Investor · Bay Area, CA · Member since 2015 · 19 posts · 14 votes
All wanted to share with you an ongoing heated dsicussions between City of San Jose, Landlords and tenants about rent control. Share your thoughts here and with the city...
Investor · San Jose, CA · Member since 2012 · 2k+ posts · 3k+ votes
10y
Amos,
So they take something that doesn't work elsewhere and try to apply it here. That's typical bureaucracy for you.
Since 2000 until now, they had 14 debt pass through and one capital improvement petitions, that's averaging one/year in a city of more than 1 million people, and they're making a big deal about it. They say they want landlord and tenant to have a relationship while they're squeezing themselves in the middle regulating rent control and collecting permit fees. It's all about building a legacy for themselves, and it has nothing to do with the people IMO. :>)
They say they want to be a leader while it's obvious that they're followers of San Francisco, Oakland and Berkeley. If they truly want to be a leader, they should abolish rent control, but I digress. :>)
If this rent control ordinance passed, I bet they would see more dilapidated buildings as landlords would likely not put money back into improvements as they don't get their returns. My partner and I thrive with these issues. We see opportunities where others don't. In fact, we were strategizing our next move over a golf game yesterday. Life is good when you don't have to work on other people's schedule. :>)
Investor · San Jose, CA · Member since 2012 · 2k+ posts · 3k+ votes
10y
Amos,
So they take something that doesn't work elsewhere and try to apply it here. That's typical bureaucracy for you.
Since 2000 until now, they had 14 debt pass through and one capital improvement petitions, that's averaging one/year in a city of more than 1 million people, and they're making a big deal about it. They say they want landlord and tenant to have a relationship while they're squeezing themselves in the middle regulating rent control and collecting permit fees. It's all about building a legacy for themselves, and it has nothing to do with the people IMO. :>)
They say they want to be a leader while it's obvious that they're followers of San Francisco, Oakland and Berkeley. If they truly want to be a leader, they should abolish rent control, but I digress. :>)
If this rent control ordinance passed, I bet they would see more dilapidated buildings as landlords would likely not put money back into improvements as they don't get their returns. My partner and I thrive with these issues. We see opportunities where others don't. In fact, we were strategizing our next move over a golf game yesterday. Life is good when you don't have to work on other people's schedule. :>)
Yikes. That would be horrible for current owners in San Jose. Thanks for sharing.
Chris,
Current owners, who have rents way below market, are getting royally screwed. Owners, who are getting close to FMR, should be okay IMO. This definitely changes our strategy. As most of our buildings are one to two blocks from SJSU, we're seeing ourselves only rent to students in the future if this passes. With students, you will get a turnover every 3-5 years, which gives you an opportunity to bring the rent to fair market. We will likely stop renting to professionals and families.
For every action, there's an equal and opposite reaction. It's the law of unintended consequences. :>)
San Jose, CA · Member since 2014 · 17 posts · 6 votes
10y
@Account Closed , I think you're right. Unless we get a recession soon, I expect something like this will pass at some point in the near future. Consequently, I'll be leaning away from properties with many 2-3 bedroom units and looking more for studios and 1-beds. I like your thoughts on student rentals. The AirBnB / short-term rental strategy also begins to look even more attractive.
Rental Property Investor · San Francisco, CA · Member since 2015 · 236 posts · 156 votes
10y
Thanks you for sharing this info @Amos M.! I've been trying to decide what to do with my loft in San Jose. Refi and keep renting out to tenants or sell and do a 1031 exchange? I'm also intrigued about the AirBnB route and possibly using my loft as a short term rental or corporate rental of some sort.
Lender · CA · Member since 2015 · 9k+ posts · 10k+ votes
10y
Originally posted by @Account Closed:
If this rent control ordinance passed, I bet they would see more dilapidated buildings as landlords would likely not put money back into improvements as they don't get their returns.
One gal I know that randomly fell into a MFR years and years ago with rent control is the absolute queen of this. Units with long term tenants: She puts as little into them as possible, but documents her doing everything right - like sending the cheapest plumber possible out there if someone complains of a plumbing thing, etc (& not necessarily being any faster than required). Her paperwork is all in order, but it's an absolute bare minimum type thing.
When she finally gets them out, she spends big on fixing the unit up, and boom it goes to market value.
It's really crummy that she is forced by rent control to do this, but when she lists the rent she gets from this units and I start subtracting expenses... she only needs to list like 3 expenses before it's cash flow negative. The long term tenants are a liability, not an asset. You don't spend money/effort to keep a liability happy. You do the bare minimum required by law, thoroughly documented.
Investor · San Jose, CA · Member since 2014 · 167 posts · 146 votes
10y
@Amos M.Thanks for sharing. I have also been following this closely as we have a rent controlled 4 Plex with a couple of tenants paying below market. This is one of the reason we are being extra cautious when looking at properties now.
Investor · Scotts Valley, CA · Member since 2015 · 25 posts · 6 votes
10y
From what I understand, San Jose's existing ordinance only protects units built before 1979. And anything built after 1995 is exempt by California state law.
Is there anything in the new proposal that would affect units built between 1979 and 1995?
Investor · Bay Area, CA · Member since 2015 · 19 posts · 14 votes
10y
@Gene Mattos I believe you're correct the last time I checked. I don't believe that has changed and it's not mentioned in the document.
@Janice Viescas Though not really called out the expectation is all of San Jose not just specific districts.
There was also a proposal to have ARO (Apartment Rent Ordinance) apply for Duplex and possible SFR. This document doesn't call out for a modification to include these rentals.
Investor · Bay Area, CA · Member since 2015 · 19 posts · 14 votes
10y
Wanted to share with you all on some updates below:
Today, a new organization to promote the rights of San Jose rental owners was launched….San Jose Residents for Real Housing Solutions. This is a grassroots organization of local rental owners who have invested their savings, their retirement, and their kids’ college funds into the community to provide quality rental housing for San Jose residents.
The proposed expansion of rent control in San Jose will have a negative impact on these individuals and SJRRHS is standing to unify these owners to oppose the expansion of rent control, educate the community about the effects of rent control, and promote real solutions that will help make housing more affordable.
The website is currently being refined and more information is in the process of being added. The launch will be publicized over the coming days.
It would be appreciated if you would please direct your clients, colleagues, owners to go to this website and sign up with San Jose Residents for Real Housing Solutions.
SJRRHS is raising money to fight rent control and further educate the public, the city, and the city council on the dangers of rent control, promote true housing solutions, and be prepared to take legal or political action should the city council adopt a new rent control policy that is overly harmful to rental owners and investors. A contribution form for SJRRHS is attached to this email.
Thank you for your continued support of the efforts of the CAA, Tri County, and our new grassroots organization San Jose Residents for Real Housing Solutions.
Rental Property Investor · Redwood City, CA · Member since 2015 · 51 posts · 12 votes
10y
Thanks for keeping us posted on the progress here. Affordable housing has its role in community development; however, most people have a complete misconception of what it means to be a landlord. There is this image of everyone being a "Donald Trump" when in reality this is actually a really tough business. Thanks!
Investor · San Jose, CA · Member since 2015 · 11 posts · 2 votes
10y
Regarding San Jose's passage of the 8% to 5%, and this "interim" ordinance...do any of you know what was discussed with respect to duplex's which currently are not under the ARO? I don't believe they were brought under the fold, but I am wondering what was said about doing so coming out of the interim time period.
on what type of units are affected for rent control. See my above link: Also below taken from the San Jose Housing Website:
Apartment Rent Ordinance Coverage Properties that are covered by the City's Apartment Rent Ordinance were built and occupied prior to September 7, 1979. A list of properties that were built prior to this date can be found . If an apartment covered by this Ordinance is rented with a government-funded rent subsidy, the apartment is exempt from the Ordinance. The multiple housing roster linked above is a previously compiled reference listing of buildings subject to the Ordinance. It may not include every address in a building or buildings that were exempt at the date of compilation...
Rental housing developments exempted from the ordinance include single-family dwellings, duplexes, condominiums, hotels, boarding houses, which are rented to transient guests for periods of less than 30 days, nonprofit homes for the aged, school dormitories, rental units owned and operated by any government agency, and any new rental units first rented after September 7, 1979.
Real Estate Agent · Cupertino, CA · Member since 2016 · 4k+ posts · 1k+ votes
9y
We need more landlords putting % of rental income on improvements. Too many slumlords. Tenants need to realize they can only park so many cars and not to keep any non functional vehicles on premise. That goes with work vehicles....Jim's Septic Tank service as an example......
Populist 'socialist' shift is happening. These are groups funded by big politicians in California and other states. Some are national organizations pushing rent control
Campbell, CA · Member since 2017 · 1 post · 0 votes
9y
I'm looking around for a rental property and there seems to be many 4plexs coming to market of San Jose recently. 1) do you guys think the rent controll is causing this rush to sell? 2) now that the supply is high, what do you think of buying a property even though its rent controlled for a better price?
SF Bay Area, CA · Member since 2016 · 31 posts · 5 votes
9y
The California Assembly proposed making ALL rental units--even those built after 1995, single family homes, multi-family--subject to rent control. That would make it statewide. California is looking worse and worse for even being a home owner.