We are in the middle of a major Affordable Housing Crisis that calls for smart and compassionate responses from all our elected representatives. This letter is in response to your email message trying to explain an action that we believed failed this test.
08 November 2019: Why I voted against the emergency eviction ordinance.
In your message, you hit one nail on the head;
“In 2019 the National Apartment Association conducted a survey of firms that build multifamily housing. The results showed that the Sacramento metropolitan area is one of the hardest places to build multifamily housing in the entire country. Nationally, our region ranked 56 out of 58 for the most barriers to building multifamily housing. Meaning it is more difficult to build apartments in the Sacramento area than the surrounding areas of Honolulu, New York, or San Diego.”
Gouging is a factor that members of my community have been dealing with, on a daily basis, for over a year.
During this Affordable Housing Crisis many property owners are responding to the housing shortage with price gouging. Unfortunately, the reality is that there is, according to the Sacramento Bee, a class of renters who are not in a position where they have real choices on where to live. In my community, if growth focused investors are allowed to continue raising rents unchecked, we will see an expansion in what is already an ongoing tragedy.
When it comes to the housing imbalance that you acknowledged, rent control laws are of necessity, temporary bandaids.
Two examples. ALL rent controls that apply to Manufactured Home Communities, ByLaw, cannot apply to any communities built after 1990. The California state rent control law, ByLaw, only applies to properties over 15 years old, on a rolling basis. So, how does that impair investors from building new housing?
Oh yes, you already identified the real problem in the quote above. We have too many, existing artificial restrictions on building new multifamily housing.
So, what are we back to? Gouging!
Look at it from our perspective. Inflation is so low, that we see no justification for any rent increase greater than three percent.
Show me one real case where the size of an increase greater that three percent can be justified, based on maintaining current earnings. The majority of these increases are based on one of two things. The current investor needs to “grow” their income to meet artificially defined goals or to match some imaginary “market rate”, or the property was sold or refinanced, based on projected increases in income. That is why we need the bandaid — rent control. In fact, for many of those in the lower income brackets, we don’t need a bandaid, we need a financial Tourniquet! That would be an emergency freeze in rent increases while the obstacles against building new multifamily housing are removed.
Unfortunately, California’s anti-gouging law, Penal Code Section 396, only contains a 10% restriction. It wouldn’t qualify as a bandaid. It is more like “Let me kiss it and make it better”.
My community is one of those that will be watching you to see how you react to this emergency. Blocking emergency measures, tourniquets and band-aids, without supplying corrective alternatives, is not acceptable. To continue the medical theme, we do need emergency treatment to stabilize that patient. But, as you noted, we also need emergency surgery to remove all obstacles to healing that are the causes behind this problem; NIMBYism, unbalanced financial incentives, overzealous environmental restrictions, etc.
For the record;
Yesterday I was at a meeting of community leaders from Manufactured Homeowners Associations across multiple local counties. When the news of your vote was brought up, the knee jerk reaction to your rejection of the “no fault eviction” ordinance was the assumption that you care more about real estate businesses and realtors, than you care about the widows and widowers, the disabled, veterans, and families who live in your district. We need you to show, through your actions, not your words, that you actually do care for those who suffer from the impact of this crisis.
This is an open letter that has been published on my blog. I am hoping to find a way where we can work together to change the landscape of our community into one where all people are cared for and no one is thrown out on the street. While at the same time freeing businesses from dangerous, burdensome restrictions and regulations to allow them to become healthy and thrive.