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If California pursues a cap on rent increases, how many tenants will it actually help?

What happened to all that talk about rent control?

Less than four months after an initiative to allow cities to expand rent control failed overwhelmingly at the ballot box, and less than four months after then-incoming Gov. Gavin Newsom talked about brokering a compromise between tenant and landlord groups, no new legislation from lawmakers or specific proposals from the Newsom administration have been introduced to cap how much rents can rise.Legislators who have backed rent control expansions in the past say they’re working on proposals to help tenants stay in their homes. Newsom, in his State of the State address earlier this month, called on the Legislature to send him tenant protections he could sign into law, although he didn’t offer any specifics.

“Everything is on the table,” said Assemblyman David Chiu, Democrat from San Francisco, who co-authored a failed rent control bill last year. “From topics like just cause eviction to Costa Hawkins and other protections, everything is being considered.”

One possible compromise: A bill to ban “rent gouging,” similar to one poised to take effect in Oregon.

That measure, expected to be signed by Gov. Kate Brown in the next few weeks, would make Oregon the nation’s first state to enact anti-gouging provisions covering the vast majority of rental properties within its borders. While often characterized as statewide “rent control,” in reality it focuses on the most flagrant rent hikes—typically 10 percent or more.

“It was surprising to see (Oregon) with that type of success. It was heartening,” said Chiu. “As California policymakers we like to think we’re leading, but in this instance, hats off to our Oregon counterparts.”

Chiu stresses that any rent-gouging bill would need to be part of more comprehensive tenant protections, and that other more stringent rent control measures are still a possibility.

A UC Berkeley housing think tank released an anti-gouging proposal last year after consulting with both landlord and tenant groups. A Bay Area regional housing plan popular with state legislators from the area offers a similar solution.

So what exactly would an anti-gouging law in California actually look like? And how many people would it actually help?

No one can say yet.

 

Read more at East Bay Times

 

Fremont City Council balks at stronger renter protections, opts for ‘minor tweaks’ to rent review law

Majority of council feels one-year old rent review program is doing well.

In the first year of Fremont’s rent review program, nearly half of those who sought help with rent increases saw them lowered, but some renters and city council members still don’t think the program goes far enough to help tenants.

The update on the program was presented by staff at the recent Fremont City Council meeting, where the council subsequently voted to make some minor tweaks to its rent review ordinance, but backed off of strengthening discrimination and retaliation protections for renters.

Councilwoman Jenny Kassan and Councilman Vinnie Bacon said they would have preferred to beef up those protections, and look at adopting rent control in the city, but the other five members of the council chose the status quo.

The city’s review ordinance is intended to help landlords and renters mediate disputes over rent increases. The council adopted the ordinance in fall 2017, and the program went into effect in 2018.

 

Read more at East Bay Times

 

 

Multifamily owners jump in the short-term rental game

When Harold Wu moved from Toronto to Baltimore for a new job, the first thing on his to-do list was to get a place to live.

As he embarked on his apartment search, the T Rowe Price senior vice president of procurement decided to book a hotel in Baltimore for a week in September.

“I looked at the usual suspects: Hilton, Marriott, Brookshire Suites, Residence Inn and so on. Then I stumbled upon WhyHotel on the internet.”

WhyHotel operates temporary hotels within multifamily buildings during a lease-up phase of a new apartment building.

Wu liked the idea of having a place with a full kitchen for the week as a home base. He never thought he’d actually end up living in that very apartment complex.

His weeklong experience at 225 Calvert ended up being the ultimate try-before-you-buy. As he looked around at other apartments — he shopped 36 in total — he found himself appreciating his temporary digs more and more. He liked the amenities, the closet space, the lockers for packages and the security. The ultimate test was of the soundproofing, and it passed.

“I wanted to see if this was a cheap renovation. You don’t hear your neighbor.”

The short-term stay aspect of the property made him nervous at first.

“Frankly, I was concerned that they had a hotel on multiple floors. I didn’t want to have a transient population walking around in my building if I were living there.”

But he has embraced it. He ended up signing a lease for a one-bedroom instead of two — he no longer has to host guests, as he has a hotel directly in his building now.

Other than seeing people with luggage around the elevator banks, Wu said he barely notices his short-term neighbors. Other apartment dwellers haven’t reported the same experiences, citing disturbances and crowded amenity spaces with the temporary guests.

Short-term rentals may not be widely accepted as a viable long-term option for a multifamily owner. Subleasing is generally not accepted, and short-term visitors can be disruptive to residents and create potential liability issues, market experts say.

 

Read more at Bisnow

 

 

Landlord-tenant relationships are changing, thanks to cryptocurrencies, Airbnb, and more

New challenges facing landlords in 2019.

This could be a great time to be a landlord.

The real-estate market still only has enough supply for half the population. We’re still seeing high divorce rates, so people need more places to live. And households are still being created faster than the housing supply. All that combined means higher rents and that trend looks likely to continue for a long time.

In fact, according to the Mortgage Bankers Association, rising rates on 30-year mortgages — now firmly above 5% and on track to reach 5.8% by the end of the year — will help to drive rents higher in the coming year as more people get priced out of home buying by these higher interest rates. According to an analysis by Zillow, rent growth will pick up in 2019 as the Federal Reserve continues to raise rates.

For landlords, this is all very good news. And, given the evolution that the real-estate market has gone through over the last couple of decades — expanding to include short-term rentals, absentee owners, do-it-yourself property managers and more — the future looks bright for all involved.

Read more at MarketWatch 

 

Could anti-price gouging laws slow rising rents in California?

California lawmakers are exploring new ways to limit skyrocketing rents.

Crooning in the shower is not Chad Regeczi’s thing.

That’s why when he learned last year his monthly rent would go up $300 so the new owners of his La Mesa apartment in San Diego County could upgrade his bathroom with a sound system, he was bemused.

“300 bucks!” he said. “I mean an iPod costs less than that. Everybody has got a phone now. Who needs a Bluetooth speaker in a bathroom apartment? It’s just weird.”

Regeczi, a VA employee, said the 30 percent rent increase didn’t match the condition of his apartment. But he felt powerless to challenge his landlords on the hike.

“Who’s gonna tell them no?” he asked. “There are no rules to how much your rent can go up.”

That may change. Talk is underway about putting a law on the books that would bar California landlords from raising rent beyond a certain percentage.

Oakland Mayor Libby Schaaf said in November the rule would mimic limits on what businesses can charge during natural disasters.

“When there’s a fire, you pass an anti-rent gouging ordinance,” Schaaf said. “The state has a fire. It’s called the housing crisis.”

Rents are surging in some California cities where there is no rent control by double, even triple digits, according to mayors and tenants rights advocates.

And more than half of the state’s renters pay more than a third of their income on housing, according to the California Budget & Policy Center. And a third of renters spend more than half of their paycheck on a place to live. The real estate firm Zillow reported last month that communities where people pay more than a third of their salary on rent, see a faster rise in homelessness.

 

Read more on East Bay Times

 

 

San Francisco landlords warm to the power of pop-ups

As San Francisco rents continue to soar, retailers have become hesitant about committing long-term to brick-and-mortar space. One solution: popping in temporarily.

Landlords once scoffed at the deals shorter than the typical 10-year term. But as tenants become increasingly wary of San Francisco’s rising rents and shifting retail climate, many are realizing the benefits of shorter leases may outweigh the drawbacks.

The Bay Area has been a landing pad for tenants looking to test the market, but hesitant to commit to long-term deals.

Union Square in particular has been home to temporary deals with online luxury consignor the RealReal, the Kylie Jenner cosmetics pop-up and the Museum of Ice Cream, which recently decided to make its temporary installation a permanent San Francisco fixture.

 

 

 

Full article on San Francisco Business Times

 

 

Rents in San Francisco and Oakland slip versus 2017

Having ended last year lower than where they started, asking rents for apartments in San Francisco inched up 1.1 percent over the past month but remain 1.3 percent lower versus the same time last year.

In fact, based on a comparison of roughly 2,500 listings, the weighted average asking rent for an apartment in San Francisco, including one-off rentals as well as units in larger developments such as Avalon’s new complex in Dogpatch pictured above, is currently around $4,050 a month which is 9 percent below their peak in the fourth quarter of 2015 with the average asking rent for a one-bedroom now running around $3,400 a month having ticked down from around $3,650 back in late 2015.

Read more from SocketSite

Rents in San Francisco and Oakland down at the End of 2017

Continuing the trend we first noticed forming at the end of 2016, asking rents for apartments in San Francisco and Oakland ended the year lower than at the start of 2017.

In fact, based on a comparison of nearly 2,400 listings, the weighted average asking rent for an apartment in San Francisco, including one-off rentals as well as units in larger developments such as Avalon’s new complex in Dogpatch, is currently running around $4,000 a month, which is around 4 percent lower versus the same time last year and roughly 10 percent below a peak in the fourth quarter of 2015.

And the average asking rent for a one-bedroom apartment in San Francisco is currently running around $3,400 a month having crossed the $3,600 mark in 2015.

Read more from SocketSite

SF and Oakland Rents Down, Relative Premium Up

Following the trend we first noticed forming twelve months ago, asking rents for apartments in San Francisco and Oakland have dropped over the past year.

In fact, based on a comparison of nearly 3,000 listings, the weighted average asking rent for an apartment in San Francisco (including one-off rentals as well as units in larger developments) has dropped to around $4,100 a month, which is not only down around 3 percent over the past two months with typical seasonality in play, but also around 2 percent lower on a year-over-year basis and 8 percent below a peak in the fourth quarter of 2015.

Read more from SocketSite