The Bay Citizen thanks our sponsors
The Bay Citizen thanks our sponsors
Posted in Housing

Updated 05/13/2011 at 7:38 a.m. PDT

The Small-Time Landlord vs. Big-Time Tenants’ Rights

San Francisco's strong renter protections are a big reason why the city has the region's highest vacancy rate

  • Text Size
  • A
  • A
  • A
By on April 30, 2011 - 2:44 p.m. PDT

landlord 01
Adithya Sambamurthy/The Bay Citizen
Wayne Koniuk inherited a building on Divisadero Street from his father

In San Francisco, one of the toughest places in the country to find a place to live, more than 31,000 housing units — one of every 12 — now sit vacant, according to recently released census data. That’s the highest vacancy rate in the region, and a 70 percent increase from a decade ago. (Scroll down to see a map of vacant housing units in the Bay Area.)

To know one big reason why, ask Wayne Koniuk. By trade, Koniuk fashions artificial limbs for amputees. By habit, he fits prostheses at no charge for people who cannot pay. This has left him a less-than-wealthy man.

But he does have one substantial asset: a Divisadero Street building that his father, Walter, an orthotist, bought in 1970 and gave to his only son in 2001 so Wayne could run his business on the ground floor and Wayne’s adult children would always have a place to live.

“For eternity,” Koniuk recalls his father saying, “my grandkids will always have a place they can go. No matter whatever happens, that building should stay in the family.”

Koniuk, who himself lives in suburban Belmont, gave a half-interest in the building to his older son in 2007 so he could evict a tenant and move in himself. But under San Francisco’s extraordinarily pro-tenant housing laws, landlords can do this only once per building.

So while Koniuk desperately wants to move his younger son into the building’s other four-bedroom apartment, he cannot. He is exploring legal options. Robert Murphy, who has lived there for 30 years without a lease, remains, paying $525.82 a month.

Last spring, Koniuk offered Murphy $45,000 to move out. Murphy’s lawyer demanded $70,000, a sum Koniuk says he does not have. Meanwhile, the city’s Rent Board notified Koniuk that he was allowed to increase Murphy’s monthly rent this year by $2.63.

Related

Murphy did not respond to several phone messages left over a two-week period. Harold Jaffe, the lawyer who wrote the demand letter, said he no longer represented Murphy.

Murphy is afforded extra protections as a renter because he is more than 60 years old. Koniuk might still be able to evict Murphy and allow his younger son, Adam, to move in by invoking the Ellis Act, which would entitle Murphy to about $10,000 in compensation and give him a year to vacate. But doing so would impose permanent restrictions on the Divisadero building’s future use, seriously depressing its value. And should 24-year-old Adam decide to move elsewhere, the Koniuks would be legally required for a decade to offer Murphy his old apartment, at his old rent. Invoking the Ellis Act would also mean that any new tenant to the unit, should Murphy decline the chance to return, would also be entitled to Murphy's old rent amount for many years to come. So the Koniuks would likely opt to just leave it vacant.

Increasingly, small-time landlords like Koniuk are just giving up. One of his Divisadero Street neighbors has left two large apartments on the second and third floors of her building vacant for more than a decade, after a series of tenant difficulties. It’s just not worth the bother, or the risk, of being legally tied to a tenant for decades.

landlord 02
Adithya Sambamurthy/The Bay Citizen
Wayne Koniuk would like to move his son into this building he owns, but is unable to move his tenant out
“Vacancy rates are going up because owners have decided to take their units off the market,” said Ross Mirkarimi, a progressive member of the Board of Supervisors. He attributes that response to “peaking frustrations in dealing with the range of laws that protect tenants in San Francisco that make it difficult for small property owners to thrive.”

Perversely, that is hurting the city’s renters as well, as a large percentage of the city’s housing stock is allowed to just sit vacant, driving up rents that newcomers pay for market-rate housing.

San Francisco is a notoriously tough city for small-time landlords. “It is the dream of every landlord to be a landlord in the most lucrative market in the country,” said Ted Gullicksen, head of San Francisco’s powerful Tenants Union. “There’s no sympathy whatsoever.”

Without strong protections, tenant advocates say, only the wealthy would be able to afford to live here. Countless longtime residents, especially the elderly, would be out on the streets.

This is a consensus view in many circles, as illustrated by a recent feature in The San Francisco Chronicle. “Throwing senior citizens out on the sidewalk is never a good idea, but it isn’t stopping North Beach developer Peter Iskander,” it began.

Left unsaid was that one of the article’s featured characters, Carlo Tarrone, pays $450 a month in rent. Or, more significantly, that Tarrone in 1999 bought (half in cash) a two-unit residential building near Telegraph Hill that the real estate website Zillow values at $1.7 million. Tarrone, whom I interviewed by phone, is by no means poor or facing homelessness.

Koniuk is not a slick developer who aims to toss widows and orphans into the street. He could sell, but he does not want to. He wants to honor his father’s wishes and allow his own sons to live in his own building.

“My name is Koniuk. My sons’ name is Koniuk. My father’s name was Koniuk,” he said. “We should be able to move them into a building we own.”

Map of Vacant Housing Units in Bay Area
Eric Fischer
This map, created using 2010 census data, shows vacant housing units in the Bay Area

A version of this article appears in the Bay Area edition of The New York Times.

Elizabeth Lesly Stevens
Senior writer Elizabeth Lesly Stevens writes primarily about business and finance. A recent transplant to San Francisco, she spent many years in New York as an editor and writer at Business Week, a media-business columnist ... View Profile
h. brown
h. brown
wrote on 04/30/2011 at 4:10 p.m. PDT

So, Mirkarimi wants to change rent control?

I was a bit sad to see a writer of your talent join the Malia Cohens and Sean Elsbernds to attack rent control, but ...

It's pretty hard for me to believe that Ross Mirkarimi wants to challenge laws that protect 70% of SF voters. Whom, I assume he wants to vote for him for Sheriff?

You sure you got that right?

Giants win 2-1 in a mud wrestler in D.C.

In typical fashion, Wilson loads bases in 9th and strikes his way out!

h.

the cheap seats
the cheap seats
wrote on 04/30/2011 at 10:03 p.m. PDT

Mirkarimi would be shooting himself in the foot to try and take away rent control considering a very large portion of his district are renters. However, there is no doubt that renters have too much clout in this city.

Follow me for a second:

If Koniuk can't move his son into the rented unit in the building he owns, then Koniuk's son, or whomever is paying for his son's place to live is directly subsidizing his tenant to the tune of the difference in rent collected vs. rent paid.

This is the rawest, and dumbest form of Robbin Hood politics. San Francisco is forcing Koniuk (or his son) to pay Murphy's rent.

Elizabeth Stevens
Elizabeth Stevens
wrote on 05/01/2011 at 11:56 p.m. PDT

Many thanks for posting...and for the Giants update.

I spoke with Ross Mirkarimi for the story because Wayne Koniuk's building is in his district. The Supervisor had stopped by Mr. Koniuk's workshop a couple of months ago in response to Mr. Koniuk's appeal for help.

Mr. Koniuk showed Mr. Mirkarimi the letter demanding $70,000. Mr. Koniuk had offered $45,000. (TBC also has a copy of the letter, and I spoke with the attorney who wrote it). When speaking with me, Mr. Mirkarimi said that "my jaw dropped" when he read the letter. "That letter is negotiated extortion, legitimized," he said, by the tenant/landlord laws as they have evolved in SF. The Koniuk episode "revealed how greed or special interest can shift [power] to the other [tenant] side."

He then went on to discuss the notion of rental-landlord law reform, and explained the reasons why it is unlikely that anyone would be willing to take on this issue. We are "beginning to see on all sides the unravelling of laws that once worked maybe 10 years ago," Mr. Mirkarimi said. "Unless some sweeping reform assures tenant concerns about not taking very precious housing stock off the renter market, yet make entry and home ownership affordable" and allowing owners to see a way to take possession of their properties, nothing will change. And the current situation is less-than-ideal, "in a stasis, in its own stasis," he said. Any attempt at reform is unlikely because of the "absence of leadership, the political will and leadership that needs to bring together all stakeholders. "

So yes, I am sure I got "that"right.

I don't think that Ross Mirkarimi's willingness to speak about tenant-landlord issues in an open-minded, thoughtful, nuanced way should make him or anyone ineligible to run for elective office. On a more general level, is it not preferable to have people in positions of power willing to refine their positions after seeing, up close, a real-world example of how a law or policy is impacting the life of a constituent?

paul mpax
paul mpax
wrote on 05/02/2011 at 7:30 a.m. PDT

You've based your conclusion on a single incident, is that good journalism? You portray the tenant as "greedy" for asking for $70k but is it fair to do so without also stating the fair market value of the property? $70k on a building worth 2 million doesn't sound so "greedy" specifically when the displaced tenant has to try to find a equivalent unit at market rate; just a guess but that cost per month I'd estimate at close to $3,000/month... do the math $70/3= 2 years at the higher rent. Doesn't appear so "greedy", to me.

Adam Walters
Adam Walters
wrote on 05/06/2011 at 1:30 p.m. PDT

You can't compare the $70k to the value of the entire bulding.

And 70k would be a fair negotiation if Murphy were paying fair rent.

As it stands he's asking for all the money he's paid to rent for the last 11 or so years.

hazy cerements
hazy cerements
wrote on 05/04/2011 at 4:29 p.m. PDT

Thanks again Elizabeth!

"...there are hundreds if not thousands of affordable newly built vacant condos ready for purchase that create homeowernship opportunities without evictions."

http://www.beyondchron.org/news/index.php?itemid=9144#more

Adam Walters
Adam Walters
wrote on 05/06/2011 at 1:34 p.m. PDT

Probably true. Too bad we're talking about renters.

R. Crawford
R. Crawford
wrote on 05/01/2011 at 9:15 a.m. PDT

Mr. Koniuk seems like a wonderful man and I have sympathy for his position. The fact remains however that his "asset" on Divisadero is just that: a piece of inherited wealth.

Mr. Koniuk's desire to give his son the gift of a four bedroom apartment is understandable, but so is the desire for the tenant who has lived there for 30 years to stay in his home. Bringing death bed pronouncements and free prosthetic limbs into the story doesn't change the underlying facts of the case.

Mr. Koniuk controls an extremely valuable asset that he did nothing to earn. The restrictions placed on that asset are designed to make the system more fair. Ayn Rand would deplore this "fairness," but it is part of our values as San Franciscans, as expressed through our city's democratic process.

My understanding that "Facts Trump Opinions," as it says on the bus kiosk on my corner, would seem to preclude Ms. Stevens' bizarre ad hominem attacks on various San Franciscans. Her regular column does the Bay Citizen no favors and is a stain on the NYT when it appears there. Please consider keeping this sort of work on the internet where it belongs.

Dan Berkes
Dan Berkes
wrote on 05/01/2011 at 10:06 a.m. PDT

If I promise to sing a lamentation for the poor property owners in all of the city's vacation spots who've turned their rental housing into 28-day vacation rentals for $3,000 - $6,000 a go, may I have a gold star by my belly button? Or would that simply screw up the writer's whinging?

Scott James
Scott James
wrote on 05/01/2011 at 10:42 a.m. PDT

Hi Dan,

It might not be the focus of this one piece, but that's definitely part of a larger story, and we've done quite a bit of reporting on the vacation rental issue you mentioned (which is being used by some landlords to stay out of long-term rentals and avoid rent control/tenants rights.)

While rampant, the vacation rental scenario you refer to is illegal in San Francisco.

http://www.baycitizen.org/columns/scott-james/vacation-apartment-rentals-lucrative-and/

We reported on this several months ago, and asked if there were any plans to enforce the law. There's been talk, but that's about it.

Best,
Scott

paul mpax
paul mpax
wrote on 05/02/2011 at 7:43 a.m. PDT

Sorry, just because other articles have covered a related topic doesn't excuse the poor journalism represented in this column: where are the facts that justify the conclusion implied in the headline?

hazy cerements
hazy cerements
wrote on 05/01/2011 at 10:52 a.m. PDT

Millionaires and billionaires trying to convince the rest of us how unfair life is for them is really a sign of the times on so many levels.

hazy cerements
hazy cerements
wrote on 05/01/2011 at 11:07 a.m. PDT

http://www.ceoperspective.com/bios-elizabeth-stevens.html

What is "CEO Perspective Group" some kind of Koch Bros front sounds like.

"Elizabeth Lesly Stevens brings nearly two decades of media experience to CEO Perspective Group's impact practice. In addition to advising executives on influence and visibility, she coaches select media and technology leaders...."

hazy cerements
hazy cerements
wrote on 05/01/2011 at 11:13 a.m. PDT

Does this mean 'senior financial-services executives' are becoming small-time landlords now?

"A longtime New Yorker, she now lives in San Francisco with her husband, a senior financial-services executive."

Aurelian Howard
Aurelian Howard
wrote on 05/01/2011 at 3:15 p.m. PDT

I'd like to know what percentage of those vacant units are owned by small-time landlords and how many are owned by the biggies.

Regardless, that unit may be Koniuk's house but it's been Murphy's home for thirty years, and think there should be a high bar to remove him.

Elizabeth Stevens
Elizabeth Stevens
wrote on 05/02/2011 at 12:07 a.m. PDT

Thanks for your post, Aurelian.

The census data, specific to San Francisco County, was the most specific data I could find. I was not able to get the sort of data you would have liked to see (as would I...) from the SF Rent Board or the other local organizations I contacted. The president of the Small Property Owners of San Francisco said it had no recent, relevant data. Such data are "not statistically kept; it's not the thing you want publicized" given how politically charged the issue is. She said that she knew that there were 11 vacant housing units on tiny Biedeman Street (in the Western Addition) alone.

Best,

Elizabeth

paul mpax
paul mpax
wrote on 05/02/2011 at 7:13 a.m. PDT

So an industry source is reliable data? Especially, when it is purely anecdotal. Even the Census data you use is suspect since it is not weighted for the current economic climate.

Aurelian Howard
Aurelian Howard
wrote on 05/02/2011 at 10:09 a.m. PDT

"Such data are 'not statistically kept; it's not the thing you want publicized' given how politically charged the issue is."

I'm not going to say "that tells me everything I need to know," but it sure does bolster my suspicion that policies lessening tenant rights would, more often than not, go towards enriching companies that own many units all over the city. The Small Property Owners of San Francisco would be gathering and trumpeting that data if it helped their "poor landlords can't live in their family homes" narrative.

Has anyone proposed adjusting the landlord/tenant laws so the rules are different for cases like Koniuk's as opposed to the city's big-time landlords?

Marushka France
Marushka France
wrote on 05/01/2011 at 10:15 p.m. PDT

I would really like to know if Ms. Stevens was hired by this landlord or something similiar and wrote this piece as a part of her services, working for CEO Perspective. It feels like a media piece to me.

I would have preferred more facts, rather than sympathy for any 'good works' of the landlord - or more info about the 'good works' and good tempermant of the tenant.

For example, does the landlord pay property taxes on the full, current value of his property, or does he have reduced taxes because the property inherited? It must also be extremely low, and i'm thinking, relative to the rent he collects. So, monetarily, one good dead, Prop 13 helps him easily keep the property, deserves another good deed, low rent for longterm tenant? This is merely a stream of inquiry.

Lastly, 'media representation' might have gotten it's first big start when big wigs of the early 20th century were encouraged to bequeath large sums of money to universities, giving them lots of ongoing 'good PR', as well as a seat on a university board, and then university boards funded research that benefited the corporations... that's how the AMA got such a foothold on our culture. So I'd really appreciate media pieces be labelled as such - disclosure. In magazines, Ads that mimic news are labelled, even if it is small print at the top of the page.

Thanks for reading.

Elizabeth Stevens
Elizabeth Stevens
wrote on 05/02/2011 at 12:26 a.m. PDT

Thanks for writing, Marushka. The CEO group is run by a woman I have known for many years, and we had informal discussions years ago about a project or two with the firm in a period during which I was not an active journalist. I did not, in the end, engage in any projects for the firm. I was unaware a live web page listed any involvement: None exists.

I have written for The Bay Citizen full-time since May 2010, and I have not engaged in any other paid, professional activities.

The Divisadero building, as any other building in California held by the same owner over a long period, has had its property taxes depressed because of Proposition 13. We have written quite a bit about Proposition 13 and its implications. Here are some links, FYI:

http://www.baycitizen.org/proposition-13/story/death-and-taxes-sfs-gold-coast/

http://www.baycitizen.org/gold-coast-property-taxes/interactive/interactive-gold-coast-prop-13/

http://www.baycitizen.org/proposition-13/story/gallo-fertile-land/

http://www.baycitizen.org/real-estate/story/ting-may-be-states-only-tax-man/

Best,

Elizabeth

hazy cerements
hazy cerements
wrote on 05/02/2011 at 9:12 p.m. PDT

"I was unaware a live web page listed any involvement"

Well it does.

Elizabeth Stevens
Elizabeth Stevens
wrote on 05/02/2011 at 12:35 a.m. PDT

Also, as indicated in the original column, Robert Murphy, the tenant in the story, was asked to comment several times over a two-week period. I left at least three phone messages at his home. I also asked his attorney, who said he and Mr. Murphy were personal friends, to ask him as well. The attorney, who said he no longer represents Mr. Murphy, told me he had been in contact with Mr. Murphy and relayed my request.

If Mr. Murphy does eventually respond, I will post his comment here.

Best,

Elizabeth

hazy cerements
hazy cerements
wrote on 05/02/2011 at 9:51 p.m. PDT

You and your 'senior financial-services executive' husband need to go back to New York.

hazy cerements
hazy cerements
wrote on 05/02/2011 at 9:52 p.m. PDT

Banker a**holes gutted rent control in NY but it's not gonna happen here.

paul mpax
paul mpax
wrote on 05/02/2011 at 7:07 a.m. PDT

Just the facts, ma'am... yet so few are contained in this column.
Jumping to conclusions is rife, though.
For example: the high vacancy rate is blamed on SF's rent control/pro-tenant policies despite the highest unemployment since the great depression and an equally bad economy. So had economy plays no part in the vacancy rate?

I have reread the column but no where does it explain what unit was used for the "once in a life-time" owner move in; was it a smaller unit and the son needs the four bedroom unit? I am asking since the reason the SF law is so strict is because of landlords abusing the owner move-in basically clearing out tenants under this pretext only to re-rent the now vacant unit at market-rate. The lack of the rational for the current law while pointing out a tenant who owns a $1.7 million building shows a bias suitable for a blog but not journalism.

Mark Pritchard
Mark Pritchard
wrote on 05/02/2011 at 9:26 a.m. PDT

The headline and lede seem to have little to do with the experience of the Koniuks. They don't have a vacant unit in their building. I don't see the connection.

Did you talk to landlords of buildings with vacant units to find out why they are vacant? Mirkarimi's explanation of "frustration with the laws" doesn't suffice. The fact is that landlords can charge whatever they want for vacant units, so what's the problem?

Adam Walters
Adam Walters
wrote on 05/02/2011 at 9:29 a.m. PDT

I feel like a lot of people commenting so far are missing the point of the article.

It is simply to make you consider the other side of the rent control debate, and to shed light on the "grey area" between tenants and landlords.

For one thing, the right to own property in is the constitution for the exact reason Walter Koniuk bought it: so your family will have a place to go, forever. Just because their family is fortunate enough to own some and yours isn't does not automatically make them the bad-guy, or extravagantly wealthy.

For another thing, it would appear the Wayne Koniuk is anything but a ruthless landlord. By all accounts he is a kind, hard-working family man and independent small-business owner; the kind of people all you "progressives" want to protect.

And for another point: a two-unit rental building on Divisadero with units stuck at $500 a month? I'm no expert, but it would seem these tenants probably COST Wayne money living there, and that is not right any way you slice it.

Don't forget Murphy does not OWN the building, he pays for the privilege to live there; he has no right to it otherwise.

Stop trying to "fight the man" for a minute and put yourself in the shoes of this father who just wants to do right by his family, the same way all of you would if you were in his position.

judy b.
judy b.
wrote on 05/02/2011 at 10:11 a.m. PDT

This piece is a judgment on who has the right to live where. I think a person who is living a home should have the right to stay, whereas the writer thinks certain people have the right to eject other people from a home and take it over for themselves.

Adam Walters
Adam Walters
wrote on 05/02/2011 at 11:03 a.m. PDT

Judy, imagine you own the building in question.
You have kids that need a place to live, they are out fighting the same rental battle as everyone else.
You have tenants, (yes, they have been there a long time, long enough for it to feel like home)but it is NOT their home. It is YOURS.

Now imagine that they actually cost you money living there, you are told you cannot evict them, and you are told you cannot even raise the rent to an acceptable market value.

All you can do is try to get them to leave voluntarily, but why the hell would they? A four-bedroom for $500 a month is an unbelievable deal, one that should RIGHTLY go to your kids.

If you honestly feel that if you were in that position you'd say "Oh well, that's his home, and even though my kids don't have one he has a right to stay" you are lying to yourself as well as everyone on this board or around you.

judy b.
judy b.
wrote on 05/02/2011 at 12:16 p.m. PDT

Adam: It happens that I will be in this position one day, as there is a house in my family that my parents have rented out for the past 25 years, and my brothers and I will inherit it at some point. When that happens, I will not evict the tenants. Two different families have lived in the house and my parents liked and respected them them both. They would be mortified if we kids - who have done nothing for the upkeep of the house - booted the people who have made that house their home under some sense of entitlement.

One person's investment is another person's home: this relationship can benefit both parties - and it should never value one over the other.

judy b.
judy b.
wrote on 05/02/2011 at 12:18 p.m. PDT

Technically, I guess my parents couldn't be mortified, because they would already be dead; better to say evicting people for personal gain runs counter to our values.

Adam Walters
Adam Walters
wrote on 05/02/2011 at 2:32 p.m. PDT

"under some sense of entitlement?"
are you serious? its YOURS. you are 100% entitled to do whatever you want to with it. if you had a friend offer to pay you 50 bucks a week to borrow your car, it wouldn't become his car just because he got used to driving to work.

"who have done nothing for the upkeep of the house"
landlords pay for general repairs, building upkeep, property tax etc.

"this relationship can benefit both parties - and it should never value one over the other."
Losing money on a four-bedroom unit while your kids struggle to pay rent? Doesn't sound very mutually beneficial to me.

Bren Darrow
Bren Darrow
wrote on 05/07/2011 at 9:08 a.m. PDT

Mr. Walters, you are not "100% entitled to do whatever you want with it" just because it belongs to you. The law places countless restrictions on everyone's use of all property, not the least of which is the common law prohibition against using your property in a way that harms another or abrogates their rights.

The tenant here has paid a sum of rent approaching $180,000 for the right to live in his home. He will not live forever, but while he does live there, his landlord will receive rental income in excess of that which his son or a vacate unit would generate. There is your mutual benefit. Just because the deal his father made 30 years ago is not as lucrative as it once was, doesn't mean the tenant has not paid his fair share many times over. The article conspicuously fails to mention the purchase price paid by Mr. Koniuk's father.

"If you want the same security as a home-owner, go buy a home. Can't afford one? Guess you should have done better in school." You obviously don't have any friends or family who are not as wealthy and successful as you are. Congratulations.

Ted Gullicksen
Ted Gullicksen
wrote on 05/02/2011 at 12:39 p.m. PDT

Actually if one looks at the mapping of the data on vacant units in SF (and the datta does not differentiate between rental and ownership), it's pretty clear that the bulk of the vacant units are in the newly built condominium building in Soutch Beach and South of Market. There are relatoively few vacant units in the neighborhoods where renters live.

o to http://factfinder2.census.gov/faces/nav/jsf/pages/index.xhtml
and query on housing and san francisco to see the breakdown by census tract and a map.

h. brown
h. brown
wrote on 05/02/2011 at 12:46 p.m. PDT

Crawford, Mpax and Marushka,

I also disagree strongly with this piece because I think Ms. Stevens was selling a cherry-picked case which (to me) nevertheless failed to advance her real point which is that SF's 1979 Rent Control (the 'Sangiacomo law') ... she feels it should be overturned. Clearly she's prejudiced as would be most 'Pacific Heights' types.

But, to say she can't write is idiotic. An embarrassment to the NYT? They're plenty able to embarrass themselves without her help. Who can forget their clarion call to George Bush in 2001 to, "Give war a chance."? Longest war in U.S. history and the New York Times assisted in its birth.

Stevens has shown a willingness to give an honest telling of all sides in the Pension Reform story which no one else in town has done. She didn't shy away from casting one of the most powerful men in town (Gordon Getty) in a bad light.

Stevens and the Bay Citizen rock. Not always to the beat that I prefer but you won't get these kinds of substantial responses from ANY other newsroom in San Francisco.

Brandon Belt drove in 2 more for Fresno yesterday. Up to .458

h.

Andrew Ferguson
Andrew Ferguson
wrote on 05/02/2011 at 2:15 p.m. PDT

The Press Conference that SaveMuni SF (savemuni.com) held on March 28 gave a complete examination of the finances and financing of the Central Subway project. There were quite a few charts and graphs with exhaustive explanation of each, showing exactly *how* unfeasible this boondoggle really is.
Unfortunately, the SFExaminer's Katie Worth reported on some other issues which hadn't been covered in that press conference.
(http://www.sfexaminer.com/local/transportation/2011/03/central-subway-design-moscone-center-san-franciscio-called-inefficient).

Financial expert Tom Rubin, CPA brought the data together. He can be interviewed on it should there be any interest.
Tom Rubin tarubin@earthlink.net

I find Adam Walters' comment refreshing: reminding us of the point of the article.

There is a lot of gray area to this subject.
Everyone on both sides has at least one horror story of the evil landlord / tenant.
This is not always the case... hence the gray area.

We need to look at how this can be applied to SF as a whole and in the long term:
Applicable to this subject is the ABAG dictate that SF must build 30,000 new units of housing.

Also throw in all the various bits and pieces that Planning Director John Rahaim was hired to do, and that SPUR has been pushing since Gabe Metcalf took its reins:
"streamline" the new unit building process by "easing" the demolition process, changing the city's zoning: building high, dense, no parking. Cut neighborhoods and any other dissenters and their voices out of the picture altogether.

In all of that, the developers have taken matters -- and the language itself -- into their own hands: one never hears the pejorative term "Manhattanization" of SF any more.
Instead, we hear about "much needed housing" and "get people out of cars."
Both terms refer to the same concept, but the developers have the edge in their language. Developers love to build without providing parking: they can't really profit from garage space.

One must also remember that developers' fees go directly to the Planning Dept, rather than into the SF General Fund, so there is a direct profit for planners to OK the demolition of older, affordable housing and approve new development.

Interestingly, developers have gathered some strange bedfellows into their boudoir. I would guess that many are unwittingly (or at least are unpaid) performing a great service for them in advocating for a dense, tall city of new buildings. (Analogy acknowledged!)

Forgive me if I have taken this subject and run with it to its logical conclusion. These matters are related, and many have not peered down the road to see where we are headed.

Andrew Ferguson
Andrew Ferguson
wrote on 05/02/2011 at 2:17 p.m. PDT

Argh: the first three paragraphs were in reference to another article...
They should not have been included in my Comment; if I could delete them from this I would!

SF Native
SF Native
wrote on 05/02/2011 at 4:53 p.m. PDT

I applaud Ms. Stevens for writing this article. Reading it I was very sympathetic to the Koniuk family’s situation. They are small property owners who want their family members to be able to live in a building they own. They should have that right after reasonable compensation to the tenant is made.

Clearly the rental issues in SF are complex and passions run high. Still, I view Mr. Murphy’s requirement that he be paid the large sum of $70,000 to move out of an apartment, after having already been offered a financial incentive much higher than is required by SF and state laws, as extortion, plain and simple. I also commend Supervisor Mirkarimi for his willingness to take a fresh look at the impact that rental laws are having on small property owners in SF.

Adam Walters
Adam Walters
wrote on 05/02/2011 at 6:18 p.m. PDT

I have to say I'm surprised there are so many people that feel a RENTAL tenant deserves any monetary compensation at all. A month to find a new place should be it.

If you want the same security as a home-owner, go buy a home. Can't afford one? Guess you should have done better in school.

Wayne and his kids should be able to reap the benefits of Walter's foresight to the fullest of their ability.

Charles Jencks
Charles Jencks
wrote on 05/02/2011 at 8:42 p.m. PDT

Robert Murphy, who has lived there for 30 years without a lease, remains, paying $525.82 a month.
Source: The Bay Citizen (http://s.tt/12lM2)

Criminal. & everybody knows it.

Lulu Taylor
Lulu Taylor
wrote on 05/02/2011 at 9:19 p.m. PDT

Finally, an article that provides balance to problems associated with rent control. Bravo to Supervisor Mirkarimi for being willing to listen to another side and hopefully open to leading the city in a new direction.

hazy cerements
hazy cerements
wrote on 05/02/2011 at 10:57 p.m. PDT

All this article really tells me is the real estate people think they have a chance to go after rent control this year.

hazy cerements
hazy cerements
wrote on 05/02/2011 at 11:02 p.m. PDT

Because imagine the pain of the majority of families in SF who don't have the fantastic sums of money to purchase real estate, and can't provide security for their children, who know that at any time a millionaire heir can throw them out and totally disrupt their lives like Caligula playing with condemned prisoners. How much does it hurt to see your children become homeless?

Where I come from, someone who takes the side of rich people over poor people is called the "C" word.....

Claudia Kelly
Claudia Kelly
wrote on 05/04/2011 at 12:00 p.m. PDT

I sold my house on Noe Street because of the relentless attacks on landlords in San Francisco by the Board of Supervisors. Every election there was a measure on the ballot designed to lure the tenant vote--it didn't matter whether it outraged the small landlord or not. That's just a big "So what!, after all they're just milking the tenants for all they're worth"--so goes the Tenants Union reasoning, which is the mirror image view of 90% of the Board of Supervisors.

After 30 years of being a landlord, the last few--following the 1994 enactment of rent control laws covering all units--were so unpleasant that I decided it wasn't worth the anxiety and frustration of dealing with this situation anymore.

I'd also like to point out that I rarely raised the rent--maybe a total of three or four times over thirty years--and certainly never did so in the case of an ill tenant. I had this situation occur about five or six times during my tenure as a small landlord in the Castro district.

Adam  Richmond
Adam Richmond
wrote on 05/04/2011 at 1:35 p.m. PDT

FYI....here's the cached text of the ceoperspective.com bio that was deleted.
Elizabeth Lesly Stevens

Elizabeth Lesly Stevens brings nearly two decades of media experience to CEO Perspective Group's impact practice. In addition to advising executives on influence and visibility, she coaches select media and technology leaders. Over her many years as an editor and writer with Business Week magazine in New York, Elizabeth covered the emergence of the corporate-governance movement, including numerous fascinating corporate takeovers and power-struggles. Then, as Business Week's media editor, she authored many notable cover stories during a time of tremendous growth, ambition, consolidation and convergence in the media, entertainment and technology industries.

She has interviewed U.S. Senators and policy wonks; finance titans from KKR's Henry Kravis to Lazard's Michel David-Weill; visionary corporate leaders from Jack Welch to Bill Gates; a besieged CEO who quietly wept while ticking off his company's problems in an interview (tactfully not mentioned in the resulting story); a financier so excited to be profiled in Business Week that he chose to be photographed for the magazine clad only in a small bathing suit; and media titans including Rupert Murdoch, Howard Stringer, Bob Iger, Richard Parsons, Sumner Redstone, John Malone, and Jeff Bewkes.

Elizabeth was a media business columnist for New York magazine, and executive editor of Brill's Content, Steve Brill's high-profile if short-lived media magazine. She also spent a very educational year as a senior editor specializing in business- and political coverage at Tina Brown's Talk magazine, where she conceptualized and edited noteworthy pieces on Marc Rich, Bill Gates, and an amazing tale of a dissolute British peer and a New Jersey technology entrepreneur who had just gleefully struck a deal with the Taliban for Afghanistan's cell-phone concession.

She was a staff member, contributed to, or provided analysis as an interview subject for New York magazine, Forbes, the Wall Street Journal, PBS's NewsHour, NPR's On the Media, Washington Monthly, among others.

Elizabeth has cheerfully endured her work being covered by the Village Voice, the New York Post columnists Keith Kelly and Liz Smith, the New York Times, and the late Molly Ivins. Given that breadth of experience, her insights and advice are helpful in prepping top executives for key media interviews.

Elizabeth graduated from the University of California and has a master's degree from Northwestern University. A longtime New Yorker, she now lives in San Francisco with her husband, a senior financial-services executive.

Adam  Richmond
Adam Richmond
wrote on 05/04/2011 at 1:41 p.m. PDT

$70,000 is not a bad request for move out and I have lost respect for Mirakarimi if what is quoted here is true. The first number mentioned in a letter from a lawyer to a landlord is the beginning of a negotiation, not the end.

Mr. Murphy will have to leave SF, let alone the neighborhood he had lived in for 30 years. The landlord gets an open unit in an increasingly desirable neighorhood.

Adam Walters
Adam Walters
wrote on 05/04/2011 at 3:06 p.m. PDT

Your Friend: "Hey, can i pay you $25 a week to use your car?"
You: "Sure man, sounds good."

Time goes by...

You: "Yo i need my car back, my son needs to use it."
YF: "Sorry, I've been driving it a long time, I'm really used to it, and can't afford another car."
You: "Too bad bro, I need it."
YF: "Um, tough luck."
You: "Well fine then, pay me more per week so he can afford one."
YF: "Sorry, I'm used to paying $25, really can't afford to pay more."
You: "At least pay for the registration and maintenance then!"
YF: "Nope, not my responsibility. It's your car."
(Finally as a last resort)
Y: AGGGGGH FINE HERES 10 GRAND JUST GIVE ME MY EFFING CAR BACK
YF: "Hmm, well maybe for 40 we can talk, think about how much a NEW car costs."

Absolutely no different. Call that fair?

Claudia Kelly
Claudia Kelly
wrote on 05/04/2011 at 3:11 p.m. PDT

All my units were empty so that I could sell without obstruction. This I accomplished over a number of years, losing a great deal of money in the process.

The goal was to be rid of the property despite the increased income potential from having empty units.

hazy cerements
hazy cerements
wrote on 05/04/2011 at 3:27 p.m. PDT

The goal was windfall profits from a real estate bubble.

Claudia Kelly
Claudia Kelly
wrote on 05/04/2011 at 4:04 p.m. PDT

It was a fixer upper of the first magnitude.

It was sweat equity, and I'm hardly rich. I now have a reverse mortgage on a condo to make ends meet.

hazy cerements
hazy cerements
wrote on 05/04/2011 at 4:24 p.m. PDT

Next time buy a building not under rent control for your real estate speculations.

Or is it more profitable to empty a rent controlled building of its tenants?

Claudia Kelly
Claudia Kelly
wrote on 05/04/2011 at 4:38 p.m. PDT

Buying a single building and owning it for 30 years...

This is speculation?

There was no rent control when I bought it together with my lover.

hazy cerements
hazy cerements
wrote on 05/04/2011 at 5:48 p.m. PDT

WOW 30 years. You must have made a FORTUNE on that building.

Adam Walters
Adam Walters
wrote on 05/04/2011 at 8:50 p.m. PDT

Hazy, either stop trolling or take off the tinfoil hat.

Not everything is a conspiracy and there are good people out there.

Not one person here has said "AGGHHH Let the landlords do whatever they want!!"

The entire point of this is to shed light on the fact that laws put into legislation to stop the ruthless evil landlords DO NOT work for small land owners.

It should not ever EVER make more sense to rent property than to own it. This is clearly broken, and BOTH sides of the argument need to be willing/able to negotiate.

hazy cerements
hazy cerements
wrote on 05/04/2011 at 9:54 p.m. PDT

"Freddie Mac loses $929 million"

http://www.reuters.com/article/2011/05/04/us-usa-treasury-freddie-mac-idUSTRE7437PY20110504

A burn rate of a billion dollars a quarter and I'M the one with the tinfoil hat?

Don't you worry Adam Waters someday soon it's going to make LOTS of sense to own and you just guess why.

Ned Ludd
Ned Ludd
wrote on 05/06/2011 at 3:07 p.m. PDT

I have two empty units (pre-1978 ) for a few years now. How much of a renovation is required to make them “new construction” so that I can rent them to tenants?

Adam Walters
Adam Walters
wrote on 05/04/2011 at 5:34 p.m. PDT

Own[ohn]
–adjective
1.
of, pertaining to, or belonging to oneself or itself (usually used after a possessive to emphasize the idea of ownership, interest, or relation conveyed by the possessive): He spent only his own money.

Rent [rent]
–noun
1.
a payment made periodically by a tenant to a landlord in return for the USE of land, a building, an apartment, an office, or other property.

Lease    [lees]
–noun
1.
a contract renting land, buildings, etc., to another; a contract or instrument conveying property to another for a specified period or for a period determinable at the will of either lessor or lessee in consideration of rent or other compensation.

I do not feel landlords should be able to evict without cause or jack up rents at their leisure.

But this situation is WRONG. Anyone who tries to pretend that legislation which allows tenants to literally hold apartments for "ransom" is downright stupid.

Richmond Resident
Richmond Resident
wrote on 05/04/2011 at 7:56 p.m. PDT

I give Ms. Stevens credit for writing on this topic. It's obviously a heated debate that few are willing to venture into, but one that impacts a wide range of citizens on both sides of the debate within SF. Personally, I'm not a believer of rent control, as I believe market manipulation leads to a wide range of unintended circumstances for all parties involved. I also have a difficult time finding that the person that was willing to make an investment in a building is at fault for wanting to receive a fair market return and have the ability to utilize the property as they see fit.

Having said that, though, I think that both those in favor of rent control and those opposed need to be open to recognizing the pros and cons of both sides. The comments on this article, however, point out what appears to be the harsh reality of such a proposal. Simply stated, it won't work. If you take a fair read of the postings, it's interesting to note that those in favor of the landlord have taken a more open approach. For the most part looking to engage in the discussion and attempting to express their opinions to the pro-rent control commenters. Instead of engaging in an open discussion on the pros and cons, to educate both sides, the pro-rent control response is to harass and belittle the commentators and politicians in the hopes that they'll keep their opinions to themselves. And, if successful, keep the topic off the table.

Personally, I'm willing to listen to both sides and adjust my opinions as appropriate. I only wish I could find a pro-rent control advocate open to the discussion.

Adam Walters
Adam Walters
wrote on 05/04/2011 at 8:52 p.m. PDT

This guy is the opposite of Hazy, and I like it!

hazy cerements
hazy cerements
wrote on 05/04/2011 at 10:06 p.m. PDT

One thing you have right about SF tenants though Adam is we really do like to see all those TIC suckers squeal.... I twist the knife in every chance I get!!!

hazy cerements
hazy cerements
wrote on 05/04/2011 at 10:03 p.m. PDT

YOU ARE NOT WILLING TO LISTEN TO BOTH SIDES...the census data Elizabeth Lesly Stevens cites in her comment indicates that most of the vacant homes are actually all those overpriced new condos no one wants to buy, which has nothing to do with rent control.

The is NO SUCH THING as a small landlord that can afford to have a building just sit empty. Case closed. Think I'm lying? Trot one out!!!! Lets see him!!!!!

Ask the apartment owners association how many of those empty rent control units are owned by big banks and they don't want to talk about it.

Ned Ludd
Ned Ludd
wrote on 09/07/2011 at 10:52 a.m. PDT

I am a small landlord. I have two duplex buildings. I have had two units empty for more than six years because I want to repair the foundation and remodel. If I rent them I will not be able to do the work once I get the permit unless my tenants agree to move out. Payments to tenants to move out seem to be in the $30-50,000 range (this is hearsay and I know of no solid evidence, just anecdote.) Why collect rent, deal with all the hassle of being a landlord just to give back the money after a few years? Rent control is great for property values. In concert with the NIMBY-centric policies of the Planning Department it makes it economically unfeasible to improve or expand existing housing stock. This artificial limit on supply drives prices ever higher.

Aaron
Aaron
wrote on 05/05/2011 at 5:55 p.m. PDT

It is hardly newsworthy that Mr. Koniuk, or any property owner, is unhappy that he cannot evict law-abiding tenants to enrich his own heirs. His position, which can be summed up as, "because my dad said so," is so arrogant and simplistic that it is laughable. If he is so displeased with what Ms. Stevens calls the "bother," or what would more fairly be called the "responsibility," he should sell the building. This owner's inconvenience does not trump this tenant's right to live out his days in the place he has made home, if that is his wish.

Supervisor Mirkarimi might stand a chance of improving the vacancy rates, and therefore the affordability, of housing in his district by investigating the owners of vacant units. If a housing owner hoards vacant properties, thereby artificially inflating market values, he or she should be compelled to put them on the market for sale or rental. The city needs more affordable housing, as Mr. Koniuk's son can no doubt attest.

Finally, I'm disappointed the only renter in a similar circumstance Ms. Stevens could be bothered to get on the record in this article is a millionaire. As she demonstrates, Mr. Tarrone made a poor choice as a subject of a Chronicle column on a similar situation. But he is no better a subject for this column. She offers no substantiation that Mr. Murphy is also a "Big Time Tenant" as her column title implies. And even if he is, she doesn't bother to speculate on what would happen to the many of us small-time renters without these protections.

Adam Walters
Adam Walters
wrote on 05/05/2011 at 7:25 p.m. PDT

I like that there seems to be an interest in this from both sides, but I still feel a lot of people are missing the point.

The point is that there are occasions on both sides that are simply unfair.

Is it fair for a landlord to kick a person from their home for no reason other than to maximize profit? Of course not.

Is it fair that some small landlords are unable to break even let alone make a fair profit? No way. Don't pretend for a second that is ok in any way.

Think about it. Really. $500 dollars a month. Mr. Tarrone lived at that rent and was able to put down half a milly CASH on a house. Really think he couldn't afford to pay more?

Sometimes the situation is so bad that tenants are able to utilize the property as an asset while the actual owner loses money.

Mr. Murphy is literally holding his unit for ransom. And let's be honest: If he has lived somewhere for 30 years at $500 a month and didn't stack any money, should that really be Mr. Koniuk's problem? Meanwhile, he son is being told that "some guy" has more right than him over a BIRTHRIGHT.

Another point: Imagine your faucet starts leaking. Happens maybe once a year. Getting a plumber to fix it is gonna run at LEAST $250. Don't forget this is the landlord's responsibility. In a huge building with tens or hundreds of units this is no big deal.

Mr. Koniuk just lost HALF A MONTH'S rent. Now I have no idea what the circumstances are, but under SF sub-tenant laws, Murphy could rent out as much space as he wants (charging whatever) and be able to remove people for any cause with 30 days notice. It's true, look it up.

This is totally broken.

Al -
Al -
wrote on 05/07/2011 at 10:37 p.m. PDT

>Murphy could rent out as much space as he wants (charging whatever) and be able to remove people for any cause with 30 days notice.

Not true. He's limited to charging whatever fraction of the apartment his subtenants occupy. And I'm not sure he is able to remove people with 30 days notice, either.

hazy cerements
hazy cerements
wrote on 05/06/2011 at 8:24 a.m. PDT

Whoever is compiling the data on the actual number of vacant rental units that fall under rent control and owned by "small-time" landlords (whatever that is in a market where 2 unit buildings start at a million dollars) doesn't want to release it. This article is based on innuendo and propaganda ultimately from some nasty offshore bank probably.

Thanks a lot Elizabeth, and thanks to your "senior financial services executive" husband?

hazy cerements
hazy cerements
wrote on 05/06/2011 at 8:34 a.m. PDT

Because you real estate people have created such a huge ridiculous mess that there aren't enough lawyers in the whole world to clean it up HA HA HA HA HAHAHAHA and your sad little media propagandas.....

http://online.wsj.com/article/SB10001424052748703703304576300151691529610.html

"Foreclosures Trapped by a Lack of Lawyers

Moves by banks to ditch law firms snared in the "robo-signing" mess are spreading delays and confusion to borrowers, while angering judges grappling with thousands of foreclosure cases now trapped in limbo.

The trouble began when U.S. banks and government-owned mortgage giants lost confidence in some law firms that handled a huge volume of foreclosures. After controversy erupted last fall over the shoddy review of loan documents known as robo-signing, banks dropped some law firms.

Finding replacement lawyers who can pick up the slack quickly has been a struggle...."

hazy cerements
hazy cerements
wrote on 05/06/2011 at 8:35 a.m. PDT

Shadow inventory: google it.

Adam Walters
Adam Walters
wrote on 05/06/2011 at 10:05 a.m. PDT

Hazy, this isn't an article about shady mega-banks doing what they do.

This is about rent control- and how laws put into place to stop ruthless mega-landlords are choking the life out of the little guy.

By the way, dude its 2011. If you are still living under the assumption that a milly is some unbelievably high number that hardly anyone can achieve you need to open your eyes. That bracket has moved up to tens of millions.

Also, owning property that is worth a mil is not the same as having a mil in the bank.

hazy cerements
hazy cerements
wrote on 05/06/2011 at 1:15 p.m. PDT

Dealing with people who don't think a million dollars is a lot of money has always been a problem for renters.

hazy cerements
hazy cerements
wrote on 05/06/2011 at 1:46 p.m. PDT

Rent control is definitely the problem.

http://www.theblaze.com/the-wire/6539350/fannie-mae-reports-8-69-billion-loss-for-q1/

Fannie Mae reports $8.69 billion loss for Q1

WASHINGTON (AP) — Mortgage buyer Fannie Mae is reporting a loss of $8.7 billion for the January-March quarter, and asking for an additional $8.5 billion in federal aid.

The new request is more than three times the $2.6 billion in government aid it sought in the final three months of last year.

The government rescued Fannie Mae and sibling company Freddie Mac in September 2008 to cover their losses on soured mortgage loans. It estimates the bailouts will cost taxpayers about $259 billion.

Fannie Mae's January-March loss attributable to common shareholders works out to $1.52 per share. It takes into account $2.2 billion in dividend payments to the government. That compares with a loss of $13.1 billion, or $2.29 per share, in the same period last year.

hazy cerements
hazy cerements
wrote on 05/06/2011 at 1:55 p.m. PDT

Income Inequality In U.S. Worse Than Ivory Coast, Pakistan, Ethiopia

http://axisoflogic.com/artman/publish/Article_62935.shtml?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+axisoflogic%2FAxisFeed+%28axisoflogic.com%29

As ThinkProgress has repeatedly noted, crucial services and public investments for Main Street America are being gutted as taxes on the richest Americans are the lowest they’ve been in a generation. Yet many Americans may not know exactly how unfair this is, as the country has grown increasingly unequal at the same time. Using data from the CIA Factbook based on the Gini coefficient — a measure of income inequality within a society — ThinkProgress has assembled the following graph, which demonstrates that the United States is now about as economically unequal as Uganda and more unequal than countries like Pakistan or the Ivory Coast:

Income inequality in the United States is actually higher than at any other time in modern history since the Great Depression. There is also a tremendous amount of inequality even in life expectancy, with the American Human Development Index reporting in 2010 that there is now a 6 year gap in average life expectancy between Mississippi, in the Deep South, and Connecticut, in prosperous New England.” As ThinkProgress previously reported [see TP report below], one of the major factors in this hike in income inequality has been the decline of unionization in America.

Brandon Butera
Brandon Butera
wrote on 05/06/2011 at 2:11 p.m. PDT

For all those on the side of the tenant please clear something up with me. According to the article:

"Robert Murphy, who has lived there for 30 years without a lease, remains, paying $525.82 a month."
Source: The Bay Citizen (http://s.tt/12lM2)

$525 a month for a four bedroom apartment? I pay $1910 a month for a three bedroom in Davis. Shouldn't it be much higher for SF?

Why is it so low? I must be missing something or else this is insanity.

hazy cerements
hazy cerements
wrote on 05/06/2011 at 2:26 p.m. PDT

The whole story sounds fishy doesn't it?

Landlords are allowed annual rent increases to keep up with inflation so something is wrong with this picture huh?

Al -
Al -
wrote on 05/07/2011 at 10:34 p.m. PDT

It wasn't an unusually low rate 30 years ago. Since he's still there, he's still paying the same rate (with limited increases). Just like an old lady living in a multimillion dollar house might pay $2000 a year in property taxes while her neighbors pay $30,000.

hazy cerements
hazy cerements
wrote on 05/06/2011 at 2:30 p.m. PDT

If the owner has owned the building for 30 years his mortgage payments must be zero. His taxes must be negligible. What's the problem?

Brandon Butera
Brandon Butera
wrote on 05/06/2011 at 2:41 p.m. PDT

Are you kidding me hazy? I'll take the word of the journalist on the accuracy of the info until someone else with a valid source proves otherwise. I don't care what his mortgage payments or taxes are, $525 for rent in SF for a four bedroom apartment is like robbing the landlord. That does not represent the value of the place in any conceivable manner.

hazy cerements
hazy cerements
wrote on 05/06/2011 at 2:48 p.m. PDT

If you want to talk about robbery lets talk about 9 billion dollars taxpayers are going to give Fannie Mae this quarter to prop up your obscene real estate bubble.

There's a robbery going on alright.

Fannie Mae reports $8.69 billion loss for Q1

http://hosted.ap.org/dynamic/stories/U/US_EARNS_FANNIE_MAE?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2011-05-06-16-58-01

hazy cerements
hazy cerements
wrote on 05/06/2011 at 2:51 p.m. PDT

"I'll take the word of the journalist on the accuracy of the info"....because you're a sheep?

Brandon Butera
Brandon Butera
wrote on 05/06/2011 at 3:21 p.m. PDT

Did you know that whatever Fannie Mae does has NOTHING to do with what were talking about.

Here is a metaphor of your logic:
You go kill someone
You cite that Scott Peterson killed his wife
Therefore you are innocent since Scott Peterson is guilty

$525 a month is still pennies on the dollar.

I'm guessing your citing of Fannie Mae has to do with some hate of propertied or wealthy people. If you do your research you'll know Fannie Mae is a government sponsored enterprised used by Congress to support low income affordable mortgages (risky) and that is why they are sucking up taxpayers dollars, so take your complaints to Congress, but back to rent control.....

Brandon Butera
Brandon Butera
wrote on 05/06/2011 at 3:22 p.m. PDT

Oh and I take the word of a journalist more seriously than a random person commenting online yes, if that is the definition of a sheep.

Question Now
Question Now
wrote on 05/09/2011 at 7:23 a.m. PDT

Do not believe landlords who claim they are not making money. They would not be in the business if they were not making money. Supposed losses that landlords report merely disguise lucrative ways of making profits.

There is no robbing the landlord-- the % of what the landlord makes over time is a great windfall. A lot of experienced landlords don’t actually pay tax, and if they do, it isn’t much. Landlords only have to pay tax on the net profit they make, which is normal income tax.

As long as housing prices continue to rise landlords will still e earning fantastic profits, regardless of what figures appear on their cash flow statements. Also, it is likely that rents will rise at approximately the same rate as housing prices, so that in future years our landlord will be charging higher rents for the house, even though the costs will not have risen as rapidly.

Letting residential property is considered a “business”, even if only one property is being let. Multiple properties is also seen as one business, and not split up per property

The first thing we need to do is identify the two different sources of income from investment property. The first is equity appreciation. This is a primary strategy for some real estate investors, who target undervalued real estate, or real estate in areas likely to increase in value, and then buy and hold until they decide to sell. There are many types of rental property, and even in a down market like today's (or especially in a down market) you can make money this way.

The second income stream is rents. A lot of landlords buy up properties and hold onto them indefinitely, living off the rents, which will increase proportionate to the finance expenses of the property the longer you hold it. Although some landlords may focus on one strategy or the other, the truth is that both are in play for any given property.

the IRS gives you a lot of deductions for owning rental property, including the ability to depreciate the entire property (the structure of the building, that is, not the land) and appliances or equipment you use for your rental business. For that reason, the effect on your bottom line at tax time could actually be to reduce your tax liability.

when looking at comparable investments, such as the stock market, it is customary not to deduct what you expect to pay in income or capital gains tax--
In addition, landlords' mortgage payments are not simply a "cost" for them.

Lets day They are buying the property over a number of years with the rent tenants pay to them. Now after that the landlord owns the building outright, she or he can sell it and pocket the $'s , or continue to rent it out without having to make mortgage payments. This would give the landlord a net operating income in excess of X amount $'s per year.

hazy cerements
hazy cerements
wrote on 05/06/2011 at 3:09 p.m. PDT

Because its called "investigation," Elizabeth. Fired yet?

http://www.sfbg.com/politics/2011/05/06/myth-poor-landlord

"And Stevens’ line about Koniak being a “less than wealthy man” seems a bit of a stretch. He owns a home in Belmont. He owns (free and clear) a building in the city worth well over $1 million. His mother owns another rental building just down the street, as well as a home in the Sunset. “Over the years,” he told me, “my dad bought up properties in the city, and fixed them up and sold them or gave them to his kids.”

Adam Walters
Adam Walters
wrote on 05/06/2011 at 4:02 p.m. PDT

Get a decent job. Get a mortgage you can afford. Buy your own house. Your father, who also had a decent job, did the same thing. When he died he gave you his.

You keep confusing being wealthy and being rich, and yes, there is a huuuge difference between the too.

Owning land free and clear is wealth. Being able to buy a Lambo is rich.

Every house you drive buy in this whole area is worth at million, stop acting like we're discussing ten-bedroom mansions in pacific heights.

hazy cerements
hazy cerements
wrote on 05/06/2011 at 8:30 p.m. PDT

"Every house you drive buy in this whole area is worth at million..."

Not for long at 9 billion a quarter.

MotherLodeBeth
MotherLodeBeth
wrote on 05/06/2011 at 3:47 p.m. PDT

People seem to forget the landlord who is not able to charge a fair market value rent, is basically subsidizing the rent.
Remember the landlord has hefty mortgage payments, property taxes, insurance payments as the landlord each month.

If the city loves helping folks pay cheap rent then the city needs to create a Section 8 type housing assistance plan,where the city pays the difference, so the landlord isn't the one getting stiffed.

Frank Snapp
Frank Snapp
wrote on 05/06/2011 at 5:18 p.m. PDT

We still need, EVERYWHERE IN THE UNITED STATES, renters unions, such as exist in MONTREAL, where we can force rent prices DOWN, which would force real estate prices down, which would help, among many other workable strategies, idiot Americans to wake up and demand more social spending and less military and corporate welfare spending in favor of the kind of social spending that prevents ANYONE from ending up a victim of sit-lie laws. Cheers.

Marushka France
Marushka France
wrote on 05/06/2011 at 11:58 p.m. PDT

Brilliant coverage and perfect solution - it's as fair as it can get.

http://www.sfbg.com/politics/2011/05/06/myth-poor-landlord

Al -
Al -
wrote on 05/07/2011 at 10:32 p.m. PDT

This article doesn't make me feel particularly sympathetic to Mr Koniak.

On the other hand, it's a real issue that someone who gets a two year assignment in another country, who would like to rent out their property (both making some money and providing housing) is discouraged from doing so by laws making it impossible to guarantee that they can move back in when they return. Or an elderly owner, who is not hard up for money, and would be willing to rent at low rates, who is too afraid of getting into a legal battle with his tenants, and so leaves his apartment empty until a family member needs it. Who benefits from this arrangement?

Al -
Al -
wrote on 05/07/2011 at 10:58 p.m. PDT

I am not opposed to rent control in principle. The logic behind it is reasonable, and the private property absolutionists are absurd.

However, there are many, many unintended consequences to rent control which should be examined, because the results may be worse than the problem it was intended to treat. A few:

- eviction controls. In a non-rent-control area, both landlord and tenant have an incentive to keep each other happy. With rent control, the landlord has a huge incentive to evict people, so that he can raise the rent. So laws are needed to prevent this. But the laws have the side effect of protecting assholes who harass their neighbors, who smoke in non-smoking places, etc, because they can claim that they're being evicted unlawfully. As a result, it becomes especially hard for anyone who has a less-than-spotless rental/reference/credit history to get a place. No one can afford to take a chance. It also encourages landlords to not rent an apartment at all, if they plan to use it in the future. Who benefits from that?

- people have to be banned from renting apartments short-term. This sucks for people who are moving into the area, tourists who don't want to stay in a hotel, and residents who go on vacation who might pick up a little money by opening up their house to someone else. (If short-term renting wasn't banned, it could be used to sidestep rent control). Likewise, other deals which could be used to sidestep rent control have to be banned or heavily regulated, from discounts. The board of supes recently passed a rule that allows landlords to offer discounted rent to victims of disasters, and even so they have to jump through bureaucratic hoops to do so. It's a pretty crazy system when you have to pass a special law to allow people to offer LOWER rent! Talk about unintended consequences.

My preferred solution would be for the city to make it easier to build lots of housing, with fewer hoops to jump through-- no parking requirements, less oversight by neighborhood groups which block any attempt to build more housing-- so that people wouldn't have to fight like crazy over the limited amount of housing that exists. I can understand that people object to building six-story buildings adjacent to three story houses, but when people succeed in killing major housing projects like the Ocean Beach safeway and the Haight St Whole Foods (which were originally planned to have dozens of apartments), well, you end up with a shortage of apartments. No kidding!

Mike L'amour
Mike L'amour
wrote on 05/09/2011 at 12:44 a.m. PDT

I have to agree with the majority of other commenters in stating that this is just poor journalism and should be an opinion piece. While it's understandable that a landlord would want to save money and support his son, it is in my view inhumane to displace someone out after 30 years of loyal patronage.

Furthermore, I don't see the connection between the census data and vacancy rate. I believe that the absurdly high rates for a place in San Francisco is the true reason. Ms. Stevens use of Eric Fisher's map is misleading as San Francisco is the (2nd) largest and more importantly densest city in the region, and therefore would have more blue dots by default. That map is simply a reflection of San Francisco's density, and not the high vacancy rates. Invoking such a map in this piece is poor journalism and I feel that Ms. Stevens' credentials as a journalist, critical thinker, member of the rational society are questionable at best.

I'd implore the editor, and NY Times, to reconsider allowing this blemish on an otherwise impeccable institution from reporting any longer.

Question Now
Question Now
wrote on 05/09/2011 at 7:01 a.m. PDT

This is called speculation. The game is played by taking the property off the market-- and then claiming a loss-- meanwhile no fair share of taxes are paid-- and the speculator waits to capitalize on increase in rents with out doing any work.
The renter pays with their labor. The landlords scream that it costs them to
rent properties-- yet few maintain as they should.
The Two rate property system in the U.S. places taxes on land and one on improvements. The tax can go higher on improvements -- it should be the other way around to discourage slumlords and vacant properties that are left to ruin.

Rent Control won't fix the issues surrounding the tax rate system
http://masongaffney.org/essays/Great_Crash_of_2008.pdf

http://masongaffney.org/blog/index.php/2009/02/empty-spaces-how-our-tax-policies-caused-the-present-seizure-by-unbalancing-hard-and-soft-capital/

Question Now
Question Now
wrote on 05/09/2011 at 7:10 a.m. PDT

Correction- the renter pays rent from the efforts of their labor and from their wages after taxes. Renters in most cases cannot negotiate the terms of their wages nor the terms of rents they are willing to pay--

The so called Market is capturing the wealth of communities via rents without giving back to communities- this is hoarding wealth.

If rents were lower can you imagine the money freed up for the economy to jump start itself? Small to mid size business and renters are held hostage to high rents--
This stops the free flow of cash throughout the economy. Small Businesses, the arts - non-profits , services cannot then compete for the rents charged that big corporations can pay.
This is not ok-- this ponzi scheme hurts all and no one is addressing the High Rents and how property owners get away with sucking $ out of the community .

We are now seeing overseas investments in U.S. Income generating Property ( Housing and commercial rental properties) since there is excess wealth in Places like China where investment opportunities are maxing out-
This has already happened to Manhattan-- and also watch this in S.F. and go search property records In S.F. (or anywhere) and see who really own what. It is all public record.

Question Now
Question Now
wrote on 05/09/2011 at 7:31 a.m. PDT

At first glance, it appears that the only money made from owning rental housing comes from rent. In fact, only a fraction of the profit comes from this source. Using "other people's money" is the key to making money in rental housing. Rarely do landlords pay for a rental property entirely with their own money. Tenants buy it for them. Once they find a property to purchase, they find a bank to lend them the money. Even if a landlords had enough money to buy a rental property, they would not. Landlords only put a "down payment" on the house out of their own money, usually ten to twenty percent of the purchase price. A bank or other lending institution loans them the remainder of the cost in the form of a mortgage.

Question Now
Question Now
wrote on 05/09/2011 at 7:44 a.m. PDT

University of Cambridge economist, Ha-Joon Chang, in his book 23 Things They Don’t Tell You About Capitalism, gets right to the point in his very first chapter: “There’s No Such Thing as a Free Market.”

What there is, instead, as Chang points out, are political and moral decisions about whose welfare (economic and other) most deserves to be defended and about whose rights are more important.

Excerpt from his book: : What they don’t tell you

The free market doesn’t exist. Every market has some rules and boundaries that restrict freedom of choice. A market looks free only because we so unconditionally accept its underlying restrictions that we fail to see them. How “free” a market is cannot be objectively defined. It is a political definition. The usual claim by free-market economists that they are trying to defend the market from politically motivated interference by the government is false. Overcoming the myth that there is such a thing as an objectively defined “free market” is the first step towards understanding capitalism.

Question Now
Question Now
wrote on 05/09/2011 at 7:55 a.m. PDT

The value of rent stabilization is that people don't have to move out of a neighborhood that they have provided value to when forces beyond their control start moving rents up. There is nothing un-American about that, and I would say that most people would see the value in that.

DR WAYNE B LANIER
DR WAYNE B LANIER
wrote on 05/09/2011 at 9:29 a.m. PDT

The lack of civility in many of the posts above is depressing.

Almost as depressing as observing decades of the spreading increase of abandoned buildings in parts New York City, filled with squatters living without utilities. I could not see any advantage to renters in that situation. Just urban blight.

A just social compact rationally and fairly protects both landlords and renters, as well as the larger interests of the City.

Carole McLaughlin
Carole McLaughlin
wrote on 05/12/2011 at 7:33 a.m. PDT

any statistics on the number of landlords physically attacked by renters each year? Renters' misplaced sense of empowerment sometimes has dire consequences. Buying a service does not create ownership.

being sued for buying
being sued for buying
wrote on 02/04/2012 at 9:41 p.m. PST

I almost cried when I read your article. Thank you so much for pointing out the other side of rent control and how it hurts home owners/buyers.

My boyfriend just bought a place for the first time in his life. We are both not from SF and didn't realize the craziness of this rent control situation before he bought. And now he can't move in because the tenants won't move out and a legal battle has ensued.

I really wish he could sell it. I would move away from here so fast. It is completely ludicrous that the tenants can use the law to demand so much money from you that it really isn't worth buying.

And for all those that responded about the poor tenant...he has been getting practically free rent for years!

I've made less than poverty level income for years and yet I have never had rent control or collected unemployment or any other assistance. I live simply and have found ways to make due. And I would never consider demanding $70k to move out of someone else's home. How can this man live with himself? How can the system allow this extortion to happen?

More Column Posts

Local Novelist Fights Hollywood, and Faces Long Odds

In 1998, Joe Quirk, a Bay Area novelist, wrote “Ultimate Rush,” a thriller about an adrenaline-fueled messenger who tears through ......
By Elizabeth Lesly Stevens    8/20/11 12:18 p.m. PDT

It’s Not Easy Being the Conservative One

Being the conservative outsider in the San Francisco mayoral race, the position staked out by Tony Hall, is a lonely ......
By Elizabeth Lesly Stevens    8/06/11 11:32 a.m. PDT

A Tax Policy With San Francisco Roots

Henry George, the 19th-century political economist, spent his seminal years in San Francisco. He is no longer a household name, ......
By Elizabeth Lesly Stevens    7/30/11 3:21 p.m. PDT

City's Children Vanish, and City Hall Wonders Why

For Leslie Kossoff, an artist who lived in San Francisco for nearly two decades, her decision to leave the city ......
By Elizabeth Lesly Stevens    7/23/11 10:12 a.m. PDT