Posted on 05/08/2011 9:31:19 PM PDT by bkopto
In San Francisco, one of the toughest places in the country to find a place to live, more than 31,000 housing units — one of every 12 — now sit vacant, according to recently released census data. That’s the highest vacancy rate in the region, and a 70 percent increase from a decade ago.
To know one big reason why, ask Wayne Koniuk. By trade, Koniuk fashions artificial limbs for amputees. By habit, he fits prostheses at no charge for people who cannot pay. This has left him a less-than-wealthy man.
But he does have one substantial asset: a Divisadero Street building that his father, Walter, an orthotist, bought in 1970 and gave to his only son in 2001 so Wayne could run his business on the ground floor and Wayne’s adult children would always have a place to live.
“For eternity,” Koniuk recalls his father saying, “my grandkids will always have a place they can go. No matter whatever happens, that building should stay in the family.”
Koniuk, who himself lives in suburban Belmont, gave a half-interest in the building to his older son in 2007 so he could evict a tenant and move in himself. But under San Francisco’s extraordinarily pro-tenant housing laws, landlords can do this only once per building.
So while Koniuk desperately wants to move his younger son into the building’s other four-bedroom apartment, he cannot. He is exploring legal options. Robert Murphy, who has lived there for 30 years without a lease, remains, paying $525.82 a month.
Last spring, Koniuk offered Murphy $45,000 to move out. Murphy’s lawyer demanded $70,000, a sum Koniuk says he does not have. Meanwhile, the city’s Rent Board notified Koniuk that he was allowed to increase Murphy’s monthly rent this year by $2.63.
Murphy did not respond to several phone messages left over a two-week period. Harold Jaffe, the lawyer who wrote the demand letter, said he no longer represented Murphy.
Murphy is afforded extra protections as a renter because he is more than 60 years old. Koniuk might still be able to evict Murphy and allow his younger son, Adam, to move in by invoking the Ellis Act, which would entitle Murphy to about $10,000 in compensation and give him a year to vacate. But doing so would impose permanent restrictions on the Divisadero building’s future use, seriously depressing its value. And should 24-year-old Adam decide to move elsewhere, the Koniuks would be legally required for a decade to offer Murphy his old apartment, at his old rent. Invoking the Ellis Act would also mean that any new tenant to the unit, should Murphy decline the chance to return, would also be entitled to Murphy's old rent amount for many years to come. So the Koniuks would likely opt to just leave it vacant.
Increasingly, small-time landlords like Koniuk are just giving up. One of his Divisadero Street neighbors has left two large apartments on the second and third floors of her building vacant for more than a decade, after a series of tenant difficulties. It’s just not worth the bother, or the risk, of being legally tied to a tenant for decades.
“Vacancy rates are going up because owners have decided to take their units off the market,” said Ross Mirkarimi, a progressive member of the Board of Supervisors. He attributes that response to “peaking frustrations in dealing with the range of laws that protect tenants in San Francisco that make it difficult for small property owners to thrive.” Perversely, that is hurting the city’s renters as well, as a large percentage of the city’s housing stock is allowed to just sit vacant, driving up rents that newcomers pay for market-rate housing.
San Francisco is a notoriously tough city for small-time landlords. “It is the dream of every landlord to be a landlord in the most lucrative market in the country,” said Ted Gullicksen, head of San Francisco’s powerful Tenants Union. “There’s no sympathy whatsoever.”
Without strong protections, tenant advocates say, only the wealthy would be able to afford to live here. Countless longtime residents, especially the elderly, would be out on the streets.
This is a consensus view in many circles, as illustrated by a recent feature in The San Francisco Chronicle. “Throwing senior citizens out on the sidewalk is never a good idea, but it isn’t stopping North Beach developer Peter Iskander,” it began.
Left unsaid was that one of the article’s featured characters, Carlo Tarrone, pays $450 a month in rent. Or, more significantly, that Tarrone in 1999 bought (half in cash) a two-unit residential building near Telegraph Hill that the real estate website Zillow values at $1.7 million. Tarrone, whom I interviewed by phone, is by no means poor or facing homelessness.
Koniuk is not a slick developer who aims to toss widows and orphans into the street. He could sell, but he does not want to. He wants to honor his father’s wishes and allow his own sons to live in his own building.
“My name is Koniuk. My sons’ name is Koniuk. My father’s name was Koniuk,” he said. “We should be able to move them into a building we own.”
Wonder if Tarrone, for all his dough, faces the same pickle: can’t move into the building he bought.
Hard to feel sorry for the know-it-alls in San Fran.
It is happening in more places than just California. We will nt rent our extra home ever again.It will be sld and until then it will stay empty. I know other people who used to have some of the oder houess that were divided into 2 and 3 apartments years ago. A decade or so ago most started turning those back into single homes and then sold them.No one wanted to buy them divided because the laws are so in favor of the tenants.
This does sound like a backdoor way for the city to acquire as much of the private property as it can.
I feel for the property owner.
I owned a rental property in California. (Not San Francisco or Los Angeles) We had a tenant who had been OK for 10 years, always paid their rent on time, took care of the property. Then something happened in their household, a change for the worse. They quit paying the rent on time, starting bouncing rent checks, they caused damage to the property, and I got complaints from the tenant’s neighbors that the police were constantly at the property.
It took 6 months to get the tenant out of there. I needed to get an attorney for the eviction process, the tenant fought every step of the way. The law is set up to give every benefit of the doubt to the tenant.
It is terrible to be in that situation as a property owner. The property is being trashed, no income is coming in, the mortgage, insurance and taxes still need to be paid, and the law is giving every consideration to the tenant.
As soon as we the tenant was evicted, we made the necessary repairs and sold the property. Good riddance! I will never be a landlord again.
In Washington DC if your house is vacant more than a month you have to register it, pay a $250 fee and be inspected. If the house remains vacant you get charged a Class 3 tax which is 6 times the regular tax. In other words if your tax should be $5,000, you would be charged $30,000.
Massachusetts dumped rent control about ten years ago. Some of the worst abusers were well paid liberala living cheap on the backs of small property owners. The head of the local NPR TV lived in rent control while making a six figure salary. Thousands of liberals in Cambridge abused the law in the name of old poor people.
Many moons ago National Review published an article which included a graph of housing availability vs the existence or nonexistence of rent control. Cities with rent control have tighter housing markets than those that do not.It was pretty clear to me that the chart should have plotted housing market tightness (the exact measure the author used escapes me at this distance) vs time since the imposition of rent control - and that the graph should include negative "time since rent control" to show that the housing market was messed up by the mere mention of rent control by politicians.
The problem will only grow more acute as more people decide to rent rather than purchase. This will just get more perverse as landlords decide to demolish their property rather than rent it. Probably not in SF, but it has happened elsewhere.
Pacific Heights II, this time the greedy maniac is the local govt.
This would be hilarious if not for my PTSD symptoms.
Incidentally, what does a landlord pay in property taxes on an apartment bldg there?
Once again, my tagline proves the point.
Hey! You gotta change your attitude.
Don’t you know that without these rules they would not be able to hire even more government (non-productive) workers and expand their empires? Don’t you know that it’s your civic duty to do what you can to distribute your income for the whole?
You have to realize, we don’t live in America anymore. It went away in 2008.
It will grow also because now you will have tenants who have developed the mentality and habit of simply not paying for the roof over their heads. My sister works in real estate. She says when you look at the foreclosure rolls they are as high or higher than ever. BUT, people are remaining in the houses for extremely long periods of time with out paying a cent. Her theort is that is how they are paying for the $4 a gallon gas and how you are still seeing stores and restaurants full.
They dont have fixed term leases? Once you move in (rent) you can stay until you die?
Tell her to hush up! If 0bama hears about this, we will wind up with an 0bamacare program for real estate. :(
Apparently, this is the obama housing program. Only some people pay their own way. Every day we look more and more like suckers for it too
The article says the guy has lived there month to month...
Wonder what regulation stops the landlord from converting that to a lease? Although I nearly died when I read that the housing board determines how much the landlord can rent it for and that the landlord can only raise the rent by $2.63?! WTF!
I've been so very tempted to take in a roommate, but these kinds of stories just have me way to fearful to even bother with it.
If a landlord cannot evict a month-to-month tenant in SF CA then it makes no sense to own and rent out property there.
You know how property owners in NYC handled rent controls? They sold all the units as condos. If you cant afford to own a condo in NYC it's not pretty.
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