M1? L1? Let’s Vote ‘No’ on Both

M1? L1? Let’s Vote ‘No’ on Both

 

We can vote “no” on rent measures and work toward a fairer rent ordinance. We can lobby to remove the relocation fees from the currently operating Ordinance 3148. Only then will we have more equitable rent control for both landlords and tenants.

There are too many lopsided issues already presented regarding M1 that make it impractical for both tenants and landlords, and too costly for the city to operate.

We must stop this pervasive stereotype that landlords are rich and tenants are poor. As noted in Barbara Manibusan’s article (“A Landlord’s Perspective on Rent in Alameda,” Sept. 22), a very low percentage of landlords here are large, corporate or out-of-town entities. Most are what she terms “mom-and-pop” landlords.

When I moved to Alameda in 2006, it was just before the housing bubble burst. Of course we did not know that at the time. I had a new job offer in San Francisco, and I struggled to find a place I could afford in the Bay Area housing market. I rented an apartment and spent a year looking for a place where I could qualify for a mortgage. A two-bedroom, one-bath, single-family home was out of reach for me. So I opted to look at a 1920s run-down duplex where the anticipated rent income would help me qualify for the mortgage. I ended up in a one-bedroom, one-bath duplex unit with the same to rent out.

I had to renovate the property prior to moving in or renting due to previous termite damage, aged plumbing and electrical issues. I also had to bring both units’ baths and kitchens up to code. I had to undertake seismic strengthening. I have since paid for regular pest control, annual heater inspections, security systems and all the other normal maintenance that one does with a building, times two. Because I am in a duplex, I have had to pay higher prices for trash disposal than single-family homes, a higher percentage on my mortgage and higher taxes. I have no reserves for any major repairs such as the roof whenever that becomes necessary.

I worked with a local Realtor to determine appropriate rent for the other unit and to screen prospective tenants who had sufficient financial resources to pay the rent and not trash the place. For most of the past 10 years, I have been underwater on the property and unable to refinance. I have managed to pay my mortgage, even through a job loss, managing two family members’ healthcare and deaths and managing the care for my special-needs brother. Like most families, stuff happens.

Two years ago, a financial adviser showed me how I was losing money on the property and not charging sufficient rent to cover expenses, even when split between both duplex units. In essence, I had been paying a fairly large percentage of operational costs for the tenant. For that reason, she encouraged me to consider raising the rent to reflect both costs for mortgage and maintenance.

I am not a landlord who revels in increasing rents because I know how hard it can be to afford living in the Bay Area. I suspect that many landlords are in similar positions. Many people are just trying to make ends meet. A lot of tenant properties seem a bit run down. Sometimes this is just because the landlords have kept rents so low for so long that they cannot keep up with the high costs for maintenance.

On the other end, many tenants make more money than landlords do. Especially in the Bay Area, it is not uncommon to see individuals in the tech industry who are making good money.

So the stereotype of rich landlord and poor tenant just doesn’t cut it anymore. It is this stereotype that seems to drive radical rent control. I agree with affordable housing, just not with every housing situation being low rent with inequitable and heavily imposed landlord restrictions. I have real costs to consider in paying my mortgage and maintaining my building and trust me, I’m not rolling in dough just because I happen to be a “landlord.”

I am very much in favor of 90 percent of L1 (which seems to align with the already existing Ordinance 3184), except for the imposed relocation fees for no-fault eviction. These amounts are exorbitant, especially for tenants who choose to rent month to month and not sign a year lease.

As a landlord, I have offered and prefer annual leases. I happen to have a tenant at the moment who prefers a month-to-month lease even though she has now been a tenant for more than four years. She never wanted a year lease, even during the first year. She’s a good tenant so this has nothing to do with trying to evict someone. 

But if the day ever came where I’d need to sell the property or for some other reason would need to give the tenant notice for any other no-cause reason, it seems inappropriate that I would have to pay four month’s rent and relocation fees, especially for a tenant who did not want to sign any year-term leases in the first place.

When a tenant wants to rent month to month, the landlord is also taking a risk should the tenant want to move out with 30 days notice. It will take at least a vacant month, often more, to clean up the rental unit and find a new tenant, meaning that the landlord is out one or more months’ rent income until a suitable new tenant is found. When a unit is rented month to month, it is typically agreed that either party may take that equal risk of 30 days notice. It is very unfair to put a burden of relocation fees and extended rent onto the landlord for month-to-month rentals.

The limit of 5 percent increase in rent for a new tenant is already a sufficient deterrent to prevent landlords from evicting tenants for no-cause only to increase rents. The relocation fees on top of those already in place are unnecessary and exorbitant.

With an annual lease, there are already standard terms for evicting a tenant. Should a landlord need to evict for no-cause prior to the lease term, they should, of course, have to give lengthier notice and agreed upon fees as outlined in the lease agreement.

A landlord and tenant should also be allowed to freely negotiate alternative terms. People have all sorts of mitigating circumstances and the rent or lease terms should be able to freely reflect unique terms without over burdensome rent control that is too restrictive for either party.

Overly restrictive controls will only entice more landlords to rent through AirBnB or similar alternatives, rather than provide more long-term housing. Alameda may be losing valuable rental housing stock because of these restrictions, thereby even further reducing supply and contributing to rent inflation.

I hope that voters will take these issues seriously when casting their ballots. While it is not fair to be increasing rents exorbitantly for greed, it is equally not fair to put undue risks and restrictions on landlords. Most of L1 makes sense, but the relocation and rent fees are exorbitant!

Let’s vote “no” on both M1 and L1. Keep the current ordinance in place and work toward removing the imposed landlord relocation and rent fees, other than what is already typically provided in annual lease agreements.

 

 

Katharine Untch is an Alameda resident and landlord.