Prop 98: No more Berkeley rent control?
There's a lot of hassles that come with living in Berkeley. However, one benefit to students is rent control. Upon moving into an apartment, future rent increases are determined by Berkeley's rent stabilization board.
This benefit ends if Proposition 98 passes. From the CA Legislative Analyst's Office:
The remainder of the report may be found here.
I'm not taking a position one way or the other on the matter. I'm just highlighting the real-world impact upcoming legislation will have on Boalt students. If the presidential primary in March wasn't enough for you to get yourself registered and turn out to vote, hopefully something like this will.
A related note: the election is not until June 3 - well into our summer gigs. Time to sign up for absentee ballots if you're venturing outside Berkeley during that period...
This benefit ends if Proposition 98 passes. From the CA Legislative Analyst's Office:
The measure generally prohibits government from limiting the price property owners may charge others to purchase, occupy, or use their land or buildings. This provision would affect local rent control measures. Specifically, government could not enact new rent control measures, and any rent control measure enacted after January 1, 2007 would end. Other rent control measures (those enacted before January 1, 2007) would be phased out on a unit-by-unit basis after an apartment unit or mobile home park space is vacated. Once a tenant left an apartment or mobile home space, property owners could charge market rate rents, and that apartment unit or mobile home space would not be subject to rent control again.
The remainder of the report may be found here.
I'm not taking a position one way or the other on the matter. I'm just highlighting the real-world impact upcoming legislation will have on Boalt students. If the presidential primary in March wasn't enough for you to get yourself registered and turn out to vote, hopefully something like this will.
A related note: the election is not until June 3 - well into our summer gigs. Time to sign up for absentee ballots if you're venturing outside Berkeley during that period...
Labels: Only In Berkeley
posted by tj at 1:33 PM
25 Comments:
Since rent control often means those who move around a lot (i.e. students) have to subsidize the low rents of those who do not, I'm not sure I'd describe rent control as a benefit to students.
Rent control is a great deal for people who have lived in their apartment for many years. They are likely paying well below market rent prices right now. Great for them, but bad for the rest of us. An apartment complex requires a certain monthly income for maintenance, property taxes, and then enough profit to make it worthwhile to be in the landlord business. The total rent must add up to that. If certain units have been occupied for five or ten or twenty years, the rents are below market and can't be raised. That means that new residents in the same complex, e.g., the incoming Boalt students, must make up the difference through higher rent.
On the other hand, it means that your landlord can't use the fact that you're already comfortable and it would be a big hassle to move as leverage to gouge you when it comes time to renew.
I'd personally rather take my chances with my landlord. Landlords don't like replacing good tenants who take care of the property and pay the rent on time, so I feel like I have some leverage too.
I was gonna comment what the first two commenters commented. Since it is such an important point, I will comment on it again.
Rent control is bad for society generally, but it is particularly bad for students, in that students are effectively subsidizing people who could probably afford to pay more. Rent control even has a negative impact on those that benefit from it, in that they feel enormous economic pressure to not move, even if a new place would better serve their needs.
Rent control is one of the dumbest ideas we have ever come up with. Not as dumb as centrally managed economies, but it's still pretty dumb.
prop 98 purports to be a response to the Kelo decision, but it does little to protect home owners and communities. instead, its radical protections fall mainly in favor of business owners and rental property owners. furthermore, its effects on regulatory takings could potentially be extremely burdensome on local governments and on statewide regulations (including increasing the costs of implementing regulations designed to protect the environment!). it goes way beyond rent control. (prop 99, which is a response to prop 98, is much more narrowly-tailored to deal with the perceived problems with Kelo).
i agree that rent control doesn't really help students - it helps long-term community residents who would otherwise be driven out by the upward pressure on rents caused by having a high student population. students (esp undergrads) tend to be willing to live in cramped spaces, and they often have rent subsidized by their parents, so they can afford to pay much more than a family can. when universities don't house their students, rents in the surrounding neighborhoods rise dramatically, driving out families and other residents who can't keep up with the rising prices. i think rent control is a good thing, even if it isn't geared toward protecting me.
I kind of like seeing Berkeley go to hell (and serve as a cautionary tale to the rest of the country) and I'll be gone in a few years, so I suppose I'm for rent control here too. I think we need to bring back commercial rent control. And require all businesses to run exclusively on renewable energy. And institute a municipal tax on people making more than $100k. And make poverty an affirmative defense to charges of public urination and robbery.
To talk about the ED part of the prop for a minute, I read through the proposal and it doesn't seem that extreme. Maybe I missed some technicalities but I like the idea that the state can no longer take your property and use it for essentially the same purpose, but transfer to someone else.
It is attempting to stop the "turning a motel 6 into a Ritz-Carelton" problem that O'Connor mentioned in the Kelo dissent.
It also says that they now have to pay moving costs. A reasonable way to pay above market, as long as there is some way to accurately measure how much people have to pay to relocate (maybe a few hundred dollars).
It still allows takings due to blight in the area, or other state emergencies. Could someone actually describe the harms for me? I know there are some, but the anon commenter didn't really make them clear.
Sorry to be off-topic, but tomorrow in room 105 at 9-12n I will present an MPRE prep lecture. Because it's the first tim I've done, I strongly recommend that you don't rely solely on my lecture. All Boalt students are welcome.
McWho,
The proposition is deceptive in that it reads like it only prevents the sort of taking that occurred in Kelo. However, if you read the definition of "taken" it is much broader because it limits the price that a private owner can charge another person to purchase, occupy or use their property (see http://ag.ca.gov/cms_attachments/initiatives/pdfs/i684_2007-05-03_07-0015_Initiative.pdf at 19(b)(1)). Forbidding rent control would hurt elderly people, anyone on a fixed income, or the poor. It also eliminates protections against evictions.
I found an admittedly-biased site claims to explain the environmental impacts of Prop 98: http://www.no98yes99.com/environment/?_adctlid=v%7Cwr0rnig01xcieg%7Cwxt8251xsnkx75
I think it's funny that people on this blog, which normally swings to the left on the political spectrum, are supporting this proposition, which is advanced by an extremely conservative group. (See their website: www.hjta.org, where they express their support for, among others organizations, the Cato Institute).
The right wing doesn't have a monopoly on understanding economics.
You people are frankly idiots if you think a landlord will rent for less because their costs are lower or their other tenants are paying more. They will always rent for the absolute maximum amount they can. Whether your neighbor is paying $100 or $10,000, is irrelevant.
If you want to argue that eliminating rent control will displace the less afluent, families and such, and long-term tenants, who create and sustain neighborhoods, thereby creating greater turnover year to year in Berkeley and increasing the supply, thereby creating competition, that *may* lead to lower rents, fine, that's a better argument, but I wouldn't bet on it being true in the current market. The main disadvantage of rent control for renters is that there isn't the same incentive to build and increase total supply, but that's not what limits building in Berkeley, so it's not as much of an issue here.
When I was an undergrad at UCLA, I lived in a rent controlled apt, and it was fabulous. I moved in at market, prices went up 40% a year for four years. My friends in non-rent controlled apartments had to move every single year, farther and farther away from campus, into worse and worse neighborhoods, while I continued to live in a sweet place right across the street from the University. I didn't have to pay moving expenses, or waste time searching for a new place and new roommates. It's true, I would have moved after I graduated and started working, but no place could compare to my place at the rent I paid, so I remained. Rent control is bad mostly for landlords, who can't *maximize* profits, but it most certainly is not bad for the vast majority of renters. Economists continue to debate this point, and there are studies that support both views.
It's not something stupid like Prop 13, which isn't indexed for inflation, basically, if you set a fair price, you continue to get that price, adjusted for inflation, as long as your tenant stays. If you aren't making a "fair profit," you can petition for a greater increase, but you have to open up your books to show that you actually aren't earning a "fair profit." Landlords in the Bay Area are not hurting.
When I was an undergrad at UCLA, I lived in a rent controlled apt, and it was fabulous. I moved in at market, prices went up 40% a year for four years. My friends in non-rent controlled apartments had to move every single year, farther and farther away from campus, into worse and worse neighborhoods, while I continued to live in a sweet place right across the street from the University.
This beautifully captures precisely what is wrong with rent control advocates. Translation: I had it great therefore I'm ok if everyone else is screwed over.
And funny you should mention UCLA. It's well worth mentioning that the area around the UCLA campus is far, far more gentrified than Berkeley. I really can't understand how anyone's jaw doesn't drop when they drive down Veteran Av. On the one side you have typical college apartments with crowded parking along the east side of the street (which the LA Parking Enforcement folks are cracking down on even moreso thanks to complaints by Mike Dukakis). On the other side you have upper class/upper-middle class homes with PERMIT ONLY parking. Same story on the Hilgard side of campus. I'm not saying the elimination of rent control is going to cure all this, but it certainly will give greater incentive to property owners to actually try to build some rental complexes on streets with permit only parking. Oh and the elimination of rent control might have prevent several apartment complexes just calling it quits and converting to condos at the height of the real estate boom. Yeah, that screwed over everyone renting too.
I'm glad you enjoyed a comfortable stay. That still doesn't change the elementary economics that rent control is putting a chokehold on the supply of available apartments.
Armen: housing costs and a lack of supply around UCLA proves rent control = bad.
Actually, UCLA is a great example because it is NOT under rent control. There are very few rent-controlled apartments left, a small percentage of units (like 10-20%) in a small percentage of buildings in a small section of town immediately west of campus. The Hilgard side has no rent control, nor does the vast majority of the Veteran side.
So the fact that the prices are COMPLETELY AND TOTALLY INSANE and outside student budgets (even with rent control, I had to share a bedroom), and, at least according to you, there is a contraction of supply, with no new building and existing units being converted to condos actually proves no rent control = bad.
Please tell me, exactly, who is "screwed over" by rent control? I believe the answer is "landlords." The only renters I know who were "screwed over" for housing are those who were not in rent-controlled apartments who were forced to leave. And trust me, the landlord couldn't care less that you are a "good tenant" who takes care of the property, they will kick your ass to the curb unless you pay them whatever rent they could get if you moved out.
Please tell me, exactly, who is "screwed over" by rent control? I believe the answer is "landlords." The only renters I know who were "screwed over" for housing are those who were not in rent-controlled apartments who were forced to leave. And trust me, the landlord couldn't care less that you are a "good tenant" who takes care of the property, they will kick your ass to the curb unless you pay them whatever rent they could get if you moved out.
No, the people who are screwed over by rent control are tenants.
1. Rent control discourages construction of new housing.
2. It encourages apartments being kept empty--either because landlords can't profit by renting them, or because of "absentee tenants" who don't use the apartments as primary residences (see NYC or any other major rent-controlled city).
3. Hence simple macroeconomics: a decrease in the supply of apartments increases demand--and cost. Rent control raises rents on people who are looking for new apartments. This particularly affects growing families, university students, and lower-income people (who move more frequently as circumstances change).
4. Because rent control is not based on income, its benefits do not correlate to need. As a result, wealthy people receive a surplus under rent control (they pay less than they would be willing to). And poorer people have to pay more for new housing.
5. Rent control particularly limits the availability of large apartments. "Empty nest" grandparents continue to rent 3- and 4-bedroom apartments, because the rents are severely under-priced (based on the long tenancy). As a result, young and growing families can't find sufficiently-sized apartments, even though their need is much greater.
This all isn't theoretical. Berkeley used to have much stricter rent control. The result was that it was nearly impossible for UCB students to find housing, and what was available was falling apart.
I'll support this when they repeal prop 13. If you want market prices, then don't half ass it. And don't forget to foreclose all those real estate speculators that created this mess of a market.
Rent control has worked fine here in Santa Monica. Single family homes are exempt. Owner-occupied with three or less units is exempt. I've lived in my building 18 years and it's immaculate. It's a small one-bedroom and I pay $1208. Without rent control it would probably be around $1700, and as a condo it would be around a million. What the landlords lose in rent control, they make up for by doing as little maintenance as possible inside the apartment, and by raising rents to market value when a tenant leaves.
Our rent control was established in 1981 and has prevailed over countless electoral challenges. That's because we have a highly educated electorate and a very high turnout at the polls, plus we have very few Republicans.
How about this for a compromise? You get rid of the state and federal mortgage tax write-offs and we'll get rid of rent control. Then renters would no longer have to subsidize lazy property owners who think the taxpayers owe them a living, and the rest of us would save many billions of dollars in taxes.
Why should the burden of providing low income housing be placed on the private property owners? Shouldn’t the government pay for this? How about we all pay a “low rent tax” to help pay for the supposedly low income tenants? Yes on 98 – No on 99
Why should the burden of providing low income housing be placed on the private property owners? Shouldn’t the government pay for this? How about we all pay a “low rent tax” to help pay for the supposedly low income tenants? Yes on 98 – No on 99
Don't be fooled by greedy landlords. The issue is not to eradicate it, but to adjust it so that is works more fairly for the lanldors as well as the tenants. Rent control laws encompass more than just controled regulation of rent increase. It also offers stability and protections from certain abuses to tenants. As for the argument that landlords charge an exorbitant amount more for recently vacated rent control apartments to compensate for the low earnings of reant contolled ones, they've got you fooled; greedy people will alaways charge as much as they can get away with charging, and if there were no rent control, what will protect you as a tenant from having your rent tripled every year per landlords whims? And what will bind them to abide by laws of decency with regard to pestilence and maintenece issues? Rent control protects millions of people. Fight to work out issues within rent control, not to eradicate it completely.
Any of you jackoffs that don't think rent control is an illegal taking........feel free to get off your ass, get a mortgage and then rent it to some self righteous slacker for less than it cost you to carry the unit.
Then come back to us with your liberal theory on rent control
Let's not forget, the basic evil of rent control is that, as it is in California, it preys upon the private individual property owner/landlord. It is not a government subsidy for housing to the elderly and disabled but takes from the private individual and give to another private individual. It drives rents up and new renters (recent college graduates) are paying for the older renters.
Lets take for example my situation.
I didny pay registration fees to Berkeley Rent Board because apartment was under renovation, but eager to get there money Rent Board took me to court without serving me and notifying at all in few cases and received a judgments.
For wrongfully claiming that I should also pay registration for my house and for my cottage which should exempted they also received the judgment.
In all for not receiving 8 times $150 they claim I owe them over $10.000.
I am being totally mistreated by Berkeley Rent Board
This is just small summary of the case....
I can provide more details.
I have two properties in Berkeley, one where I live thats has a cottage and other one that has four unit, where I only rent two units and other two I been working on for some time, and it has not been rented since 1992.
I been paying rental registration fees since 1990 and only around 2005 all of this has started.
City rent board official , Alvaro de Lagarra has been falsely accusing me of not complying with rent board regulations, which is paying apartment registration(currently $170),
so currently rent board has judgements for about $10.000 for not paying 8 times $150.
He has been telling my tenants that they dont have to pay rent, because I have not registered unit
..... has been filing claims against me without serving me the papers...
has been claiming I dont pay fees, even that apartment has been empty, has trespassed my private property, harassed my tenants, many of them have moved out because of this,
has been with court officials conspiring to go around a law.
He has been spending time online , while at work sending erotic and derogatory remarks against public officials at Yahoo web site on dragonmax groups, http://groups.yahoo.com/search?query=agonmax ,
has asked administrator to close access to public viewing after I have discovered it.
When I wanted to settle all rent board matters after one court appearance and went there to the rent board, he has not informed me what other options I have , like filling petition for waving late fees and etc only has shouted at me vulgar epithets (get the f--- out of here) with another employee and than asked me to leave ...
in court when I presented witnesses I won , but not completely, so when I filed appeal and wanted to have it on Judge Mathis Court (the producer of that program has contacted me first) and asked clerk to postpone a date, she said it will be postponed...however I showed up, because I didnt trust the court and judge did not postponed it and wanted to hear an appeal, but I was not ready, my witnesses where not there, so I lost.
This seam to be a corrupted atmosphere , when rent board person has come on first court date he only said , that some neighbor told that I dont live there. The case should have been dismissed, however the judge told the rent board guy to come back with more evidence... when I come to court expecting same treatment when asking for postponement, judge didnt care and laugh at me, together with rent board guy Alvaro de Lagarra.
I have some sound recordings of proceedings from previous court hearings.
This Friday I have to be in court for \"order for appearance and examination\" after lost cases to pay the judgement,
They have filled a nine cases :
BS06277832 on May 01, 2009 at 1:30 pm at room 202
BS07335332 on May 08, 2009 -/all same time, same place/---
BS05221396 on May 15, 2009 -/-----------------------/---
BS06277850 on May 15, 2009 -/------------------------/---
BS04164563 on May 22, 2009 -/------------------------/---
BS03105377 on May 22, 2009 -/------------------------/---
BS08395663 on May 29, 2009 -/------------------------/---
BS07335395 on June 05, 2009 -/-----------------------/---
BS08395661 on June 05, 2009 -/-----------------------/---
All cases were filed on April 01, 2009
My financial situation is difficult, I was in last 2 years 3 times in foreclosure and still am behind few months in mortgage payments.
Also my health is not good, my spine three vertebra's are out of balance and I am in constant pain, but somehow I manage.
Look at this article below for how rent board is projecting what they are doing, but in reality they dont care at all about renters or property owners.
http://www.dailycal.org/article/102931/foreclosures_holding_steady
Sincerely Yours,
Is this how rent control should work ????
Acting like mafia demanding almost ten times what wrongfully anyway they claim I owe them and not giving anything for it.
We are two Irish people here on an "outstanding ability" visa. We are also scared human beings about to get evicted from a Berkeley property due to the "Golden duplex" rule.
The rent board rules that the owner was not resident on the property, and that we had proved that in a formal hearing. However, it said that AFTER the hearing he moved some furniture in and that made it his "principal residence" - which allows him to evict us. The rent board grabbed some $$$ from him, and threw us to the wolves
It was a strange verdict. It was like if you wanted to fire an employee for absenteeism, proved he was absent, and were then told that AFTER the hearing, someone had seen his briefcase on the desk, and so he was there.
The place has been a wreck for years, cited by the city for 19 violations including dangerous ones that the owner refused to rectify - and yet in the "counseling", the RB never told us that the owner's refusal to rectify these after 35 days made it ILLEGAL for him to collect rent by Ca civil code;
http://law.onecle.com/california/civil/1941.1.html
11k+ down the drain. Yes, we're going to the cops. This is particularly the case as the landlord refused to give receipts and often asked for rent several times after it was paid - all documented, and all in the light of the RB's indulgent gaze.
We have written to Councillor Wozniak, but my expectations are not high. At the moment, Berkeley has NO RIGHT to claim there are any renter protections and indeed should not inflict its feudal system on people from countries that at least have had Magna Carta.
It does not surprise me that an RSB person went to jail, as in my experience it is a criminal organization - whatever the intents of its founders
Students usually get discounts and that is how it should be. They have many expenses to afford and earn less money than an adult. I travelled to Argentina for a semester to study there. The buenos aires apartments we were offered were as good as any others but at half price. Just showing the student card gave you the discount!
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