23 September 2016

Landlord Who Supports Rent Control

[Background - the city council of my town, Richmond CA, has had a very heated political debate for a couple years now over whether or not to institute rent control.
Richmond is currently one of the more affordable pockets in the San Francisco Bay Area, especially for being close enough to the center to have its own BART stop, but like rents everywhere in this popular and rapidly growing area, they are climbing fast.
With rent control measures, landlords would only be able to raise rents they charge by a certain percentage (generally close to inflation levels) each year, and could only evict tenants if those tenants actually did something wrong (or if the landlord wants to move in), not just as a way to get new tenants to pay higher rent (rents can be increased between tenants, assuming they move out voluntarily or are evicted for a legitimate reason).


In the public discourse around the issue, those against it are constantly making the claim that it would "hurt small-time landlords".
I posted the following to a couple neighborhood discussion groups on the topic:


Not that any one cares about one random individual's opinion, nor that they should... 
...but since so many who talk about the subject feel entitled to speak on my behalf, I just wanted to set the record straight. 
I grew up in Richmond, and I live here now. I worked for the downpayment money for our triplex home from scratch, on an ordinary working class salary (averaging around 20k a year). I was able to save money by living in trailer parks most of my adult life.

Today I am a "small time" landlord. I own just a couple of units, which share the same land as my own home is on. I put a lot of money and time and work into upgrading it and making it a nice place for my tenants to live, and I still have a giant mortgage on it.

And there is absolutely no way I could honestly claim that rent control would "hurt" me.


My mortgage is a fixed amount, and repairs and vacancies are reasonably predictable. I make a profit on my rentals - that's why I got them - even though I charge my tenants below "market" rent.

There is no specific dollar amount or percentage of profit that I am "entitled" to. While being a landlord does require more than zero work, so does managing a stock portfolio. The fact is I am making unearned income. No one has any right to claim to be entitled to unearned income.

Further, rent control does not require me to LOWER my existing rents.
All it does is prevent us from arbitrarily raising rents to whatever the highest bidder is willing to pay.
Not getting MORE money is not the equivalent of having money taken away.

As land holders, we are controlling a basic human necessity.
In other human necessities, for example, clean water and other utilities, the companies that control the supply are not allowed to make up whatever prices they think some people will pay. The government steps in in the form of the public utility commission, and caps what they can charge.
With the affordable care act, there are limits to how much individuals can be charged for access to basic and emergency health care. That's a human rights issue.

Living on the street, or in a park, or in a doorway, is considered a crime, so even if we wanted to pretend that was a reasonable way to live, it isn't a legitimate option in our society. That means every individual HAS to have housing. We don't need to make unlimited profit from having control over a basic human necessity.

It is entirely possible that some, or even all, of my tenants make more money than I do. I actually wouldn't be surprised if that were the case. That is irrelevant. Nobody proposes that people who make more money should have to pay more than everyone else for food or furniture or computers or anything else. If someone who can afford a bigger place or one in a better location, and chooses not to (to save money to buy their own place, or any other reason), that's their choice.

All rent control does is say that I can't arbitrarily kick people out of their home just so I can make more profit than I am already making, nor arbitrarily jack up the price from what we originally agreed to, just because silicon valley hired a bunch of people from out of state.

One last thing: I am opposed to building more housing too.
There is a reason I have never lived in San Francisco, and it isn't just the cost of housing. There are 17,000 humans per square foot there (10 times the density of Richmond). As a result the city has 24 hour gridlock, $50 per day parking garages, and an ocean of garbage is cleaned off the street every day. For all the negative reputation Richmond has, San Francisco's crime rate is higher.
It has been found by researchers that the single biggest variable in crime rate is population density. The more people, the worse life.
Instead of trying to accommodate every single person from out of the area who wants to live here - either by pricing out existing residents or building infinitely more housing, what if we simply *don't* accommodate all the new people who want to move in? Demand will be high - and go partially unfulfilled - and that's ok.

Today I am a "small time" landlord. I own just a couple of units, which share the same land as my own home is on. I put a lot of money and time and work into upgrading it and making it a nice place for my tenants to live, and I still have a giant mortgage on it.
And there is absolutely no way I could honestly claim that rent control would "hurt" me. 
My mortgage is a fixed amount, and repairs and vacancies are reasonably predictable. I make a profit on my rentals - that's why I got them - even though I charge my tenants below "market" rent. 
There is no specific dollar amount or percentage of profit that I am "entitled" to. While being a landlord does require more than zero work, so does managing a stock portfolio. The fact is I am making unearned income. No one has any right to claim to be entitled to unearned income. 
Further, rent control does not require me to LOWER my existing rents. All it does is prevent us from arbitrarily raising rents to whatever the highest bidder is willing to pay. Not getting MORE money is not the equivalent of having money taken away. 
As land holders, we are controlling a basic human necessity. In other human necessities, for example, clean water and other utilities, the companies that control the supply are not allowed to make up whatever prices they think some people will pay. The government steps in in the form of the public utility commission, and caps what they can charge. With the affordable care act, there are limits to how much individuals can be charged for access to basic and emergency health care. That's a human rights issue. 
Living on the street, or in a park, or in a doorway, is considered a crime, so even if we wanted to pretend that was a reasonable way to live, it isn't a legitimate option in our society. That means every individual HAS to have housing. We don't need to make unlimited profit from having control over a basic human necessity. 
It is entirely possible that some, or even all, of my tenants make more money than I do. I actually wouldn't be surprised if that were the case. That is irrelevant. Nobody proposes that people who make more money should have to pay more than everyone else for food or furniture or computers or anything else. If someone who can afford a bigger place or one in a better location, and chooses not to (to save money to buy their own place, or any other reason), that's their choice. 
All rent control does is say that I can't arbitrarily kick people out of their home just so I can make more profit than I am already making, nor arbitrarily jack up the price from what we originally agreed to, just because silicon valley hired a bunch of people from out of state. 

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