sympathy for land lords in university towns.

sherlock said @ 5:30am GMT on 15th Aug [Score:1 Informative]
When I was at UCSB I had mushrooms growing out of my bathroom walls from water damage. Landlord refused to do anything. Scum of the Earth.

lilmookieesquire said @ 6:02am GMT on 15th Aug
Sounds about right.

pk359 said @ 5:51am GMT on 15th Aug [Score:1 Insightful]
Goleta's mostly fine, it's just Isla Vista that sucks.

lilmookieesquire said @ 6:02am GMT on 15th Aug
Yes. Thanks for that. It's been awhile.

Galipoli said @ 7:18am GMT on 15th Aug
just another reason to buy in north oakland. temescal is nice this time of year.

thizzwardo said @ 7:25am GMT on 15th Aug
Hey. I grew up in Berkeley, and I am currently back here for a minute, and I feel I can offer some insight here. Berkeley is a great place to live/raise a family, but at the moment all properties in desirable locations in the bay are pretty expensive, due to the influx of tech-people over-paying for property, artificially driving housing prices up (this is a much bigger issue in SF, although it also spreads out to the more convenient commuter-cities in the east bay).
If you want to buy a house to live in long term, I would recommend Oakland. East Oakland (closer to downtown/lake merrit...not in the industrial area/by the colliseum; that location is forever doomed to be a ghetto) is already in the throws of heavy gentrification....tons of new restaurants, bars, shops are popping up there already, and West Oakland is close on it's heels. I'd recommend looking at a property in the east or the west, in an area that is still pretty minority-heavy/run-down, but boarders an up-and-coming nice area. Give it 5 years, and your neighborhood will go from ghetto to bohemia and the section-8 projects will be torn down to build nice apartments. Your house will appreciate substantially within 5-10 years; it's been happening for years now. There's tons of beautiful original victorians in West Oakland below San Pablo that only need a little fixing up to be envy-inducing. Also, if you have kids, you can absolutely send them to Berkeley public schools if you live in oakland (Berkeley public schools are pretty great....Cal tags applications from kids who went to Berkeley High to make their entry easier, as the cirriculum is so critical-thinking heavy that Cal knows BHS kids will have an easier time transitioning into UCB. We had Cal professors come in and teach guest lessons all the time). The community is wonderful....diverse, progressive, prolifically multi-cultural....the food availiable to you is second-to-none, and you'd be a 10 minute drive from Berkeley, maybe 20-30 minute drive to SF, depending on traffic. If I had the money to buy a house, that is absolutely what I would do.
Another option is Emeryville (home to Pixar), which currently boasts the best economy in the entire bay, and is inbetween Berkeley and Oakland. It's gotten real nice in the past 10 years or so, but I believe there are more apartments than houses....any house on the Emeryville boarder in either Oakland or Berkeley would be nice....in fact, there's a house they just renovated that's down the street from me and is doing open houses atm, I think....1210 Carleton st. Check it out.
Good luck and all the best for house-hunting.

cb361 said @ 9:10am GMT on 15th Aug
The thing that impressed me about the buildings in San Francisco was how every house in a terrace could be completely different, even though they were touching walls on both sides. As though a hundred individuals all bought a plot of land, and then built whatever they felt like. If you have a terrace of houses in Britain,they'll all be identical, or at least very similar. Maybe it goes back to the towns that were built during the Industrial Revolution.

Seeing SF made me realise how soviet a lot of the architecture in Britain looks. I can't imagine how they organised it though, or the arguments there must have been between neighbours.

Adam said @ 9:53am GMT on 15th Aug
The part that you couldn't see is that most of those older homes are absolute crap. Paper-thin walls, insufficient insulation, leaky windows, questionable seismic stability.

dietcoke said @ 8:52am GMT on 15th Aug
some form of rent control would be nice.
My best friend has a 2 bedroom apartment, last year he was paying $900 a month, now with this oil boom and hundreds and hundreds of jobs in the area and a shortage of housing his rent was jacked up to $2,500 in less then a year.
Lots of jobs means high rent which means unless you work in the oil industry here, you are going to have to get plenty of roommates or move away.

atter_cob said @ 9:21am GMT on 15th Aug
Berkeley does appear to have some wacky laws that are overly protective of tenants. Still, I'm pretty sure you can get people to move out if you really want to. Hell, everyone in Berkeley smokes pot so you can evict them with cause right there.

Persephone13 said @ 9:42am GMT on 15th Aug
If there's no rent control and you wanted someone to move out at the end of their lease, couldn't you just increase the rent to something ridiculous?

eIfish said @ 11:18am GMT on 15th Aug
Generally the lease itself has clauses to address that.

foobar said @ 7:59pm GMT on 15th Aug
Even without outright rent control, there are usually hard limits on how much and how frequently rent can be increased to prevent that.

* (The Asshole FKA Morris) said @ 10:55pm GMT on 15th Aug
In Ontario, once per 12 months and for an existing occupant, a prescribed rate adjusted to inflation. For a new renter, what ever the market will bear.

atter_cob said @ 9:54am GMT on 15th Aug [Score:1 Insightful]
Ok, I read the "dissenting opinion" and it was a load of biased crap. If you want the security to stay in a place for the rest of your life then buy a home and get a fixed-rate mortgage. If you rent then you do not own the place and you should not expect to be able to live there forever.

As for the rental shortage in SF: well DUH of course condos are more profitable because the rent laws are so strong. Nobody wants to be a landlord in SF so there are no rentals to be had. How is that not obvious?

eIfish said @ 11:17am GMT on 15th Aug
I've always wondered why people with a mortgage are considered homeowners. The bank has all the powers a landlord does, the only difference is that the bank is less likely to act like an ass.

Actually, I really wonder why the banks haven't got into the buy-to-let market. By underwriting hundred-percent buy-to-let mortgages like they did, they were essentially saying "here, we'll assume all the risk, and if you do make money with our money, we only want a small amount of it".

atter_cob said @ 7:57pm GMT on 16th Aug
Because you do own the home. The only claim the bank has is that if you fail to pay they claim it as collateral. It's a subtle point, but still a significant one. For example if someone comes into my home* and they trip on a raised paving stone then they sue me, not the bank because I own the home.

* Of course, as we know from previous long discussion anyone entering my home would be promptly shot, so this is a hypothetical discussion. rofl

bbqkink said @ 8:22pm GMT on 15th Aug
You enter into a contract and all of a sudden you don't like it so you want to quit..to damn bad. Landlords know the rules of section 8, the advantages and disadvantages. If you don't want the deal don't take it.

So yea if the people who also knew the rules, rent your place they can stay as long as they want. After they have payed your mortgage for years, now you decide they have to leave, bull. You took the security of section 8 live with it.

atter_cob said @ 8:03pm GMT on 16th Aug
The problem is that the the government came along and said "we don't care what you two agree on in your contract, you also have all these extra conditions imposed." These conditions mostly favor the renter, so you can see why the owner is not happy about them.

And your second point and my second point are sort of the same: the people building homes/apartments know the rules and don't like them, so they don't rent them out and sell them instead. The result is a shortage of rental units that makes things even harder on there renters. So the government responds with stronger rent-control laws and just makes the problem worse.

radioelectric said @ 8:26pm GMT on 15th Aug [Score:1 Underrated]
"If you rent then you do not own the place"

Really? In the UK while you are renting a place it is primarily YOURS. That's what you pay all of that money for.

atter_cob said @ 7:54pm GMT on 16th Aug
When you rent something you have use of it. But it's still not yours. For example you can't modify it in a significant way.

epease said @ 3:07pm GMT on 15th Aug
I've lived in Bezerkely back and found most of the rentals are established as rental units. If your goal is to buy and rent out the property then these laws are not unreasonable. a 3 day notice to pay or quit is standard in all of California for tenants who fail to pay; then you sue them in court using the unlawful detainer complaint.

I suppose if you want to rent your property for a little while then want the tenants to move out at some point in time you should put the date in the lease.

Avid said @ 4:56pm GMT on 15th Aug [Score:2 Insightful]
I consider myself liberal, but the degree of the pro-tenancy of the laws in California seems unsustainable. What this amounts to is a market distortion: unproductive or less-productive people occupying rent-controlled apartments, when there is excessive demand from more-productive people who could easily pay the market rates, were it not for this distortion.

Why should the young graphic designer, engineer, entrepreneur, etc. need to spend 2-3 hours a day commuting to get into the city? Would these people in rent-controlled apartments really be harmed by trading places with the (typically young) people that are forced to commute? Rent-control creates an artificially high demand for apartments in these communities, which inflates prices on those not fortunate enough to have begun renting 20-30 years ago.

Prop 13 is quite similar; it disproportionately taxes the young in favor of the old.

I don't advocate complete repeal of these laws, but they can't be 100% divorced from market economics. Any tenant's rent should slowly but steadily increase in the face of inflation and increased demand. Similarly, property taxes need to reflect the real value of the real estate, inflation, etc. To create a system that advantages the interests of the elderly over the young to such a degree is not only patently unfair, but also destabilizes the state through underfunding.

bbqkink said @ 10:47pm GMT on 15th Aug
I consider myself liberal..you might want to reconsider.

happiest_sadist said @ 5:26am GMT on 16th Aug
Maybe he meant "neoliberal".

bbqkink said @ 5:32pm GMT on 15th Aug
Once you agree to section 8, you are bound by section 8.

Landlords do this because they get their rent checks promptly on time. If you don't want the protections of section 8 don't so it. don't cry because you changed your mind and now want to kick out the people that ALSO consented to section 8 rules.