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My Sage Advice to Renters: Think Like a Buyer

hammery2I’m a tenant. I’d be very much lying if I did not admit I enjoy the multiple protections offered me by SF, especially when a look at home prices convinced me I’d always be a renter. In the past, I got a sort of vicious thrill thinking how so many landlords get the screw in this city, because really, I was jealous of people who could own not only their own home, but other people’s homes as well. And here I was, teaching English at San Francisco State and summer classes for Stanford; yet I could only dream of the day when [insert misery-wreaking landlord name here] could no longer chastise me as if I were her recalcitrant teenage daughter.

But ironically, some of these same laws that so protect renters work to keep us renters forever. For instance, if I could finally afford a condo that was currently tenant occupied, the only way I could evict that person is to follow the new eviction laws in the city. To quote from the Tenants’ Union webpage, I have just cause to evict if “The landlord or a close relative of the landlord (if the landlord lives in the building) wants to move in to the unit and will remain a minimum of 36 consecutive months.” However, “under this just cause, landlords must pay relocation benefits of $4,500 per tenant plus an additional $3,000 to senior or disabled tenants or households with children.” I don’t want to evict anyone at all really, but with rent control like it is, people who have good deals have no incentive to move, ever. And that same rent control will logically frustrate a landlord so much that he/she opts to sell. Both of these situations mean chances are good that a condo or 2-unit building I might buy with partners will be occupied.

Further ironic: Because of this morass of laws, tenant occupied properties are usually the best deals when they hit the market. Thus, in a sense, as a buyer, I find these units in my price range. Yet the red tape in actually getting the unit vacant– or later, in converting it to condo– brings it back up to a price and stress level I have no interest in.

And so, I rent on. And on. And on.

I am absolutely not for complete de-regulation of the rental market. De-regulation in the commerce of housing doesn’t work: Witness the mess the real estate market finds itself in now. However, fellow renters, I urge you to study in two ways:

1. Really investigate, critically, the laws that come to the ballot promising to protect you. Knee jerk reaction is to always vote “pro renter,” but you might actually be very much screwing yourself if you ever aspire to leave renting behind you.
2. Know SF tenants’ laws, not only for your own protection now, but also to understand what you’re undertaking if you ever try to buy an occupied home, or worse, become a landlord yourself.

art and quote: SF Tenant’s Union


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alexclark

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13 thoughts on “My Sage Advice to Renters: Think Like a Buyer”

  • fluj

    December 19, 2008 at 9:13 am

    Interesting post. Ironic that the tenant’s union has effectively turned tenant against tenant. On the one hand, it’s sort of easy to step back and think that that would be the only logical outcome to years of stacking the deck in favor of renters. But on the other hand, who could have known that TICs would be co-opted so broadly?

    Reply
  • Lev

    December 19, 2008 at 10:07 am

    I pride myself on being a good landlord, but rent control scares me away from buying in SF, so I’ll never get a chance bring my goodwill over the bridge.

    Just yesterday I had an experience in rent control… I went to SF to buy a piece of furniture a woman had posted on Craiglist. During our conversations she mentioned how she actually lives around the corner, the house we were standing in she simply sublets and turns a profit!

    I didn’t ask too many questions, I felt rather disgusted at her. I just assumed it was rent controlled and the landlord was pretty absent not to watch over his property. But even if I can partly fault the landlord for not keeping a closer eye on his tenants, I can only imagine the fight he’d have to wage to evict them if he did find out what was going on.

    Can anyone speak to how common this sub-leting and turning a profit is by renters? Sounds more lucrative then owning. 🙁

    Reply
  • vivaveloce

    December 19, 2008 at 10:35 am

    This is a perfectly illustration of the unintended consequences of rent control. Rent control laws are a disincentive for developers or would be landlords to create additional supply, and the passage of time effectively takes units off the market further constraining the potential supply of rental units. This artificial constraint on the supply of units drives up the cost to the newest renters, who effectively subsidize those who have been in their units for some length of time.

    Reply
  • what

    December 19, 2008 at 3:52 pm

    Um, rent control in SF does NOT apply to anything built after 1979. So if someone were to “build more rental housing” they would NOT be subject to rent control at all.

    But of course we refuse to build these at all. Instead it’s all pricey condos for rich single people, or shitty housing built by Daly’s friends in the ‘non profit do nothing” sector.

    Reply
  • anna

    December 19, 2008 at 5:55 pm

    what, you are SO singing my song there. I get so f____ing tired of the constant borrage of new lux condo complexes that the majority of SF– the VAST WANTING TO BUY majority– can’t buy. It, as much as anything else I mentioned, keeps us renters forever. Very stupid planning.

    Reply
  • 40YearOldRenter

    December 19, 2008 at 7:24 pm

    Also, single family homes and condos are not under rent control either, doesn’t matter when you bought it. You can raise rent by 10% with a 30 day notice, and up to 60% with a 60 day notice.

    Come on guys, don’t you know the rules already?

    Reply
  • anna

    December 19, 2008 at 9:07 pm

    Maybe not rent control for SFH, but moving into an occupied one is an expensive project indeed…

    Reply
  • RE reader

    December 21, 2008 at 8:02 pm

    Point: Anna.
    Interesting to read info from a renter on a real estate site. Kind of expect a lot of BUY NOW BUY NOW propaganda and not much else.

    Refreshing.

    Reply
    • thefrontsteps

      December 21, 2008 at 9:04 pm

      RE reader,

      That’s why we got Anna on board. We hope you keep coming back. This ain’t your typical Realtor spiel site.

      Thanks for the comment!

      Reply
  • former renter

    December 22, 2008 at 7:52 pm

    I agree with the author. HOW IRONIC THAT THE HEAD OF THE TENAT’S UNION OWNS HIS HOME! Gee i wonder why?HE knows owning is better in the long run.

    Many renters will stay renters forever precisely because of the laws designed to protect the MINORITY of renters. The MAJORITY of renters aspire to own someday, but the ridiculous laws referenced by the author as well as the TIC laws, condo lottery, etc. are making renters indentured servants. WHAT DOES TED GUILICKSON HAVE TO SAY TO THAT?

    Reply
  • former renter

    December 22, 2008 at 9:02 pm

    @ 40 Year old renter
    Some SFH are rent controlled. A newly converted ondo from a TIC is a SFH but is rent controlled if the owner used the ellis act to evict the tenats. The Ellised condo has to be sold before it can be rented free of rent control.

    And guess what? The Ellis was used time and again by legitimate renters looking to be owners via the TIC route.

    We were renters who couldn’t afford to own outright, so we went the TIC route. 8 years later, I own a condo but won’t put this thing back to the rental pool because rent control scares me. The shortsighted losers on the board of supes that voted for this measure forgot that restrictng me from rerenting means that this will nev er be rent controlled again, althought it would be a profitable rental.

    With market prices as they are, this will never be a rental agian

    Reply
  • Joe Friedman

    December 23, 2008 at 1:30 am

    Definitely not your typical realtor site. Where else would you find someone as contradicting as this? It’s a buyer’s market?!?!@? Oh wait, it may not be so. What’s the deal? Get the story straight TFS.

    [Editor’s Note: Okay Joe, Der Foolj, Flouchebag, Sushi Blow Fish, Zinfadel…what name you going to come up with next? It is a buyer’s market and it’s a great time to be a buyer if you have the means.]

    Reply
  • anon8mizer

    December 23, 2008 at 2:05 am

    TFS is following the “team of rivals” model. Seems to be working for the prez.

    Reply

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