Grand Jury criticizes Berkeley Rent Stabilization Board

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June 26, 2012 9:27 am by Frances Dinkelspiel

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Berkeley voters passed a rent stabilization law in 1980, and the law now covers 19,000 rental units in the city. Photo: Tracey Taylor

 

A highly critical report by the Alameda County Grand Jury has found that the Berkeley Rent Stabilization Board is a “self-sustaining bureaucracy that operates without effective oversight and accountability.”

This rent board pays Jay Kelekian, its director, $183,000 a year to oversee a $4 million budget and manage just 21 employees – which is more than the city Berkeley pays its director of public works, who oversees 326 employees and has a $90 million annual budget, according to the report.

“The executive director makes an exorbitant salary that comprises nearly 5% of the entire budget of the agency,” according to the report. “The Grand Jury finds this unacceptable and concludes the board needs to reprioritize services and to reduce costs, not only in its administration but in services to the citizens of Berkeley.”

The rent board also pays its board members an “excessive” $500 a month and provides health benefits, according to the report. BRSB also spends $50,000 a year on a Sacramento lobbyist.

The Berkeley Rent Stabilization Board is able to pay its administrators so handsomely because it imposes some of the highest rental registration fees in the state, according to the report. Berkeley assesses landlords $194 per rental unit, compared to Oakland’s assessment of $30 per unit, and San Francisco’s $25 per unit assessment. While Santa Monica assesses landlords $156 per rental unit, it also permits landlords to recoup those costs from tenants by levying a $13 monthly fee. Berkeley, in contrast, does not allow landlords to recoup their costs, according to the report. Property owners can only assess tenants $4 a month for a total of $48. Continue reading

Tossed-Out $20 Tenants Turn Millionaires in Mumbai

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Residential buildings sit at Napeansea road in Mumbai, India. Photographer: Dhiraj Singh/Bloomberg

By Pooja Thakur on June 25, 2012

 

Thousands of rent-controlled tenants in Mumbai paying $20 a month, and often less, are being turned into millionaires by developers tearing down crumbling colonial mansions to build luxury towers for the rich.

South Mumbai, including a stretch of prime land hugging the Arabian Sea, has about 500 dilapidated stone structures dating back to the early 1900s with a potential redeveloped value of about $40 billion, according to Pujit Agarwal, managing director at Orbit Corp. (ORB), a Mumbai-based developer that derives about 80 percent of its revenue from redeveloping old buildings.

“For generations, most tenants were living a hand-to-mouth existence, barely making two ends meet,” said Agarwal, whose firm is one of around 75 vying to oust Mumbai’s rent-controlled residents. “Now, with redevelopment, these tenants have become multimillionaires overnight as capital values of the properties they occupied soared.”

Home prices in Mumbai have climbed to a record 10,833 rupees ($200) per square foot, doubling in three years, according to Liases Foras Real Estate Rating & Research Pvt, a research company based in the city. Continue reading

Rent control sometimes benefiting the rich

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Tuesday Jun 26, 2012 7:21 AM PT

Well-to-do people are taking advantage of the city’s long-protected practice of limiting rent increases to preserve affordable housing by using their cheap apartments as weekend getaways.

Attorney Andrew Zacks represents landlords who work with the city to push out these cheaters. He says these tenants are cynically playing the system.

“You have this class of very rich, elite people benefiting from rent control,” he said. “They have a good deal on a $500 or $800 place on Nob Hill and they use it as a pied-a-terre when they come into the city.”

Delene Wolf, executive director of the San Francisco Rent Board, is still fuming over a group from the South Bay that formed its own little housing cooperative.

“It drove me nuts,” she said. “It was four doctors and their wives. They traded off on the weekends and used it to go to the Symphony.”

Their co-op was disbanded after a 2001 law was passed that allows landlords to file a petition giving them the right to attempt to prove that the tenant is not a full-time resident.

Wolf feels the law is working and points to a decline in the number of cases heard. The first year there were 93, and the last couple of years it has averaged below 20. Continue reading

High Salary Tenants To Pay ‘Fair Level’ Of Rent

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06/14/2012

Tenants on high salaries would in future pay a fair level of rent for the privilege of living in a social home, under plans announced by Housing Minister Grant Shapps. 
The Minister argued that this “handout to the very rich” must end if social housing is to offer the vital support system to those in need. On average the economic subsidy provided by this to high earning social tenants in England is worth as much as £3,600 a year – a subsidy Mr Shapps said he considers unfair both to taxpayers and those who have been left languishing on social housing waiting lists.

The proposals published for consultation today would see high-income tenants – for example those earning above £60,000 or £100,000 – potentially paying up to market rents if they want to continue living in taxpayer-subsidised housing.

The move could see tens of thousands of high earning social tenants paying market rents to continue living in their social homes.

Mr Shapps said that with millions of people languishing on waiting lists, it was right that those who could afford it ‘pay to stay’ in homes that should be helping those in the greatest housing need.

Today’s proposals would give social landlords the extra flexibility they need to increase rents for high-income households – and seeks views on whether this is something landlords should be required to do. The additional income generated could then be used by landlords to increase spending on affordable housing.

Ministers believe the changes are necessary to address the problem of precious social housing resources being occupied by tenants who could comfortably afford to live elsewhere.

Housing Minister Grant Shapps said: “For far too long, millions of people on waiting lists have watched helplessly as high-earning social tenants continue to occupy homes designed to help the most vulnerable. These high-income tenants are not only blocking homes that could benefit those in greater housing need, they’re also relying on poorer taxpayers to subsidise their lifestyle.

“A lazy consensus about the use of social housing has left landlords powerless to deal with this problem. So we want to call time on this blatant unfairness and these handouts to the very rich. Proposals I’ve announced today will give landlords the option to charge high-earning social tenants a fair level of rent – so if they want to continue using this precious national resource, they will pay for the privilege.”

Source: UK Build

Complex rent laws bar 1/3 of apartments from rent increases

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June 7, 2012

No Eviction After Renter Didn’t Pay for 9 Years

By 

The state’s highest court ruled on Thursday that a Brooklyn loft tenant who has not paid rent since 2003 could not be evicted because the landlord had not brought the building up to residential standards.

The ruling by the State Court of Appeals could affect tenants in some buildings covered by the 1982 Loft Law, which has allowed hundreds of former manufacturing or commercial buildings to be rented to tenants as long as the landlords make necessary changes, namely in fire protection and other safety measures, to bring them up to residential building codes.

The tenant, Margaret Maugenest, has lived and worked as an artist in her Gowanus loft at 280 Nevins Street since 1984. According to her lawyer, Margaret B. Sandercock, Ms. Maugenest began withholding rent in 2003 because of maintenance, fire and safety issues. That rent, Ms. Sandercock said, was under $600 per month.

In 2008, the building owner, Chazon L.L.C., sued to evict Ms. Maugenest for nonpayment, and two lower courts ruled in Chazon’s favor. But on Thursday, the appeals court said that because Chazon had missed deadlines for bringing the building up to residential code, and did not receive an extension from the city’s Loft Board, state law prohibited it from evicting tenants, even for nonpayment.

“In the absence of compliance, the law’s command is quite clear,” said the decision, written by Judge Robert S. Smith. Continue reading

Three years after their building was demolished, rent-regulated tenants fight for compensation

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June 06, 2012 03:00PM

Rent-regulated tenants of a Lower East Side building demolished three years ago due to violations that were neglected by the landlord are petitioning to receive their promised $1 million compensation, DNAinfo reported.

In 2009, the Department of Buildings ordered the demolition of 128 Hester Street due to existing untended building code violations and further damage from the construction of a Wyndham Hotel behind the property. The New York State Division of Housing and Community Renewal ordered landlord William Su to pay $1 million to the 29 residents in 2010 as compensation for the demolition. At the time, it was deemed a victory for rent-regulated New Yorkers.

But the tenants have yet to receive the money and claim that Su has avoided meeting with them to discuss the issue. Su’s lawyer told DNAinfo that his client was no longer required to pay the sum because it was deemed unfair as the building was already in disrepair when Su’s company purchased it.

Thanks to the petition, spearheaded by Asian Americans For Equality, the landlord and the former residents are expected to meet again Thursday to negotiate a fair settlement.

Source: The Real Deal

England holds its ground on rent controls

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Rent controls: should they be brought back?

With some tenants spending 60% of their take-home pay on rent, critics are calling for regulation – but landlords say it would reduce supply


guardian.co.uk

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Whatever the level of supply, tenants are facing a 'rent rise bubble', stretching the limits of what they can afford. Photograph: Christopher Furlong/Getty Images

The economy may be in a double-dip recession, but landlords are pushing through ever-higher rents, according to property website Rightmove. It warned this week of a “rent rise bubble”, stretching the limits of affordability.

One in three tenants now spend more than half of their take-home pay on rent, with one in six in London paying 60% of their net income in rent. “This is unique evidence of a rental squeeze that may be leaving some tenants with little, or no, headroom left to pay more,” says Rightmove director Miles Shipside.

Few are renting because they want to. The report found that 56% of people are “trapped renters” who are forced to pay landlords because they can not access a mortgage.

Should rents be capped? During the London mayoral election, Ken Livingstone pledged a “living rent”, saying that no one should have to pay more than a third of their wage to private landlords. But within the Labour party, Livingtone is a rare advocate of rent control. Even housingcharity Shelter is not calling for the restoration of across-the-board rent controls. This summer it will issue a research paper on the rental crisis, but it is expected to focus more on giving tenants greater long-term security, and encouraging large-scale institutional investment in rental properties, rather than calling for price controls.

Policy officer Robbie de Santos says: “Short contracts might be suitable for more mobile people, but for many families there would be benefits from continued stability. For example, they would be able to predict how much their rents will go up so they can plan their finances. Continue reading

The Same Old Story Re-emerges in France

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By  | Posted Tuesday, June 5, 2012, at 7:52 AM ET

Cécile Duflot, Minister for Housing and Territorial Equality Wikimedia Commons
Cécile Duflot, Minister for Housing and Territorial Equality                                                                                      Wikimedia Commons

 

France’s new housing minister is making her mark quickly with the imposition of“emergency” rent control measures and curbs on evictions. I hope the stated temporary nature of the rules reflects a recognition that this sort of strategy doesn’t work to cope with the long-term question of housing availability, though one always has to worry that temporary measures may become permanent.

What’s really noteworthy here, however, is the nature of the circumstances in which this emergency arises.

The most reasonable time for rent control is when you have some policy reason to want to prevent people from becoming employed in the residential construction sector. During a war, for example, you might deliberately curtail civilian building to free up resources for strategic projects. But France is not at war, and François Hollande’s stated top priority is fighting joblessness and promoting economic growth. In that case high rents—in other words, a high level of demand for houses relative to the existing stock—should be part of the solution. Since a construction boom would be a welcome driver of employment, the question for France is why don’t high rates lead to an adequate level of new building? In American jurisdictions undersupplied with housing, the answer usually turns out to be rules against building multi-family homes, rules requiring provision of huge numbers of parking spaces, and sometimes simply blanket rules saying that the “character” of existing neighborhoods can’t change.

The details of the French situation are doubtless different, but basically similar barriers exist all around the world. A country facing high unemployment and rising rents should be trying to see what’s blocking new construction projects and removing the obstacles.

 

Source: Slate