burningmoney.jpgDave’s here to answer your questions every Wednesday, so send them to him at tenant@sfappeal.com, here’s what to make sure to include in your letter.

Having read your “Tenant Troubles” blog and examined your website, I am curious as to your personal view of bona fide OMI evictions / good faith owner-move-in buyouts. I should be clear, I’m not looking for your advice in the interest of the landlord, but rather advice in the interest of tenants, AS a (potential) landlord.

We are currently looking to buy somewhere to live in in SF and many places we have looked at are two units, both tenant occupied. My husband and I have no interest in raising rents or emptying the building for the purposes of raising rent in the future however we do need somewhere to live. We don’t own any other property in SF. I am aware it is possibly within our legal rights to do an OMI eviction on one unit (and leave the other occupied as is, rent controlled and all). However the thought of being an evicting landlord (colorful adjectives you use such as sleazy, lying, greedy etc, I don’t THINK apply but still, we would be displacing someone from their home, there’s no way around it…) does not sit easily.

I fully support rent and eviction controls on principle. I value the notion of ‘home’ over ‘home ownership’ (UnAmerican I know). Should I just walk away from occupied properties? Don’t buy SF property at all? Someone else will buy and evict no doubt. Is there a way to do this and have everyone come out on top? What’s the way forward?

A few years ago a very dear of mine came to me seeking my thoughts on this very issue. She and her husband, long time San Francisco residents and City employees wanted to buy a building with two units, one for them and one for retiring parent.

The market was off its rocker, fueled by what we now know was a Ponzi scheme designed by corrupt banks, mortgage brokers and realtors. Two unit buildings were being snapped up by speculators to be converted into TICs and condos. Tenants were being evicted right and left, because the cheapest buildings were those occupied by tenants, especially long-term disabled and elderly tenants.

My friend has long been a social justice advocate, but she found herself in a position similar to yours. My friend had just seen a building that would be perfect for her and her family, a building in a good location that was priced right and could accommodate her family’s growth. She was planning to have a baby. But the building had tenants and in one unit, elderly tenants.

As we spoke, I described the cases I was defending and others I’d witnessed at the Tenants Union. I told her horror story after horror story. During our conversation, I witnessed something that I will never forget. I saw my friend become resolute in her ideals.

We both came to the conclusion that community begins at home and that nobody should have the right to disrupt community simply because they can afford to do so.

With the courage of their convictions, my friend and her family bought a two unit building that was vacant. They paid top dollar so that they could sleep at night. My friend could raise her daughter and speak of social justice without underlying hypocrisy. My friend’s decision was brave and principled but it came at a cost. Brave, principled decisions usually do.

If you think about it, much of what is wrong in our country today comes from bottom line thinking that has utterly no regard for its effects on people.

I can tell that you’re conflicted and I think you may trying to do the right thing, but if your decisions are colored by our culture as it is evolving, you’ll be wrong every time. For example, if you believe in “home over home ownership,” why do you need to buy at all?

And why would you even think that your values are “unAmerican”? Do you actually believe that one-third of Americans (renters) are unAmerican?

My advice to you is the same I gave to my friend, buy a place that doesn’t have tenants. Buy a condo or a house or an unoccupied building with a friend. But before you do, find out if the building was previously emptied by an Ellis eviction.

Ellis eviction notices are registered with the Rent Board and they will also show up in a title search. Ask your realtor if tenants were evicted at all to market a unit. He or she will lie, but watch them squirm when you ask. That alone should drive you crazy if you truly care about a stable community.

Also ask yourself if you really want to own property in a city where everybody is rich; a city that drives out its young people because they can’t afford to come back from college and live here. Think about your role in that, if you pay an exorbitant, insane price for a unit in a building.

Community begins at home. Sit down with your husband tonight and discuss what kind of a community you want to live in. Understand that your decision, however small it may be in the larger scope, may have a ripple effect.

Finally, understand that if you make the wrong decision and buy a building in which you evict tenants, you will burn in hell forever.

Dave Crow is an attorney who specializes in San Francisco landlord tenant law. However, the opinions expressed in these articles are those of the author, do not constitute legal advice, and the information is general in nature. Consult the advice of an attorney for any specific problem. You understand that no attorney-client relationship will exist with Dave Crow or his firm, Crow & Rose unless they have agreed to represent you. You should not respond to this site with any information that you believe is highly confidential.

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the author

Dave Crow is an attorney who specializes in San Francisco landlord tenant law. However, the opinions expressed in these articles are those of the author, do not constitute legal advice, and the information is general in nature. Consult the advice of an attorney for any specific problem. You understand that no attorney-client relationship will exist with Dave Crow or his firm, Crow & Rose unless they have agreed to represent you. You should not respond to this site with any information that you believe is highly confidential.

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  • Rogre’

    “Finally, understand that if you make the wrong decision and buy a building in which you evict tenants, you will burn in hell forever.”

    C’mon Dave, don’t hold back. Let it all out. Tell us how you REALLY feel!
    (just ‘kiddin’ – he’s right on!)

  • netopia

    Sure, sure, rents are too high, renters have no rights, waah waah and blah blah blah. The difference between you and me, Dave, is that when I see a societal problem I ask why it exists. Here’s why rents are so high:
    1. Rent control (which causes vacancies and raises at-market rents)
    2. NIMBY-ism (which limits the development of new residences that could increase supply)
    3. Environmentalism (see #2)
    4. Affordable housing programs (which, by raising the cost of developing new residences, see #2)
    5. Limits on condo conversion and other similar laws (see #2)
    6. Property tax kept and held low by Prop 13 (which enables the rich to afford to buy and, especially, hold, more property than they otherwise might)
    All of these issues are caused by overzealous legislators and self-righteous lawyers like you, so, congratulations. I’m a renter in SF and I own property outside of SF because I can’t afford what’s in SF, and won’t until thousands of new units are built and rent control is ended.

  • pffft

    Are you able to buy the new property without selling or moving out of your current home? I realize that would be expensive but maybe giving a current tenant 6 months to move out might make everyone a little less anxious?

    I understand the emotions here but if have a system where one can own property or land that they don’t occupy then you really can’t avoid this situation. What’s the alternative? The state owns all land/property? It’s illegal to own or rent property that you don’t occupy?

    Should it be illegal to fire someone from a job too? Then you get MUNI. That’s working well, right?

  • milkcluber

    I bought a vacant two-unit building in a probate sale. Because it was a probate sale, from a long-time owner who lived in one unit and whose sister lived in the other unit, I did not have to be concerned about a past eviction or current tenants. The property had cosmetic needs and other improvements, but it was not only a good home for me, but it allowed me to return to use a unit that had been vacant for more than a dozen years. I believe we are all lucky to live here, and because I value a good tenant and because I live here as well, I generally set the rent several hundred dollars lower than the market and usually don’t do annual increases unless there has been significant cost increases (like water rates, etc). I do think there are ways to be a good member of the community and also own a home and offer a reasonable home to another.

  • Zouaf

    I’m not clear on why evicting tenants must lead to burning in hell. If they’re old and destitute, maybe. But it’s not as if I have a God-given right to occupy my apartment. The real answer isn’t angry moralizing but increasing the supply of less expensive housing in this city. Step down off the soapbox, Dave.

  • quotidian

    Dave, I’m on the fence here. It is absolutely true that disrupting a home disrupts the surrounding community, and if such disruptions are frequent or systematic, the community will suffer dearly. But it sounds like you’re saying that displacing any tenant, ever, should be universally illegal. I live in Oakland, in what used to be a single-family home, and now comprises eight apartments. When the owners purchased it ten years ago, the building was split up into 16 studio apartments, occupied by some very honest folk, but also a handful of “bad apples” — drug dealers, prostitutes, etc. Certainly, such members of society can be good, responsible tenants, but in this case they were a bad influence on the property and the surrounding community. The previous owners left the building on “autopilot,” and when sold it was crawling with pests and filth. The new owners eventually succeeded in removing the tenants so that renovations could proceed; all relocated tenants were compensated generously and in accordance with the law, and only the bad apples objected, claiming they were entitled to stay put. Looking at the trajectory of our neighborhood, I can say with complete conviction that the owners made the community BETTER by doing what they did. Before, it was just another decrepit slum run by an absentee landlord; now, it is a true home for its residents, and a positive influence in the neighborhood. I don’t doubt that some members of the community would object to that claim; there is no universal right or wrong. But I am quite certain that my landlords did the right thing.

  • Agreen2k

    David, both you and the prospective buyer may be overlooking something. Not every tenant is in love with where they live, and may be quite willing to move if it’s financially worth their while.

    I lived through an Ellis Act eviction of my building, in which four of the six units were bought out by the landlord (myself and a neighbor were the long-term tenants who didn’t want to go, hence the Ellis). A couple of my neighbors considered the landlord’s buyout offer a windfall, and a couple others had no problem moving on since they’d only been there a few years.

    So before you go feeling all guilty about buying a building with tenants in place, find out how long they’ve been there, and whether they might consider an offer to move on. Even if you do an OMI, you still have to pay the tenant(s) to relocate, and some might be more than happy to take the money and run.

    Yes, moving sucks, but you’d be surprised how many people have no problem with it when a nice chunk of change comes their way as a result.

    If a tenant-occupied building is considerably cheaper than one delivered vacant, some of your savings can be passed on to the tenant in the form of a relocation payment. They get money, you save money, and you can sleep at night knowing you compensated somebody for the hassle of moving.

    Of course, you could encounter a tenant who considers the building “home” and has no desire to leave, in which case you just find another building.

    But you’ll never know unless you try.