Didn't they see this?
Posted on 01/24/2019 7:40:05 AM PST by rey
We have friends who just sold a five unit apartment house on Telegraph HIll that they have owned for at least ten years. They live in Nevada and bought it so that they would have one of the apartments for their own use when they came to town.
For openers, the law would not allow them to end the lease on any of their tenants so that they could have a place of their own. So for several years, when the came to SF, they still had to stay in a hotel. Then the city came along and demanded that they do substantial earthquake “hardening” of the structure, necessitating that they “relocate temporarily” two of their tenants. They offered one of them “some additional money” to not come back (which was illegal, but it worked). They wanted the penthouse, but it was occupied by an over 60 bachelor. The rules for over 60 tenants are even more onerous that for “normal people.” Fortunately, the guy found a girlfriend who lived out of the city and he left.
But the deal killer was that under SF rent control law, you, as a landlord, are only able to raise rents 60% of the actual value of your property. So each year, your income lags the market, while the cost of maintenance goes on. They finally had had enough, sold out and reinvested the money in properties in Nevada and Arizona. And with Prop 13, the new owner is facing a huge increase in the building’s property taxes, with no ability to raise rents to cover that cost.
“This is by no means meant to be a revenue generator,”
LIAR.
Didn't they see this?
Telegraph Hill and Pacific Heights are two very different places in the city. Nazi Pelosi and Dianne Fineswine live in Pacific Heights.
The point is how the system is rigged against Landlords.
“The point is how the system is rigged against Landlords.”
For sure. We just sold a commercial building in a well-known North Bay city. We owned it for 18 years. We were lucky to choose a place to invest where the city government stays of of the business of trying to control the property rental business. That said, we too are investing the proceeds in property outside the State of California, and because we’re doing a tax-free exchange, California will get zip in any capital gains taxes.
The remedy is to burn the property and collect the insurance and then leave the burned out hulk
The Homeless did it. There were no police protecting the streets. They burned the place in retribution for comolaining about crapping on the sidewalks.
You don’t suppose that mandatory minimum wage had something to do about it, do you? The same owner could open up in the suburbs and pay employees $10/hr instead of $15/hr. That would inspire businesses to move.
That’s it in a nutshell. The factor they did not mention is the incredible overreach, fees, taxes, and regulation that cost more to comply with than what you can make.
That’s absolutely how Ca destroyed my business.
What businessman wants to rent property where customers have to sidestep human feces on the sidewalks and step over vagrants reclining in their doorways?
Dear Supervisor Peskin,
That is what is called the free market. You know, what made America great. Those are their stores; not yours.
If the developers names are Trump-related, it will bring a criminal investigation. Schumer, Pelosi or other RAT relatives, not so much.
Not that I agree with the councilman’s draconian marxist leninist solution, but this behavior has been SOP for a long time. Walk west on Bleecker from 7th ave South in the Village and you will find dozens of vacant shops whose landlords are waiting for someone to meet their price. Even on Long Island this plays out in our many strip malls. One in Carle Place that hosts a Manhattan level restaurant has had four of its nine properties vacant for over five years. Is there a solution? Market forces created this, it is likely they eventually will solve it. As for Frisco, were this abomination to become law I would challenge it on the takings clause of the 5th amendment.
So you can’t get a tenant in a bad neighborhood. Punishment is to tax you.
I predict a boatload of mysterious fires as property owners choose to go Galt.
Her! Hear! Buckeye McFrog nails it!
Punitive taxation is a dhimmicrap weapon of choice.
Maybe the regulatory environment in SF is so egregious as to keep entrepreneurial risk at an ebb. Ya think? maybe no one wants to risk being in a store front business in that loony bin.
I’m a landlord of several rental units. My highest priced unit on a price per square footage basis is approx $1.45 per square foot monthly.
I wouldn’t mind opening a business in a non-feces neighborhood.
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