Lawyer pumps up S.F. landlords at boot camp
Nellie Bowles
Published 6:37 pm, Sunday, November 24, 2013
Daniel Bornstein, one of the city's most prominent real estate lawyers, has been helping local landlords, offering them advice at an event called Rent Control Boot Camp. Photo: Michael Short, The Chronicle
Printable Version
Email This
Font
In the Fort Mason Center one recent night, real estate attorney Daniel Bornstein stood in front of a crowd of nearly 400 people.
"Can there be protected tenants in a property built after 1979?" he asked, pointing to the audience. "No!" they shouted in unison.
"If you get rid of an illegal in-law unit and the building becomes a single-family home, what can you do?" he said. "Owner move-in eviction," the audience responded.
In a city known for rallies organized by everyone from Tibetan freedom activists to Folsom Street leather fetishists, this was an unusual demographic: landlords.
Lately, landlords, many of whom feel picked on, are coming together - not only to battle the stigma of renting out property but also to learn how to benefit from the tech-fueled real estate boom. Some have been watching neighborhood rents skyrocket while their buildings sit full of tenants from the early '90s who pay less than half of market rate.
Among themselves, they've talked about the recent bad publicity aimed at landlords and Ellis Act evictions ("up 170 percent, I know, we've heard") and how it's getting them down ("It's like we should be ashamed to be landlords" and "people act like we're evil").
Bornstein, one of the city's fiercest and most prominent landlord-tenant rights attorneys, worked the stage during the recent gathering billed as a Rent Control Boot Camp wearing a sharp pinstriped suit and a dark goatee. "Only in San Francisco has being a landlord been so stigmatized," he said.
The law allows landlords to evict tenants when they remove their properties from the rental market. It is often used to remove tenants so the property can be sold.
Largely because of the tech boom, the city saw 68,000 new jobs last year but added only around 120 housing units. Rents have risen nearly 21 percent this year, while the government-approved increase for rent-controlled apartments was only 1.9 percent. A vacant multiunit building can sell for double the price of an occupied one.
Bornstein ran through the rules of rent control and gave examples of how he had dealt with "problems" - long-term rent-controlled tenants - to unlock cash flow. The energy rose to such a pitch that the 46-year-old became engaged in a call-and-response with the landlords.
"Every $1,000 more a month in rent is $100,000 equity appreciation in the property," he said.
Bornstein told anecdotes about clever ways of getting buildings up to market rate. One time, he worked with a large home that had seven rooms rented out on seven separate leases. The first thing he did was persuade the tenants to go on one lease, thus changing the classification from multiunit to single-family.
"Then what do you do with seven people who moved into a single-family house in the '90s? Raise the rent to market rate," he said.
He argued that rent control doesn't help the poor. "Rent control doesn't protect the most vulnerable - it protects the longest occupying. It's agnostic as to their wealth. It ossifies the divide between tenants and landlords when we should be providing a path to homeownership."
When Bornstein asked if anyone had questions, dozens of landlords raised their hands. One man asks if he can raise the rent 100 percent to get the tenant out.
"What is aggressive versus what is egregious is a very good question," Bornstein said, before recommending the landlord not do that.
"Can there be protected tenants in a property built after 1979?" he asked, pointing to the audience. "No!" they shouted in unison.
"If you get rid of an illegal in-law unit and the building becomes a single-family home, what can you do?" he said. "Owner move-in eviction," the audience responded.
In a city known for rallies organized by everyone from Tibetan freedom activists to Folsom Street leather fetishists, this was an unusual demographic: landlords.
Lately, landlords, many of whom feel picked on, are coming together - not only to battle the stigma of renting out property but also to learn how to benefit from the tech-fueled real estate boom. Some have been watching neighborhood rents skyrocket while their buildings sit full of tenants from the early '90s who pay less than half of market rate.
Among themselves, they've talked about the recent bad publicity aimed at landlords and Ellis Act evictions ("up 170 percent, I know, we've heard") and how it's getting them down ("It's like we should be ashamed to be landlords" and "people act like we're evil").
Bornstein, one of the city's fiercest and most prominent landlord-tenant rights attorneys, worked the stage during the recent gathering billed as a Rent Control Boot Camp wearing a sharp pinstriped suit and a dark goatee. "Only in San Francisco has being a landlord been so stigmatized," he said.
Defending the Ellis Act
To the idea of people being outraged about Ellis Act evictions, he asked: "Is there any other profession that the government won't let you leave? As American citizens!"The law allows landlords to evict tenants when they remove their properties from the rental market. It is often used to remove tenants so the property can be sold.
Largely because of the tech boom, the city saw 68,000 new jobs last year but added only around 120 housing units. Rents have risen nearly 21 percent this year, while the government-approved increase for rent-controlled apartments was only 1.9 percent. A vacant multiunit building can sell for double the price of an occupied one.
Bornstein ran through the rules of rent control and gave examples of how he had dealt with "problems" - long-term rent-controlled tenants - to unlock cash flow. The energy rose to such a pitch that the 46-year-old became engaged in a call-and-response with the landlords.
Better option than eviction
In many ways, Bornstein's advice was surprising: It's far better to pay tenants to leave than to evict them. Part of his job is to help convince landlords that a one-time $50,000 payment to a tenant can be worth it, especially if the tenant is about to turn 60 (and become protected and very hard to evict)."Every $1,000 more a month in rent is $100,000 equity appreciation in the property," he said.
Bornstein told anecdotes about clever ways of getting buildings up to market rate. One time, he worked with a large home that had seven rooms rented out on seven separate leases. The first thing he did was persuade the tenants to go on one lease, thus changing the classification from multiunit to single-family.
"Then what do you do with seven people who moved into a single-family house in the '90s? Raise the rent to market rate," he said.
He argued that rent control doesn't help the poor. "Rent control doesn't protect the most vulnerable - it protects the longest occupying. It's agnostic as to their wealth. It ossifies the divide between tenants and landlords when we should be providing a path to homeownership."
When Bornstein asked if anyone had questions, dozens of landlords raised their hands. One man asks if he can raise the rent 100 percent to get the tenant out.
"What is aggressive versus what is egregious is a very good question," Bornstein said, before recommending the landlord not do that.
No comments:
Post a Comment
Thank you for commenting.
Your comment will be held for approval by the blog owner.