“In many cases rent control appears to be the most efficient technique presently known to destroy a city – except for bombing.”— Assar Lindbeck.
In Coastal California, throughout the West Coast, as well as in urban areas to the East, and beyond, there is much talk of the rising cost of housing, the housing crisis, and the need to create more affordable housing.
This article will focus on this subject as it pertains to the Bay Area, specifically the East Bay, though many of the points made here will apply to other cities and regions across the nation.
One of the biggest dilemmas in this subject, is the fact that while many are hoping for or demanding more “affordable” housing, the cost of building housing is doing nothing but increasing, while the amount of available land to build new housing in the inner Bay Area, is shrinking. Much of the city of Berkeley, as well as Oakland, San Francisco and other cities of the greater Bay Area, is already built out. There is a lot more new housing being built on vacant land in the East Bay from Richmond to Hayward, but there’s a limit to how many units will thus be generated, and how “affordable” they will be.
Within this broader issue of discussion of a “housing crisis” and need for more affordable housing, I am seeing more evidence of not only a certain dysfunctionality, but even an unmitigated hostility to ever “smaller” property owners in the East Bay. There are moves by cities in the East Bay and beyond (I’ll mention some issues in Seattle at the end of this article) whereby cities appear to be using illegal means to pass illegal laws. They are essentially bullying small property owners, who are those who have the least access to the legal system to defend themselves: they dont’ qualify for free legal aid as many tenants do, and they do not have the large capital that the larger real estate companies and large scale property owners do.
As well, I find that not enough people know about some of the disturbing trends in both Berkeley and Oakland regarding loss of rights by the smallest of property owners, trends which could in fact imperil some of these owners and make it more difficult for them to retain their own housing.
Some important recent court cases and developments
See these pdf documents for court case documents on recent court cases wherein the city of Oakland has sought to expand controls to single family homes, through the imposition of relocation fees and the claim that rental bedrooms in an owner occupied Single Family Home, are subject to rent control :
In Ballinger vs City of Oakland an Oakland couple sues the city over the unconstitutionality of “relocation payments” to tenants when they seek to move back into their own home. They are being represented by the Pacific Legal Foundation, and there is an article about their case here: https://pacificlegal.org/case/ballinger-v-city-of-oakland/
In Owens vs City of Oakland, an Oakland homeowner sues the city over the claim of the RAP (Rent Adjustment Program) that his rental bedrooms are “rental units” and claim that his single family home is no longer a single family home, but in fact a type of apartment building or multifamily dwelling, so that they argue that rent control applies. Whereas Costa Hawkins state law makes it clear, rent control cannot apply to Single Family Homes.
Also in Oakland, the city supported a ballot measure, Measure Y in November 2018, which passed, and removed exemptions from the Just Cause initiative for owner-occupied duplexes and triplexes. This means that owner occupants of such properties can no longer evict problem tenants if none of the official “just causes” for eviction are found to apply. For instance, if the tenant simply bullies the property owner, this would not be sufficient cause to evict. As a result of the passage of Measure Y, predictably, units would be likely to be removed from the rental market. It appears that 79 such owner occupied duplexes may have been removed from the market in only 6 months after the passage of Measure Y.
How this number was derived: taking info from the current list of owner-occupied duplexes and triplexes registered with Oakland’s Rental Adjustment Program, a public acts request (OPRR #19-1492) done in April 2019 obtained info that there are 608 owner-occupied duplex owners and 206 owner-occupied triplex owners in the City of Oakland, for a total of 814 owner-occupied duplex and triplex owners in Oakland. Yet in the city’s May 7, 2019 Finance agenda report, the city states that for 2019 there were only 529 owner occupied duplexes. This suggests that 608 minus 529 or 79 total owner occupied duplexes were removed from the market. There may be other explanations for this difference in numbers, but given that when rent control laws pass there are always units removed from the market, this could well be the explanation. There are other indications this is only the beginning and many more of the total 814 owner occupied duplexes and triplexes in Oakland may end up no longer available to any renter as a result of this foolish measure. But this doesn’t stop the city…Oakland is now seeking to expand rent control to owner occupied duplexes and triplexes.
As well, those duplex and triplex owner occupants were voluntarily keeping their rents low…. quite low compared to market rates. Now the city is in effect punishing them for their charitable nature by trying to freeze these rents in place.
The May 7, 2019 agenda report by Katano Kasaine, director of finance, shows that the city can identify owner-occupied duplexes and that it knows the average rent the owners are charging: $2,089—which is between 20% and 40% below the median of $2,500 and $2,999 recently reported by the Bay Area News Group in their “Price We Pay” report.
Also, there are 529 owner-occupied duplexes in Oakland—not 4,000 falsely published in the Oakland City Measures in November 2018 and claimed repeatedly by Leah Simon-Weisberg, the Berkeley lobbyist who wrote Measure Y, which was written specifically to target these owners and take away their right to a time-limited lease. (Noel Gallo and Rebecca Kaplan subsequently forwarded Ms. Simon-Weisberg’s drafts to the City Attorney, though at the time Ms. Leah Simon-Weisberg was violating Oakland’s Lobbyist Registration Act, and should not have permitted to act as a lobbyist.)
These duplex owners are voluntarily holding rents down—and they continued to do so after Measure Y passed. These numbers show you that the local advocacy groups are not telling the truth about the rent increases they claim are happening in these buildings.
In New York City, where a sweeping rent control measure was passed into law, Mom and Pop landlords are wondering if this means they will be forced out of the market: https://www.amny.com/news/politics/rent-laws-new-york-1.32225521
Meanwhile in Berkeley, the city of Berkeley is apparently helping the Rent Board in trying to remove the exemption from rent control for owner-occupied “Golden Duplexes”, and is arguing that if an owner of such a property has a Living Trust, they should no longer get the exemption from rent control because ” a corporation is not a person”. Never mind that most people with assets use Living Trusts to protect their assets for their relatives and heirs.
These moves by East Bay cities to try to expand rent control, may well fly in the face of the Costa Hawkins Housing Act which you can read about here:
Some local property owners are trying to fight back….there are plans to sue the city of Oakland.
Though there has as yet been no court case which will clarify this, I contend that all rent control is unlawful, as on their face, such laws violate the Constitution of the United States of America, which prohibits the states from from passing any law which impairs the obligation of private contracts. (Article I, Section 10). Though this statement in the Constitution has been interpreted as allowing for legislation over entire businesses or industries (as with rental property businesses), I submit that this interpretation is incorrect, and also unconstitutional. It should be manifestly obvious to anyone who studies the Constitution, that the Constitution provides the Federal Government very limited, enumerated powers. None of these powers include regulating any business or industry. Moreover, as the states, in their legislation, are limited by what the United States Constitution allows, as stated in Article VI of the Constitution. “The Constitution…shall be the supreme law of the land, and the judges in every state shall be bound thereby”.
In addition, rent control laws violate the Constitution’s 14th Amendment due process clause, for taking of private property, which is what rent control amounts to. More on that below.
If you go to the Constitution and examine what in fact are the powers given to the Federal Government, and the state, county and local governments, you might thereby conclude that over 99% of the laws and legislation we have in this nation, are illegal. It’s all unconstitutional. As well, it should be patently obvious from the Constitution, that nearly all, if not absolutely all, of the Federal “3 letter agencies” are totally unlawful. The FBI, CIA, DHS, ATF, BLM, NSA, IRS, FDA, CDC, INH, NPS, and most all other 3-letter agencies have absolutely no basis in the limited and enumerated powers given to the Federal Government in the Constitution. Among other things, as you may have guessed, this means that because the National Park Service is illegal, all National Parks, National Historic Parks, National Monuments, are totally illegal. The Bureau of Land Management is illegal for the same reason. The Federal Government cannot own or operate state lands, except in the case of military or naval, or post office lands, in line with their powers over these in the Constitution. This type of overreach would have appalled the crafters of the Constitution, as they were keen to preserve the sovereignty of the states. All National Parks need to be converted to State Parks, and the NPS must be dissolved. All BLM eg Bureau of Land Management lands, need to be converted to state public lands.
You may then ask, how is that possible and practical? How can a nation, state, county or city possibly run an effective government without all the laws we have to keep order?
The answer is common law. We are supposed to be a nation under common law: that was meant from our nation’s founding, and it’s meant to be the case now. The appropriate role for government in our nation, is to protect people and their property, period. Nothing else. But instead, we’ve moved further and further away from common law, into “civil law” and what’s termed “maritime/admiralty law” or statutory law, or commercial law. Our government has moved from a role of protecting people and their property, to one of preying upon people and their property. Our government has become a criminal monstrosity, and thus must change.
See this article for clarification: http://www.paulstramer.net/2022/06/notice-of-conflict-at-law.html
Common law is on the surface very simple: its basic principle is that people are not to harm others, or other’s property. Under common law, there are no “victimless crimes”, which would itself result in the release of millions of people unjustly and unlawfully incarcerated in this nation. What does “no victimless crimes” mean? It means, for instance, it’s not a crime to speed on the highway, or fail to stop at a red light. A government can recommend that people do not speed, and that they stop at red lights, but it cannot require us to do that, as there is no one harmed by someone, for instance, passing through a red light, when no other drivers are at the intersection or even in sight. It should be clear to any thinking person, that if a government is justified in passing laws based on fears of what “might” happen, if people were free, there would be no end to the ensuing trajectory into complete totalitarianism. Yet this is the trajectory we’ve entered into: increasing government overreach and unlawful action, based on fear and imagined scenarios. In the case of rent control and similar laws, we have an unlawful attempt to do social and economic engineering. Engaging in social and economic engineering is NOT one of the 19 enumerated powers listed in the United States Constitution.
We have seen, not just for a few years, but for many decades, and actually more than a century, increasingly unlawful action by government at every level. You may have many doubts about this, and ask, how it’s possible that our government became so unlawful, even criminal— wouldn’t anyone have stopped things, if it was so obvious that unconstitutional actions were being taken?
This is a whole other story, for another day and another, much longer article. There is a mind-blowing backstory to all of this, which you can begin researching by watching the films called “The Fall of the Cabal” and “The Sequel to the Fall of the Cabal” on Bitchute, by Janet Ossebaard. I also encourage you to do research into State Nationals, and what is the difference between a US Citizen and a State National, and what’s the difference between the legitimate government of the United States versus the Territorial British Government, or the Municipal Government of the United States.
Now let’s step aside from my “big picture critique” and get back into more detailed critique, which doesn’t require that you agree with me on the Constitutional issue, to follow along and see other problems with rent control.
One of the issues involved in rent control, is that without a procedure to guarantee landlords a “Fair Rate of Return”, rent control laws may be illegal. This was determined in the famous 1976 case Birkenfeld vs City of Berkeley, which is discussed here:
And referred to here: https://scocal.stanford.edu/opinion/birkenfeld-v-city-berkeley-30384
Finally, as this excellent article by RS Radford clarifies,
Why Rent Control Is a Regulary Taking
rent control in and of itself is likely to be illegal. Radford points out on page 3 of this article, that:
…no peacetime rent ordinance has ever been upheld against a regulatory
takings claim…..recent empirical studies of rent control in California and Massachusetts, demonstrate the failure of these regulations to meet the Supreme Court’s current constitutional standards….. this article concludes that rent control laws will need to meet increasingly stringent standards to survive constitutional scrutiny under the criteria set forth in recent Supreme Court rulings.
For clarification, it should be noted that rent control originated as a war-time policy (created during WWII) and was actually never intended to continue beyond this short term duration.
Recently, a group of property owners filed a federal lawsuit in New York state, challenging rent regulations there. https://www.nytimes.com/2019/07/16/nyregion/ny-rent-regulation-lawsuit.html
This case will be quite interesting to watch. As is stated in the article:
The lawsuit argues that rent regulations violate the 14th Amendment’s due process clause and the takings clause of the Fifth Amendment, which says private property shall not be taken for public use without just compensation.
As of 2018, only four states — California, Maryland, New Jersey and New York — and Washington, D.C., had localities with some type of rent control. A few months ago, Oregon became the first state to implement statewide rent control.
However, in 2012 the Supreme Court declined to hear a rent control case brought before it:
“Most recently, in 2012, the Supreme Court declined to hear a case brought by the owners of a five-story brownstone in the Upper West Side. Some of the apartments were rent stabilized, meaning they were subject to caps on rent increases and usually allowed tenants to renew their leases indefinitely.
The landlords, James D. Harmon Jr. and Jeanne Harmon, argued that tenants paid around $1,000 a month, or about 60 percent below market rate. They said that regulations forcing them to accept below-market rents represented an unconstitutional taking of their property.”
Further, a recent US Supreme Court case, Knick vs Township of Scott, PA, has ruled that property owners may bypass state courts and file directly in federal court over 5th Amendment issues of illegal “takings” of their private property. This is a very welcome ruling for those harmed by what amount to illegal laws many cities are passing, on rent control or other controls or government takings of private property.
Knick vs Township of Scott
Knick vs Township SCOTUS ruling
A number of other organizations and interests joined this lawsuit via Amicus Curiae filings which can be found here on Pacific Legal Foundation’s website: https://pacificlegal.org/case/knick-v-scott-township-pennsylvania/
The US Supreme Court ruling in this case (which was slight: 4 justices dissented) is very welcome news because it reduces the financial burden that many have in trying to fight back against illegal laws and illegal “takings” of private property. The crux of this issue is addressed in this post on a real estate forum. This is the sum of the issue:
the “ripeness doctrine” created an exhausting, costly, and if you ask me an otherwise punishing process for any property owner attempting to find 5fth amendment relief. As you might imagine, there have been tons of other similar cases that ended up in litigation hell, stuck in the property owner’s own state judiciary unable to make its way to federal courts.
This brings me back to Knick V. Township of Scott. The opinion released today wholly, and with prejudice I might add, removed the “ripeness doctrine”. Using the West Hollywood case as an example, what this means is that if the plaintiff where to file the same suit today, they could avoid the 4-year process of exhausting their state remedies and go straight to federal judiciary from the start.
We can all be tremendously grateful to Pacific Legal Foundation for taking on Rose Knick’s case, because without pro bono representation by this libertarian law group, fighting for property rights, she like thousands of others, would not have been able to afford the costs to fight back against illegal taking by the government. Pacific Legal Foundation makes the point well, that “Federal courts need to stop treating property rights as “second-class” rights and allow property owners to defend their constitutional rights in federal court—just like every other constitutional right.”
It should anger every property owner when, for instance, a group of homeless people set up an illegal encampment on city property, and then when the city seeks to evict them over the nuisance they are causing, they sue the city in federal court on numerous allegations of violations of their constitutional rights, only to lose on every count. This occurred in Berkeley, with the ill-begotten lawsuit filed by members of the Here/There encampment. At the same time, thousands upon thousands of property owners in Berkeley, San Francisco, Oakland and beyond have been denied the very same opportunity to file suit in federal court, with claims far more meritorious than the nonsense concocted by the attorneys representing these homeless activists.
The Trend to Scapegoat Small Property Owners
I see a concerning trend in the San Francisco Bay Area, and it’s a growing tendency to scapegoat property owners, including small property owners with only one property, for the housing problems and housing crisis in coastal California and beyond.
I am concerned about the amount of rhetoric which appears to demonize all property owners, and try to assign blame to them, when tenants have difficulty finding or affording housing. The housing crisis — which affects owners too — and makes it difficult to buy a home, and to continue to afford to live in an expensive home —- is a complex problem, with several causes – not the least of which, is government regulations, fees and policies — which has been decades in the making. Yet human beings pine for simple explanations, and simple answers.
In this article, I argue that the suggested “solution” of expansion of rent control and more restrictions on property owners, a “solution” that the cities of Berkeley and Oakland are attempting to railroad through and sell us a bill of goods, is an “answer” that does not fit the problem at hand. It’s an “answer” that has been politically brewing for quite some time, due to simplistic distortions in understanding the housing crisis and a concerning tendency to demonize property owners. As well, it’s an “answer” that is based on several fallacies or misunderstandings. Such as: (1) the fallacy that rent control is effective in bringing rents down, or that (2) expansion of rent control will help open up more units of affordable housing, (3) small property owners (eg those who own ONE property) are all or mostly “greedy landlords” who are gouging their tenants, (4) no significant problems will be created if no-fault evictions are prohibited and owner-occupants of duplexes and triplexes (who live on the same property as their tenant) end up with a problem tenant whom they can never ever evict.
I’ve noticed it’s a troubling theme, that too often, instead of attending to the root and real causes of problems, if those causes are too difficult to address, people will instead attend to things that are easier for them to control. So this becomes a tendency similar to the “Streetlight Effect”, where people will in the place where it’s easiest to look or assign blame where it’s easier to assign blame. https://en.wikipedia.org/wiki/Streetlight_effect
Eg, they look for lost keys under the streetlight, where they didn’t lose them, instead of several blocks away in the dark, where they DID lose them.
I believe that this is exactly the dynamic that we see occurring when, instead of attending to the real causes of the housing crisis, we find city leaders riding the momentum of scapegoating small property owners and the widespread delusion that rent control reduces housing costs, and trying to pin the housing crisis on the smallest of property owners, sacrificing or crucifying these small operators, because, well, when people are angry they want to see someone PAY. And it’s easier to pick on the small operators than figure out how to stop mega giant real estate companies from buying up lots of single family homes in a city (which SHOULD be going to families or collectives) , how to build a lot more housing, reduce government costs in housing by changing zoning, building codes, reducing permit fees, and coming up with ways for people to collectively buy properties for less and build smaller scale and more affordable homes.
First, let’s look at the housing crisis and some of its causes.
Building Costs Are Higher in California. Aside from the cost of land, three factors determine developers’ cost to build housing: labor, materials, and government fees. All three of these components are higher in California than in the rest of the country. Construction labor is about 20 percent more expensive in California metros than in the rest of the country. California’s building codes and standards also are considered more comprehensive and prescriptive, often requiring more expensive materials and labor. For example, the state requires builders to use higher quality building materials—such as windows, insulation, and heating and cooling systems—to achieve certain energy efficiency goals. Additionally, development fees—charges levied on builders as a condition of development—are higher in California than the rest of the country. A 2012 national survey found that the average development fee levied by California local governments (excluding water–related fees) was just over $22,000 per single–family home compared with about $6,000 per single–family home in the rest of the country. Altogether, the cost of building a typical single–family home in California’s metros likely is between $50,000 and $75,000 higher than in the rest of the country.
….our analysis suggests that the state probably would have to build as many as 100,000 additional units annually—almost exclusively in its coastal communities—to seriously mitigate the state’s problems with housing affordability. Adding this many new homes, however, could place strains on the state’s infrastructure and natural resources and could alter the longstanding and prized character of California’s coastal communities. Facilitating this housing construction also would require the state to make changes to a broad range of policies that affect housing supply directly or indirectly—including many policies that have been fundamental tenets of California government for many years.
In this article,
Andre Shashaty indicates that it is government which is largely responsible for our failure to build adequate housing:
Governments at all levels have been complicit in allowing housing costs to rise year after year, making it impossible for builders to produce housing affordable to working people without government subsidies. There are lots of reasons for this, from building codes to land use regulations that limit density. Most local governments keep driving up the cost of housing and very few of them do anything to mitigate those increases, and even fewer work to reduce the cost burdens they impose.
on the effect of building regulations on affordable housing, Edward Glaeser and Joseph Gyourko indicate that
zoning [regulations] are responsible for high housing costs….the affordable housing debate should be broadened to encompass zoning reform, not just public or subsidized consruction programs.
In this article on SF housing crisis, the author clarifies that it’s the government policy which is the root cause of the high cost of housing.
This article indicates that 25% of the cost of any new home, is attributable to government regulations:
This article clarifies all the regulatory costs in housing construction:https://www.nahb.org/en/research/~/media/ABF9E4DE53084D5F8242CF6BA4EF075F.ashx
Donald McDonald in his book “Democratic Architecture”, points out (pg 24) that
…the labyrinth of codes that makes it very difficult, if not impossible, to build low-income housing. …For example, do we always have to have double walls with insulation, and double-glazed windows to save energy, even in a mild climate like California’s? Which is more important to health: a hallway between the kitchen and bathroom, or not having a kitchen and bathroom at all?
McDonald then asks a very pertinent question:
The objection often raised to code modifcations is that in paring the codes down, the poor receive inferior housing, that they are deprived of the comfort and safety enjoyed by the wealthy, and that injustice is perpetuated. But is that really the point of view of those who are homeless, of families who are forced to share apartments with relatives, or of young couples who cannot afford to buy a house?
In addition to the increase in housing costs when we insist on building everything to the specifications of upper middle class values, there have also been losses of entire styles of housing, based on changes in zoning laws and code provisions. In former times, as Andrew Heben points out (pg 17) in his book Tent City Urbanism: From Self-Organized Camps to Tiny House Villages:
An abundance of single room occupancy (SRO) hotels flourished in US cities of the early 20th century, ranging from rooming houses for the middle class to lodging houses for the lower class. Just within lodging houses, accomodations ranged from private rooms to large rooms broken into cubicles, to bunk rooms.
Ironically, at the beginning of the 20th century, we were better able to house the very poor, than we are now. As Heben points out, changes to the building codes made it impossible to continue to build the SRO housing which was one of the best options for the poor. The minimum square footage for habitable space was increased, and it was then required for each unit to have its own kitchen and bathroom. He writes,
This significantly drove the cost of development up, making it economically unviable to build very low-income housing on the private market.
Thus the theoretical improvement in the standard of living, as reflected in increased requirements in the building code and changes to the zoning code, actually has reducedthe standard of living for many, as they now live on sidewalks instead of in the now-prohibited bunk rooms in an SRO. Additionally, since it is impossible to build private housing that is affordable for the very low income, housing for these populations is now dependent on government subsidies, which are in ever shorter supply.
Heben summarizes (pg 20) by saying that
The building code has come to mandate middle class norms and eliminate simpler housing options that are perceived to negatively influence adjacent property values.
One alternative to the standard large middle class unaffordable single family home, is the tiny house.
The tiny house movement is producing zoning questions which cities need to explore. Tiny houses are simpler, tiny houses are more affordable. Tiny houses put the dream of home ownership within reach of many. Tiny houses blur the distinction between homes and RV’s. Some municipalities are leading the way in terms of openness to regulatory changes. In Spur, TX tiny houses are allowed as primary dwellings. In Quixote Village in Olympia, WA, a former homeless tent camp has become a tiny house village of 30 homes with a central kitchen and shower/laundry area. Emerald Village in Eugene OR and Community First Village in Austin Tx, as well as Om Village in Madison WI, SEcond Wind Cottages in Ithaca NY, and River Haven in Ventura CA and Dome Village in Los Angeles, offer residents a place to live with a buy-in cost of only $10-30k in many instances. These are experimental solutions which have yet to be applied on a large scale, and to more municipalities, but I think they are very important examples of what can be done to provide more affordable housing.
Other examples of ways that housing costs can be decreased by relaxing building codes and zoning requirements: eliminating the energy-savings requirements in building, such as use of double glazed windows and regulations on insulation. Reducing minimum room size and unit size. Reducing ceiling height requirements. Eliminating the requirement that many cities have that there must be on-site parking spot for each unit. Reducing permit fees and inspection requirements. Relaxing regulations on grey water systems, and electrical and plumbing hookups. Eliminating the regulations which require new housing in a residential neighborhood to be of a similar type to existing housing there. Allow residents to live in RV’s , treehouses, tents or yurts, or unheated cabins lacking electricity or plumbing, on their own properties, or rent out such space. Revise city zoning laws so that SRO’s/rooming houses/lodging houses can be again constructed to provide housing for the lower income individuals.
Minneapolis for instance is seeking to change single family zoning to address this issue:
This more recent article on Minneapolis’ ending of single family zoning also indicates that one of the primary causes for our “housing crisis” around the nation, is government policy:
The first sentence in this article: “Housing is one area of American life where government really is the problem…. And perhaps the most important reason is that local governments are preventing construction…. Cities are in constant evolution, and we’ve limited that evolution by mandating that two-thirds of the city is exclusively single-family,” said Jacob Frey, the mayor, “.
Then, this NYT article
points out that more and more cities and even whole states are beginning to question the single-family-home zoning premise that has become nearly “gospel”, entrenched in city and suburb design across the nation:
“Single-family zoning is practically gospel in America, embraced by homeowners and local governments to protect neighborhoods of tidy houses from denser development nearby.
But a number of officials across the country are starting to make seemingly heretical moves. The Oregon legislature this month will consider a law that would end zoning exclusively for single-family homes in most of the state. California lawmakers have drafted a bill that would effectively do the same. In December, the Minneapolis City Council voted to end single-family zoning citywide. The Democratic presidential candidates Elizabeth Warren, Cory Booker and Julián Castro have taken up the cause, too.
A reckoning with single-family zoning is necessary, they say, amid mounting crises over housing affordability, racial inequality and climate change. But take these laws away, many homeowners fear, and their property values and quality of life will suffer. The changes, opponents in Minneapolis have warned, amount to nothing less than an effort to “bulldoze” their neighborhoods.
Today the effect of single-family zoning is far-reaching: It is illegal on 75 percent of the residential land in many American cities to build anything other than a detached single-family home.
That figure is even higher in many suburbs and newer Sun Belt cities.”
One can see the problem visually — for instance in San Jose California, 94% of the city is zoned for single family homes:
But not everyone is in line with the goal to allow such dramatic changes in single family home zones, and in California recently, Senate Bill 50, introduced by Scott Weiner, failed due to opposition from suburban areas. https://www.latimes.com/politics/la-pol-ca-california-sb50-failure-single-family-homes-suburbs-20190522-story.html
Having lived in several different kinds of neighborhoods, from strictly suburban, to dense urban where single family homes are mixed in with large apartment buildings and smaller 3 to 10 unit buildings, to less dense urban areas with single family homes, duplexes and triplexes, I can say that the latter definitely feels best to me. Suburban settings are innately alienating landscapes, as they are not places one is drawn to walk and explore. Separating homes from business areas means one ends up having to drive to buy a gallon of milk or a bag of apples. Suburban enclaves are also not conducive to social mixing: they do not encourage people to explore. They contain few if any cultural amenities. Leah Gallagher’s book on the sunset of suburbia goes into some of these issues. Then on the other hand, very dense inner city landscapes can also be alienating, as well as those where single family homes are surrounded by large apartment buildings. These are noisy areas, often without sufficient parking. In my mind the neighborhood of homes containing one to four units would be the ideal way to incorporate more housing in traditionally single family home districts. I believe that to keep the areas quiet and neighborly, no more than 4 or 5 units should be allowed on one historically single family home lot in these zones.
Rent Control Causes Housing Costs to Rise
One of the consequences of the housing crisis, has been an obsessive focus by some cities and some tenants, with rent control, as a means of providing affordable housing. When area median rents rise dramatically, tenants and city governments tend to try to impose more controls and more regulations on property owners, whom they believe will experience greater temptations to evict tenants, in order to raise their rents. Some cities attempt to expand rent control laws, or impose heavier fines for violating them, and other cities without rent control contemplate having rent control. In Oakland recently, the City Council, declaring a “housing emergency”, passed a 90 day moratorium on rent hikes and evictions…. in spite of the fact that Oakland has rent control, which already severely limits rent hikes and evictions. (No one bothered to explain how the “housing emergency” created by decades of failure to build adequate housing, might be solved in 90 days) .
San Francisco, taking a page I guess from Oakland’s playbook, then ruled in April 2016 that it was no longer permissible to evict schoolteachers or students during the school year. Also in San Francisco in 2015, A landlord was fined $276,000 for evicting a tenant via the Elllis Act and then turning around and offering the apartment as a short term rental. The city council in Alameda ( a city without rent control laws) passed a temporary moratorium on rent increases in that city in late 2015, during a heated city council meeting in which one person was assaulted. Tenants had become desperate when many were being given no-fault eviction papers, or were seeing their rents increase as much as $500/month.
Economists are nearly unanimous in agreeing that rent controls are destructive. In this article on rent control the following points were made by Walter Block:
In a 1990 poll of 464 economists published in the May 1992 issue of the American Economic Review, 93 percent of U.S. respondents agreed, either completely or with provisos, that “a ceiling on rents reduces the quantity and quality of housing available.”1 Similarly, another study reported that more than 95 percent of the Canadian economists polled agreed with the statement.2 The agreement cuts across the usual political spectrum, ranging all the way from Nobel Prize winners milton friedman and friedrich hayek on the “right” to their fellow Nobel laureate gunnar myrdal, an important architect of the Swedish Labor Party’s welfare state, on the “left.” Myrdal stated, “Rent control has in certain Western countries constituted, maybe, the worst example of poor planning by governments lacking courage and vision.”3 His fellow Swedish economist (and socialist) Assar Lindbeck asserted, “In many cases rent control appears to be the most efficient technique presently known to destroy a city—except for bombing.”4 That cities like New York have clearly not been destroyed by rent control is due to the fact that rent control has been relaxed over the years.5
Rent control is an odd type of law in several ways. First, in a free market economy where we have almost no other form of price controls, it imposes price controls, setting the maximum amount that individuals may charge for accomodations that they are offering. This amounts to forced charity, where private individuals are forced to provide charity to other individuals, who may have absolutely no need for such charity. in fact there are no need requirements or means tests for tenants to benefit from rent control, and many benefit who are actually wealthy individuals. We dont’ tell people that they have to sell their baked goods at such and such a price, and that they must give charity to everyone who buys them — we dont’ insist that people sell their clothing at set prices. And in fact, as Walter Block points out, it would make more sense to have price controls on all other products, except for housing. Rent control scares off investors, developers and it scares off potential buyers — thus reducing the likelihood of investment in or construction of the housing that is so badly needed. Thus Block writes:
The surest way to encourage private investment is to signal investors that housing will be safe from rent control. And the most effective way to do that is to eliminate the possibility of rent control with an amendment to the state constitution that forbids it. Paradoxically, one of the best ways to help tenants is to protect the economic freedom of landlords.
This article provides more info on the destructive aspects of rent control, and points out that rent control reduces the supply of housing:
When a community artificially restrains rents by adopting rent control, it sends the market what may be a false message. It tells builders not to make new investments and it tells current providers to reduce their investments in existing housing. Under such circumstances, rent control has the perverse consequence of reducing, rather than expanding, the supply of housing in time of shortage.
William Tucker in this report states that rents are uniformly higher in cities with rent control, because rent controlled tenants tend to hoard their apartments:
…data I have collected from eighteen North American cities show that the advertised rents of available apartments in rent-regulated cities are dramatically higher than they are in cities without rent control. In cities without rent control, the available units are almost evenly distributed above and below the census median. In rent-controlled cities most available units are priced well above the median. In other words, inhabitants in cities without rent control have a far easier time finding moderately priced rental units than do inhabitants in rent-controlled cities.
This is because tenants in the regulated sector tend to hoard their apartments, forcing everyone else to shop only in the shadow market. Thus, rent control is the cause of the widely perceived “housing crisis” in rent-controlled cities.
Even such a traditionally liberal -progressive paper as the SF Weekly ran an article entitled, “The Case For ending Rent Control” in August 2000. See that article here: The Case for Ending Rent Control . Did you know, for instance, (as stated in this article) that
“Before the late 1970s, rent controls had been enacted in the United States only during times of war and economic crisis. Policy-makers considered the controls to be of temporary use in damping inflation. With the exception of New York City, controls were lifted when the national emergencies receded.”
Rent control removes many units from the housing market, thousands more than do Ellis Act evictions, for instance. The Anti Eviction Mapping Project reports that there were 4014 Ellis act evictions between 1997 and 2014 in San Francisco, a period of 17 years. This averages to 236 per year, which they label the number of “San Francisco Families forced out of their homes.” Yet, since Ellis Act evictions are often done so that the property owner can move themselves or their family back into their property, Ellis Act evictions are just as likely to be oriented to a San Francisco family reclaiming their home. While 236 tenants are evicted each year by the Ellis act, it must be pointed out that in San Francisco it is nearly impossible to evict a tenant through any means other than the Ellis Act. Meaning that a property owner has to go to extraordinary lengths simply to have access to their own property. Some property owners such as the one in this story https://www.nytimes.com/2011/05/01/us/01bcstevens.html never actually are able to move into their own home. This in my view is actually a more perverse situation than price controls on products. The fact that as a business person, one could be effectively imprisoned in a relationship with someone who one has long since lost interest in doing business with, is a feature unique to rent control, which makes the law particularly concerning. This is most notable and egregious in cases where we see the property owner living on the same property as the tenant they cannot evict, and who may be bullying them, as occurred in this case . A video about that latter situation can be seen here: https://abc7news.com/realestate/i-team-investigates-tenant-landlord-dispute/723260/
While Ellis act evictions removed 236 renters a year from other people’s properties, rent control laws themselves kept 31,000 units off the rental market in San Francisco, as reported in this article . This article states that 100,000 units are sitting vacant in the SF metro area: https://www.sfgate.com/realestate/article/An-estimated-100-000-homes-are-sitting-empty-in-13692007.php As well, the recent news about the “Panama Papers” in April 2016, has revealed that money laundering could actually be a significant contributor to San Francisco’s housing crisis. THis article goes into that issue: How Money Laundering effects SF’s housing Crisis . We know as well that foreign investors, increasing those from China, are buying up apartments in US cities, and leaving them empty. This is happening in a significant degree in Vancouver, Canada, for instance — where the “vacancy rate” is reported to be 0.6%. In fact the vacancy rate is likely to be much higher if these investor properties are considered — but as these owners are not renting out their properties, but instead hoarding them off the rental market, they deplete the supply of long term permanent housing in a quite significant manner.
In addition, a growing number of single family homes are not being sold to families at all. They are sold to investors, often large-scale investors, as described in this article: https://www.nytimes.com/interactive/2019/06/20/business/economy/starter-homes-investors.html which says that:
“For decades, single-family homes were an investment primarily for people who wanted to live in them. Real estate investors were around, but they were mostly individuals or small partnerships. That changed with the Great Recession and its aftermath, when investors bought at least two million homes, and almost certainly far more than that, with prices depressed. Large-scale institutional investors bought tens of thousands of homes for less than they cost to build….Once the bargains dried up, the investors were expected to stop buying….Except they didn’t stop. Last year, investors bought about one in five starter homes in the United States (defined as priced in the bottom third of the local market). In this image of properties bought by investors, the light color represents areas where 7 to 10% of SFH purchases are by investors, the middle brown color represents areas with 10 to 14% bought by investors, and the darker brown represents areas where 18 to 27% of single family homes have been bought by investors.
The result is that families compete for a shrinking pool of homes, and prices go up, making housing less affordable even for those ready to buy a house.
All concerns about rent control as law set aside, let us consider the practicality of rent control as a means to provide affordable housing. First, as we have seen, rent control actually decreases the available housing supply, due to the number of property owners who would rather keep their units permanently off the market, rather than have them filled with a rent controlled tenant. Rent control causes tenants to stay in place longer than they would otherwise, resulting in less turnover of units. While the tenants in a rent controlled unit do benefit from the artificially lower price they are paying (and what renter wouldnt’ want to pay the lowest price possible?) , the lower the rent they pay, the more the landlord has to increase other tenants’ rents to compensate for the loss involved in that low rent situation. As well, the less rent paid, the less the landlord can afford to maintain that property, so it is quite common that rent controlled properties become more run down and blighted than those not subject to rent control.
Also, because a landlord has to assume that any given tenant might stay in place a long time, when there is a vacancy, he must increase the rent as much as possible, so as not to lose out over time when the tenant remains and remains. Finally, those benefitting from rent control, can only benefit while remaining in the same place. They are trapped in place, and cannot move. This can cause stress and fear, if for instance the renter has needs arising which would make a move to a different apartment very desirable, but the tenant cannot afford to move because rents in the city have increased so much during the time she was in residence.
Rent control does nothing to make units affordable to newcomers to an area, but rather, for reasons explained above, tends to ensure that newcomers will see higher rents.
The solution to affordable housing cannot be that once you rent a place, you can never afford to move. Rental agreements in the USA are of two types — month to month, and a year lease. No one signs a rental agreement saying that they will be renting the premises for the rest of their natural life. That isn’t how we do business in the US, and yet, that is the implication of rent control — that what was intended to be a business arrangement that could be ended in either 30 days or 1 year by either side, now becomes a form of imprisonment, once for the tenant, who increasingly cannot afford to move out, and secondly for the property owner, forced into a potentially lifelong business relationship with someone they may very well not want to do business with for a lifetime.
The premise of rental housing contracts that are 1 month or 1 year, is that the renter can always find another place to live. In a housing market where it is more difficult to find another place to live, desperate and frightened tenants increasingly view their apartments as their own property, encouraged in this entitled attitude by the rent control laws. Often tenants and property owners alike will assert that “housing is a right” and that people have a right to their housing. I would agree that people have a right to housing, but they do not have a right to stake claims on other people’s property, and doing so on the property of an owner-occupant, who lives alongside the tenant in a small urban setting, cannot be a prescription for happiness. To deny the amount of stress that this can cause the owner, or to place the tenant on an equal footing with the property owner (ignoring the fact that one has set down a lifetime investment to buy this property) is to demonstrate significant disrespect for this small property owner. In essence, a small owner who is denied the right to evict a tenant he or she lives with, is, via eviction control and/or rent control, imprisoned in a lifelong business relationship with that person, and the only means of escape would be to sell their property. How can that be legal, fair, just or right?
De-Control instead of Rent Control
My argument through this article, is that more and more government control, rules, regulations, codes, is what is actually causing the crisis in affordable housing. The solution to affordable housing is therefore most certainly not going to come from still more control, more laws, more fines, more punishments, and more expropriation of private property. Rather the solution will come from de-control, and a relaxation of building requirements, a relaxation of zoning laws, a relaxation of lender requirements, and an abolishing of the discriminatory term “single family home”, which shows a clear bias towards nuclear families and against intentional families and communities.
In addition to the abolition of rent control, something else that would help provide more affordable housing, is to make the process of eviction one which no longer involved going to court, or at least eliminated the option of a jury trial. It should be very simple and reduce time and expense, to have tenant and landlord in an eviction case, simply meet with a judge, as in small claims court, and obtain a result in a few days or at most a couple weeks, instead of the 6 to 8 months it can now take to evict a tenant who fights the eviction or requests a jury trial. (In this case it took 274 days for the landlord to evict the tenant, who actually had never paid the landlord a dime since he first moved into the apartment)
Too many landlords have had to spend far too much money just to evict a tenant who isn’t paying rent, or who is vandalizing their unit, or harassing other tenants, or causing other problems. It is a grave concern to property owners, that someone could refuse to pay rent, vandalize your property, and then when you move to evict them, they could insist on a jury trial and delay the eviction and cause the property owner to have to pay thousands of dollars to wind their way through a long legal process.
First, the government creates obstacles to development in the form of the costs for studies, reports, planning and zoning meetings, permits and inspections, all of which add up to 25% of the cost of construction, and then it creates even greater obstacles in terms of severe restrictions on the type of housing that may be built, and where, and imposes upper middle class values and requirements on those who cannot afford such housing and may not even desire it.
Secondly, the government responds to the housing crisis its own bureaucracy has created, by passing rent control laws, which in effect constitute a partial seizure of private property, by the government, for its own purposes of housing people. Through rent control, government expropriates private property, imposes harsh and unrealistic limits on rent which do not keep up with increasing costs of property owners, and essentially imprisons property owners into business relationships with individuals they may have long since ceased to want to do business with, by prohibiting them from evicting tenants. In some cases, property owners are actually unable to move into their own home and live in their own home, or must pay enormous sums to do so, because the “right” of the tenant to housing is deemed greater than the owner’s rights to their own property. Facing such ominous and indeed sometimes terrifying restrictions, many property owners understandably seek ways to avoid being subject to rent control, being imprisoned in relationships with bad tenants, and being unable to move into their own property when they wish, and consider doing short term rentals instead.
Third, when a property owner does want to move into their own property, Oakland has joined Berkeley and San Francisco in the unreasonable requirement that the property owner pay many thousands of dollars to the departing tenant as “relocation fees.” This policy as well comes from a demonizing and punative approach to property owners, which seeks to shift some of the difficulties of the housing crisis, onto the backs of small property owners. It makes as much sense as requiring a landlord to pay for their tenant’s dental procedure, asserting (even without any evidence) that since the landlord is wealthier and has more stuff, they should be paying for living expenses for someone who has less. An Oakland couple who were thus billed many thousands of dollars for the audacity of wanting to move into their own home, are suing the city of Oakland over this:
Fourth, by increasing restrictions on the smallest of property owners in the city, Oakland and other cities working to apply eviction and rent control laws to owner occupied properties, are perversely making it more difficult for those with least means, to be able to afford to buy or cooperatively buy housing in the city. Such restrictions on the rights of owner-occupants, are much more of a problem for them than for large-scale real estate investment companies and corporations who have the finances and means to much more easily pay for legal expenses and evictions. Thus, by trying to impose eviction and rent control on small property owners, Oakland and other cities unwittingly are ensuring that more and more properties in the city will be owned by the large real estate investment companies, who will increasingly be the only ones capable of doing the property rental business. Oakland will thus make it more difficult for those of average middle class means to own property in the city. This is the opposite of what the city should be doing. As property ownership, perhaps collective ownership, is a better long term solution for people than perennial existence as a renter, the city should be doing all it can to support the smallest property owners, rather than passing laws which make their lives much more difficult, make their ability to pay for their housing more difficult, and which ultimately could lead them to lose their homes.
Fifth and finally — though the city of Oakland and many tenants who are pushing for more restrictions on owner-occupied duplexes and triplexes, believe they are helping tenants…the irony is that they are creating significant obstacles for those very tenants they believe they are helping, to eventually own property in the city. For those who are not super wealthy, owning a property which has space through which one can earn rental income, is perhaps the only way to afford property. By making it much more difficult to run such a rental property, such as by making it impossible to evict a tenant with whom relationship issues or other stresses have arisen, the city cuts off its nose to spite its face.
In response to this argument, I’ve heard some tenant activists say things such as “Well, people shouldn’t buy property if they can’t afford it without rental income” or “They shouldn’t buy if they can’t follow the laws.” These comments seem hypocritical, considering that these tenant activists would likely not agree with the assertion, which one can make in opposition to a demand for affordable housing, that “One should not live in a city where one can’t afford the high rent”, or “As a master tenant, if you end up with a problem roommate or sub-tenant, you should never be able to evict them, but should have to move out of your own apartment yourself and let them stay there. ” One assumes that most tenants have had the experience of a bad roommate. It happens. People sometimes turn out to be different than they appeared during an interview for roommates. To argue that one should just never make the mistake of renting to the wrong person is unrealistic, as well as in attributing sublime magical powers to a property owner that no one has, of having a secret way to predict how someone will behave for the rest of their life.
In the end, small property owners want the same thing, no less, than tenants want– which is to be permitted to live comfortably in their own homes, free of stress and harassment from problem occupants on their own property, and permitted to charge fair rents that allow them to not lose their homes in foreclosure. By allowing them this, and by ceasing to try to impose excessive controls on them, cities would actually make MORE housing available. Cities have not learned what is abundantly clear from many studies and from talking to most any property owner — people can only tolerate a certain amount of regulation and risk, and if the city tries to impose more on them than they can accept, they will go out of business, and this will be a loss both for them and for those they could have housed.
Similar problems in other cities
There are problems similar to what I’ve written about here, occurring in other cities. In some cases the problems are worse than what is occurring in the East Bay. For instance, Seattle recently passed a law, intended to prevent discrimination in rentals, which requires landlords to take the “first in time” ordinance, which requires landlords there to take the first financially qualified individual who applies. This law is now being fought by the Pacific Legal Foundation, the same group which is representing the Ballinger couple in Federal Court in Oakland. Read about their work on this case here:
Thus, this law would prohibit landlords from being able to choose their own tenants! This law also disregards the fact that financial qualifications are only part of what landlords look at when deciding to whom to rent. There are many other issues landlords consider and screen for, and the method by which a property owner chooses a tenant, so long as it does not run afoul of anti-discrimination laws, should not be regulated or limited by any government. If a property owner wants to use astrology charts to decide to whom to rent, that is their perogative. Government cannot impinge upon a landlord’s decision making process.
Having Won their fight on the illegality of the “First in Time” ordinance, Pacific Legal Foundation also had to fight another ordinance, the so called “Fair Chance” ordinance, which sought to prevent landlords from being able to perform criminal background checks on their applicants. Then too, the City of Seattle decided to appeal their loss in the Superior Court and took the case to the Washington Supreme Court. It is being heard there now. Here are some of those court documents: