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From the April 2006 Newsletter:
By Kim Stryker
It’s never a surprise when the SF Tenants Union and their friends raise their hands in the air and run around screaming that the sky is falling. The usual rant is “too many evictions,” and they’re doing it again. The Rent Board web site shows a slight (5%) increase in total evictions this year, primarily for breach of rental agreement and nuisance evictions.
However, the evictions the Tenants Union seems most concerned about, Ellis evictions, are about the same this year as last – 280. This is based on the Annual Report on Eviction Notices prepared by the SF Rent Board for the Mayor and Board of Supervisors. While 280 is a very low number considering that there are 354,000 units of housing in San Francisco,1 what is significant is that these evictions are almost entirely in small multi-unit buildings of four units or less. So why are city officials not investigating the real question: Why do owners want to sell their buildings?
Small rental property owners already know the answer. In fact, it’s one of those “We told you so!” moments predicted four years ago by SPOSF. While the eviction numbers aren’t significant, they do show what is happening to San Francisco’s mom-and-pop landlords: They are fed up with over-regulation and some are using the only way they have left of getting out of being landlords.
Remember SPOSF’s 2002 comprehensive survey in which many of you participated?2 The study had a response rate 1,161 out of 2,100 small building owners of 2-6 units. To better understand the issues, we surveyed SPOSF members and non-members. All were told their answers would be anonymous and the results were collected and tabulated by an impartial third party. Not surprisingly, there was no significant variation in replies between SPOSF members and non-members in their replies.
The results predicted what we are seeing now. The largest response group was seniors over 60 years old (39%) and the second largest were owners in their fifties (29%) – they no longer want to be landlords. They stated that current regulations have a negative impact on their retirement plans (61.8%). Nearly half (49.7%) said they cannot afford to repair their properties. So is it any surprise that half (49.8%) said they planned to sell? The number one reason cited was over-regulation; the second was that they were tired of being landlords; the third was an inability to make a profit.
The most shocking information from the 2002 survey was that 43% of small property owners surveyed said they would consider using the Ellis Act. It is clear that while there is no tsunami of Ellis Act evictions as decried by the Tenants Union, some small property owners are deciding to call it quits. And who can blame them?
One can’t claim – as the Tenant Union, Housing Rights Committee and numerous other groups do— that these owners are greedy speculators. The survey showed that 63% of these owners would rent at below market rate if strict regulatory conditions were relaxed. To prove that fact, at the time of the survey, on average 1.4 units per response – more than 1,600 total in the survey pool – were already removed from the market due to over-regulation. The sampled owners stated they planned to remove many more in the future. When will City officials start to believe us when we tell them that their policies are hurting senior mom-and-pop landlords and are hurting the renters who either are eventually evicted, or who discover that the pool of rental units in these small buildings is growing smaller?
It is clear that the City has forced its neighborhood landlords, many of them living in the same building with their tenants, into a lose-lose situation: either sell their building and home, or fall behind in retirement income and building maintenance. This lose-lose policy and ways to deal with it will be more carefully scrutinized in future newsletter articles.
–Kim Stryker is co-founder of SPOSF.
1 San Francisco Housing Data Book, Bay Area Economics, 2002.
2 SPOSF Member Survey, 2002.
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