Investor · Mission Hills, KS · Member since 2015 · 59 posts · 11 votes
Hello !
Love this site and great respect for all the Pros helping small timers learn and grow.
Questions out of curiosity.
- What do you think would be the impact of such kind of ordinance in high growth area like San Jose. Would multi family prices really go down and investor move to other cities.
- Can other cities adopt same measures across Bay Area / CA.
- How do existing properties go from being not to being rent controlled or does that not happen?
Here's the link if you haven't heard already:
http://www.sanjoseinside.com/2016/04/20/san-jose-city-council-lowers-rent-control-cap-to-5-percent/
Property Manager / Investor · San Jose, CA · Member since 2013 · 779 posts · 301 votes
10y
Agree with Minh. The previous rent controls were fairly balanced (for rent control). I watched the whole debate online. They are really working in the noise of the issue not doing anything meaningful other than hurting tenants if anyone.
Before all this came up I'm not sure how many landlords actually knew about the exceptions. I personally used them to help me out on a property where rents had not increased in 20+ years. Even then the unit was 40% of market rates.
The law of unintended consequences is going to sting in this case, I have a feeling.
San Jose, CA · Member since 2015 · 4k+ posts · 3k+ votes
10y
@Brad S. Well, the issue is rent control. And in San Jose this only involves properties built up to the 1970's if I recall correctly. So, this wouldn't impact many owners.
And if this passes, you're only talking about a reduction in a few percentage points. I just don't see this making any kind of major impact.
Investor · Mission Hills, KS · Member since 2015 · 59 posts · 11 votes
10y
@Account Closed agree, this probably wont make a dent in san jose.
My concern because i own a 100 year old rental duplex in a neighboring city. It is not under rent control and I have no clue if cities can force impose it in future.
San Jose, CA · Member since 2015 · 4k+ posts · 3k+ votes
10y
@Brad S. Well, who knows what the future may bring. I guess your best plan of action, other than keeping active in the local politics, is to be sure your units are at top market rents. So, if/when rent control was to ever happen, you'd be starting with top market rents.
Investor · San Jose, CA · Member since 2012 · 2k+ posts · 3k+ votes
10y
Brad,
This new rent control ordinance is the sole effort of one individual in my personal opinion (IMPO). It has nothing to do with rent control or the benefits of tenants, but rather it has everything to do with gaining power for this individual unfortunately. Please allow me to explain.
There's over 4,000 buildings under rent control totaling 44,000 units. In the last 16 years, there has been 14 debt pass through petitions for rent increase above 8% due . That's less than 1/year. So about 0.02% of the tenants was being impacted per year. That's like batting 99.98%/year. Almost perfect wouldn't you say? Does it worth wasting everyone's time, efforts and City's resources to try to fix this 0.02%?
For better or for worse, this new proposed rent control ordinance has already backfired on the CSJ. Year to date, the City has already received 7 debt pass through petitions and still counting. Some has petitioned for up to $1,000 rent increase per month per unit. Tenants are receiving 90-day notice to vacate because landlords are revolting to this new rent control ordinance. The Housing Department is inundated with phone calls from tenants' outcry and tenants' advocates. Landlords basically gave the City Housing Department a middle finger. All in all, it's a result of one's selfishness IMPO.
One has to understand that "for every action, there's an equal and opposite reaction." The fact that the existing rent control ordinance is working 99.98% of the time, the Housing Department should have left it alone and enforced what's currently on the ordinance instead of reinventing the wheels. This individual is trying to make the City of San Jose become SF and Berkeley by introducing Just Cause Eviction, implementing a Registry System to track all tenants and landlord's rents and increases, etc...
I could go on, but what's the point? The CSJ is having a housing shortage. Both tenants and landlords are asking the City for more affordable housing. Rather than focusing on solving this affordable housing matter at hand, the City turned its back on the people and chose to stick the issue to landlords who own buildings before September 1979, which are subject to rent control. Sigh....... The backlash has just begun. I expect more debt pass through petitions and evictions to come in the coming months due to one person's selfishness. At the current pace, the debt pass through petitions and evictions for this year alone will likely surpass the last 16 years combined. Thank you very much for your imprudent decision CSJ. You reap what you sow.
Property Manager / Investor · San Jose, CA · Member since 2013 · 779 posts · 301 votes
10y
Agree with Minh. The previous rent controls were fairly balanced (for rent control). I watched the whole debate online. They are really working in the noise of the issue not doing anything meaningful other than hurting tenants if anyone.
Before all this came up I'm not sure how many landlords actually knew about the exceptions. I personally used them to help me out on a property where rents had not increased in 20+ years. Even then the unit was 40% of market rates.
The law of unintended consequences is going to sting in this case, I have a feeling.