Speaking of public spaces and big doings, too often the official response to such events can be “excluding and abusive” says Richard R. Troxell, House the Homeless president and co-founder. “This is no longer the America that I hold in my heart and in my mind.”

In the past, wiser empires chose to extend public celebrations to even the most indigent subjects, with bread and circuses for all. Such generosity helps to stave off revolutions.

Windsor, site of the recent wedding of Prince Harry and Meghan Markle, is one of the most affluent towns in the United Kingdom. As in so many other places, the number of people experiencing homelessness has grown. So how did the rough sleepers of Windsor fare, in the run-up to the royal wedding and during the festival itself?

Way back at the beginning of the year, the local council leader made news by writing a letter to the local police, demanding that the streets be cleared of homeless people, well before the spectacle commenced. Some accused him of a heartless focus on prettifying the town for tourists and media, at the expense of the locals. Journalist Harriet Sherwood mentioned that, after making this first demand to the police, the conservative politician continued his campaign through social media, from his own temporary location at a U.S. ski resort.

Some benefits for Windsor’s homeless

The Windsor Homeless Project teamed up with a greeting card company to create memorabilia for the street people to vend directly to tourists. It also produced more substantial commemorative merchandise to be sold in shops, with part of the profit earmarked for the Project.

Meanwhile, individuals “on the ground” pessimistically predicted that they would be involuntarily relocated. A bus belonging to Christians Against Homelessness, which had been providing a venue for 10 people to sleep each night, was seized by the police.

At the same time, a Thames Valley police superintendent told the BBC that his department would take a very compassionate approach, saying, “This is a public event, so everyone is welcome.” A council spokesperson said the area’s customary street people were offered somewhere else to stay during the commotion, and/or a place to store their belongings safely.

In another article, the BBC seemed say two different contradictory things at the same time. The story is titled, “Royal wedding: Thousands sign ‘begging ban’ petition.” Did the headline writer craft a purposely inflammatory, or perhaps intentionally ambiguous headline? Because the first line says,

More than 300,000 people have signed a petition to stop Windsor council from “removing rough sleepers” before the royal wedding.

KRDO.com described the people experiencing homelessness as “in the spotlight.” Social media lit up with protests from sympathetic housed people on behalf of the people whose property was being removed from them. The reporter wrote,

Some questioned how rough sleepers who had given up their sleeping bags and personal items would cope in the days and nights until Monday. Others pointed out the apparent double standard as royal fans arrived in Windsor armed with sleeping bags, backpacks and bunting and prepared to camp out overnight in the hopes of spotting the royal couple’s procession. They are setting up camp on the same streets where rough sleepers have bagged up their belongings and handed them over to the authorities.

The police, however, insisted that no one was forced to place their gear in storage. But if they toted their belongings around they could expect to be searched, and quite possibly have things confiscated. Any unattended baggage might be viewed as a disguised bomb, and treated accordingly.

Complain, complain, complain

Not surprisingly, some Brits astutely pointed out that, for the price of the royal wedding, all the rough sleepers in the area could have been housed, not temporarily, but permanently. Sadly, that is not how governments comport themselves. Instead, some throw fancy weddings; others hold self-aggrandizing military parades.

Reactions?
Source: “I’ll be asked to clear out’: how Harry and Meghan’s wedding affects Windsor’s homeless,” TheGuardian.com, 05/15/18
Source: “Royal wedding: Homeless in Windsor ‘will not be moved on’,” BBC.com, 05/15/18
Source: “Royal wedding: Thousands sign ‘begging ban’ petition,” BBC.com, 02/17/18
Source: “Windsor’s homeless are giving up their belongings before the royal wedding,” KRDO.com, 05/17/18
Photo credit: Stuart Chalmers on Visualhunt/CC BY-ND

When the Super Bowl took place in Minneapolis earlier this year, the city seems to have made an effort to minimize the trauma experienced by people experiencing homelessness. Officials explained that street people were steered away from the central festivities — not to hide their existence, but because the massive crowds and heavy law enforcement presence could be problematic for them. The police and the event’s 10,000 volunteers received training on how to direct needy people to resources.

Westminster Presbyterian Church, in the heart of the affected area, opened a space for people to store their belongings in the daytime, and served coffee and a bag lunches. Over the weekend, shelters for single adults expanded their hours.

Some train lines required possession of a Super Bowl ticket to ride, and indoor public spaces were made unavailable. The routes people customarily take from Point A to Point B are the fastest, most direct routes, to avoid being out in the cold any longer than necessary. But changes in transit routes, and the closing off of downtown areas, made it extra difficult for street people to get around.

Journalist Solvejg Wastvedt wrote:

For Minnesotans with the fewest resources, a Super Bowl in subzero weather can be more than a minor disruption. Some of downtown Minneapolis’ homeless residents say the changes there are straining their coping skills.

Because the hotel rates increased so much, the public money that usually shelters some families was not enough to keep them under a roof. Raz Robinson wrote:

Many of the 2,000 homeless children in the St. Paul public school system had to sleep with their families in tents, cars, or simply outside on the street.

Still, the city did not engage in the sort of mass displacement tactics that had characterized the preparation for the big game in San Francisco two years before. In the past, Minnesota has not been so tolerant. Reporter Kelly Smith recalled how the police had swept away homeless camps for an all-star baseball game in 2014 and for the Republican National Convention in 2008.

Brotherly love

In the summer of 2016, highway construction and park renovation caused about 50 people to wind up sleeping on the grounds of Philadelphia’s Convention Center, with the Democratic National Convention coming up. At the time, the city had around 14,000 units of emergency and long-term housing, with the permanent housing always full, shelters and safe havens generally 90% full, and about 700 people routinely on the streets.

It must be admitted that some people are unable or unwilling to enter shelters, and that’s just how things are. Still, there is always need, and the city budgeted around $60,000 for 100 extra temporary beds during the convention.

“Most Cities Evict Their Homeless Before Big Events. Philly Is Trying Something New,” read the ThinkProgress.org headline for a story by Bryce Covert. He wrote:

When San Francisco hosted the Super Bowl in February, it relocated homeless people from particular areas, with some homeless people reporting that their belongings were confiscated, and while it said it would give them slots at a shelter, the shelter already had a huge waiting list.

When the Pope came to visit New York City, the city swept nearby homeless encampments and threatened to ticket and arrest anyone who didn’t leave. Before hosting the Republican National Convention last week, Cleveland, Ohio enacted new restrictions that effectively criminalized being homeless near the convention center.

In anticipation of the convention, Philadelphia reverted to its own, more compassionate and satisfactory Pope visit plan, concentrating on outreach efforts, and those 110 (or 110) additional beds.

A permanent feature that was created for the occasion but remains active and extremely helpful is Food Connect, an app that garnered about 7,000 meals for people experiencing homelessness, from the bounteous amount of food unused during the convention events.

Reactions?

Source: “Super Bowl disruptions more than just annoyance for Mpls. homeless residents,” MPRNews.org, 02/04/18
Source: “Super Bowl Fans Accidentally Put Homeless Minnesota Kids on the Street,” Fatherly.com, 02/05/18
Source: “Where did the homeless go in Minneapolis during Super Bowl week?,” StarTribune.com, 02/01/18
Source: “Uh-oh! Company’s coming. Get those Philly homeless out of sight,” Philly.com, 07/03/16
Source: “Most Cities Evict Their Homeless Before Big Events. Philly Is Trying Something New,” ThinkProgress.org, 07/25/16
Source: “New Beds for Homeless, Food Rescue App Ensure Lasting Impact of DNC on City’s Most Vulnerable,” NBCPhiladelphia.com, 07/28/16
Photo credit: Leif Kurth (26.3andBeyond) on Visualhunt/CC BY

In January, the Department of Housing and Urban Development (HUD) made public the amounts that homeless assistance programs would receive in each state. HUD Secretary Ben Carson spoke of the “array of interventions” supplied by the department’s Continuum of Care grant funding.

Throughout the state of Texas, $88,239,025 is to be distributed to 205 organizations. Compared to last year’s round of grants, that’s a $2 million growth. For some, the result is even better than it sounds, because this year, there are fewer organizations to divide it among.

Narrowing this down, Austin/Travis County (home of House the Homeless) receives $5,935,642. Locally, 15 agencies were determined to be effective enough to receive the federal funds. Ann Howard, executive director of ECHO (Ending Community Homelessness Coalition), says that local supportive housing programs “have a 93 percent success rate at helping people secure and maintain housing.”

Weeks later, The Huffington Post published a leaked internal memo from the housing bureaucracy, suggesting that its mission statement would be changed to support the virtue of “self-sufficiency” and that language warning against discriminatory behavior would be removed. This surprised no one, since Carson has become rather notorious for his contrarian notions.

In public utterances, he has proposed that poverty is a state of mind, that public housing should not be “too comfortable,” and that individuals kidnapped from Africa and brought to America against their will were no different from voluntary immigrants. Shortly, Carson sent a memo around the department to make the claim that…

[…] suggesting HUD will cede its role in anti-discriminatory housing as “patently false,” adding that “the notion that any new mission statement would reflect a lack of commitment to fair housing is nonsense.”

 

According to the National Low Income Housing Coalition (NLIHC),

The Fair Housing Task Force (FHTF) […] submitted a letter to Dr. Carson signed by 573 organizations and individuals — 164 national organizations and 409 state or local groups and individuals — condemning HUD’s decision to drop the anti-discrimination language.

NLIHC President Diane Yentel told the reporter that present-day segregated communities were created and caused by federal housing policy in the past, and governments at every level have an obligation to reverse that grave error by promoting fair housing at every opportunity. She points out that a mission statement does not have the force of law, but the law does, and should be obeyed.

Journalist Jeff Andrews notes that the role of a mission statement is largely symbolic, it does reflect accurately the reality that since Carson took control, HUD has worked diligently to roll back, erase, negate, and disregard many rules that were put in place to combat discrimination and segregation. One of these ignored mandates is the Affirmatively Furthering Fair Housing, or AFFH, rule, which was designed to have communities use HUD data and methodology to shine a spotlight on segregation-prone problem areas.

On May 8, Elizabeth Findell reported for the Austin American-Statesman:

Local nonprofits sued the U.S. Department of Housing and Urban Development and HUD Secretary Ben Carson on Tuesday, trying to force the agency to continue recently launched enforcement of some fair housing rules. The requirement that local entities use federal housing money to “affirmatively further” fair housing policies has been part of the Fair Housing Act since its inception in 1968, but the provision only began to be enforced starting in 2015.

It took that long for HUD to insist that communities report to the agency on those efforts to “affirmatively further” fair housing. And now, HUD has halted the requirement until 2020 and, as Jeff Andrews points out, “because of the way the program works, it’s actually a delay until 2024.”

In Austin, Texas Appleseed and Texas Housers joined the National Fair Housing Alliance in bringing suit against Carson, because suspending this rule gives communities the impression that they can continue to segregate and discriminate without being held accountable. They will still continue to receive federal funds, and that’s definitely not right.

While Austin and Travis County can usually be counted on to act in a civilized manner, there could be a problem in the part of the state that is still trying to recover from Hurricane Harvey, where…

[…] the nonprofits fear that local and state agencies will not be held to the standards requiring them to move people to safer ground fairly and locate new housing in a way that reduces segregation.

 

On the other hand, there is not even a consensus of opinion about how advanced Austin itself is. City Council member Greg Casar is quoted as saying:

We do have a really serious problem in Austin. We’ve been ranked repeatedly as one of the most, if not the most, economically segregated cities in the country.

Of course HUD came up with an excuse for delaying the AFFH requirement: “a data and mapping tool the agency provided to local jurisdictions didn’t work correctly to compile the reports.” And that’s why the delay. Let’s see, that law was made in 1968, so the agency has only had 50 years to figure it out. Sounds reasonable, right?

Reactions?

Source: “Feds grant $88 million to combat homelessness in Texas,” KXAN.com, 01/11/18
Source: “Ben Carson removes anti-discrimination language from HUD’s mission statement,” Curbed.com, 03/08/18
Source: “New Draft HUD Mission Statement Removes Anti-Discrimination Language,” NLIC.org, 03/12/18
Source: “Austin nonprofits sue HUD, Carson after changes to fair housing rules,” MyStatesman.com, 05/08/18
Photo credit: Lomo Cam on Visualhunt/CC BY-SA

Recently a letter to the editor, written by House the Homeless president Richard R. Troxell, was published by the Austin American-Statesman. In it, Richard praised the forward-looking aspirations of mayor Steve Adler, who holds the totally reasonable belief that people who work in a city ought to be able to afford to live in that city.

Richard notes that when Ronald Reagan was president, funding for America’s housing programs was cut by 75 percent. Also, between 1997 and 2007, the federal minimum wage stagnated for an entire decade, and has only crept up a slightly since then.

In Austin and Travis County, the annual homeless count increased again this year. Mayor Adler’s State of the City speech in February enumerated previous successes:

From the time we took office until now, this City has incentivized or co-invested in the construction of more than 2,000 completed income-restricted affordable units — and more than 6,300 are in progress… We are on track to meet our goal of 400 new Permanent Supportive Housing Units by the end of this year… We are among the cities that have achieved effective zero in homeless veterans.

On the downside, the January point-in-time count, according to Nancy Flores …

[…] found a total of 2,147 people experiencing homelessness. During the same period in 2017, the count tallied 2,036 people. The count shows a 23 percent spike in the number of people sleeping on the streets compared with last year while the number of people living in shelters went down by 6 percent. Mayor Steve Adler attributed the decrease to issues such as lack of emergency shelter beds and temporary dips at shelters due to construction.

 

Austin has done an amazing amount, but the Ending Community Homelessness Coalition (ECHO) says that housing programs are already running at capacity, and there are not enough beds, caseworkers, mental health specialists, or a lot of other things. Obviously, society is still creating the need for services. More than ever, attention needs to be paid to the root causes of homelessness, which too often are rapacious greed and insensitivity to the needs and rights of all humans.

Going back to the Mayor’s February speech, Mayor Adler gave a shoutout to the City Council for its “special willingness to try new things and to put new resources behind the mission of housing the homeless.” Among other innovations, it created an Anti-Displacement Task Force to address long-standing abusive practices that have contributed to homelessness. Now it is working on the Downtown Puzzle, which could combine expansion of the city’s convention center with job creation and help for the Austin Resource Center for the Homeless.

The conversation about how to tackle homelessness must include the business community. House the Homeless and Mayor Adler are on the same page about that. Even people who are employed full-time, or more than full-time, often cannot afford housing. The way things are now, working taxpayers subsidize the benefits that help people experiencing homelessness to live.

It seems like businesses should pitch in to cover the safety-net costs for the people whose work they profit from. It also seems like businesses could and should do more to prevent homelessness from occurring in the first place.

To find the root causes of homelessness, start with the land itself. Another project underway is the massive revamping of the land development code, in which many civic entities are involved. Mayor Adler says:

Austin has a rare opportunity to lead the way out of this mess. Austin is emerging as a voice offering reason and progress in a world that isn’t getting enough of either these days.

Reactions?

Source: “Letters to the editor: May 4, 2018,” MyStatesman.com, 05/03/18
Source: “Read the text of Mayor Steve Adler’s State of the City address,” Statesman.com, 02/20/18
Source: “City Council approves action plan to end homelessness,” MyStatesman.com, 04/26/18
Photo credit: Arman Jones on Visualhunt/CC BY

One might think that enough had been said about San Francisco’s peculiarities as an increasingly uninhabitable city. It paints an ugly picture of the possibilities faced by other cities.

Amongst all this, there is a bright spot. The rent control ordinance has some strange loopholes that, for once, benefit the tenant.

An illegal unit is one created without the required permits — so it doesn’t have a certificate of occupancy. Lacking the paperwork, the landlord cannot prove that the unit was created after the magic date of June 13, 1979, and voila! — the tenant is on rent control.

Also, the landlord can’t evict a person for illegal use of the property, because the landlord did something illicit by renting it out in the first place. Curbed.com says:

In a bizarre twist of red tape, you can sometimes be better protected living in an illegal unit than in a market-rate one built after 1979.

Still, even those tenants protected by the Rent Ordinance can be evicted for 16 “just cause” reasons, which include the breach of terms, non-payment of rent, and other offenses that are only fair.

On the other hand, evicted tenants are awarded relocation payments for many reasons, and there are some good humane rules on the books. After mid-June of 1979, there is no such thing as rent control, and tenants can be evicted for “almost any reason.”

San Francisco Tenants Union is a formidable source of information, including news about the exciting Ellis Eviction Mapping Project, which describes itself thusly:

We strive to make the often obscured mechanisms of material, cultural, and affective displacement palpable. We see the eviction epidemic as endemic to a political economy built to privilege corporate interests of real estate and tech, and seek to contribute to a living archive that deconstructs corporate collusion.

Vacancy Tax

Some politicians are in favor of enacting a vacancy tax, attempting to force landlords to place empty units on the market, which would in theory increase the availability of short-term rentals by 8% or possibly as much as 12%. Although, like everything else, they would probably find a way to get around it and avoid paying the penalties.

Joe Eskenazi reported that San Francisco’s chief housing inspector, Rosemary Bosque, “confirmed there is no tool, no law — no means — to compel private property owners to rent out their rooms rather than leave them vacant.” Apparently this is not a problem outside the U.S., but Americans take their property rights very seriously.

Supervisor Aaron Peskin wants a vacancy tax. Here are some examples of the criticism via online commentary:

They made it very unattractive to rent and now when people choose to keep units vacant rather than rent under idiotic rent regulations, they want to tax vacancies.

This is a blatantly unconstitutional taking of property.

If you live in my property, and I want it back and can’t get it back, you are taking the property without just compensation.

There is a very strong feeling that investors are “just parking capital in the city’s housing stock” and leaving places empty for sinister reasons, like plain old greed. Apparently, it is more cost-effective to hold onto a building, with everything brand-new, in hopes that inflation will bring a huge reward when it eventually sells.

Many people believe that the whole scam is simply more dirty capitalist maneuvering. Because it does a great societal ill, by filling up the absolutely limited resource of square land footage with empty structures, some see a need to end this kind of speculation, and see a vacancy tax as the best way to discourage it.

Reactions?

Source: “San Francisco rent laws your landlord probably doesn’t want you to know,” Curbed.com, 04/17/17
Source: “San Francisco Tenants Union,” SFTU.org, current
Source: “How to Fill All the Empty SRO Rooms,” SFPublicPress.org, 10/23/17
Source: “No Vacancy for the Homeless,” SFPublicPress.org, 10/23/17
Source: “SF to explore taxing property owners who keep buildings, units vacant,” SFExaminer.com, 03/31/18
Photo credit: Nicolas Raymond (freestock.ca dare to share beauty) on Visualhunt/CC BY

The San Francisco housing shortage is a nightmare stew of complicated ingredients including but not limited to geographical limitations, rent control, a shrinking SRO pool, the disastrous Airbnb model, short-term rental exceptions, OMI evictions, landlords whose get-rich strategies are incomprehensible to the average sane person, and even the occasional predatory con-artist tenant.

Joe Eskenazi, who writes about these matters for the SF Public Press, accuses landlords of keeping rooms and buildings empty for years, while waiting for the price to go up. But Randy Shaw, whose job involves protecting and/or housing impoverished SRO residents, takes the opposite view, and insists that:

Virtually every owner of a currently vacant SRO I know wants to lease it out for city homeless programs… I cannot think of a single SRO owner who thinks that a good profit strategy is keeping units off the market.

Three years back, Shaw noted that the average cost to build a new housing unit in San Francisco was $690,000. In other words, one million U.S. dollars would not even build two places for human beings to legally live. (A tent, while considerably cheaper is, alas, not legal.)

Shaw explains the city’s three key strategies to address the housing crisis. One is Small Site Acquisition, which authorizes the city to buy buildings from owners who want to get out of the landlord business. The average price for one of those was $450,000 — almost half a million, for those who haven’t had their coffee yet.

And then, there is master leasing

Since 1998, the city has funded nonprofit groups to “master lease” single room occupancy buildings, to house those who would otherwise be homeless. Apparently, the price of buildings abruptly went up. Shaw wrote:

These rising prices mean the city must pay a lot more to expand its master leasing program. Most longterm owners interested in leasing have already done so. New opportunities involve owners whose recent purchases leave them with high mortgage costs and the need to charge higher rents for nonprofit leases.

Six months ago, Eskenazi explained how the city can’t afford the master-lease gambit unless the hotel contains at least 70 rooms, which “leaves about 90 percent of the city’s 404 private SROs out of the running.” He reported that although the city controls more than 40 SRO buildings with around 4000 occupied units, among the remaining such buildings in private hands, one out of seven rooms is usually vacant.

Both sides accuse the other of not mentioning things they should have mentioned, and mentioning things they should not have. Shaw cites the example of the Bristol Hotel, whose owner wanted the city to lease it for step-up housing, but the city didn’t think that was the best use of taxpayer dollars.

Shaw is a great proponent of this intermediary stage, where the hotel has no desk clerks, social workers or counselors:

This involves getting longterm tenants in supportive housing into apartments, thus freeing up vacancies in existing master leased hotels… Based on what we have found, there are fewer real SRO vacancies today than perhaps ever before. This is largely due to the dramatic number of master leased hotels.

For those who graduate from the misleadingly-named “permanent supportive housing” program, Eskenazi agrees that step-up hotels are a good idea. But that model only works with tenants who can get along without supervision, whereas the city’s funding priorities are with the hardcore homeless, who by definition need a lot of human intervention.

A number of Shaw’s anti-homelessness activist colleagues don’t see his point either. They are bewildered at his claim that he “cannot think of a single SRO owner who thinks that a good profit strategy is keeping units off the market.”

They can. They can provide documentation, as can the city. Eskenazi says:

There are activists and organizers, in fact, who track SRO vacancy rates and denote “red flag” hotels, where the high percentage of unoccupied rooms denote a good likelihood of conversion — legal or otherwise — to a tourist hotel. SRO properties for sale explicitly note the number of vacant rooms, as — intuitively — the building gains value when it has fewer longtime tenants paying 1979 rents and more opportunities to charge new tenants 2018 rents.

Why would it make sense to hold rooms vacant? Eskenazi keeps on trying to get to the bottom of it. Take the Bel-Air Hotel, for instance, which he wrote about last fall. Out of 59 residential rooms, 28 were vacant. The owner, Roger Patel, had come very close to signing up with the Department of Homelessness and Supportive Housing, in a move that would have filled all his rooms, with the government paying as much as $800 per month each. But the deal did not go through. According to sources in the know, the owner backed out when he learned how much it would cost to bring the building into compliance with the Americans with Disabilities Act.

Apparently, building owners invent reasons to not rent out the rooms that are supposed to be for ordinary people. Then they whine about the vacancy rate, so they are allowed to convert those rooms into mini-palaces for wealthy tourists. There is a lot more to it, including the Five Sisters project debacle, which Eskenazi explains in great detail for anyone interested in going deeper.

The city can punish stubborn landlords by limiting the number of tourist rooms they can rent out during the peak season. But the Department of Building Inspection gets 1,000 violation complaints per month, and supposedly can’t keep track of them all.

Reactions?

Source: “SF’s Mythical ‘vacant’ SROs,” BeyondChron.org, 02/27/18
Source: “Sticker Shock for SF Housing Solutions,” BeyondChron.org, 04/28/18
Source: “How to Fill All the Empty SRO Rooms,” SFPublicPress.org, 10/23/17
Source: “No Vacancy for the Homeless,” SFPublicPress.org, 10/23/17
Photo on Visualhunt

House the Homeless has been using San Francisco as a mirror to reflect many aspects of urban life that exist now, or soon will, in other American cities. We looked at the single-room occupancy scene, the short-term rental rules, Airbnb, “owner move in” evictions,  autocratic landlords, Ponzi-like schemes of ever-expanding acquisition, and the 12,000 yearly complaints received by the Department of Building Inspection.

Like some other cities, San Francisco has a rent-control ordinance. It restricts annual increases, but applies only to apartments built before 1979. Landlords hate it because they say they are not getting “fair market rate.”

However, there is a mystery. Rent control ceases to apply when the existing tenant (and there are fewer every day) moves out. When that happens, the landlord can name his or her price. Yet apparently, some of the same landlords leave these properties empty and unrented.

The public speaks

Thoughts gleaned from the comments sections of several news articles do not clear up the confusion. The anti-rent-control hardliners hold that in a totally fair system, one month’s notice to the tenants should be the only rule. Outside of that, owners should be able to raise the rent at any time, to any stratospheric amount, for any reason, mainly just because they can.

Rent control is blamed by anonymous newspaper readers for “blight, vacancy, poverty, crime, foreclosure, dependency, displacement, and economic stagnation.” But then somebody else comes along and says that rent control is not even a factor, because it does not apply to new buildings, and yet new buildings sit empty too.

If a unit is vacant, large maintenance bills can be put off, so it looks like less money is going out, and makes the picture more attractive to a potential buyer. Okay, fine. Someone needs to sell a building, they do what they gotta do, especially if it means leaving huge infrastructure expenses for the next sucker. But in a new building, what large maintenance expense would there be?

And yes, renters take advantage of the system. In a 2014 newspaper, a landlord told of a woman who had held onto a rent-controlled 4-bedroom apartment for almost 20 years, paying him approximately $1,000 per month and subletting rooms for $900 per month. In other words, making a killing off property that he owns.

On a related topic, people argue back and forth about the tax implications of allowing property to lie fallow when it could be bringing in revenue. It has something to do, maybe, with a deduction that depends on exactly when the owner began to rent the property.

More rules, and nobody happy

In the tourist season, May 1 through September 30 (which is almost half the year!) single room occupancy landlords are legally allowed to rent 25% of their allotted “residential” rooms to tourists. If they are nicer rooms, perhaps it makes more sense for landlords to just leave them unoccupied the rest of the time, rather than let local, relatively poor people scuff up the floors.

A letter by Susan Dyer Reynolds to MarinaTimes.com exposes yet another side of the problem, that of the owner-occupier, who actually lives in the building but prefers to leave a unit or some units empty. Why would this happen? The writer cites an entertainment film called Pacific Heights, in which Michael Keaton portrays an evil con-artist tenant who rents an apartment with the intention of making the owners so miserable that they will eventually be driven to attack him, so he can sue them and wind up owning their house.

Reynolds happened to see this movie while “in the midst of dealing with a squatter who made Michael Keaton’s character look like a model citizen,” and went on to say that she would rather pay a fine for keeping the place vacant than be caught up in another such “expensive, time-consuming and dangerous situation.”

In the Mission District, a 156-room hotel has been empty since 2012. Apparently, the owner wants to be prepared for a surprise offer. What if a buyer comes along, eager to pay a gazillion dollars — but only on condition that no pesky tenants are infesting the place? Even if just two-thirds of the rooms were occupied, still that would be 100 people to be somehow gotten rid of, which is a giant pain in the posterior.

Worse yet, if they have leases, the owner would have to wait until the longest lease ran out, and by then the prospective buyer might have lost interest. All landlords of course feel that the law is tilted unfairly in favor of tenants, while all tenants believe the law treats landlords with kid gloves.

*****

Earlier this month House the Homeless launched a petition on Change.org calling for more benches in the city of Austin, TX, to help people living with homelessness get off the sidewalks. House the Homeless President Richard R. Troxell hopes the petition will find support in other cities across the U.S.

Reactions?

Source: “Why some San Francisco landlords don’t want to rent,” MarinaTimes.com, August 2017
Source: “No Vacancy for the Homeless,” SFPublicPress.org, 10/23/17
Photo on Visualhunt

San Francisco is one of the cities that the rest of the nation looks to for an example, whether good or bad. If the affordable housing crisis were a science problem, the city would be one big petri dish. Single room occupancy units and the depredations of Airbnb are only two of the many factors in play.

At the beginning of this year, the Office of Short-Term Rentals (STR) put a crimp in Airbnb’s style by requiring licenses. In his newspaper column, activist Randy Shaw praised landlords for complying so quickly and cooperatively, and then went on to suggest reasons that might have prompted this excellent behavior. Maybe SRO rents had risen so high that landlords were content to get along without the illegal Airbnb income.

If true, that would only be good for landlords, and bad for long-term residents. But it’s also unlikely, because people who own buildings always want to wring every possible cent out of them.

Faces clean and shoes tied

Because the hotel industry made no secret of its intention to challenge the new law in court, there is another theory. Knowing that a judge will be scrutinizing their case, the landlords temporarily cleaned up their act, to avoid being perceived as a bunch of dodgy scofflaws. Overall, the most likely reason for the improved behavior is that Internet advertising is out there for everyone to see, and getting caught is guaranteed.

As always, there are unintended consequences. Efforts to guarantee more rights for SRO renters have prompted a surly response from some landlords. They say, in effect, “You want people who stay more than a month to be treated like tenants? Fine. How about we require first and last month’s rent and a security deposit, to move in? Oh, and we’ll start doing background checks.” As Shaw wrote, “If the marketplace supports such additional upfront payments, then such changes are fine by me.”

It is hard to understand how an anti-homelessness activist can so blithely dismiss the threat. First and last month’s rent, plus deposit, is an enormous amount of money that is for many people an overwhelming barrier — yes, even if they are employed!

A long look through a jaundiced eye

Another rule that was meant to be helpful states that a building owner who removes a “residential” tenant from a room, in order to convert it to tourist use, is required to find another room for that displaced residential tenant at the same rent as before. Joe Eskenazi says this “creates incentives to leave residential rooms empty.”

Over a period of months, he produced a series of pieces for the San Francisco Public Press exploring various aspects of the local housing crisis, including the mysteries of why landlords act like they do. He says that some keep rooms empty for months or years:

[…] driving up the value of a building that may eventually be transformed into a high-rent, shared-living space for the city’s transcendent new residents. Other owners are holding those rooms empty, perhaps in search of an even bigger payout down the road when they sell their buildings.

 

This still does not explain why it is more profitable for an owner to keep a place unoccupied rather than collect rent. There does not seem to be a tax advantage, as far as the federal government is concerned.

Many people are under the impression that vacant property can be “written off as a loss” but apparently this is not the case. Landlords will ask outrageous rent, and stubbornly let a property remain empty rather than accept a smaller amount of rent. Eventually, “the market” will catch up, and meanwhile, they don’t have to pay to maintain the empty place, which can sit suspended in time like Sleeping Beauty’s castle, until a prince comes along.

In a fancy city like San Francisco, a lot of homes and apartments are owned by people from other states and even other countries, who are interested in the investment value of real estate, but only from the angle of reselling it for a huge profit, not at all in the hassle of renting it out. Of course landlords blame the measures that were taken to protect tenants, such as rent control, affordable housing mandates, anti-eviction laws, and anti-new development laws.

So, you’re a landlord

Say, you’re a landlord who cleverly gets rid of a bunch of old, low-paying tenants and acquires a batch of new, high paying tenants, or even leaves a building empty — then what? Eskenazi wrote about the scourge of the Mission District, Anna Kihagi, who has been called rapacious, abusive, predatory, and (by tenants) names that cannot be repeated here:

For years, Kihagi and her family members […] bought up building after building in this city and, particularly, the Mission. Harassment of tenants, especially long-standing rent-controlled tenants, many of whom are elderly and disabled, followed thereafter, as did evictions and new, market-rate rentals… Kihagi brings in swollen — and now provably illegal — income from buildings to inflate her income stream and then borrow against it to buy new buildings and repeat the process.

As Deputy City Attorney Peter Keith described it, “The paper value of the building skyrockets, so there’s more to borrow against to make the next down payments on the next buildings.” If the city’s prosecution of Kihagi for illegal eviction of rent-controlled tenants is successful, the increased value of those buildings might help pay off cheated renters and other creditors.

Also, if the city wins, it can reset the rents to previous levels. But even if the greedy landlord’s grand plan fails in that sense, it will still have succeeded in uprooting a great many people and lowering the quality of their lives.

Join the Protest on Tax Day, April 17

This year, the U.S. Tax Day falls on Tuesday, April 17. Once again, we will be leading “Tax Day Action!” protests at the nation’s Post Offices demanding a living wage. We invite you and your community to join us at the Post Office this April 17. Send in photos of your event!

Source: “New SRO Law’s Surprising Success,” BeyondChron.org, 04/25/17
Source: “No Vacancy for the Homeless,” SFPublicPress.org, 10/23/17
Source: “SF goes after city’s cruelest landlord, snatching away her rent payments,” MissionLocal.org, 02/05/18
Photo on Visualhunt

San Francisco, like Los Angeles, is important for its “bellwether” quality. Both West Coast cities tend to manifest societal problems before the rest of the country, and sometimes they come up with solutions that the rest of America can look to for an example.

What problems beset San Francisco and contribute to a housing shortage so severe that rent costs as much as 45% of income? How does San Francisco rank as the hottest real estate investment city, to the point where financial advisors audaciously guarantee “no bubble and no crash possible”?

Longtime activist Randy Shaw addressed “Owner Move In” (OMI) evictions, which flourished in the early 2000s, and which he called an invitation to fraud:

An OMI notice is served. The tenant retains a private attorney who negotiates a large buyout of his client’s tenancy. Under the terms of the buyout, the tenant gives up the right to sue for the owner’s failure to move in…

It was perfectly okay to ditch a tenant if the landlord wanted to live in the unit himself — but the eviction process could be lengthy and expensive. Landlords figured out it would be cheaper and easier to make a lump-sum payoff up front. A lucky few tenants welcomed the windfall payments and cheerfully walked off into their futures.

Of course for tenants as a class, the whole OMI eviction scam negatively affected the rental market scene citywide. Landlords were chucking tenants out of far more rentals than they could possibly live in themselves, but nobody was keeping an eye out for this, and the exception was widely abused. Over the years, various ordinances strengthened enforcement so there would be fewer OMI evictions.

But why?

The whole game has an Alice Through the Looking-Glass quality, for reasons we examine over the next couple of posts. In a sane world, landlords would want their properties occupied by paying tenants.

So, why boot them out? To get higher-paying tenants, of course. Or — and this is the crazy part — to leave the place empty, which seems to be the strong second choice. But first it helps to examine the many factors that have worked together to bring San Francisco to such a pass, because if we don’t take note of the worst examples and how they got that way, we are doomed to repeat the same losing scenarios in city after city.

The OMI situation had to do with apartments, which are treated differently than SRO (single room occupancy) units. Shaw believes that it is good for the city to have its SROs occupied by committed long-term tenants. Of course, if more apartments were available for local residents, rather than tourists, that would presumably free up some SRO units for people who currently have nowhere at all to live.

The apartment squeeze comes from the other direction, too. Because the cost of houses, condos, lofts, etc. has risen so precipitously, fewer people can afford to buy homes and are renting apartments instead. So the pressure comes from both ways — from tenants trying to move up into more desirable rentals, and from former homeowners who have been forced to downsize.

Complicated rules and inadequate oversight

The San Francisco situation became ugly for many reasons, not least the invention of Airbnb to broker short-term rentals to business travelers, tourists, and people sticking a toe in the water before deciding to move there.

Unfortunately, Airbnb “explicitly violated this city’s housing laws” from Day One, and “aided and abetted in the cannibalization of affordable residential stock,” in the words of Joe Eskenazi, who has written extensively on the topic. Property owners were supposedly allowed to book Airbnb visitors full-time, only if they themselves lived on the premises full-time. For example, renting out a room above a garage, while the family stayed in residence; or renting out a house if its owner family went on vacation.

Tourist-only rentals were supposed to be limited to 90 days per year. The idea was, if a long-term tenant moved out, the landlord could have three months to go nuts and grab as much Airbnb gelt as possible, before obediently signing a lease with the next long-term tenant.

But who cares about a little thing like a rule? Consequently, speculators bought up properties and milked multiple Airbnb cash cows at all times. For regular people, the apartment market dried up.

Single room occupancy

The original Conversion Ordinance included complicated rules for SRO buildings, about what percentages of their rooms can be used for what purposes, at what times of year, and for how long. Of course, owners had been playing fast and loose with the rules for years anyway, says Eskenazi…

[…] by renting out residential rooms on a weekly basis — which, obviously, catered to tourists — and shuffling around residents approaching the 32-day threshold that establishes tenancy rights in a practice called “musical rooms.” The loophole was finally closed early this year. “Long story short: You have to treat residential units like residential units,” said Supervisor Aaron Peskin…

 

Owners of these places thought they could have it both ways — receiving, as Adam Brinklow phrases it, “legal breaks and considerations because they provide cheap housing to residents who otherwise might be homeless,” and also cashing in on the Airbnb bonanza. A year ago, in order to favor impoverished local residents over wealthy strangers, the law strengthened the 32-day rule. Landlords resented this bitterly, and some felt so strongly about it, they promised retaliation, like the one who threatened to stop working with a non-profit called Homeless Prenatal.

In January the Office of Short-Term Rentals geared up, and began issuing licenses to short-term rental hosts who proved they were law-abiding. Thousands of illegal listings by Airbnb and similar outfits immediately vanished from the web.

Reactions?

Source: “The US Real Estate Forecast 2018 to 2020,” DanaDavisProperties.com, 2018
Source: “The Truth about Owner Move-In Evictions,” BeyondChron.org, 04/05/17
Source: “San Francisco lawmakers pass SRO rental cap,” sf.curbed.com, 02/01/17
Source: “No Vacancy for the Homeless,” 10/23/17
Photo on Visualhunt