WTF, Chuck: Those poor exploited landlords


In my continuing attempt to make sense of the politics of the Chron's C.W. Nevius, I present: What The Fuck, Chuck -- the saga of the poor landlord.

I'll try to be fair: There's nothing inherently wrong with this story. I don't like rich people taking advantage of anything, particularly rent control. It's true that there are a few people who are cheating, good for Chuck to expose them (tho he didn't exactly name names). You can't make better copy than a family that moves to Hawaii (!) and keeps a rent-controlled house in the Richmond. (Of course, maybe the parents needed to be there for a couple of years for work, and were hoping to return to their family home and the landlord wouldn't allow sublets, but whatever. Sounds horrible.)

And I'm not excusing it for a minute.

But I've never seen Nevius write a story about a family that can remain in this city only because of rent control, or a longterm tenant being forced out by the Ellis Act to create "homeownership" opportunities for a wealthier person who can buy a tenance in common, or a landlord who lies, cheats and abuses tenants to get rid of them so he or she can raise the rent -- and those are far, far more common occurences. Those are problems that happen every day in this city.

It's always about the poor landlords.

Yeah, there are bad tenants. But anyone on the front lines of the renatl-housing struggles in San Francisco can tell you that the abuses by the property-owning class radically exceed the harm caused by the tenant class.

I feel about this the same way I feel about the ongoing stories on bloated city employee pay and pensions. Yes, it's true: Some city employees game the overtime and pension systems and in effect pluck money from the pockets of the taxpayers. I see no reason why a police chief who retires at 55 should get $250,000 a year for life.

But it's also true that a lot of city employees earn a basic middle-class salary and get a pension of maybe $30,000 a year, which is hardly excessive -- and the fact that the private sector quit giving pensions decades ago doesn't mean that the public sector is wrong to do it. But all of these stories create a powerful Big Lie mythology of bloated public payrolls, which undermines any effort to raise taxes for desperately needed public services.

You tell people enough tales about the poor landlord and the rich tenants and you start to make rent control look like a bad idea. Which is about the worst thing you can do in San Francisco today, where the existence of any middle class at all is primarily the result of rent control -- and if anything, rent control ought to be stronger.

In other words: A little perspective here, please.




though - that's the point. A program that started out trying to help the poor is mostly taken advantage of by graduate-level workers who know how to game the system. I've known a quite a few tenants making 100K per annum or more who hoard their rent-controlled place, even while saving enough to buy a ski cabin in Tahoe.

What needs to happen as a mininum is do what NYC and put a income ceiling on who can qualify for rent control In NYC, it's hardly low - 150K per annum, I believe. And given how much the SFBG hates people earning that much, surely they should support such a cap.

Better yet is to abolish rent control and get rid of all these distortions and games. and instead help only the poor with vouchers to help with their rent, more like how Section 8 works. Then landlrods could get a fair market return while we help only those who really need it.

Posted by Guest on Jun. 18, 2012 @ 2:22 pm

Why isn't rent control means tested? Google/Apple/Tech... employees should not be getting affordable housing assistance.

Posted by Guest on Jun. 18, 2012 @ 2:33 pm

Rent-stabilized tenants are checked against their 1040 and, if over 150K pa, they lose the cheap rent.

Posted by Guest on Jun. 18, 2012 @ 2:43 pm

The end of rent control, that is.

The key to broad-based public support of any social program is that it be available to as broad of a constituency as possible. The same arguments can be made for public education, health care, retirement pensions, public transit... anything. Why should rich people get a pension? Why should rich people's kids get free public schooling? Etc etc. Well, one good reason is that the more you start playing these divide and conquer games, the more the program loses support among the classes which are "excluded."

Means testing is the first step towards eliminating rent control entirely, which is, of course, the whole point for those pushing it.

Posted by Greg on Jun. 18, 2012 @ 2:56 pm

It's illegal in thirty States and many places, like Boston and even our own Cotati, have abolished it. In SF, new arrivals hate it for deceasing the vacancy rate, suppressing supply and pushing up rents for vacant units. RC really favors those who hoard their units for decades, much like Prop 13 which I feel sure you paradoxically oppose.

The demographics are changing in SF, which is why Tim always opposes market-sector housing. He and I realise what you don't - that every year a few thousand more RC untis vanish, while no new ones can ever be built.

And at some point, there won't be enough RC tenants to prevent a repeal, and then we'll see new supply, a healthy two-way markets, and eventually and ironically, lower rents.

Posted by Guest on Jun. 18, 2012 @ 3:13 pm

"It's illegal in thirty States and many places, like Boston and even our own Cotati, have abolished it."

That's one reason I don't live in 30 states, Boston, or Cotati.

"In SF, new arrivals hate it "

When I newly arrived here, I loved it, as do most other new arrivals. Because they know there will be some stability, and protection from rapid price shocks at the whim of the landlord.

"RC really favors those who hoard their units for decades"

In other words, it favors people setting up roots in the city and creating a stable life for themselves. And this is bad, why?

"The demographics are changing in SF, which is why Tim always opposes market-sector housing. He and I realise what you don't - that every year a few thousand more RC untis vanish, while no new ones can ever be built."

Oh I realize it very much that there's a concerted effort to shift the demographics of this city, to make it a city only for the rich. That's why we need to fight ferociously for what we still have.

"And at some point, there won't be enough RC tenants to prevent a repeal, and then we'll see new supply, a healthy two-way markets, and eventually and ironically, lower rents. "

Oh yes, that's why the landlord lobby is pushing so hard against rent control -because they know that repeal will drive down rents. And they're all for driving down rents, because they're, um, just interested in making less money... out of the goodness of their hearts. Yeah, that's the ticket!

Posted by Greg on Jun. 18, 2012 @ 6:59 pm

But on average, rents will decline, because of new supply. Those thousands of units that landlords keep vacant or tIC would be rented again. While those rich folks who hoard RC untis for a pied-a-terre, as Nevius describes will give them up, enable real residents to use them.

I'm sure you're perfectly happy to have someone else subsidize your rent and your lifestyle, but that doesn't mean it's good policy. RC simply leads to bad behavior on the part of both LL's and TT's, and that's good for nobody. It's a failed policy and a vanishing one.

Posted by Guest on Jun. 19, 2012 @ 4:55 am

If you want to know whether on the whole rents will decline, or on the whole they will rise, the only thing you need to know is that the landlord lobby is pushing for this. Pushing hard.

They are not stupid.

They are not altruistic.

That one fact tells you all you need to know. The rest is just blah, blah, blah.

Posted by Greg on Jun. 19, 2012 @ 7:31 am

not ultimately the control of rents. The troubling parts of RC are the other parts of it, that effectively restrict the control and freedom that an owner has over his own property.

That is why both the Costa-Hawkins Act and the Ellis Act were passed. The former gave back to landlords certain rights that had been taken away from them, such as rent control even on condo's and SFH's. And the Ellis Act gives the ultimate sanction - to go out of the rental business - because it was getting to the point (altho not in SF) where cities were telling LL's that they had to rent out vacant units, and trying to fine them if they didn't.

Ask any SF LL (go on, actually talk to one) and you won't here them complain so much about the rent but more that someone is squatting in their units for decades.

We can help the poor with housing needs. But giving blanket help to everyone is ridiculous. There are people in SF on six figure incomes whoa re squatting on crappy studio flats in the Mission just because of rent control (I say that because I know one). If you don't like the rich, and I know that you don't, why do you support them exploiting RC, as Nevius explains so well?

Posted by Guest on Jun. 19, 2012 @ 10:02 am

The point of getting rid of rent control is to equalize rent for all by raising rents on rental hoarders that for no other reason than their cheap rent is keeping them in an underutilized apartment and likely trapping people from moving on with their lives. It will allow the rental market to be more fluid with supply and to normalize the market by taking the risk of tenants staying too long and causing a landlord to become upside down on an apartment's real economic costs to maintain.

The Rent Board's 60% of the annual CPI index is 60% of a joke, a bogus index that is artificially low and has little correlation with the real cost of building or maintaining housing in San Francisco. This causes rents to fall too far behind the real economics costs of housing over time.

New arrivals and landlords should not have to subsidize hoarders. It is a greedy transfer of wealth to a hoarding tenant for no other reason than taking up space affording them far more economic rights than the economic risks or economic choices they have made as a renter. This economic imbalance is at the heart of Tenant greed or a Tenant's will to stay longer than they might otherwise stay. It is an economic incentive to stay stuck and letting someone else take the risk and also pay the real economic costs of your housing for you over time. This is not fair to new arrivals or to landlords.

No one wants to work for free, including Tenants or Landlords. Remember, there has to be an incentive for landlords to be landlords and an incentive to encourage building more rental apartments.

Because of Rent Control, what we see is mostly new buildings being built for home ownership. Rent Control is a bad social experiment that has ironically harmed the rental market in San Francisco for All.

Posted by Guest on Oct. 10, 2012 @ 11:27 pm

Should everyone then receive food stamps regardless of need? Obviously not.

In any case, I still don't think your "divide and conquer" theory is a valid justification for giving affordable housing benefits to people who can easily afford them. Income tax returns would be a very simple mechanism - similar to that used for many other government programs.

Posted by Guest on Jun. 18, 2012 @ 3:48 pm

then no rent control for you, and your rent immediately goes to market.

When a rent-controlled tenant is wealthier than his landlord, then something is seriously, sickly wrong.

Posted by Guest on Jun. 18, 2012 @ 4:31 pm

Or, if not market, the lease becomes an openly negotiable amount between tenant and landlord (not an amount decided by the Rent Board).

Posted by Guest on Jun. 18, 2012 @ 5:22 pm

set a new rent and the TT is free to either accept the new terms or move to somewhere better suited to his fiscal situation.

Given that Oakland is crammed full of super cheap rentals and is only 10 minutes away, there is little downside.

Not that six figure guys would slum it there.

Posted by Guest on Jun. 18, 2012 @ 5:37 pm

How DARE a lowly tenant... a mere vassal, become wealthier than his lord! This is an outrage to the divinely ordained order. Off with his head!

Posted by Greg on Jun. 18, 2012 @ 7:05 pm

Hence his inability to comprehend why anyone would have a problem subsidizing the below-market rent of those who can afford at-market rent.

Posted by Troll II on Jun. 18, 2012 @ 7:18 pm

And, you couldn't be any more wrong about me.

I simply believe in a very ancient principle of human interaction. Long before all the "invisible hand" nonsense, people have had an idea that there is a fair price for goods and services. And charging a price above what's generally considered fair, simply because you *can*, is immoral.

You don't have to be a communist to believe that -I'm not. A fair price can include a reasonable return on investment and reward for risk. In other words, profit. The key word, of course, is "reasonable."

Nor does it matter that people sometimes disagree and "fair" can't be precisely defined down to the penny. There comes a point where the great majority of people agree that a price is thoroughly ridiculous. Some people may still *pay* it -NOT because they agree it's fair, but because a select few can afford it, and the commodity is scare, and they want it badly enough. As I and many others do with San Francisco housing. However, everyone still realizes that the price is out-of-control exploitative, and we welcome any kind of reasonable regulatory limits on the out-of-control price gouging.

This notion of fairness is not new. In fact, it's innate to human nature, and it takes years of capitalist re-education to beat it out of you. Experiments with toddlers demonstrate that from a young age, we're innately wired to desire fairness, and our notions of what that constitutes "fair" start out remarkably similar. And, when individuals violate those norms, the community reacts negatively.

It's a notion that existed eons before the self-serving amoral sophistry of omniscient "free markets" came on to the scene, and though it doesn't seem like it now, I believe that *if* humanity survives, then this very basic idea will persist and guide our interactions long after the twisted morality of capitalism is relegated to the dustbin of human history and forgotten.

Posted by Greg on Jun. 18, 2012 @ 8:08 pm

apartments in a city where housing is scarce.

Posted by Troll II on Jun. 18, 2012 @ 8:19 pm

When you say a rent is "fair", you mean somebody else is subsidizing it.

What really is "fair" is paying your own way, not dipping into somebody else's pocket, and not living somewhere that doesn't suit your budget just because you want to.

If you cant afford something, do without.

Posted by Guest on Jun. 19, 2012 @ 4:57 am

A factually incorrect one, actually.

A subisdy is when someone provides payments to help for something. Section 8 is a subsidy -one that is rightfully paid, I may add.
Rent control is not a subisdy. It's a regulation to prevent price gouging. Big difference.

I pay my way. I don't dip into my landlord's pocket. My landlord dips into *my* pocket.

Landlords still can and do make a profit. They're just limited (somewhat) in terms of how much they can gouge.

Posted by Greg on Jun. 19, 2012 @ 7:45 am

It's just not the government giving the subsidy. It's the landlord. If you're paying less than market rent then the difference is the subsidy your landlord gives you.

Maybe that can make some sense if you're poor and he's rich. But what about those cases where it's a mom'n'pop who just own one building, are retired, and this is their only income? And the tenants make 100K plus working for Google? See the problem?

Posted by Guest on Jun. 19, 2012 @ 10:05 am

The market is a religious myth.

Posted by marcos on Jun. 19, 2012 @ 10:19 am

Seems to be all ya got.

Posted by Guest on Jun. 19, 2012 @ 11:39 am

I know of 3 separate Apple employees who routinely brag about their rent control situation. One somehow feels entitled (it gives him more spending money) even though his landlord lives in the same small building and raises their family there. It is remarkably unfair and should not be protected under the law.

Posted by Guest on Jun. 19, 2012 @ 10:30 am

Capitalism and capitalist politics are unfair, deal with it.

Posted by marcos on Jun. 19, 2012 @ 10:41 am

Rent control laws can be justified when they create affordable housing for those who need it. When people are routinely shown to take advantage of the rent control system, the laws should be improved.

Posted by Guest on Jun. 19, 2012 @ 11:02 am

Nobody has been shown to routinely take advantage of anything, except for some landlords who will raise the rent to market rate even though their costs remain fixed.

Posted by marcos on Jun. 19, 2012 @ 11:30 am

It shows how wealthy tenants can use RC to exploit poorer landlords

Posted by Guest on Jun. 19, 2012 @ 11:42 am

The real economic costs of housing are not fixed, they move with inflation like everything else. With Rent Control the owner of the building is forced by law to pay for the real economic costs of a tenant's apartment, this become especially imbalanced and unfair over time.

Posted by Guest on Oct. 10, 2012 @ 11:41 pm

capitalism, then obviously you would oppose anything that interferes with it.

Such as, er, rent control.

Posted by Guest on Jun. 19, 2012 @ 11:44 am

Грег не коммунист.

Posted by marcos on Jun. 19, 2012 @ 7:45 am

No one questions the tenant's right to be wealthier than his/her landlord. If that is the case, good for the tenant. The issue -- the outrage --- is that the wealthier tenant is being subsidized by the less wealthy landlord.

Posted by S.Marty Pantz on Sep. 19, 2012 @ 5:40 pm

is usually looked on with scorn and suspicion. This is definitely the case with Tim being confronted with rent scammers - it challenges his basic notion of right (renters) and wrong (landlords). He becomes very agitated and reactionary when faced with a different sort of paradigm.

There is another thing very wrong with this piece, this statement: "the fact that the private sector quit giving pensions decades ago doesn't mean that the public sector is wrong to do it." Uh - why is the public sector RIGHT to do it Tim? It breeds resentment between taxpayers and public workers and leads to them not only forgoing their pensions but also far worse consequences - like being stripped of collective bargaining rights and the hollowing out of the tax base because people won't approve necessary tax increases in reaction to the perception, right or wrong, that public workers are leaches. You're honestly willing to destroy the state in an ill-fated quest to keep in place benefit plans which are outdated and unacceptable to the vast majority of the public?

Posted by Troll II on Jun. 18, 2012 @ 2:39 pm

He doesn't. He's driven by - to use your words - a paradigm that is absurdly simple and almost completely wrong:

Public=good; Private=bad
Unions=good; Employers=bad

And so on. For Tim, politics isn't a subject to debate and reflect upon. It's a football game, and ra ra for his side.

If SFBG closed down, he'd be unemployed and unemployable. The last hippie in town would never shave again.

Posted by Guest on Jun. 18, 2012 @ 2:52 pm

It's a dogmatic way of thinking which has led to the almost complete demise of private-sector unions and the coming extinction of those in the public sector. You'd think after losing and losing and losing you'd perhaps want to rethink your strategy but no - it's like he believes that if he just doubles down with another scathing editorial decrying corporate unfairness corporations will magically become more fair. It doesn't work that way. Progressives really need to start making an attempt to understand power - REAL power - and by that I don't mean a few useless seats on the DCCC.

Posted by Troll II on Jun. 18, 2012 @ 3:59 pm

as with Clinton and Obama, they recognise political reality and move towards the center.

And of course they should, because that's where most Americans sit politically.

But then the loony left whine that their leaders have abandoned their "principles", not understanding how necessary that is and how there is no mandate in this country for far-left policies.

Tim would rather be smugly purist than actually have relevance and authority. And that's why he is a hack writer for a third-rate publication rather than actually out there making a difference.

Posted by Guest on Jun. 18, 2012 @ 4:27 pm

Most Americans are disgusted with the corruption of politicians and the fact that they have sold themselves out to the highest bidder and are ready to burn the whole place down. That is hard a "centrist" belief. More of a radical one.

Posted by GlenParkDaddy on Jun. 18, 2012 @ 11:04 pm

describe would not happen, because those pol's wouldn't get elected.

Posted by Guest on Jun. 19, 2012 @ 4:59 am

Tim is a writer. Writers write. You cannot expect anything else of them.

Real power resides in things like votes and dollars and armed mobs and armies.

Some of us understand that. A pathetic few, granted.

Posted by GlenParkDaddy on Jun. 18, 2012 @ 11:01 pm

The public sector is right to offer pensions because it is a Good Thing to provide for retirement security for all Americans, to not force us to throw our savings at the casino of Wall Street for regular fleecings, for the required culling of the herd, in the hopes that we might be lucky enough to get a seat when the bubble music stops.

Why do you want seniors to face a retirement living in a refrigerator box, under a freeway, eating cat food, because your ideology says that is a Good Thing?

Posted by marcos on Jun. 19, 2012 @ 8:10 am

Isn't a nevus a freckle?

Or perhaps an ugly mole on the body politic?

Posted by Greg on Jun. 18, 2012 @ 2:48 pm

You gotta give Nevus props for moving from Walnut Creek to San Francisco. At least he lives in The City he pretends to cover. He is still a douchebag though.

Posted by GlenParkDaddy on Jun. 18, 2012 @ 11:06 pm

Even Paul Krugman has argued that rent control is bad policy. And his article on rent control covered San Francisco.

Posted by The Commish on Jun. 19, 2012 @ 7:30 am

It's sort of like Godwin's Law... in any discussion about rent control, the desperation of the anti-rent control side is inversely proportional to the amount of time it takes to bring up what Krugman said in 2000.

I get it the logic. Krugman's a famous economist. He's a liberal. If a liberal famous economist opposed rent control at some point, well then rent control must not be good for liberals.

Well, Krugman's wrong. Or rather, what he said in 2000 is wrong. I know that Krugman's evolved on a lot of issues. Who knows if he still believes it himself.

But regardless, as I said above, all you really need to know is that the landlord lobby hates rent control with a passion. They are not stupid, and they are not altruistic.

Krugman or no Krugman, that's all you need to know. Support rent control or oppose it, but rent control works. Thousands of landlords can't be wrong.

Sorry, but I trust the opinions of thousands and thousands of landlords over the dated opinion of one Krugman on this issue.

Posted by Greg on Jun. 19, 2012 @ 8:00 am

Krugman also said that we need a multi trillion dollar fiscal stimulus to pull the economy out of the liquidity trap, but the right wing supply sider landlord lovers ain't clamoring for that, huh?

Posted by marcos on Jun. 19, 2012 @ 8:17 am

lobby is that they want to keep RC.

Your argument is a non-sequitur because it's redundant. Yes both sides support the side they support. Duh.

Posted by Guest on Jun. 19, 2012 @ 10:10 am

Most tenants support rent control for EXACTLY the same reason that most landlords and their organizations oppose it: because it WORKS to keep rents DOWN.

There are exceptions. Individuals can be wrong. Even ones with fancy degrees. But on the whole, people are not stupid.

Very, very few people honestly believe the tripe that rent control should be abolished in the best interests of *tenants*!

Posted by Greg on Jun. 19, 2012 @ 3:36 pm

argument, which is why people often miss the logic.

The only new build in SF right now is condo's, which are exempt from rent control. Why do you think that is? It's obvious - even though new build is technically exempt from rent control anyway, nobody builds any rentals anyway because of fear of future possible control. It's too risky.

So you have a finite number of RC units and no new ones will ever be built. Meanwhile, every year, a few thousand of those RC units vanish because of the 15 just causes for eviction, or tenant deaths or voluntary leaves. And then, almost without fail, when they become vacant, a landlord will take it off the market it, sell it as a TIC, condo convert it, rent it short-term or even leave it empty.

Think about a system that is so pernicious that a LL will leave the unit empty, sometimes for years at a time, rather than risk a "squatting tenant" who will never leave, and might even bequeathe the place to his kids.

And what is the result of this? Low rents, you claim? No, the highest rents in the nation, outside of possibly a few zip codes in Manhattan. If RC is such a success, why is a 1-bedroom flat in my neighborhood cost at least 3K a month? Rent control is a lottery - it doesn't help the poor so much as the inert, and those who game the system.

But of course if you like rent control, you must love Prop 13, because it works in a similar way, punishing new owners and rewarding old ones. Yet, funnily enough, liberals like have no problem with hypocrisy and contradiction, and routinely oppose Prop 13 even while you claim that rent control "works".

Posted by Guest on Jun. 19, 2012 @ 3:59 pm

The SFBG, and/or commenters espousing the SFBG's views, have cited Krugman in support of its positions in the past. So it's relevant to note he isn't in support of a key point of the SFBG's agenda, i.e., rent control.

Krugman's views may have evolved. But in his article said it was "Econ 101" that rent control had deleterious effects and that every freshman economics textbook had a case study on how rent control is bad policy. Sort of hard for Krugman to have evolved and say "just kidding" after writing that.

Posted by The Commish on Jun. 19, 2012 @ 10:33 am

You have no economic evidence at hand to prove that SF rents are high due to inelastic and constant demand rather than due to rent control.

Waving the hands and pointing to Krugman does not make your case for you.

Posted by marcos on Jun. 19, 2012 @ 10:56 am