Unit 8 Assignment
Sometimes government and state lawmakers put policies into place that they believe will benefit those whom the laws apply to. Unfortunately said policies sometimes give people the short end of the stick while others get the longer end. Some policies however may be considered an over step at the hands of our government and law makers. Imagine owning property and being a landlord and state lawmakers decide that they’ll decide how much one’s allowed to charge their tenants. Imagine being a tenant and there being a lack of available places to rent, landlords over pricing units or being pushed out of a lease all together. Well those are some of the issues that the residents of San Francisco, California are having to deal with. The issue of rent control has and is still being discussed. There are those that are for and against rent control and maybe even a few in between. Rent control seems to be giving both tenants and their landlords the short end of the stick while other tenants and landlords seem to be benefiting a lot more (Ferguson, 2018). Therefore, I believe that San Francisco, CA law makers should either abolish or put new Rent Control laws into place that benefit landlords and their tenants because as of now the laws that are in place are causing hardships for both parties involved.
Rent control is administered by the San Francisco rent board meaning that landlords are only allowed to raise rent by certain amounts per year. Rent control also means that tenants can only be evicted for “just causes” (sftu.org, 2018). Although landlords are only allowed to raise rent by set amounts each year they can still petition the rent board for other increases such as when a landlord has work done on his or her property and the value increases they can petition the board for an increase. This method of rent increase is called capital improvements. Capital improvements are things such as a new roof, windows, and even exterior paint. If the value increases on the property so can the rent. Rent control may seem like a way to stick it to “fat cat” landlords but rent control is causing problems for tenants as well. The problem with rent control is that it leads to a shortage of available apartments for rent. Due to such low rental prices and landlords not being able to raise rents tenants are staying in rented apartments a lot longer than the average person. Since landlords can’t rent apartments at market value they see no reason to invest in property to rent out which causes a shortage in the long run. It’s simple supply and demand that’s being greatly affected by rent control (Murphy, 2014).
Rent control has been causing problems for tenants and their landlords for some time now. Rent control leads landlords to feel less inclined to rent out apartments. When landlords feel less inclined to rent out apartments then apartment rentals become scarce leaving some people without a home to live in. If landlords are unable to raise the rents on apartments to fair market values, then they themselves will suffer financial problems this will lead to landlords becoming unable to maintain or repair their rental properties and may even result in foreclosure. Henry Karnilowicz the president of Small Property Owners of San Francisco Institute estimated 5% of the city’s 212,000 rental units are kept vacant by landlords who would rather just not deal with rent control. He said that many owners would rent those homes if there were reforms, like requiring the rich to pay full market value (James, 2012). People tent to believe that another issue with Rent control is that people tend to think “fat cat” landlords are the owners of most rental units and they’d be more than happy to stick it to them, 30% of the cities rental properties are owned by mom and pop investors.
Rent control doesn’t seem to just be a problem effecting San Francisco either. In New York City a man named Aaron Carr founded a tenant watchdog agency called the Housing Rights Initiative. The agency was founded because unfortunately some landlords are not following the rent control rules and regulations when it comes to permits and things alike. Aaron Carr’s agency searches public housing records to expose what he says is a broken system of tenant protection (Bagli, 2018). Although there are some tenants that take advantage of Rent control policies by staying in apartments for long periods even though they can afford to pay full market value, it’s still not right for a landlord to lie and attempt to bypass laws. Aaron Carr issued a report claiming that Kushner Companies had falsified more than 80 work permit applications for 34 buildings. Mr. Carr even went as far as connecting tenants from the Kushner buildings with lawyers to file lawsuits. While some praise Aaron Carr for his work in helping tenants that aren’t being treated fairly, others say Mr. Carr has ruined the reputation of many innocent and reputable landlords. Although we know not all landlords are the fat cat stereotype we’ve heard so much about, In one Housing Rights Initiative. -initiated lawsuit, against a company called Argo Real Estate, a building owner and property manager, lawyers say that Argo improperly deregulated 369 rent-regulated apartments at nine buildings in Queens, while getting more than $1 million in tax breaks. From the information that has been gathered it appears landlords and their tenants have both not only benefited but there has seemed to be an influx of people left out to dry.
(Robert P. Murphy, The Case Against Rent Control, 2014) https://fee.org/articles/the-case-against-rent-control/
(Cornelius Ferguson ,Discussion Post 1, 2018) https://purdueglobal.brightspace.com/d2l/le/content/70555/viewContent/6040408/View
(James Scott, How The Rich Get Richer: Rental Edition , Feb. 17, 2012) https://www.nytimes.com/2012/02/17/us/san-francisco-rent-control-and-unintended-consequences.html
(Charles V. Bagli, Are Landlords Telling The Truth? The City Doesn’t Always Check. He Does, Sep. 23, 2018)