Rent Control Sacramento: The City offers a Bandaid to slow the bleeding

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Sacramento is the fastest growing big city in the State of California.  The capital city has seen a 9.4 increase in rent, three times higher than the national average and double the states average.

With rents averaging $1700, the Capital city has become an attractive and lower cost alternative to renters in the San Francisco Bay Area and Los Angeles County.  The city has become popular with Millennials.  Sacramento, is the third most popular destination after Seattle and Nashville.

The new arrivals aren’t challenged by the rent prices

In Sacramento, fewer landlord are offering yearly leases ,opting for month to month agreements where they can increase rents with a 30 notice.     Many long term renters have experienced several rent increases this year.    After 16 years in a South Land Park Apartment, one tenant received 3 rent increases in less then seven months. Her dishwasher and disposal hasn’t worked in more than two year.  Today her rent is 62% of her income and she is not alone.    Sacramento’s eviction rate is more than twice the state average.

Fast Facts 

Don’t believe the Hype, not everyone is leaving California for Texas, Nevada, Oregon and Arizona, the state’s population continues to grow.  Nearly 40 million people call the Golden State Home.    There is a housing shortage in most population centers in state with Sacramento being one of the worst in the nation. According to Yardi matrix , Sacramento ranked 90 of the 96 markets. While Sacramento needs 2700 units annually to meet demand, only 593 apartments were completed in 2017.

While there has always been a need for affordable housing, the city eased requirements shortly after the Real Estate bubble burst and reduced funding for the program.

The Basic Myth 

Rent control will stop construction on new housing units……..

In most cities in California, (including Sacramento) apartment construction are at record levels.   Even in cities with existing rent control laws.  Developers set the rent on new developments,  once occupied, the cities rent controls would apply.   

Passage of Proposition 10 in November would allow California cities to place rent controls on new development. 

 (If the developer cant make a viable profit they may choose not to build.)

Tenants will not leave their rent control apartments, resulting in an shortages.  

The objective data, doesn’t support this.

 

Sacramento’s 

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It very clear, Sacramento’s Mayor Darrell Steinberg’s and some members of the city council do not support any form of rent control.   His support of temporary measures disappointed many attending the rent control workshop last night.

Steinberg: “I do not favor permanent rent control in our city,” “I believe building more affordable housing is the best way to stabilize rents. 

  Funding for affordable housing may take 7 to 10 years. The reality for his constituents is they needed rent relief yesterday. They needed relief the first hour he took office.

(Government:   I want you to know we understand what your going through, needing shelter from the rain.  Currently there isn’t funding for umbrellas.   I have instructed my  has been instructed to locate funding.   Finding a source may take some time, but I assure you we will make this a top Priority. After a few necessary meetings with governmental agencies,  we should get funding for that umbrella you clearly need in two years, nine years tops! )  

Mayor Steinberg, supports a cap of 5% on annual rent increases that would expire after three years. The cap, would apply to apartments older than 20 years.

This is a slap in the face for renters in the city.  He has excluding more than a few thousand apartments units, built during Sacramento’s last building boom between the late nineties to 2007. What happens to rents after the cap expires? 

Council members Steve Hansen, Eric Guerra and Rick Jennings suggested mediation be available to tenants if a landlord attempted to raise the rent by more than 6 percent.  Their plan would also make it mandatory for landlords with more than five units to offer 18-month leases, which Jennings said isn’t as extreme as rent control and would help stabilize rental rates.“  According to their proposal, if a tenant who receives a rent increase of more than 6 percent within a 12-month period requests mediation, they must still pay rent, plus the 6 percent increase, until the dispute is resolved.

Mediation?  Rent control let talk about it?  This proposal is completely absurd! 

This was clearly written by individuals who a have close ties with developers or own property in the city.  Rent control isn’t a new language, there isn’t a code to crack.  Not only is there several resources available members of their staff could make calls to cities along I-80 as  Richmond, Berkeley and San Francisco have rent control legislation in place. There is nothing ambiguous in those cities agreements.  In San Francisco, rent increases are limited to 6% a year*  no meetings, the landowner would need to get permission from the city to increase rents beyond the cap.   (* The landlord can exceed the cap if capital improvements are required) 

 

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Sacramento currently needs 2700 units of new housing annually.  In time, the demand  will only increase.  The city’s homeless population is growing by the hour. Sacramento has joined, San Jose, San Francisco and many other cities with employed individuals living in their cars, camping in our parks, because they cant afford housing.   According to the Sacramento County Coroner’s office, in 2016, 78 homeless people died within the county. But in 2017, 124 people died: an increase of more than 150%. One homeless person dies every three days.

This issue of housing and homelessness isn’t just a Sacramento problem its a national problem.  Its a national disgrace.  Ignored until it overwhelms.

The primary issue isn’t rent in the the new developments in Sacramento.  It is the exorbitant rent increases renters are experiencing all over the city.    Long term tenants are facing rent increases because the landlord can.   Resulting in fear, insecurity, and helplessness.

Proposition 10, may not be the answer to the state’s housing shortage. It is an reaction, to the inaction of local government .  The noise generated by the  renters of Sacramento have forced Mayor Steinberg and company to look at rent control.  Their proposed fixes won’t slow the bleeding Sacramento.

A genuine approach would be an ordinance that would immediately cap all rent increases to 6% city wide.   An ordinance that would prevent evictions without cause. (which would prevent landowner from evicting tenants to circumventing the law)

Tax incentives to those developers that include market rate housing in their projects.  Incentives to developers who add housing to their projects throughout these adding additional intensives for developer to build near light rail stations.  These projects could be managed thorough  Sacramento’s Housing Authority.   Returning to reality, none of these are likely to happen.

Renters of Sacramento,will have to make rent control a part of law.   There is no need to   have to re-invent the wheel as several templates   There are rent control advocates in the State that will participate in penning the law.

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CityFella

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Greed: Sacramento

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If your a renter in Sacramento, you more than a bit worried these days.  The rumors are true.  Rents  are on the rise in a big way.  Not in small increments but several hundred dollars a month.   Gia lived in her Pocket area apartment with her daughter for 15 years, re-signing her lease was a simple formality until last October. Her landlord would only agree to a month to month lease.   Her rent increased $150.00 a month and by December it was raised from $1220 a month to $1445.    She is currently in the process of moving to Woodland, her new landlord agreed to a one year lease.

There are many Gia’s in Sacramento, many are worried.   In many cities, with rent control or rent stabilization, landlords are only permitted to raise the rent significantly if there are major capital improvements, otherwise they are limited to a percentage.

Sacramento, isn’t Santa Monica, San Francisco or New York.  There are no laws preventing rent gouging, allowing landlords to increase rents to the moon and beyond.

Gia isn’t out of her old apartment, 15 years is quite a challenge.   She loved her old apartment, it was a 10 minute drive to her job in Elk Grove.   On this day she is bitter and angry. As she cleared her dining room, her landlord moved in new counter tops, new linoleum and a new dishwasher,something she asked for five years ago, she says its more than a slap in the face .

Its clear, there are people who can afford sixteen hundred dollars for a one bedroom apartment.  New apartments are opening in midtown every month with new tenants paying upward of $2300 a month.  Between 2016 and 2017 Sacramento had the highest year over year rent increases than any city in the nation.

These rent increases have displaced many Sacramentians and is contributing to the cities homeless population.  Throughtout the city, owners are increasing rent by 40% and higher, adding no more than a can of paint. Simply because they can. Welcome to the new gold rush. Greed: Sacramento.

 

CityFella

 

 

 

Fully Employed and Homeless

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Photo\Sacramento Bee

No they’re not colorful mirage’s lining the streets of Sacramento.  Camping tents are nightly homes for some of the thousands of homeless individuals in Sacramento. The fortunate have tents and sleeping bags the majority sleep on the city streets without shelter sleeping directly in elements

Many of the homeless are fully employed . Living in cars, other in tents.  Trying to save enough to move into an apartment.   Some have been displaced by rising rents. There are jobs in Sacramento, most paying less than $16.00 an hour.   To afford an apartment in the city, you need to earn nearly $32.00 an hour.

I recently met a family living inside a shell of a relatively new truck at a downtown park.   In July, this family of four received a notice that their rent would increase by $600 on a home they have lived in four years.   Three members of the family are  fully employed, the youngest is in middle school. Every morning they drive him to school every morning.

The family meals are prepared in local parks.  At night they sleep in the bed of the truck and shower at a near by truck stop.  The family is relocating to Woodland next month ,downsizing to a two bed room apartment.  The relocation mean two members of the household  will have to find new jobs.

In much of the state renters are more than concerned as rents are increasing at high rate, displacing thousands of Californians. While there is some resistance in government to implement rent control. it’s difficult to justify rent increases of 30% or more with out capitol improvements or tax increases it is simply a form of gouging

This form of gouging will add  to homeless population and have a negative effect of the cities funds . In 2015, the city said it spends more than $13.6 million annually to address homeless.  The homeless population has increased by 31% in the last two years.

According to the 2015 Point-in-Time Homeless Count for Sacramento County, on any given night,approximately 2,650 people throughout Sacramento County experience homelessness. Over the course of a year, it is estimated that over 5,000 people will be homeless for one or more nights in Sacramento. While the majority of these people are sheltered, just over one third (predominantly single adults) are unsheltered, typically sleeping in their vehicles, an encampment, or another outdoor location.

????? If your rent increased  by 40% or more. Could you absorb the cost or would you relocate?

CityFella

 

Sacramentians Must Demand Rent Control !

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Building Boom:  Many new apartments on 16th Street Midtown

“Rent Control in Sacramento?”

Every day renters in the State of California are waking up to 30 day notices on their doors or in the mail notifying them of rent increases of 20% to 50%.  Landlords, aren’t making capital improvements to their properties, or facing major tax increases or fees.  Its simply greed. No where in California is rent increasing faster than the Capitol City.  In fact there are only two other cites in the nation where rents are increasing faster than Sacramento, Arlington Texas and Reno Nevada.

There is currently a shortage of housing and construction workers in the state.

Sacramento’s Mayor Darrell Steinberg says he has “significant concerns” about rent control, saying the city should focus more on finding money for affordable housing and giving tenants additional notice when rents increase. Steinberg said he isn’t outright dismissing rent control, but he’s worried about the “unintended consequences” of discouraging developers from building housing.   Steinberg said much of the issue stems from the fact that Sacramento “is not building enough housing.” “We need to change that and be very aggressive about it,” (sacbee)

The reality is,citizens need relief yesterday.   Locating funding for affordable housing could take years or decades.  High rental costs will only increase homelessness in the city effecting the quality of life for all Sacramentians.

Basics in Bold Print

As of July 2017, average rent for an apartment in Sacramento, CA is $1439 which is a 14.18% increase from last year when the average rent was $1235 , and a 0.14% increase from last month when the average rent was $1437. 

One bedroom apartments in Sacramento rent for $1275 a month on average (a 15.45% increase from last year) and two bedroom apartment rents average $1507 (a 13.27% increase from last year). (source Rent Jungle. Com)

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Wage Growth in Sacramento  5%

Minimum Wage in Sacramento $10.50

Minimum Monthly Income Required for a one bedroom Apartment in $3094.00 or $19.33 an hour.

Maximum Rent for an individual earning Minimum wage $693

(Source: https://www.zillow.com/rent-affordability-calculator/)

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Every night, more than 3,600 people are homeless in Sacramento County, a statistic that’s 30 percent higher than it was in 2015. (SacBee)

Many homeless individuals are employed .According to a 2002 national study by the Urban Institute, about 45 percent of homeless adults had worked in the past 30 days. About 3.5 million people experience some kind of homelessness every year, and about a quarter of them are employed at the time (National Coalition for the Homeless) 

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What is Rent Control?

Rent control is a special set of laws that particular cities adopt. It generally includes rent increase limits and eviction restrictions. Some cities’ rent controls require relocation assistance to be paid to tenants under certain circumstances, and interest on security deposits.

These laws do not apply to other cities, nor to every rental unit in the city. One of the most commonly misunderstood ideas by tenants is that they were under rent control, when they weren’t.

 Los Angeles passed rent control in 1978 amid cries from the landlords that rent control would prevent future apartment construction, so Los Angeles exempted any structure built after October, 1978 as a political compromise. Newer structures [built after 1978] in Los Angeles are not under rent control, at all.

Under the “Costa-Hawkins” law, when a tenant voluntarily leaves or is evicted for most reasons [ie, not 30-day notice, nor after change of a term, for that term], the landlord can raise the rent to ANY AMOUNT for the new tenant, whose rents are thereafter locked into the rent control limits [3% or whatever].  Any rental unit built after 2/1/95, as well as houses and condos, are not under rent restrictions.  Even where these rent restrictions do not apply, eviction protections do continue.

Two new additions to LA Rent Control are worth noting. Ordinance 175130 [3/5/03] now prohibits the landlord from changing terms of tenancy [other than legal rent increases and government required terms] without mutual agreement of the tenant. Ordinance 174501 prohibits landlords from raising the tenant’s portion of rent [eg, beyond the legal 3%] after terminating a rental assistance program, like Section 8; the landlord can get out of the program, but gives up all the assistance money if he does.

Another exclusion applies to single family dwellings: a rented house by itself on a lot is not under rent control, but a duplex or “two on a lot” houses would be under rent control [if built before 1979]. There are other exclusions like college dorms, motels, and hospitals.

Cities that have rent control provide call-in numbers where you can find out whether the area you live in has rent control and whether your unit is registered under that rent control.

    Normally, rent can be increased with a 30-day notice.  However, due to the current wave of rent hikes, effective January 1, 2001, newly revised Civil Code Section 827 requires a 60-day notice if the rent increase will make that year’s increases exceed 10%.  The idea is to give tenants the ability to adjust to gouging rent increases, but not to stop them. The calculation is a little weird; it doesn’t have to be a large rent increase at once, but just the total of increases over a year.  This new law will mostly affect the expensive rentals, which also tend to have proportionately much bigger hikes.  Also, it does not affect yearly leases, but only month-to-month [or shorter] tenancies. This law expires automatically in 2006, unless the Legislature extends the time or makes it permanent.

    For example, if last year in January you were paying $500, and the landlord already raised the rent $25 in July, an increase for more than $25 this January would require a 60-day notice, because the total of increases for the year would be more than $50, 10% of $500. If the increase total was 10% or less for the year, all you get is the 30-day notice. If the year’s rent increases already total 10% and the landlord then wants to increase rent by one dollar, it has to be by 60-day notice, to mitigate the impact.

    The new law also adds 5 days for mailed notices of change of terms of tenancy. A mailed 30-day notice is effective 35 days later; a mailed 60-day notice is effective 65 days later.

How Can We Get Rent Control?

   Rent control is really only necessary where the vacancy rate in the area is below about 5%, because at about that point, landlords don’t worry about having a vacancy by raising the rent or neglecting repairs, and you don’t have much of a choice when you look around. Consequently, rent control is a law passed by cities where the housing market is tight and rents are going up just because landlords are in control of a necessity of life that is in short supply.  Rent control is not likely going to be a state law, because the problem is local.

   There are two ways to get rent control. The easiest but weakest is for your City Council to enact it, as Los Angeles did. The hardest but strongest is where tenants organize and put rent control on the ballot by getting petition signatures [and then the voters approve it], like Santa Monica did. Both of these require tenant voting clout, that a large number of tenants are registered to vote, do vote in the local election, and all vote together. If the City Council enacts it, it would be an ordinance [city law], but the voters can make it a Charter Amendment [a city constitutional change, more powerful].

    Your first step would be to go to the City Council meeting, and during the Oral Presentation portion [or whatever public input is called there], you tell them about the problem and ask if they are considering enacting rent control [like Beverly Hills, Palm Springs, San Francisco, Santa Monica, and other high class towns have], or at least Just Cause Eviction, like Glendale [a notoriously conservative town] has. You want to mention these towns in your presentation, since their first knee-jerk reaction is that “rent control destroys cities,” but they can hardly say that about those cities.

    They say whatever publicly, but you then make an appointment with them individually to see where they personally stand and how far they would go. You might find that Just Cause Eviction is not objectionable, and that they might even agree with paying relocation assistance for tenants of buildings being demolished or going through major rehabilitation or termite fumigation. Avoid being confrontational with them. They don’t want to offend the landlord contributors to their campaigns, but may be sympathetic enough to put their political toe into the water. If you get a majority of them to privately approve of something, one of them has to introduce the idea in public discussion.

   If the City Council is going to enact something, they want to be heroes for doing it, even if it’s short of rent control. While they are getting ready to take that step, you’ll want to be in touch with the local newspaper to talk about your plan to organize tenants for better legal protections. Once you’re in the news, other tenants will start to contact you, and you can form a group that can all go the City Council and amplify what you have said. This public clamor then triggers the City Council’s response to take action, and you’re on your way.  The group thanks the City Council for their concern and they get to see the public reaction to that.  If it’s a good reaction, they are encouraged to do more.

   Meanwhile, you do need to find other tenants who are both motivated to do something by their own situation and willing to put in some time to do it. Senior groups, somereligious institutions, teachers, firemen, labor unions, the local Democratic Club or similar liberal group, some liberal organizations, and a lot of local business owners, can help in various ways to get the word out and help you form a political group. There are a lot of talkers, but few doers, so you want to get volunteers into project-based committees, which naturally filter out the talkers. Here’s a helpful explanation for the new people.

   If you have to get rent control by petition, you might as well have the strongest possible law, since the landlords are not going to fight you any less if the law is weak. They fight dirty all the way, and always have. Election fraud is their main tool. Propaganda, false information, and misleading arguments are all you hear from them. They have the money to buy millions in political advertising, while you’ll be lucky to get out one mailer to the voters.  They will have celebrities and public figures telling the public that Rent Control will bring crime to your city, turn it into a slum, drive down their property values, steal from the landlords, prevent the landlords from being able to pay for repairs, run up millions in taxpayer expenses, and force landlords to evict all their tenants. Here’s some common rent control myths. None of these are true, of course, but unquestioning voters will be persuaded.  On your side, you have public controversy, newsworthiness, talk shows, newspaper stories, TV coverage, and pathetic stories about landlord abuses of vulnerable tenants. The political battle is not over the wording of the law, at all, but over emotional and philosophical issues in general.

   The technical wording of the rent control law requires a lawyer to write. It needs to be constitutional, not prevented by State laws, cover all the loopholes, and effectively create the kinds of protection you want. It has to be clear and organized, so that it can be easily followed and doesn’t end up in court for years. When it is circulated for signatures, there are specific laws that must be followed as to procedure, format, timing, and public information, and you should have a lawyer’s help to make sure that those things are done. This website CAN provide some of that assistance, but as a practical matter, local legal advice is necessary. For a start, here is a draft of a rent control law that you might want to circulate by petition in your city. It can be modified to some extent, easily, but major changes would require a re-drafting because so many things are interconnected within it. [Rent Control Draft]

   Tenant voter registration is an important part of this process. Tenants are so used to not having a say, not having their views considered, not having any power to change their lives, that voting seems inconsistent with how they’ve come to view themselves. Only about 5% of tenants actually vote in local elections. Tenants are truly a politically disenfranchised majority. Landlords are only 2% of the population, but seem to run things, because they leverage their money and power. A 10% tenant voter turnout could change the history of politics in your town. Politicians would stop saying they’re against rent control, and start expressing concern for the abused tenants who need their help. It’s a numbers game, to be sure.

   If you are really sincere about wanting to take action, there are groups like ACORN that will help, for a percentage of your donations. There may already be a tenant group formed in your town, which the local reporters or city clerk might know about, and you can join them. You aren’t the only one thinking like this. (source: http://www.caltenantlaw.com/rent-control/)

In San Francisco:Annual Allowable Rent Increase March 1, 2017 – February 28, 2018 = 2.2%  Most tenants are covered by rent control. This means rents can only be raised by certain amounts per year and the tenant can only be evicted for “just causes.” In addition, some rental units have restrictions on how much the landlord can charge the new tenant due to previous evictions. Tenants who do not have rent control can have their rent increased by any amount at any time with a proper written notice.

Rent control is administered by the San Francisco Rent Board. The Rent Board website has extensive information and you can download the San Francisco Rent Ordinance and Rent Board Rules and Regulations or come to our counseling clinic for more information.One of the more unjust parts of rent control is the capital improvement passthrough. Capital improvements are improvements for the building, the landlord’s investment, which tenants mostly pay for through a passthrough. Not only can the landlord get the tenants to pay for increasing the value of his or her investment, the landlord can then write the cost of the improvements off in their taxes. Capital improvements are things like new windows, a new roof, painting of the exterior of the building,  and other similar improvements to the property which add substantially to the life or value of the property as opposed to routine maintenance. Landlords must complete the work, petition the Rent Board and win approval of the rent increase before the cost can be passed on. Tenants can contest the increases at the hearing on certain grounds, like that the work was never done, or was not necessary, or was done to gentrify the building, but it is difficult to stop such a pass through in its entirety. (Source; https://www.sftu.org/rentcontrol/)