San Francisco, CA · Member since 2013 · 52 posts · 12 votes
I recently gave my Section 8 tenant a 60 day notice of a rental increase from $1,095 to $1,300. Section 8 reviewed my request and only approved an increase to $1,200. Any one know what my options are from here? I'm working under the assumption that I am allowed to increase the rent to what I deem as market rate (1,300). If the tenant wants to stay, they will have to cover the portion Section 8 doesn't? If they don't want to stay, then we terminate the lease?
Rental Property Investor · Oakland, CA · Member since 2011 · 3k+ posts · 2k+ votes
12y
You are in Oakland my dear!! Because the just cause/eviction rules are in place, what just cause do you have to end the lease? (aka get them out of apt). Nonpayment of rent? Owner-occupying unit? Will not agree to lease substantially similar to prior lease? No, no, and no? You might be stuck.. If I could go to any below-market-rent building in Oakland w/ just-cause protections and end the leases with the tenants because they are not market rate (sec 8 or not), I would be a rich rich man by now.
You actually have it better than most out there, because without Section 8, you would still be sitting at lesser rents than your $1200 AND still not have the ability to end a lease! You're probably going to have to consult a good eviction lawyer in Oakland if you want to pursue it, but the difference to market is actually very small relative to most of what I've seen in Oakland. It is very difficult to have all or even most units at market rents in Oakland. And the city is very landlord-unfriendly if you end up in a dispute. Part of my hesitance to dip into Oakland, given prices today.
good luck though, and be careful if you're going to take action against your tenant without excellent legal advice. There can be BIG repercussions!! The tenant is like the proverbial "customer" in Oakland.. They are always right!! (even when theyre wrong)
Real Estate Investor · Santa Cruz, CA · Member since 2009 · 267 posts · 73 votes
12y
Hey Jessica,
Are you initiating the increases in congruence with Oakland's rent control ordinance? I believe the increases are only allowed once every 12 months, and according to the CPI fluctuations for the Bay Area metro region. I know that in San Jose, you can only increase rent by 8% per annum, or 21% every two years. How many units does your building consist of? Have you ever considered exchanging into triple net investments to eliminate management responsibilities?
Dallas, TX · Member since 2013 · 4k+ posts · 744 votes
12y
Jessica,
You can raise the rent but if section 8 approves $1200, it might be better to take it because the tenant could call the case worker and say I want to move, and now you lost guaranteed rent over $100.
San Francisco, CA · Member since 2013 · 52 posts · 12 votes
12y
@Joey Budka - As far as I understand, Section 8 is exempt from Oakland's rent control price caps. In accordance with California and Oakland law, my increase is over 10% so I gave a 60 day notice.
My building has 7 units. For the time being I managing the property to learn the ins and outs but I may consider a triple net in the future.
Rental Property Investor · Oakland, CA · Member since 2011 · 3k+ posts · 2k+ votes
12y
Hi Jessica. I have one sec8 tenant in my Richmond properties, so I can only speak to Richmond housing authority, although I believe the process is similar. The housing authority periodically calculates the tenants contribution, capped at a percentage of their income. In addition, you can petition the housing authority for an increase to get to market rents. But it is the housing authority's decision to decide what is a fair market rent and they pay the portion above the tenant's cap. So u may not be able to go higher if housing authority thinks it is too high. Because at least here in Richmond, the tenant is NOT ALLOWED to pay the extra if they are at their cap (30% of income or so, I believe, w adjustments..). Housing authority will have to pay more, at their discretion on what is market rent.
I would call the housing authority, be really nice to the person on the phone, then find out who you can ask about raising rent to a market rate (and maybe getting some leases to show the market rate). I've done this in Richmond and got a wealth of information. Although they sent out a letter that all increases are on hold due to federal govt sequestration BS. They told me I can give the tenant 60day notice to leave and get a new tenant at higher price. But no increases for existing tenants.. Go figure. Have to throw someone out to get same result. May be different in oak on notice to end lease. Im on hold on that for now because the tenant is hands-off and not quite worth it for the time being..
Call them or stop by for sure! You'd be surprised how helpful they can be if you are nice (and maybe get the right person). A smile in person doesn't hurt either.!
looking forward to speaking with you next Tuesday at the East Bay meetup!
Rental Property Investor · Oakland, CA · Member since 2011 · 3k+ posts · 2k+ votes
12y
I'm realizing now where you are in the process. You probably already filled out the request and they didn't agree with you.
http://www.oakha.org/owner/RIInformationSheet.pdf
the website states that you can provide your own comps, or they will use gosection8.com to establish market rent. Your only mistake is the assumption that you can change to what YOU think is market rent. You have to prove it to them. Or you can take what they give you. But if you want to play the section 8 game, you cannot just pick the rent you want and have the tenant pay the extra. Their game, their rules. Call and ask how you can re-petition and provide leases supporting the amount. But can only petition once per year, so may be too late if the tenant was already notified. Move quick! You are right that you are exempt from rent control w section 8 tenants in Oakland, but still subject to just cause/eviction rules. Good luck, and see you soon!
Rental Property Investor · Oakland, CA · Member since 2011 · 3k+ posts · 2k+ votes
12y
You are in Oakland my dear!! Because the just cause/eviction rules are in place, what just cause do you have to end the lease? (aka get them out of apt). Nonpayment of rent? Owner-occupying unit? Will not agree to lease substantially similar to prior lease? No, no, and no? You might be stuck.. If I could go to any below-market-rent building in Oakland w/ just-cause protections and end the leases with the tenants because they are not market rate (sec 8 or not), I would be a rich rich man by now.
You actually have it better than most out there, because without Section 8, you would still be sitting at lesser rents than your $1200 AND still not have the ability to end a lease! You're probably going to have to consult a good eviction lawyer in Oakland if you want to pursue it, but the difference to market is actually very small relative to most of what I've seen in Oakland. It is very difficult to have all or even most units at market rents in Oakland. And the city is very landlord-unfriendly if you end up in a dispute. Part of my hesitance to dip into Oakland, given prices today.
good luck though, and be careful if you're going to take action against your tenant without excellent legal advice. There can be BIG repercussions!! The tenant is like the proverbial "customer" in Oakland.. They are always right!! (even when theyre wrong)
Rental Property Investor · San Francisco, CA · Member since 2013 · 1k+ posts · 1k+ votes
12y
I'll second j martin's last paragraph: if you intend to go beyond what section 8 agreed to or attempt to remove the tenant (even by gentle persuasion) make sure to consult a knowledgeable attorney. Oakland's tenant/LL operations are second only to SF, and I have heard of tenants walking away with six figure settlements. Remember, the rent board is not on your side! Just be cautious.
Rental Property Investor · Oakland, CA · Member since 2011 · 3k+ posts · 2k+ votes
12y
Couple other things I remembered.. you may end up on a m2m lease with the tenant if the same as up here in Richmond after the initial lease term.
And if you're looking for a lawyer to figure it out, I don't recommend talking to a family member/friend/family attorney who's great at what they do. I'd want to get an attorney that deals with Oakland rent/tenant/eviction law as their main business. It's a crazy world out there.. Don't get caught in an unjust eviction in Oakland!
@Account Closed , it sounds crazy to people that aren't in New York/SF/Oakland etc w/ rent control, but landlords pay out tens of thousands or more sometimes to "buy out" tenants to have them leave. A vacancy is usually like a gift from god if they leave voluntarily. Back up to market rents in a wildly hot and increasing market (depending on exactly where it's at, but it's all going up in these places..). It releases a lot of value too..
Involved In Real Estate · Woodhaven, NY · Member since 2013 · 77 posts · 11 votes
11y
I'm about to start researching "How to raise rent on Section 8 tenants in NYC" however I came to BP first to see what others have experienced and maybe get some answers. I found this post, which was really helpful and thought I would ask if anyone has gone through this process successfully and can offer some helpful tips.
I currently have a two family in Bushwick with two very nice Section 8 tenants. However, my rent is too low and I need to bring them a bit closer to market value to adjust for rising expenses.
Thank you all for listening, any help would be appreciated.
Investor · Berkeley, CA · Member since 2015 · 2 posts · 0 votes
10y
First time posting, long time investor in the Bay Area.
As you know, Richmond City Council passed rent control and just eviction, it was suspended, and will probably appear on a general election ballot next year.
Any ideas on evicting current tenants (while law is not in effect) and replacing with section 8 tenants. Section 8 is exempt from rent control and so perhaps you could get higher rents with section 8 than otherwise. Yes, the rent ceiling is backdated to June 2015, but that is just the rent ceiling, not the just eviction.
Forget the fact they are welfare tenants. Research how to terminate a tenant. If the regulations legally allow you to non renew that is your best course. If they do not and your rent increase is legal then it is their choice to leave if they do not agree to the new higher rents. Research will answer your questions. In the mean time let your leases roll over into M2M leases to allow you the flexibility. You may get lucky by sticking to your guns on your rent increase and insisting on a M2M lease. The welfare handlers may move the tenant solving your problems.
Investor · Berkeley, CA · Member since 2016 · 242 posts · 304 votes
9y
Hey folks,
I'm jumping into this string because it seems like a good place to post a related question.
I own a SFD in Oakland that I want to rent out. Rent control does not apply to a SFD, however just-cause for eviction does.
I would like to rent out the house for 1-2 years and then have the option to sell it, which means I would want the tenants out at the end of the lease. Can I write a lease that says that at the end of the term the lease terminates and if they don't move out then the rent goes up triple. If the tenant signs the lease at the start, they are agreeing to move out or to 3 x rent when the term is over. Does this not by-pass the just-cause issue? The tenants agree to these terms when they sign.
Good idea, or am I missing something?
Thanks!
Ori
@J. Martin know you know a lot about this in our area, would be great to get your insight.