As reported by the San Francisco Chronicle, Antioch is only the latest city in the Bay Area to enact stronger rent protections by capping rent at 3% or 60% of the Consumer Price Index (CPI), whichever amount is less. Our earlier article discussed some of the forces at play in the spread of rent and tenant protection measures being digested and approved in suburban areas with less history of activism.
People are more receptive to the door-knocking of tenant advocates, and it comes down to dollars and cents. Californians who were once silent about the rent control debate are getting mad. They are paying more for groceries and at the pump. There is sticker shock for just about everything, so it’s only natural that people are more empathetic to the calls for increased regulations.
Whenever we run across one of these articles about reforms to landlord-tenant law, it usually opens up with a story of a tenant’s hardship. The Chronicle article at hand began with the tale of a cockroach infestation, the foul odors from laundry room pipes, and the indignity of broken toilets. Stories rarely open up with the travails of landlords.
In 2018, we were amused to come across an SF Curbed article inviting tenants to share their worst apartment stories, from bed bugs to paper-thin walls. Instead, the thread generated horror stories told by landlords about nightmare tenants.
Let’s face it—there are good landlords and bad landlords. Good tenants and bad tenants. No one should be painted with a broad brush. A rental agreement comes with covenants between two parties. If someone fails to fulfill their end of the bargain, these lease breaches need to be addressed for sure, but there are already mechanisms in place to air out these differences.
In a recent interview, I said that housing is fraught with tension. While there may be a difficult but necessary conversation to have with tenants about an impending change in their housing situation, landlords should consider the optics of displacing a tenant as we deal with the residue of the pandemic.
Our state needs to build more housing and the politics will dissipate, but until then we have a housing crisis and landlords are seen as being on one side of the problem. Rental property owners have already been asked to bear the brunt of a global public health crisis by providing free housing. Although having a roof over your head is a necessity, so is having food on the table. The analogy we have used is walking into a Safeway, stocking up a grocery cart, and heading to the door without paying. If stopped on the way out, the shopper says food is a necessity and that the meat, cheese, bread, and milk will be paid for at some far-flung date in the future.
Try that stunt and you might get arrested. But this is what happened to housing providers during the long, dark winter of COVID, and continues to happen in Alameda County. To our knowledge, our community is the only sector of society that has been tasked with providing a service without compensation..
We Are In This Together
All of us have felt the pain of inflation, the likes of which we haven’t seen since we were watching Dallas and the Jeffersons on television. As we observed earlier, the CPI takes into account certain consumer staples but does not adequately reflect the climbing costs of operating a rental business—costs for building materials, hiring contractors to make necessary repairs, taxes, and so forth.
Existing Laws Already Protect Tenants From Squalor
At first blush, anti-harassment ordinances like that recently enacted in Concord come across as solving the problem of tenants living in a subterranean dungeon with no running water or heat.
In fact, the responsibilities of landlords to provide a safe, secure, and sanitary dwelling are already spelled out in local ordinances and state law, which sets the minimum standards to comply with California’s implied warranty of habitability.
Whether through making complaints to the city and building inspectors, reaching out to a local rent board, or consulting free legal counsel, there is plenty of recourse available for tenants to voice any concerns about the inhabitable conditions.
Not long after we posted the Chronicle piece on social media, a tenants’ attorney celebrated the groundswell and imparted his take. We might take exception to the retaliation part. If landlords resort to “self-help” evictions, the tenant can and will use these heavy-handed tactics as a defense in an eviction action. It is entirely possible, as well, that retaliatory acts will invite a lawsuit. In the words of the Delta Association of Realtors President James Britto in a City Council meeting in the summer, “There’s always a few that ruin it for everyone… we don’t really need more regulations.”
Smaller Landlords Being Driven Out of Business
Ironically, efforts to keep properties out of the hands of corporate landlords will ensure that these pariahs scoop up housing stock as smaller landlords are driven out of business. Lawmakers have a natural distrust for ownership when the owners are corporations, REITS, or LLCs when at least one member of the LLC is a corporation. These types of entities strike as “greed-fueled” investors.
While larger rental housing providers have been able to weather the storm, many smaller operators that own duplexes, triplexes, fourplexes, and the like have been decimated. When small, mom-and-pop landlords want to sell their property because they are hemorrhaging money, who has the wherewithal to buy the property? The so-called “greed-fueled investors,” of course.
Never in our careers have we encountered so many landlords with $10,000, $25,000, $40,000, even $70,000 in rent debt. Alameda County landlords have been especially hard hit, in some cases obligated to provide housing services without receiving rent for over two years. Our office has been fielding more calls from cash-strapped landlords looking to avail the Ellis Act to go out of business. It is saddening.
It’s a catch-22. Landlords are required to maintain the property in habitable condition, but making necessary repairs requires money. For many clients, it’s a hard pill to swallow: the rental unit must be maintained in habitable condition, even if the tenant is not paying rent.
The Perception of Rental Housing Providers Sometimes Differs From Reality
Although landlords are often mischaracterized, the East Bay Rental Housing Association put together a nice profile of mom-and-pop landlords and gave them the opportunity to tell their stories. We love this piece because it puts a human face on engaged, compassionate rental housing providers, a picture not typically portrayed in the media.
Parting Thoughts
Our community is already swimming upstream with a deluge of regulations, but we can expect more to come. Landlords and property managers in some locales will have to get acclimated to a new regulatory regime that is foreign to them. Stay educated, and if there are any quandaries in understanding a complicated web of rent and eviction controls, reach out to legal counsel well-versed in landlord-tenant law and practice it on a daily basis. Rest assured, what you don’t know will hurt you.
As the founding attorney of Bornstein Law, Daniel is a well-respected authority in landlord-tenant disputes and property management issues. With over 23 years of experience in handling real estate and civil litigation throughout the Bay Area, he also manages rental properties, is instrumental in completing real estate transactions and is renowned for his educational seminars. For more information, visit www.bornstein.law or call 415-409-7611 or Email: [email protected].
Reprinted with permission of the Small Property Owners of San Francisco Institute (SPOSFI) News. For more information on becoming a member of SPOSFI or to send a tax-deductible donation, please visit their website at www.smallprop.org or call (415) 647-2419.