I hope someone can hear my voice for the rent control in the bay area. I hope someone can understand our feeling and suffering as a landlord.
First we need to understand why the rent is so high in the bay area.
As we learned in the school or college, all kinds of failure or success in the business come out theoretically from the demand and supply. The major cause is lack of supply of housing to driving up the rent. However, if the rent reaches the certain point, it should attract more people to invest in the housing market to alleviate the rental market. However, since the house price increases dramatically, like in the Cupertino area, same house increases from $365K in 1996 to $2018K in 2018, comparing the rent increase from $1200/mo in 1996 to $4200/mo in 2018. The house price increases by 453% while the rent only increases by 250%. The cash flow is reduced by half, ie, the return rate from 3.9% down to 2.4%. If we take the property tax of 1.25% into account and insurance etc, it may get 2.4% before and 1% now. Tell me why I want to take the hassle to get into the rental market? That is why it is short of the rental house.
Also it is not easy to become a landlord. So many years, we, as a landlord, suffer a lot or even tortured by the bad tenants. I have at least 3 bad experiences during the period when I enter to rental market from 2008.
The first bad tenant was in the San Pablo area, a section 8 tenant, Jeaneane. She got a good position as occupation community outreach coordinator in San Francisco. I didn’t realize it dragged me into the terrible life. At the beginning she delayed the payment of the rent just after a few months. I called and texted she made up a lot of excuse. When I contacted her several time during the month she said I harassed her and treated her rude. As a landlord, just like a beggar, I needed to beg her many times to get the rent payment. There were about 9 months passed by. There are a lot things broken as well, like the garbage disposal, it was broken and replaced several time. I even found the nail inside the garbage disposal and there was a hole to the outside. The toilet and sink had been back up many times. Sometime, I needed to skip the lunch to take one hour to drive there and cleaned it up by myself and back in another hour to back to work.
I couldn’t stand with it. I decided to sell my house. When I started the process, she brought up bunch problem. First, she told me the storage room under the stair case had mold. I immediately hired the mold professional to do the inspection and mold test. We found the room had been flooded. It looked someone deliberately flooded the place before and caused the mold condition. I spent at least $5000 to remove the wall and cleaned up the mold. This was not the end. She brought another issue. She took the picture of mouse feces and told me there mice inside the house. Then, I hired another rodent pest control professional to catch the mice. I spent another $1200 for setting the traps and sealed the holes. The service must cover a year period. After a several months, she finally found a place to move out. She even asked me to pay her back $30 for the food taken by the mice and asked me to return the security deposit at the same time she moved out. After her left, I found out she didn’t pay for the water bill, I needed to pay her water bill with $200 fine from the HOA. During those times, I had many sleepless night. It was really a nightmare to rent to this kind of people.
There are 3 more cases. I will publish it when I have time.
Tell me who will like to become a landlord. This is not the easy money. I worked day and night to earn it. Sometimes, the tenant called me at 3am in the morning for the plumbing or leaking problem while most of the people were still sleeping. I hope they will learn the housing market getting worse after the rent control. Under rent control there will be less and less houses coming out in the rental market. Who will suffer? The renter. They don’t even find the rental house. Like recently, it is a real case, a section 8 tenant, she stayed in the hotel and had spent 2 thousand dollars in the hotel. She showed up no security deposit after she got the approval from the housing. We couldn’t accept it. Finally she became homeless. She became so angry and sent us tons of foul language and even told us she would revenge on it or committed suicide. This is the result of the rent control.
If I have time, I can write up more stories to describe the landlord life. Sometimes, it just looks like a beggar -- a beggar to beg for the rent money from the tenant. They just don't pay for the rent and leave the house for foreclosure or force to sell the house. Sometimes, it looks like a janitor, even worse, to clean up the tenant manure in the toilet by hand.
The best solution for the lack of housing is to control the price of the housing. Increasing the house supply can suppress the house price. If the return rate or cash flow for the rental market increases more than the saving interest in the bank, it will attract more investors for rental house investment so as to alleviate the housing issue in the bay area.
