The many faces of protected tenant status

San Francisco Chronicle ^ | 2/24/6 | Carol Lloyd

[SmithL]

Eloise, a grandmother who has lived in her home for over 20 years, is quiet and conscientious and always pays her rent on time. Even so, from the moment her new landlords bought the building some five years ago, they have made it abundantly clear that she's not wanted.

"I guess I'm the proverbial tenant from hell," she says with a laugh.

Does she have grandson with a drug problem? A pit bull with an appetite for small children? Or perhaps she's one of those compulsive hoarders who can't stop collecting old newspapers?

None of the above. In a different market, in a different city, Eloise might be considered an ideal tenant. She takes care of her home, she knows her neighbors, she dearly loves her neighborhood.

But this isn't anywhere. This is San Francisco, and Eloise lives in such fear of her landlords' wrath that she asked that I not use her real name. Her crime is that she pays less than one-third of market rent -- based on rent control -- and she cannot be evicted. She is a protected tenant.

In San Francisco, Oakland and a handful of other municipalities around the country, it is a phrase that strikes dread in many a landlord's heart. It also a phrase that invokes an invaluable right for many poor, elderly or disabled tenants who would otherwise be cast onto the rough seas of the rental market. For these vulnerable tenants, it offers the most basic refuge in a housing market that has virtually no affordable housing left.

Although each city defines the category of protected tenancy in different ways, most laws are grounded in the same principle: that some tenants, because of their prolonged tenancy and their especially vulnerable circumstances, just shouldn't be evicted.

[SmithL]

From each according to his abilities,
to each according to his needs.

[KellyAdmirer]

Yes, living in a less-expensive city would be so degrading, wouldn't it?

[sarasmom]

I guess.
Rent or own?
There are plusses and minuses for either choice.
No excuse for not knowing the difference, IMHO.

[Attention Surplus Disorder]

It should be said, as part of their due diligence, the buyers of the bldg can easily discover whether any tenants with the above status live in the building.

[aligncare]

My wife and I were a young couple just moved into a lovely apartment in Palo Alto, California, from a rural community in the central valley of California. We were paying $125/mo. Now the rent was $180/mo. A huge jump in those days. What we did not know was that Palo Alto (or just that area of Palo Alto?) was rent controlled and about to change. The rent began to go up in increments of $35 to $50 every few months. By the time we moved six years later, we were paying $780/mo.

It was a financial burden, but we adapted. Salaries improved, cut backs in spending were made, and when that wasn't enough, we moved to more affordable housing.

We were young and launching our careers. Don't know what it would have been like if we were old and on fixed income, though. But, remember I said it was a LOVELY apartment. Maybe too nice for our income level; artificially too low a rent perhaps to begin with.

[kenth]

These guys had to know they were purchasing property with rent control protected tenants, didn't they?

[I still care]

My parents, as NY landlords, deal with this all the time.

When you buy an apartment with a protected tenant, you take that into account in your purchase price. They just let a $180000 apartment go for less than $100000 because they had a protected tenant from hell in it.

The problem is when you have an apartment like this with a bad tenant. You can't get rid of them no matter how bad they are. Often these apartments cost more to maintain then the rent.

Some of these little old ladies go senile. And you are worried because you don't want to get sued over not taking care of the apartment, and something happens to them, but they won't let you in.

If you can wait them out until they die or move or buy them out, you can do ok. But they can live in there 20 years and slowly go nuts.

[twidle]

"We were young and launching our careers. Don't know what it would have been like if we were old and on fixed income, though. But, remember I said it was a LOVELY apartment. Maybe too nice for our income level; artificially too low a rent perhaps to begin with."

My opinion, the new owners bought knowing there were rent controlled units and intended to harrass them and make more money for themselves. Those tenants have a contract that by law should be honored. New owners-Aggressive Opportunists!! should be fined or arrested for harrassment, or worse even for pre-meditated "extortion" or RICO (Racketeering).

[kenth]

That's what I was wondering. You take the chance hoping you can outlive them or buy them out or something.

Sounds like you have to have a really strong constitution to take on one of those deals. Heck of a bet to make. ;-)

[Do not dub me shapka broham]

With all due respect, that's bunk.

There is no morally legitimate defense for theft of someone else's property.

If there is some locality that legalizes armed robbery-and when you think about it, that's essentially what rent-controlled and rent-stabilized apartments are-that shouldn't give the perpetrator of the crime a clean conscience.

The debate over vacancy and luxury decontrol in Albany several years ago is a perfect illustration of the warped, surreal mentality that animates the political culture of this state, but especially this city.

First of all, no one is entitled to live on prime Manhattan real estate.

As far as I know, there's no part of the U.S. Constitution that guarantees someone an artificially depressed rent, or the right to live La Vie Boheme in an apartment near SoHo or TriBeca.

The idea that someone should be able to inherit a piece of property that the person bequeathing that piece of property never owned is so absurd that it could only take hold in an environment as dysfunctional, and politically neurotic as New York, or San Francisco.

They eliminated rent controls in Massachusetts during the Weld administration, and guess what, the sky didn't fall.

The artificial scarcity imposed upon the housing market by this pernicious, insidious policy-which was intended as a temporary benefit extended to GIs in the aftermath of World War II-is only one of the reasons that New York City's economy-despite the ebullient prattling of our obnoxious, statist cheerleader of a mayor-is stagnating.

When people are discouraged from entrepreneurialism, when small businesses are dissuaded from investment because of onerous regulatory schemes, when middle-class taxpayers are forced to flee to other, more hospitable climes-only to be replaced by less educated, less successful immigrants who provide a seemingly endless source of cheap labor-the economy inevitably suffers.

The obliteration of Prospect Heights-and planned erection of yet another dismal Ratnerville in the heart of downtown Brooklyn-is yet another illustration of the habitual idiocy of New York officeholders, one that I won't delve into right now, since I already seem to have exhausted my initial tirade.

Anyway...

[monocle]

Rent control laws are another form of governments taking property from a private citizen and giving the property to third party. The Kelo decision raised a furor that is still being felt as states act prohibit such unpopular actions. Rent control is a taking of property by governments and if you support such actions I hope that someday such actions may not bite your own behind.

[Do not dub me shapka broham]

Yes, living in a less-expensive city would be so degrading, wouldn't it?

How gauche!

;-)

[Do not dub me shapka broham]

...consider a column that Tierney wrote last summer. The subject, at bottom, was Manhattan's absurd system of rent control, and any good libertarian could have cranked out a column making a telling economic argument against it. Tierney, by contrast, approached the subject through the seemingly pathetic case of Joan E. Mazzola, aged 70 and beset by emphysema and heart ailments. Her landlord was seeking to evict her! Mazzola pleaded, "I don't know what I would do. I have no place to go."

But why was Mazzola in danger of being evicted? Tierney wanted to know. Well, her large two-bedroom apartment at Park Avenue and East 84th Street would rent at a free-market price of $10,000 per month, according to her own estimates. She was paying $1,847.77. So, somewhere along the line, she had come up with the bright idea of renting out the second bedroom for $2,200. In other words, her "roommate" was paying more for his share of the apartment than she was paying for the whole apartment, netting her a nice little profit of $4,225 a year, plus rent-free housing on Park Avenue. This was in contravention of a law, presumably designed for such situations, that forbids charging a roommate more than his proportional share of the rent. Mazzola pleaded that she was ignorant of these laws limiting rent charges, but that, Tierney remarked, "is not the easiest case to make when you're paying $8,000 below market price."

Still, whatever her economic sins and crimes, would Tierney have her forced out into the cold, cruel world? "What about the place you own in Westport, Conn.? The house your landlord says is on nearly two acres, has an estimated value between $490,000 and $640,000, and yields $33,000 annually in rental income?" "'Oh, maybe there's almost two acres, but the house itself is tiny,' she replied. She didn't care to discuss the financial details. She did, however, volunteer that her landlord was a 'cutthroat, horrible person' who wanted her out of the apartment so he could make more money. 'To him, it's just business,' she said. But then, Mrs. Mazzola herself was pretty businesslike about that second bedroom."

http://www.objectivistcenter.org/cth--444-Two_Cheers_John_Tierney.aspx

[son of caesar]

And what the huge majority of folks dont seem to understand is that we all subsidize these rent controlled apts and the section 8 folks too. Section 8 is when you have losers who cant pay rent, so the govt pays iirc 75% of their rent. Its a good deal for losers. When the landlord who invested and maintains his building cannot make profit, does he pay taxes? NO. In fact, owning apts is for the most part a tax ploy. You would be amazed at how owning apts negates your tax bill. Finally, landlording is a business and govt has no right to set prices of apts at all. This is communism and as proof it all started in Mass and NY, true communist outposts if ever there were any.

[Do not dub me shapka broham]

I could spend all day enumerating the societal ills wrought by public, federally-subsidized housing.

There are entire communities within this city that have been devastated-the famous "blighted" neighborhoods that our politicians are so eager to point out when dreaming up equally disastrous schemes to thwart individual initiative-by pernicious bureaucrats from HUD and state and city housing authority.

City Journal published a phenomenal essay-written by Heather McDonald, I believe-illustrating how public housing, and concomitant social welfare programs, such as subsidies for single mothers not to marry, and to have more out of wedlock children, led to the maladies that afflict large swaths of this city's most economically depressed, crime-ridden urban centers.

[PeteB570]

So the landlord subsidizes her rent with money out of his own pocket? It's the same thing if you can't charge market rent.

I'd bet in an extreme case of that you could find where a building full of similar "renters" could be barely making any profit after taxes, upkeep, etc.

Why do they "need" rent controls? Because the wacko enviro-nuts, et al will not let construction keep up with demand.

[aligncare]

The problem is the easy with which this issue can be portrayed by the socialists and lapped up by the uncritical masses. "How could you throw Grandma out into the street", they would say.

[ansel12]

I would like to see the racial, ethnic, religious, and financial make up of people that live under rent control.

[I still care]

Well, there is property "flipping" and there is true investing.

My father bought most of his properties back in the 80's. I thought his approach really risky but he is one of those people who has real faith in owning real estate. He's been through boom and bust.

The real thing is, he just loves managing property. Really loves it. Gets himself elected to the property boards, and puts real effort in improving property and buildings - gets the druggies out, etc.

He started out with real dog properties, because he did it all by himself, and just improved everything he touched. I have enormous respect for him.

[CyberAnt]

I agree .. as an employee of an apartment owner .. you are required to submit a rent roll to any lender which has to show who is paying the rent.

If this new buyer didn't know that information - they weren't paying attention. We just re-financed a huge complex, and we had to document all those Section 8 people.

Section 8 can be a good thing if you screen your tenants carefully. We have more than half - and of that maybe 1 or 2 are bad tenants. The rest of them are hard working and pay their rent on time.

But .. I suspect the buyer wanted to tear the building down and build condos - or convert the apartments to condos - and with protected renters - they are being prevented from doing that.