AnonymousBy Ernie Salomon
This is a question that I would like publicly answered by Limon and Jackson about their AB 3088 housing anti eviction bill.
Why have you put the the inability of millions of tenants to pay their rent during the Covid 19 Epidemic, squarely on the backs of landlords to finance?
The bill is immoral! It places the cost of lost income of tenants during the Covid pandemic solely on the financial backs of landlords. Landlords did not cause the Covid pandemic.
They are not to blame for tenants being unable to pay their rent because of income loss from shutting down employers with rulings that are imposed by our state’s government.
Millions of workers have been thrown out of work by government edicts concerning Covid 19. Many are on unemployment or have no income at all. Is this the fault of landlords, ladies? Well, is it?
Many landlords have mortgages and all have taxes, insurance and maintenance expenses, etc. They cannot operate on 25% of scheduled rents. A huge number of tenants, especially in the high rent areas and the rest of California are marginally able to pay rent during normal times. They will not be able to pay thousands in back rents when their payments are due.
Eventually, landlords will raise rents higher than they normally do in order to recover the rents that they cannot recover. Some landlords will leave their units vacant until this bill is no longer in effect. Other landlords will lose their properties when they are foreclosed by lenders. AB 3038 does not protect landlords from foreclosure, it prevents them from collecting the 75% of their rents that they need to make mortgage, taxes, insurance and maintenance payments!
SB 3088 will also put a lag in the building of new residential units because landlords will not build new units while this law is in effect or there is the prospect of renewing it.
Why have Limon, Jackson and their associates in Sacramento, who all continue to receive their good sized taxpayer paid paychecks, health and pension benefits, put this Covid 19 crisis on the backs of just landlords? Why don’t they pass a bill making gas stations cut their prices by 75%? The same for grocery stores, utilities and all other important resources: Cut all prices by 75%. Sounds crazy? Probably, but then this is what Jackson and Limon have thrust on landlords!
AB 3088 is a lousy law; an unfair law and most of all it is an immoral law!
Is it no wonder that a majority of people living in California have said that they would leave, if they could. Many who can afford to leave, are leaving every day! Our state is going downhill in several measurable categories. We have 50% of our country’s homeless population and 34% of our country’s welfare recipients, but we are only 12% of our country’s population! We have the highest median cost of housing in the entire USA!
Our state’s GDP is up only about 1%! Its tax base is shrinking!
More and more people are turning against government. They cannot be blamed for doing so. I am one of them!
Remember in November!
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While I understand why Mr. Salomon may be concerned, this is an attempt to prevent of tragedy of epic proportions from occurring. Does anyone really want to see millions of families evicted from their homes through lack of funds, and does Mr. Salomon propose a solution to this? He does not. The bill says he is owed the money and will get it eventually, assuming the renters find employment and have any to give. Small landlords can also ask for mortgage forbearance. In my neighborhood a house was owned by a little old lady with a good lawyer. She put the house into a trust, and upon her passing her heirs assumed control and rent it out for market rates ($3,000/mo). They pay about $300/yr in property taxes based on what their grandmother owed, while I pay about $8,000/yr. I’m pretty sure this particular landlord can afford to get by on $750/mo (25%) until Jan 31. Really, how many landlords have recently bought property in SB to rent out unless it was for AirBnB? The economics of buying a current property for $900K to rent out are horrific unless you think you can get $400/night from vacationers.
“Is it no wonder that a majority of people living in California have said that they would leave, if they could. ” I googled this and the only thing I could find is CNBC with a survey that said 53% of respondents have considered leaving due to the high cost of living, especially housing. Not that CA is not a desirable place to live, but that you have to work hard to afford it. Typical conspeak, where you take a fact and embellish it so that it promotes your worldview better.
Yes, I’ll remember in November. I’ll remember what trump said, on tape, February 7th. ‘it’s airborne, Bob’ …. ‘5 times deadlier than the flu, Bob’. But told the American people 3 weeks later ..’it’s the same as the flu’ …’it will go away, like a miracle’. We are all still dealing with this b.s. because our president LIED to us. Look at other countries…Canada ZERO deaths last Friday, America had about 1200. Crystal clear where this problem started and who is responsible for it
PITMIX, while this is just anecdotal evidence, in the less than 20 years I’ve lived here, every friend I’ve made has left CA citing many of these reasons among others. In the comparatively short time I’ve lived here [not a lifelong resident] I’ve seen it go downhill fast, sadly. It was a much better place to live even just 10 years ago. You have to work hard anywhere you go really. But with all the taxation, you can hardly enjoy anything that CA has to offer – it would be better for many to live somewhere affordable, and save up for nice vacations which is almost impossible to do here especially areas like SB. It’s not worth it to many.
I would love to hear Jackson and Limon address this problem. Obviously there are some landlords with enough resources to cover a gap in rent receipts. Just as obviously, there are some landlords without deep pockets, or any pockets at all. Surely Jackson and Limon have a response for this? Of course, anyone taking on the responsibility of property ownership knows that sometimes a tenant will not pay, and there will be months of legal hassle to deal with the problem. But generally you’d have only one non-paying tenant at a time, unless you have a lot of units. If what Ernie says is right, this bill is short sighted and unfair.
The best arguments include both a “What” and a “How”. You’ve done a reasonably decent job of spelling out what bothers you–I can see the argument and nodded my head a few times.
But the how? How do you want to solve this? We have millions of people in this country that barely scrape by as it is. I’m so glad to read about the amazing fortitude of others in the thread who would make their own bootstraps to pull themselves up by if that was the only job available. Great. Good for you. There are millions of others who either cannot. How do you want to deal with them? How happy would you be to see unemployed people in the streets? How would you like to then have your tax dollars go to feeding and housing more folks in dire need, rather than assisting them where they currently are now?
It is easy to find fault in a plan or process, it is much harder to actually design a solution that will work for most parties involved, at least most of the time. Your argument solves for one group while ignoring another entirely.
I’d encourage you to build full, complete arguments, rather than hamfisted halfsies.
That sounds like classic Marxism to me pitmix. Have the government assess who is in need, who has the means to pay, and redistribute the wealth accordingly. Beware, Marxism has never worked well outside the theoretical confines of a sheet of paper. If you regulate the rental market much beyond our current rules, there will no longer be a rental market.
all investments come with risks – someone using rental properties as a source of passive income is no different than someone owning a travel related stock pre-CV and then getting crushed – gov’t will always have their way of getting their hands on people’s money – whether it through rental property legislation or capital gains taxes on stocks – I agree with poster that these type of laws suck – they end up subterfuging market forces and hurting the people they are trying to help
MAST8 – Are you somehow connected with SBJOE?
Bull crap. I’m not going to hurt renters because I feel bad for landlords. Find a real job
You assume “government” will always be in the hands of Democrat liberals and government union employees. That guarantees voter passivity. So you might miss the voter backlash that is currently brewing. We have seen the future of more government control in our lives, and is a losing argument.
The issue is not whether the landlord takes a risk; this issue is what happens when the landlord takes the rental property out of the rental inventory completely. after the price of renting it becomes a losing proposition. State legislators need to guard against over-reach. But this is an election year, so they are going for partisan pandering first.
I hope you are correct
Here is the solution: look up on Zillow almost any community outside of expensive coastal California; even in the rest of California as well as all the other states. It will knock your socks off how affordable housing and rental price are. Demanding one lives only in expensive coastal California and only at someone else’s expense is not a solution. The solution is to find where it works for your own income level and skill set – there is a world of wonderful housing options out there. There is little independent industry or career ladders in this area to keep anyone here who cannot afford the housing prices. And if you refuse to work for the leading and well-paying industry in town – the government — you are simply not being realistic -and for that there are no solutions.
Chip, that is just scare tactics. True free market capitalism does not exist anywhere in the world because it is too grim to contemplate. Even Adam Smith knew that the people or government would have to make decisions in their rational self interest and not just purely based on economics if we are to live without children starving or working 16 hours a day in a factory. No one is proposing marxism, so take your finger off of your M-16 trigger. We are just looking for a way forward that keeps people in their homes. If you want something to worry about, worry about crony capitalism. That is a present danger where government is picking winners and losers every day.
Andrea, I don’t know of anyone who has left the state recently. I know of a couple that left in the 80s. Maybe you and I run in different crowds?
Well for starters, a renter now has to certify why they cannot pay their rent under penalty of perjury if I understand the law correctly. So they are tightening it up. Perhaps the same could be done for landlords, where they must certify that they will lose their home or whatever if they cannot collect rents and there could be a similar exception. It’s workable.
Smith, you are right. California is a worse place now than it was 20 years ago and a hugely worse place than it was 60 years ago. Why? Because money came in to capitalize on the resources of the state. When my grandparents came here in the early 1900’s it was the promised land. It was wonderful for a few decades after that but post WWII it became polluted, resources were overburdened, labor was exploited and so on. Now it is only fit for the uber wealthy and those who got a foothold decades back. So let people leave and make labor more valuable and reduce the environmental destruction. Good future it seems to me.
Chip – so bailing out the corporations and the rich is Marxism? Trump is a Marxist then?
Crystal clear where this problem started? I thought it started in China and the Chinese covered it up. What should Trump have done? Would you be a Trump supporter if he did what you said?
And yet China handled the pandemic with an eye to keeping their citizens alive, and did a damned good job, given how little was known about the virus at the time. What did our federal government do? Whine about “it’s not my responsibility” and blame it on others. That a gigantic failure of leadership, and left us looking like complete incompetents. Good thing we had some governors who knew what leadership, integrity, and science are.
Write a letter to Monique Limon. I have written a couple opposing some of her legislation. She has always written back with a thoughtful response.
I totally agree. It is as if legislators are turning a blind eye to the fact that many, many rentals are individually owned by regular people and are a form of income! The buck cannot stop at regular people, it needs to stop with the huge companies who constantly receive government bailouts: BANKS. It is frankly stupid to propose an eviction moratorium without also proposing a mortgage moratorium.
My concern is for the mom & pop landlords who decided to put their savings into property as opposed to the stock market and depend on their rental income to live. An owner’s capitalization rate for rental property can be as little as 3% in SB. That’s not much to live on after rental expenses. So will be much less than 3% if tenants aren’t paying rent! Some owners be forced to sell rather than bear the brunt of AB3088. Guess who’s buying? It’s the REIT’s and real estate LLC’s. These are exactly the “landlords” who have historically been driving rental prices up. So the affordable housing crises just get worse. What’s the solution. I think we need to look at what other countries are doing. Their governments are helping their citizens pay rent. Socialism? Or what governments are supposed to do in times of crises.
By doing that, they are causing another giant problem……… now, the property owners / landlords might not be able to pay their own bills, and potentially losing their rental properties, which will leave the tenants homeless. Big domino affect….
Gotta think it through….. consider the cause & affect….. short term, and long term.
You are correct of course but, Limone and Jackson absolutely don’t care about the fiscal solvency of landlords. As far as they are concerned the landlords only function is to pay their taxes so that Limone and Jackson can continue to be paid. Is it short term thinking? Absolutely, but they will be termed out in the short term and move on to bigger things (at least they think so).
I am so sick of the whiners. If you don’t like living in California, please leave. In fact, by leaving you will be doing the rest of us a big favor since you will make the state less crowded and happier since we will not have to be around your negativity. Ernie, thank you in advance. Be sure to write.
I applaud the writer for his courage in speaking out against this injustice. Limone and Jackson should not promote their own image on the backs of others.
I agree with you SBLIFE, SBSAND, D8VANILLA, A-1600109438, and 3P14159. To SBJOE, I don’t like wining either. But when business people get crushed under arbitrary government regulations, they have a right to speak up about it. To everyone, I’ve researched rent control, including but not limited to New York City’s rent control disaster, and have found that rent control is, in any form, basically the government clamping down on rental income while ignoring or increasing rental expenses. That’s not good business. Rent control has resulted in the past from a negative and discriminatory attitude towards those who appear to be prosperous, as well as a basic lack of understanding on the part of politicians on how to run a successful business. The reason the United States of America exists is to provide a safe haven for the private citizen, the little guy/gal, to live in peace and prosperity. Any legislation that adversely affects these same private citizens without due cause is unConstitutional. I personally believe our state government has lost its collective mind, having lost touch with us everyday California citizens and what works best for us. 🙁
This is a great article. I would encourage everyone to consider the unintended consequences of this bill. All legislation that squeezes landlords will result in a reduction in the availability of rental housing and higher rents! While a proposed law may sound good, in California it will almost certainly achieve the opposite of its stated intention.
Chip and Vorker, stop spreading the fake news. Prop 13 as it applies to residential real estate is not affected. Only commercial real estate, and those owners are doing just fine as you can see by all of the vacant properties on State Street because they don’t need the income. Residential property taxes will stay the same so my neighbor in her house for 30 years will still pay $300 a year while I pay $8000 per year. When they passed Prop 13 the Jarvis people snuck in the tax break for commercial and it has been a boondoggle ever since.
Bigugly, a person who has “bought” a million dollar house has convinced the bank that they can pay off the mortgage over time. But that person does not have a million dollars now. Yes, they are in a better financial position than many other people, absolutely. But they don’t actually .have. the money. They owe it.
Certainly this bill is illegal theft -A criminal act in which property belonging to another is taken without that person’s consent. How is the landlord to collect when the renter moves out?
What’s next? A new bill that will take ‘excess funds’ from you bank account? I can see it now every dollar over $2K removed from your bank account by the state of CA.
Shhh! Don’t tell anyone that ‘helping the great American farmer…’ by upping corn-based ethanol in gasoline is just a fat government subsidy.
Where are those mom and pop landlords you are talking about? I don’t believe they exist. The 2020 economics of putting 20% down on a $900K house and then renting it out for $3,500/mo are not good. Any mom and pops that are renting houses bought them back in the day when houses cost $200K (1998). So property tax and mortgage payments are very low, and they can get by on 25% of 3,500/mo, with the rest being due in 2021. Don’t cry for them, Argentina. The last landlord I had, bought her house in 1960 so only had income from the property and very small tax payments unless she decided to fix things up.
In your pie in the sky scenario, the landlord is just going to let the property sit nonproductive and take the loss on the tax payments? I doubt it. Not all of them are crazy like the commercial landlords on State Street.
3:22, the voter backlash occurred in 2010 and 2016 and look how that turned out. We’ve had enough of junior high voter backlash to last a lifetime.
PitMix, here is why a landlord will leave a unit empty rather than letting tenant live in it rent free: tenant wear and tear costs the landlord money – one plumbing back up, one replaced appliance, one subsidized relocation for a termite tenting, cheaper utility bills if included in the rent, additional property and liability insurance, and all the other ongoing costs that eat into the monthly income that all landlords face. Plus the hovering threat of a tenant who will fight any eviction tying up the property with legal maneuvers that can go on for over 6 months, particularly if they file for bankruptcy – that eats into any accumulated profits too and can easily wipe out any saved rental incomes. Mnay mom and pop landlords alreasy rent at net neutral income anyway because they are holding their property for equity value over time ,as part of their own financial investment portfolio. Many landlords live in terror of getting a tenant with an attitude because they know Calif landlord tenant law is totally stacked against them. When holding the propery primarily for equity value, renting it out in the interim in this state today has almost become not worth it. Leave the rental unit empty, sleep better at night and cut down on ongoing property owning expenses generated by tenant occupancy. makes a strong argument for getting out of the landlord business and simply call it a second home, or even a storage container for yourself.
LetMe, even in your example you are talking about a $200K investment for a garage conversion, so those people can also get by with 25% of the rent ($500/mo?) until January when they get the rest of it back. Do you think the landlord in this situation was depending on the rent to pay their mortgage? I doubt it. I know a couple that bought a home 2 years ago and are living in the garage and renting out the main house. I guess they might be in some trouble but both of them work for an internet startup so I think they probably can survive.
Thank you for sharing @9:55. It is often assumed that because you are a landlord that you are rich. When in reality it is quite expensive to manage with the mortgage, taxes, insurance and the like. Not everyone with a house to rent is rich. And it can be quite devastating for ones future to lose such a large investment when no income is coming in.
It will be very interesting indeed if prop 13 is overturned. A lot of people bought their homes and planned their finances and retirements assuming a predictable property tax bill over the long term. In addition, a lot of middle class families have homes in neighborhoods that have gentrified and skyrocketed in value. Are you willing to tax people out of their homes because their neighborhood gentrified and they aren’t rich enough to afford current market rate property taxes? That is exactly what was happening before prop 13.
I agree, SB Joe. Thank you.
There is nothing unjust about trying to protect the less fortunate from being homeless.
There really is no such thing as a “modest house” in Santa Barbara money-wise. There just isn’t. Maybe you are lucky enough to get your hands on some property… a small “modest” 2 bedroom single family home. Well, the median home value in Santa Barbara is $1,134,649. Santa Barbara home values have gone up 2.0% over the past year, it’s INSANITY. If you buy a house in this market you are WEALTHY. Uber wealthy, in fact.
Such fake news. Every dollar over $2K? Weird stuff like that makes people discount any portion of your argument that has any reasonable element. How does a landlord collect? Have you heard of Small Claims Court? Google it if you haven’t. That’s how they do it now.
9:02, why are you saying they live there for free? They have to pay 25%, and then pay the rest back in 2021. That should cover some of the standard maintenance you refer to. As for the other stuff, choosing a bad tenant is always a risk when you rent property. But if you have to distort the facts to make your argument, I guess it wasn’t that strong to start with.