Showing posts with label Rent Control. Show all posts
Showing posts with label Rent Control. Show all posts
Wednesday, May 31, 2017
What types of buildings are subject to Rent Control in SAN JOSÉ
The current San Jose rent control ordinance only applies to triplexes and larger buildings that were built before Sept. 7, 1979 and excludes:
• Multifamily units built after September 1979
• Rental units located in a building containing two or fewer dwelling units
• Single family homes
• Condominiums
• Townhomes
• County property within San José’s boundaries
Thursday, March 3, 2016
Stop Rent Control in Mountain View
I received this email from SILVAR:
Call for Action!
Stop Rent Control in Mountain View
Call it “rent stabilization,” call it “binding arbitration,” call it whatever you want, it is still the City of Mountain View deciding how much a property owner is allowed to raise rents. This is bad for our community and bad for business!
Come tell the City Council NO to binding arbitration in Mountain View!
Tuesday, March 15
6:30 p.m. until late
500 Castro Street, Mountain View - City Council Chambers
In late 2015, the Mountain View City Council voted against rent control. They did, however, vote to “look at” what a binding arbitration program would be like. Now staff has completed the proposed ordinance. See how bad it is:
Binding arbitration IS rent control!
· The City will determine by what percent a property owner can raise rents every year. This is an arbitrary number picked by the council.
· The City will ban raising rents more than once in a 12-month period, regardless of a property owner’s business needs.
· It will only apply to three or more unit buildings built before February 1, 1995. The City would be placing the responsibility for affordable housing on owners of older properties.
· If a property owner raises rents twice in a year, or above the amount set by the City Council, or if there is a different rental dispute, the tenant can take the property owner to voluntary mediation followed by binding arbitration. The property owner must then prove to the arbitrator that the rent increase was “reasonable.”
Binding arbitration is bad for Mountain View!
· The City has not said how much it will cost, but “fees” paid by property owners will fund the program. Adopting a program without knowing the financial impact on property owners is wrong.
· It is unclear who the arbitrators will be, and there is no requirement they have any experience in rental housing issues.
· The Ordinance does not even say for how long the arbitrator’s decision will apply!
· The City already adopted a mandatory long-term lease program (“Right to Lease Ordinance”) and has not given it enough time to see what impacts it will have on the housing market.
Contact Government Affairs Director Jessica Epstein at jepstein@silvar.org or (408) 200-0108 if you have questions or are planning on attending the meeting.
Wednesday, October 12, 2011
Selling or Buying a Short Sale Rental Property in a Rent Control Neighborhood
Be careful when you are selling or buying a short sale rental property in a rent control neighborhood.
Below is a list of California Bay Area Localities With Rent Control Ordinances:
City of Campbell
City of East Palo Alto
City of Berkeley
City of Fremont
City of Hayward
City of Oakland
City of San Leandro
City of San Jose
City of San Francisco
Before buying or selling a rental property in a city with rent control, you should consult a real estate attorney familiar with the Rent Control Board of the particular city in which the rental property is located.
For example, what happens if in the months leading up to the short sale, the tenants threaten to move out and in response the landlord drastically reduces the tenants' rent? Will this set a new monthly rental base with which the new owner must use in calculation of his future potential monthly rental rate? Or does a long history of higher market rental rates take precedence over a few short months at the drastically reduced rental rate? One real estate attorney associated with the Oakland Rent Control Board stated that as soon as the owner dropped the rent, he created a new rental rate that was subject to rent control.
The new owner would inherit the drastically lowered rent as his base and could not raise the rent for the existing tenants back to market rate. This killed off any interest from real estate investors.
In one case study, the seller did drastically lower the rent to his tenants soon after putting his investment property on the market. Did the seller unwittingly hurt his own chances of selling? Maybe that was exactly what the seller wanted. It was a short sale, and the seller might have simply been trying to collect as much rent as possible before losing his property to the bank.
To the seller faced with renters who are threatening to leave, then it might be in the seller's best self interest to lower the rent. This has two advantages in the mind of the short sale seller. #1) Better to collect some rent rather than no rent, and #2) The owner collects free rent for longer before losing his home. Making the property less attractive to buyers effectively delays the sale of the property. Since the deal no longer appeals to real estate investors, it will take longer to find a buyer. Only buyers willing to buy and live in Oakland as their primary residence will still be interested.
Every extra month of delay is extra rental income for the seller. However, when faced by an owner attempting such tactics, the banks would probably save a lot of money by simply foreclosing, booting out the tenants, and selling the property as a vacant unit. That seller is counting on his hope that a bank will not respond in this manner.
Disclaimer: I am not a real estate attorney. This discussion is just so you know what issues to think about and what questions you should ask. The bottom line is whether you are selling or buying a short sale property in a rent control neighborhood, you should consult a real estate attorney familiar with the Rent Control Board of the particular city in which the rental property is located.
Below is a list of California Bay Area Localities With Rent Control Ordinances:
City of Campbell
City of East Palo Alto
City of Berkeley
City of Fremont
City of Hayward
City of Oakland
City of San Leandro
City of San Jose
City of San Francisco
Before buying or selling a rental property in a city with rent control, you should consult a real estate attorney familiar with the Rent Control Board of the particular city in which the rental property is located.
For example, what happens if in the months leading up to the short sale, the tenants threaten to move out and in response the landlord drastically reduces the tenants' rent? Will this set a new monthly rental base with which the new owner must use in calculation of his future potential monthly rental rate? Or does a long history of higher market rental rates take precedence over a few short months at the drastically reduced rental rate? One real estate attorney associated with the Oakland Rent Control Board stated that as soon as the owner dropped the rent, he created a new rental rate that was subject to rent control.
The new owner would inherit the drastically lowered rent as his base and could not raise the rent for the existing tenants back to market rate. This killed off any interest from real estate investors.
In one case study, the seller did drastically lower the rent to his tenants soon after putting his investment property on the market. Did the seller unwittingly hurt his own chances of selling? Maybe that was exactly what the seller wanted. It was a short sale, and the seller might have simply been trying to collect as much rent as possible before losing his property to the bank.
To the seller faced with renters who are threatening to leave, then it might be in the seller's best self interest to lower the rent. This has two advantages in the mind of the short sale seller. #1) Better to collect some rent rather than no rent, and #2) The owner collects free rent for longer before losing his home. Making the property less attractive to buyers effectively delays the sale of the property. Since the deal no longer appeals to real estate investors, it will take longer to find a buyer. Only buyers willing to buy and live in Oakland as their primary residence will still be interested.
Every extra month of delay is extra rental income for the seller. However, when faced by an owner attempting such tactics, the banks would probably save a lot of money by simply foreclosing, booting out the tenants, and selling the property as a vacant unit. That seller is counting on his hope that a bank will not respond in this manner.
Disclaimer: I am not a real estate attorney. This discussion is just so you know what issues to think about and what questions you should ask. The bottom line is whether you are selling or buying a short sale property in a rent control neighborhood, you should consult a real estate attorney familiar with the Rent Control Board of the particular city in which the rental property is located.
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