While nobody wants to see anyone that is truly impacted by the virus put out on the streets, the entire burden for keeping the public housed cannot be forced upon the backs of individual citizens.
Housing is an essential service. Who else is forced to provide an essential service for free? Nurses, grocery store clerks, doctors, amazon delivers, hospitals, all essential; all get paid.
In times of panic, calmer and wiser heads are required to keep society intact. Allowing any tenant in San Jose to eliminate their rent due to a direct financial impact of the corona virus is a panicked reaction that will again have far reaching consequences that short-term city council-members will not have to face. The fabric of society counts on laws to be upfront in advance so that we know how to follow them and that they apply to everyone. San Jose has decided to make laws retroactive as well as change business contracts so that housing providers have no idea what law will come next or how they will be able to financially follow new laws. Panicked law making is not responsible governance and is the primary driver creating lack of stability in housing.
This is a reaction to panic by asking private citizens to perform a public service. For free.
BAHN represents over thousands of small mom and pop landlords. These are landlords that depend on their rental income to both pay their bills and to be their pensions. The fact that the city council offers to remove pensions from older landlords while maintaining an 8.5% annual increase on their own government, tax-payer-paid pensions is more than irony; it is selfish in a time of great need.
These mom and pops often invested in buildings that no one else would buy. They often did not get Fannie or Freddie back mortgages, an application requirement for mortgage delay. The buildings did not qualify and now will not qualify for mortgage deferment.
Consoling yourselves that mom and pops can get a delay in mortgage payments is not a reality. The majority will still have to pay without delay.
For those mom and pops who do eventually qualify for a delay in mortgage payment, it would be just that. A delay in mortgage payment. Not a waiver. And the criteria for getting a mortgage delay from a bank will be far different than the criteria set forth from the city council for tenants rent waiver.
And quite frankly banks have not agreed. They have not agreed on who can apply or if. They have not set forth criteria. The eviction moratorium laws in California are confusing. Santa Clara County doesn’t require notice from tenants for 60 days but San Jose might and it’s not clear on the new CA state law. All these laws colliding will also collide with banks offers, requirements, and stipulations. If we can’t provide the correct documentation to our bank because a city or a county or a state doesn’t require it from the tenant, then automatically we would not qualify for a delay in payment from the bank even if our mortgage was backed by Fannie/Freddie.
What if the tenants have savings but the housing provider does not? What if the housing provider gets sick but the tenant does not? Will the tenant provide for the landlord?
If San Jose is confident that mom and pops would get a loan delay, please contact our banks directly and request the delay for each of us.
There is no waiver: for maintenance fees, for up keep, for property taxes, for insurance, for the contractors we employ, for the utilities you force us to pay. We will still have our bills during the pandemic and after. Asking us to make our tenants our fiscal dependent is unconstitutional and unwarranted when other solutions abound. Tenants are not our children.
While some may be able to avail themselves of mortgage relief or small business loans, if housing providers are ultimately never able to collect deferred rent, they may never catch up. As a result, mortgage relief is nothing more than kicking both mortgage default and personal bankruptcy cans down the road.
Do you think this action will eventually raise the price of housing? Perhaps you do.
Many tenants already see these eviction moratoriums as carte blanche for not paying rent for any reason. We continue to get calls asking why tenants have to still pay rent. We get calls from tenants who own Teslas. We get calls from roommates who have jobs but one roommate who actually quit their job and now the whole apartment thinks they can skip rent. We get calls from tenants who have no budget and continue to pay $250 cell phone bills and large cable bills. Tenants have no stake in the game. No reason to budget. No reason to cut back on other discretionary spending.
People don’t have to choose between food and rent. A homeless crisis can be averted. An eviction crisis can be averted. San Jose doesn’t have to place the entire burden of housing the public on our shoulders.
The city could easily offer loans to tenants to pay their bills once the tenants have met the City’s own direct correlational connection to coronavirus. The City could deal with the paperwork required by the City to verify and investigate tenant’s ability to pay. We call for rent loans, rent grants, rent vouchers and other subsidies to ensure citizens can continue to pay for housing and other essential needs without bankrupting their landlords.
We did not go into the business of providing housing so that we could provide unsecured loans to tenants. We are not familiar with making personal loans. This is not our profession.
We should not be forced to financially provide for our tenants. For their housing. For their utilities. Tenants should not be our fiscal dependents. And yet that is what the City of San Jose continues to unconstitutionally mandate. Offer tenants City loans NOW!
BAHN-SJ, is a non-profit group of mom and pop rental property owners in San Jose. We help members: by advocating for affordable, quality housing and small business policies; educating members to abide by the laws and improve business acumen; and by providing a way for homeowners to connect.
No other industry is being forced to subsidize the crisis at this level – this is a federal crisis and federal funds need to be used. Government should be mandated to provide tenant subsidy payments from the general fund or the homeless money they have set aside. Provide it to landlords who are going to immeasurably hurt by this, as direct payments.
Dear AOA: Voucher System for Rent
Tenants [in Los Angeles] have now been granted a full one year to pay rent back for April and possibly May. Now, no verification needed as to why a tenant does not pay rent. Just the word COVID-19 will do. This is whether they were truly impacted or opportunists taking advantage of this crisis. This stands for each month a tenant does not pay rent.
No evictions for other lease violations such as unauthorized occupants, pets, or nuisance simply COVID-19 approved by the City Council on March 27, 2020. A tenant has more and more incentive not to pay the rent or abide by the terms of the lease and building rules, creating an added burden on the already difficult position of managing properties.
Between the delay for the right to collect rent, restrictions and added timelines to collect rent, excessive time is added to go through what will be an overly backed up court system. And the cost to evict or collect unpaid or past due amounts owed gives the tenant an incentive not to pay rent.
The impact of lost rent, while paying mortgages, taxes, insurance, payroll, maintenance, supplies and repairs, along with other various expenses leaves no money to pay property taxes, business tax, income tax, mortgages, etc. We will have a domino effect from non-payment of rent and the city will destroy us with any further delays of rent collection (deferment).
The logical solution would be rent vouchers based on the existing rent per unit given by the City/Government. The cash monies being given to residents by the government is not the solution. Implementing a voucher system ensures people will keep their homes and prevent complete collapse of our economy – a much better solution then sending a check which may be used for incidentals versus essentials.
The delay of payments of rent is pulling the supporting block of the building owner to pay mortgages, causing a run on the banks for cash and triggering failures across the board. Do you remember the days of the Resolution Trust (RTC)? The receivers, the bankruptcies … the suicides. That will be a drop in the bucket compared to what will happen with more free rent. Give free rent and we can make a new game of “JENGA” pulling the supporting blocks out of the bottom and watch and see what happens – it all comes crashing down. No income for the City, valuation discounted on real estate, no property taxes being paid, no business tax to be paid, etc., etc., etc.
Let’s prevent this from happening with further “free rent”, deferments, extended payment plans, etc. We should implement the VOUCHER SYSTEM or nothing at all.
Respectfully, Ben Leeds
I am sure you have been reading about the planned tenant strike. I’d like to see AOA formally demand the city of L.A. to exempt landlords from paying the outrageous monthly trash fees that we are forced to pay. Remember … in January, the rates increased. AOA, on behalf of landlords, should demand the following:
A three month suspension of payments to trash companies if the landlord has tenants not paying rent. (20% or more loss of rents for the month of May.)
A one year suspension of all housing fees landlords are required to pay the city.
50% or more of loss of rents and landlords should be able to request a six-month deferment of property taxes due on 12/10/2020.
A two-year freeze on any future planned rate increases for trash, utilities and city fees.
Dan, the tenant groups are more vocal in getting the attention of the politicians. I would like to see AOA members get more vocal and put more pressure on city officials. Tenants are not the only ones that can strike. Landlords’ lockout can be in the form of payments for services.
I am signing [the petition] because I’ve got a couple dozen tenants who probably won’t be able to pay rent soon. But you guys at AOA are idiots if you think “the cure is worse than the disease”. The entire country should be in lockdown right now. At the rate things are going, 200 million plus people will be infected by this time next month.
This is what I sent to the Governor and am sending to Councilman Ryun and Mayor Garett.
Dear Governor Newsom:
I am writing you as a landlord of 34 years with great concerns with the actions taken against landlords. While I understand and accept the actions of an eviction moratorium, I am alarmed about the talk of rent suspensions and/or rent forgiveness as being promoted by LA Councilman David Ryun. The unforeseen and unintended consequences of such actions could be fatal to the housing industry. Not only would property values drop significantly, but future housing projects would all but evaporate. Think about it. Who (what persons or financial institutions) would want to invest in an industry such as multifamily where the government arbitrarily relieves tenants from their financial obligations and responsibilities? While it is all well and good to help tenants, there are programs and avenues to do so without continuing to place the burden on landlords.
When I got into this business in 1986, I saw my responsibility to provide the best housing I could but never saw the possibility of being called upon to be a tenants’ personal banker and fund their rent with zero cost loans and no guarantee of repayment. While I have owned 150 apartment units at one time, I now own just one 26 unit building which is also our home and home to some of our family members. As of April 1st, I am delighted to report that of the 26 units we own, only one tenant has used Covid-19 as a reason to not pay. Imagine if the government makes a blanket decree that no one has to pay rent until the government so determines the emergency to be lifted. That number would skyrocket to all my tenants not paying rent because the government says it to be their right! Now I have zero income to pay all our building plus personal bills including property taxes, insurance, mortgage expense, trash removal, utilities, the gardener, our trades people, our cleaners and resident manager among many others and the repercussions it has on their livelihoods.
As it stands, the current system in place, while onerous in and of itself, is at least somewhat reasonable. However, I predict that most of those tenants who choose to not pay rent based on Covid-19 criteria will end up working the system right to the end of the 12 month period (LA law) when payment is expected, give notice and leave the landlord with a large unpaid rent bill. The government should guarantee to landlords that that will not happen but I can assure you, that is exactly what will happen.
Please stop this irrational thinking and ensure that there are no further burdens placed on Landlords. Thank you.
Respectfully, Craig W. Davis
Dear Dan: Here is a Sample Letter Suggestion to Send to Mayor:
If the City Council is going to protect tenants from eviction, then the City Council also needs to protect property owners from default and foreclosure under their mortgages. A Real Estate blood bath of foreclosures will not help anyone in this city.
If tenants don’t pay rent, then property owners will not have the money to pay their mortgage payments, let alone upkeep their properties properly.
In addition, property owners will also not have enough rental income to pay their property taxes. Money always goes to first pay mortgage payments to avoid foreclosure, and property taxes will always come second. How will the City function with greatly reduced revenue from property taxes?
The City should protect all citizens with BOTH a moratorium on evictions for failure to pay rent; AND a moratorium on mortgage payments and foreclosures for inability to make the monthly mortgage payments as a result of the COVID – 19 Virus, until the tenants resume paying their rent, once the Moratorium on Evictions has been lifted. Thanks for your help!
Sent to Mayor Garcetti:
You have a lot of nerve to say that rent from welfare aka rent control tenants can be deferred during this Corona Virus for months!!!! How are landlords going to pay their expenses / bills???
You already caused landlords to spend thousands of dollars on Seismic Earthquake Retrofits, putting landowners in debt and financial hardship. Have you forgotten this???!!!!!
Now you are giving permission to welfare aka rent control tenants to keep rent payments from landlords. Are you out of your mind!!!! I am livid!!!!
So is the city of Los Angeles going to pay the monthly deferred rents to the landlords that are already financially struggling from low below market rate rents and Seismic Earthquake Retrofits financial hardship??!!!!!
I expect an answer or I am also going to be on the news protesting your ridiculous “rent- deferred” comment you stated on television today!!!
Enough abuse towards landlords!!!
Regards from a Welfare aka Rent Control Landlord, Robin Force
Here is my solution to the problem we may be facing. If the tenants know they can’t be evicted, there is a good chance they won’t pay rent. If they get 2 months free rent because of the new law and it takes me 90 days to evict after the law is over, that would give the tenant five months of free rent. They’re not as stupid as you may think. My renters don’t give a [hoot] about their credit and if they don’t pay the rent come April, I won’t care about my credit either. I’m 60 and done. I’ll finish paying off what I have now and sell a few to pay off some other buildings. I won’t need credit for that. I plan to fight back the best way I can.
1. I must make my mortgages no matter what so they don’t go back to the bank. First bill to be paid will be my mortgages.
2. If the renters don’t pay rent April 1, then I have no intention of paying $200,000 for property taxes due April 10th to the state of California and County of Orange. They can charge me a late fee, I don’t care. When jobs open back up and the renters start paying rent again I will pay the property taxes. Don’t think the tax collector is going to like that very much! Hope all apartment owners do this. They will get the message loud and clear.
3. I will not pay water bill of $5,200 each month. It is my understanding we cannot shut off electric, gas, water and so on by law. So what if we don’t have the money and don’t pay the bill because the renter didn’t pay their rent? Let’s not kid ourselves; I pay the bills from the renters paying their rent. I guess the water company can’t turn the water off either? Let them carry the free renters. I don’t know what to say. Maybe they can get ahold of Newsome and explain that [crap] runs downhill and get the jobs back ASAP.
I’m a numbers guy and this whole shutting down America for the flu or a virus like the flu makes zero sense. Why take every, and I mean every, business down in America because of a virus? Why are they shutting down a bar? People are in America should be able to make up their own minds if they want to go hang out or not. This is communism 100%. Obama must be laughing his [butt] off right now – he is getting exactly what he wanted – government having 100% control over the people. They need to get the jobs going again in the next two weeks. I’m afraid if they wait until June we will have civil war on our hands and all for nothing.
The only way giving free rent to the renters for two months is if they also say we don’t have to pay the montages for the next two months also. Newsome saying it is not free rent and that they will pay it back is 100% [bull]. In 30 years I have never collected money from a tenant I evicted. They run off with my money never to be seen again, period
You ever get a ticket from the Highway Patrol? They make you pay the ticket up front first and then go to court if you want to fight it. If you win they send the money back to you. YET when a tenant is being evicted they pay nothing and then disappear after court never seen again!!! What a joke.
Open Letter to The Honorable Eric Garcetti, Mayor, City of Los Angeles
We have a BIG dilemma and I hope you can help us! We understand the situation that is happening now. We understand the way we live is going to change for the next few weeks or months. Yesterday you announced a moratorium on evictions for non-payments of rent. You might as well have proclaimed “Free Rent for All”.
We understand that people will have income disruptions. And that includes Mom and Pop landlords like us. But have you considered that many tenants will take the No Eviction opportunity to pay nothing at all, some regardless of whether they have the funds of not? Or that even with the most honest intentions, many who live paycheck to paycheck may well fall into a spiral of debt not just to their landlords, but to DWP, their doctors and pharmacies, their car payments, the cable company, come April 15th, just a month away, their taxes.
My guess is the list of bills I’ve just enumerated was most people’s lowest to highest priorities. Many landlords will be bankrupt far before all the other regulations that existed before COVID- 19. Those who can survive will, through no fault of their own, be responsible for homelessness that’s magnitudes worse than we already have.
Let me present a flip-side scenario. A tenant withholds his rent, with the City’s permission, for months. And then, when the free clock winds down, they submit their 30 day notices to vacate with absolutely no intention of repaying their housing.
We understand if a tenant can’t pay all of their rent, at least some rent must be paid and a way to guarantee we get the unpaid rent.
Meanwhile, who is going to pay my mortgage? What about property taxes that are due by April 10th? Fritz and I are on Social Security and our five properties (30 units only in LA City, three of which are Section 8) after the mortgages and expenses, puts food on our table. What about us?
Sincerely, Shirley F.