Dave’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.

crow_kinglandlord.jpgI currently live in the Mission, in a loft (or condo) and was built around 1991, thus is not subject to Chapter 37 of the San Francisco Administrative Code. It is a 21 unit building.

I have lived in the building since 2004. I resided in a 1353 square foot loft from 7/16/04- 9/1/05 at a rate of $2500. I then moved into a smaller 851 square foot unit that I have resided in from 9/1/05 until present at a rate of $2000 per month (it is the smallest unit on this floor and is directly above the garage, which brings a lot of pollution and noise into my unit).

I recently received a rent increase. The increase was for $800 per month, or rather, a 40% increase. While I know that I can receive an increase at any given time, 40% seems unconscionable. While I was told that everyone received an increase, I do know that my next door neighbor’s increase was only 20% (he went from $2500 to $3000 for a 1209 sf loft). As well, I have spoken to neighbors upstairs who have a 1509 sf loft and only pay $2900. I have also spoken to neighbors who have received 10-20% increases, while others had none at all.

I have contacted the landlord and all they can say is that “it’s been raised to market value” and “we are not being discriminatory with the unequal increases.” This seems strange to me considering I did not bring up the word discriminatory and I know that they just leased a two bedroom (1044 sf) loft two doors down for $3100. How is my one bedroom worth only $300 less than the unit 2 doors down or $200 less than my next door neighbors 2 bedroom (1209 sf) unit?

I am a 39 year old professional woman who has never been disruptive, had a complaint or paid a bill late in my life. I also live alone and have no pets. Lastly, I helped to rent out my old unit while transitioning to the smaller unit, which I moved into on an “as is” basis (meaning they didn’t clean and only did minor touch of paint).

My question is, is it within their (landlords’) rights to raise rents in a disproportional manner?

The short answer to your question is yes.

The landlord’s answer to your question is, “It’s my property and I can do anything I want to including raising the rent or even taking it off the market. If you don’t want to pay the increase, I’m not forcing you to live here, you can move.” Unless you live in a rent controlled unit, the law will tell you the same thing.

Since the dawn of agriculture, when specific plots of land had to be protected from invaders, both human and animal, property rights–to protect, to make productive and to defend–have been a central theme in human history. Wars, contrary to the propaganda to justify them, are always fought over land and the natural resources that derive from land.

As societies became more complex, ruthless bands of sociopaths (call their leaders pharaohs, kings, popes, bankers or the 1%) took control, they usurped the commoners’ (call them the people or the 99%) rights to own the land. I’m sure the bargain went something like this: “Look peon, I’ll defend your land for you, but because I have taken on this burden you have to give me unfettered rights to your land.” Faced with an offer they could not refuse, most commoners gave in. Those who resisted lost their ability to pass down their genetic make-up to future generations. It seemed that evolution created the perfect marriage of cowards and kings.

Every once and awhile some throwback like Spartacus or Jesus or Robin Hood would try to set things straight, but who were they kidding?

As societies prospered and grew, kings relied increasingly on their lords to administer to their lands. In return for their service, lords were granted lands upon which they could rule like kings as long as they understood who was boss and paid their taxes. Being the sociopaths they were, lords quickly figured that they could force their subjects, now called tenants, to pay the lords’ taxes for them.

Lords owned their tenants like chattel and that did not change for thousands of years. “They Don’t Call ‘Em Landlords for Nothing.”

Flash forward to the Age of Enlightenment and the American revolution. Yes, the Founding Fathers created something new, but, as a tenant, you should remember that the new rights defined by Thomas Jefferson, John Adams and the rest were only bestowed upon white, male landowners.

The new constitution made property rights sacrosanct. While the founders did understand that the vast new country would expand and property owners (full-fledged citizens) would exponentially increase, they forgot (or did they) that land is, ultimately, a finite resource. The American cowboy humorist Will Rogers (1879-1935) is famously misquoted as advising, “Buy property, they ain’t making any more of that.”

In San Francisco the finiteness of land is demonstrated on a daily basis. Last year, average rents increased more than 13%. I am beginning to hear the same horror stories of bidding wars for apartments reminiscent of the previous dot bomb days of the late 90s.

You hear it all the time, San Francisco is becoming a city for the ultra rich, community is destroyed and those who have to serve us our mocha frappuccinos have to commute from Fremont to do so. We are becoming, as I pointed out in my post, “What’s Wrong With Working in a Bookstore,” San Francisco has become like Stratos, the city in the clouds in the 1969 episode of Star Trek. The “troglites” who create the city’s fungible wealth, are prohibited from living among or partaking in the intellectual pursuits of their masters.

As we all know, San Francisco is a city famous for its restaurants, the diversity and quality of which are world renowned. A couple of years ago I was sitting in the bar at Coco 500 with a dear friend of mine. We struck up a conversation with a guy from Wisconsin who was there with his wife and daughter. The daughter was a student in San Francisco who sighed and rolled her eyes as her old man proceeded to explain why Midwest family values were superior to our San Francisco, liberal, family hating, queer loving anarchy.

Of course, we took the bait and a rather animated discussion followed. At one point, for effect, my friend openly declared that she was a communist. That really got the guy going. He thought that all communists had to be marginal, frayed and broke. He asked, “How can you afford to be drinking in this restaurant.” I piped in, “Rent control, baby, rent control!”

So I am going to answer your question with some questions of my own:

In a market economy based upon products and services is it a good idea to divert larger and larger percentages of disposable income into the pockets of the few who simply cannot spread it around as efficiently as the many?

Should a landlord have the right to increase rents when higher rents destroy the very fabric of community?

Should land be treated as a “market” commodity subject to the laws of supply and demand when the supply is finite and the demand is almost infinite?

In my mind these are the central questions of our times and they need to be answered thoughtfully rather than with slogans and platitudes.

I’d like to hear your thoughts and comments. Start the discussion here. Next week I have a related question from another tenant. In that column I’ll continue to explore this issue.

In the meantime you should check out the OCCUPY related activities sponsored by the San Francisco Tenants Union. And don’t forget to join the worldwide general strike on May 1.

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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  • cedichou

    This is comment bait, but I’ll bite.

    – all landlords are not the 1%. This is a ridiculous claim. Yeah, it was imposed in SF because of a 1% greedy assbag Angelo Sangiacomo. But most are mom-and-pop landlords who buy a 2-unit and rent out the in-law as retirement planning or some kind of safe investment. The 1% income is at $350k/year, a far cry from the rent revenue of a 2BR unit (say $25k/year). Reality check: at 5% interest, you could buy a $1mil building with little or no down payment a couple years back and $50k/year of interest. You’d get half from the tenant, needed $25k of your own. You could do this on an income of $100k. It’s not poor, but it’s 25% of the people in the bay area. http://www.demographia.com/db-sfbay$$.htm

    – a study has shown that rent control does not protect the poor and that a very significant fraction of the people in rent controlled units make six figures income. There are more tenants making over $100k in rent controlled unit than tenants making under $35k. That IS a disgrace: giving low rent units to the rich instead of the poor.

    – landlords in SF did not inherit their units from fealty to the king. They bought it. They have to pay a mortgage and maintenance on the building. The cost for this increases faster than rent control allows. For large landlords, there is enough churn to bring some unit up to market rate. But if you’re a small landlord (as most are), you cannot average out. So mom-and-pop could be subsidizing the living of someone making $100k who pays nothing in rent because he’s been there since 1998.

    – this article is very interesting on the unintended consequences of rent control: http://www.nytimes.com/2012/02/17/us/san-francisco-rent-control-and-unintended-consequences.html

    – the problem of finite supply and infinite demand will ensure that rents go up. Rent control cannot stop this. The perverse incentive of rent control is to artificially hike the rents of open units so as to anticipate as much as possible upfront the later impossible rent increases. It also discriminates against tenants who look like “long term” (since those will take away the future ability to increase rent). So who you’re going to rent to: a 50yo lady and her cat who might stay here 40 years, or two 25yo just graduated girlfriends? And is the answer the person who needs rent control the most? Some landlords even prefer not to rent at all rather than take in a rent controlled tenant. Perverse incentives which reduce supply, and put more pressure on increasing rents of open units.

    – the solution to the mismatch between supply and demand is: a) stop saying the demand is infinite. It is not. Rents were going down in 2003. b) increasing the construction of new units; densifying neighborhoods along the public transport infrastructure. If SF build units for 5,000 people per year, it would create more units than the projected growth, thus creating more supply than demands. http://www.abag.ca.gov/planning/pdfs/SFHousingNeedsPlan.pdf

    – and if the city feels it should provide subsidized housing to its working class, it should do it in a way that does not subsidizes yelp and zinga millionaires and does not hurt the mom-and-pop who rent to them.

  • cedichou

    This is comment bait, but I’ll bite.

    – all landlords are not the 1%. This is a ridiculous claim. Yeah, it was imposed in SF because of a 1% greedy assbag Angelo Sangiacomo. But most are mom-and-pop landlords who buy a 2-unit and rent out the in-law as retirement planning or some kind of safe investment. The 1% income is at $350k/year, a far cry from the rent revenue of a 2BR unit (say $25k/year). Reality check: at 5% interest, you could buy a $1mil building with little or no down payment a couple years back and $50k/year of interest. You’d get half from the tenant, needed $25k of your own. You could do this on an income of $100k. It’s not poor, but it’s 25% of the people in the bay area. http://www.demographia.com/db-sfbay$$.htm

    – a study has shown that rent control does not protect the poor and that a very significant fraction of the people in rent controlled units make six figures income. There are more tenants making over $100k in rent controlled unit than tenants making under $35k. That IS a disgrace: giving low rent units to the rich instead of the poor.

    – landlords in SF did not inherit their units from fealty to the king. They bought it. They have to pay a mortgage and maintenance on the building. The cost for this increases faster than rent control allows. For large landlords, there is enough churn to bring some unit up to market rate. But if you’re a small landlord (as most are), you cannot average out. So mom-and-pop could be subsidizing the living of someone making $100k who pays nothing in rent because he’s been there since 1998.

    – this article is very interesting on the unintended consequences of rent control: http://www.nytimes.com/2012/02/17/us/san-francisco-rent-control-and-unintended-consequences.html

    – the problem of finite supply and infinite demand will ensure that rents go up. Rent control cannot stop this. The perverse incentive of rent control is to artificially hike the rents of open units so as to anticipate as much as possible upfront the later impossible rent increases. It also discriminates against tenants who look like “long term” (since those will take away the future ability to increase rent). So who you’re going to rent to: a 50yo lady and her cat who might stay here 40 years, or two 25yo just graduated girlfriends? And is the answer the person who needs rent control the most? Some landlords even prefer not to rent at all rather than take in a rent controlled tenant. Perverse incentives which reduce supply, and put more pressure on increasing rents of open units.

    – the solution to the mismatch between supply and demand is: a) stop saying the demand is infinite. It is not. Rents were going down in 2003. b) increasing the construction of new units; densifying neighborhoods along the public transport infrastructure. If SF build units for 5,000 people per year, it would create more units than the projected growth, thus creating more supply than demands. http://www.abag.ca.gov/planning/pdfs/SFHousingNeedsPlan.pdf

    – and if the city feels it should provide subsidized housing to its working class, it should do it in a way that does not subsidizes yelp and zinga millionaires and does not hurt the mom-and-pop who rent to them.

  • Tweety

    As a tenant in a 1995 building, I know this pain well. Most of us in the building received notice of a significant rent increase to start next month. It will force us to look elsewhere to rent and SF will lose more great residents. Rent control is a difficult subject and unfortunately, not a single solution that solves all problems. I agree with @cedichou that the issue of supply and demand is the largest contributing factor to the painful existence of renters in this city. There are plenty of areas where new development can happen without disturbing the fabric of San Francisco.

  • Tweety

    As a tenant in a 1995 building, I know this pain well. Most of us in the building received notice of a significant rent increase to start next month. It will force us to look elsewhere to rent and SF will lose more great residents. Rent control is a difficult subject and unfortunately, not a single solution that solves all problems. I agree with @cedichou that the issue of supply and demand is the largest contributing factor to the painful existence of renters in this city. There are plenty of areas where new development can happen without disturbing the fabric of San Francisco.

  • wc1

    Although I sympathize with the letter writer, she has effectively been living in a rent controlled building for the last 7 years. Her landlord could have been raising the rent every year but hasn’t. I find it hard to believe that she didn’t expect that her rent was going to get raised at some point.

    As to rent control, I have no problem with a housing subsidy for those in need. If the people in SF agree that we need to help the less fortunate with housing then this cost should apply to everyone as a tax, and not on the backs of private property owners and newcomers to the city.

  • wc1

    Although I sympathize with the letter writer, she has effectively been living in a rent controlled building for the last 7 years. Her landlord could have been raising the rent every year but hasn’t. I find it hard to believe that she didn’t expect that her rent was going to get raised at some point.

    As to rent control, I have no problem with a housing subsidy for those in need. If the people in SF agree that we need to help the less fortunate with housing then this cost should apply to everyone as a tax, and not on the backs of private property owners and newcomers to the city.

  • wc1

    [quote]- a study has shown that rent control does not protect the poor and that a very significant fraction of the people in rent controlled units make six figures income. There are more tenants making over $100k in rent controlled unit than tenants making under $35k. That IS a disgrace: giving low rent units to the rich instead of the poor.[/quote]

    We have two sets of friends who make well over 100k who are living in rent controlled apartments. One couple pay 1275 for a 1 bed in the Castro (not sure of the other couple).

    This couple decided that instead of buying in the City, which would only increase their outgoings on housing, they would by a house down south and are renting it out. The rental income covers the mortgage for the house and their rent here in SF.

    Not only are they living essentially rent free and can afford so much more, but they are keeping a perfectly nice affordable 1 bedroom off the market for someone who actually needs it.

  • wc1

    [quote]- a study has shown that rent control does not protect the poor and that a very significant fraction of the people in rent controlled units make six figures income. There are more tenants making over $100k in rent controlled unit than tenants making under $35k. That IS a disgrace: giving low rent units to the rich instead of the poor.[/quote]

    We have two sets of friends who make well over 100k who are living in rent controlled apartments. One couple pay 1275 for a 1 bed in the Castro (not sure of the other couple).

    This couple decided that instead of buying in the City, which would only increase their outgoings on housing, they would by a house down south and are renting it out. The rental income covers the mortgage for the house and their rent here in SF.

    Not only are they living essentially rent free and can afford so much more, but they are keeping a perfectly nice affordable 1 bedroom off the market for someone who actually needs it.

  • Milky Teltron

    You should only have as much land as you can protect without servants.

  • Milky Teltron

    You should only have as much land as you can protect without servants.