Landlords deny huge rent hikes

Landlords deny huge rent hikes

Dave Boitano

Despite what you may hear, most landlords are not raising rents by double digits, several landlords said Wednesday night.

And they brought the data to prove it.

The meeting was the second of three sessions held to explore issues related to rental housing in the city. Last week, tenants spoke of how they were affected by rent increases. Wednesday night was the landlords turn.

Under strict rules laid down by facilitator Jeff Cambra, audience members could not question speakers and no one was allowed to mention properties or owners by name.

To maintain a safe environment speakers did not have to give their full names, but many did. Last week, some tenants requested anonymity because they feared retaliation from landlords.

Lisa Fowler, who works for Gallagher & Lindsey, gave a breakdown of reasons tenants gave when they moved out of the 1,000 rental units the company owns or manages over the past 23 months to determine if high rents were forcing renters out. The most common reasons were job relocation, or relationship breakups forcing one of the partners to move out or move in with someone else, Fowler said.

Other tenants moved because their unit had been sold, the owner moved back in or they bought their own homes, she added. Others left the area to care for a parent or family member in another part of the country.

"What we found, which is just what I thought I knew from memory, was that most people did not cite the amount of their rent going up or being too high as their reason for moving,” Fowler said.

Don Lindsey, founder and chairman of Gallagher & Lindsey, showed that most rentals owned or managed by his company had only modest rent hikes in the last decade. He analyzed rents during an 11-month period in each of two years.

The average rent in the 215 units analyzed rose from $834 monthly in 2004 to $1,204 a month in 2014. That represents 4.4 percent annual hike over a decade, he said.

Lindsey said the numbers are indicative of Alameda’s housing market.

“These are averages,” he said. “We have had up years and down years. The market in the last 10 years has been pretty solid.”

The cost of maintaining property amounts to between 40 and 50 percent of rental income, he said. It cost more than $120,000 to retrofit one 17-unit property to meet seismic standards.

But raising rents can work against an owner. Gallagher & Lindsey works to keep tenants for continuity and to avoid the high cost of remodeling units for rental once a tenant moves out.

“That’s philosophically the way we run buildings. We want people to stay,” Lindsey said.

John Sullivan said most of his rentals are below market price as well. Most tenants are not seeing the kind of huge rent hikes that make headlines, he said.

“That’s really what’s happening out there, not what you read in the papers,” he said.

But Angela Hockabout of the Alameda Renters Coalition had a different story to tell. Her rent was raised 25 percent last August, from $1,800 a month to $2,250.

The news was devastating, said Hockabout, a stay-at-home mom.

“It felt very impersonal,” she said. “I felt I was some landlord’s personal ATM."

The group will meet on January 7 to seek solutions to the problems and are expected to present recommendations to the City Council on January 20 if both sides can unanimously agree on any proposal.

Comments

Submitted by C. (not verified) on Thu, Nov 20, 2014

Not many people tell their landlords to their face they are moving because the rent is too high. They make up some other excuse. If you want your landlord to give you a good reference you don't give them ammo to use against you with the next landlord that would imply you are cash strapped. Also "huge" is a relative term. For some people a $50 to $100 a month rent increase seems nominal but for others on a tight budget it can mean a serious reduction in disposable income or force them to move. For them it is "huge". Maybe Mr.Cambra should interview the Alameda Food Bank clients who resort to the food bank because a disproportionate amount of their income must go to housing. Set up a table on Park Street or at South Shore and allow Alameda tenants to anonymously talk to you about how they truly feel. How vulnerable do they feel when they see rents going up and up in the rental listings in the paper and the property companies websites? The problem is not just that rents are being raised year after year while units are occupied, it is that when property turns over landlords are hiking rents significantly. It is becoming increasingly unaffordable to rent here. I have watched one single family rental home go from $2,400 a month to $3,000 a month in a span of under five years. Each time it becomes unoccupied the rent is bumped up at least $100 a month. Did those tenants leave because of a rent increase? I don't know. Did they tell their landlord they were moving out because the rent was too high? Maybe - but maybe not. For the property manager quoted in the article to say all is well because tenants aren't complaining that they have to move out because of rent increases does not persuade me. Tenants don't like to burn bridges and telling your landlord or property management company that you are leaving because you are unhappy with a rent hike is not the norm. Renters in this town know they are largely at the mercy of the three large rental agencies. Getting branded a malcontent who moves out when the rent is increased is not a label most tenants want - thus they give other reasons for moving out. Mr. Cambra has his work cut out for him to glean what tenants are truly feeling and experiencing. My hunch is that a good share of tenants move when incremental rent increases, over time, push them over the edge. Then they quietly give notice - providing a different reason for moving - and try to find something cheaper in Alameda if they are very lucky or off-island.

Submitted by Struggling (not verified) on Thu, Nov 20, 2014

I was at the meeting last night. I'm a tenant who received a $300 / 20% rent hike in October of this year. So, while I know there are more good landlords than bad ones out there, the truth and fact of 20%+ rent hikes cannot be denied despite the multiple attempts to do that last night.

Secondly, regarding Lisa Fowler's citings of the reasons tenants gave for moving out, I have to say there is a lot of ambiguity in her findings. If someone is moving away for a job couldn't that also be an indication that they can't afford to live in the Bay Area anymore? That they secured employment elsewhere where half of their take home pay doesn't have to go to rent?

Another reason she cited for people moving out was that they were moving in with someone else. Couldn't that be interpreted as they are moving to be able to share rent with someone?

If it were me, I'd rather say I'm moving because I got a new job than admit that I can't afford my rent in the Bay Area. I'd rather say I'm moving in with my boyfriend than admit I'm no longer able to support myself.

In short, I don't think the data Lisa Fowler presented is proof that none of the Gallagher and Lindsey tenants are struggling to pay their rent.

Submitted by Family Landlord (not verified) on Thu, Nov 20, 2014

I'm a landlord with below market rate rent for my tenants. The data Lisa Fowler and Don Lindsey presented was to counter the perception/rumor that landlords were indiscriminately raising rents to exorbitant rates that were forcing existing tenants out of their homes. That to me is the key issue. Are Landlords throwing people out of their homes, and disrupting lives simply because the rental market has gone crazy in Alameda? I think the preponderance of evidence shows that is not so. I have long term tenants, and I have raised the rent modestly (a two hundred dollar per month increase this summer) which was the first rent increase in 8 years. I want them to stay. If they had to move out of the house for any reason, I would instantly double the rent for the next tenants, because that is what the market will support. My neighbor moved out of the house he owns (same model as mine) and rented it this summer for double what I charge. He was able to do this with no fallout, because it was a first time rental and he didn't evict anyone or cause a tenant to leave because of a dramatic rent increase. So if one wants to argue that the rent in Alameda is too high, I do not think one will garner much sympathy. Live where you can afford to live. If one wishes to argue that dramatic rental increases are evicting families and disrupting lives, that resonates with the public and could lead to restrictions on landlords that I do not support. The vast majority of landlords in Alameda are doing the right thing and I think the Fowler data was presented to support that. I am also a renter, and when I chose my current residence, I took into consideration what type of landlord they were and how they treated the previous tenant. I did not rent several places because the landlord was erratic or treated the previous tenant poorly. I wish my rent was lower, but I acknowledge it is pretty much the norm in the current market I live in. Alameda is still far more affordable than San Francisco or Palo Alto, but as people discover our island heaven, the rents will rise. I believe this will happen largely through natural turnover as opposed to forced evictions by landlords doubling the rent. I find it ironic that most of the people protesting the cost of housing in Alameda are exactly the same people against development and building new housing here. We had a huge population decrease on our Island since the Naval Base closed. One third of our Island is vacant and development has stalled due to these naysayers, who are against building a lot of housing on the Island. One can't have it both ways. There is this thing called "supply and demand", and right now supply is way out of whack with demand due to the tech balloon and the lack of new housing in the region. Compare us with Seattle (which has added a lot more housing than we have) and you will see that we are reaping what we have sown, by preventing new housing from being built here. We do not have an evil Landlord syndrome in Alameda. The only changes that need to be made/legislated are the addition of more housing stock on the island.

Submitted by C. (not verified) on Thu, Nov 20, 2014

How do you know most of the people protesting the cost of housing in Alameda are the same people against development and building new housing here? That doesn't make sense on the face of it. I am guessing most renters and would-be home buyers would welcome more housing stock on the island. Why would you wait 8 years to raise your rents on your property and then hike it $300 a month? That seems like poor property management to me. Why not small incremental increases each year? A $300 a month jump in rent would be a shock to most renters budgets. Your comment "live where you can afford to live" smacks of callous indifference to people who have lived in Alameda all their lives and who COULD afford to live here up until the last couple years when rents started going through the roof.

Submitted by Kate Quick (not verified) on Thu, Nov 20, 2014

We have three rentals - a three bedroom flat in a two flat Victorian, a two bedroom basement apartment, and a two bedroom cottage. We raise rents when people move out, and set rents at or slightly below market. We get advice as to market from the realty company we use to advertise and show the properties and screen the potential renters. We maintain the units well and do major renovations when they go vacant. Our rents have increased, but we do not burden the tenants with rent increases while they are there. This keeps us in long term tenants which lowers our cost, since tenant turnover is an expense. Having these rentals is part of our retirement income plan and we are yielding what we planned to yield. It is true that people are paying more for housing in Alameda, but if your landlord is not raising the rent while you are there, is maintaining and upgrading the property, and has a nice neighborhood to offer, I think that somewhat mitigates the higher cost of renting.

Submitted by kathryn (not verified) on Thu, Nov 20, 2014

Apologies for comment. My computer died.

Submitted by MJ (not verified) on Thu, Nov 20, 2014

Rent control, like the kind in San Francisco that excludes new construction, is just a wealth transfer device from small owners to large developers. Rent control constricts supply, which drives up cost, and then large developers excluded from rent control cash in.

Submitted by b. (not verified) on Thu, Nov 20, 2014

What I have seen is that when someone moves out, the rent has been increased by an enourmous amount: ex: motherinlaw apt was renting for $1,200/mo and suddenly went to $2,000/mo when the last tenants moved out. THAT'S AN $800/mo INCREASE!

What this is about is the changing of the very FABRIC OF THE COMMUNITY! Changing the very KIND of people who "can afford to live" in Alameda. You're forcing life-time or long-time residents who have been on The Island for decades to leave.

What are you going to do when all the "regular folk" have been pushed out and you've made Alameda into just another little San Francisco? Will you mow down blocks of 1890s Victorians and 1920s Bungalows to build soul-less and charm-less "condos"? And who will live in those?

Submitted by Kristen (not verified) on Thu, Nov 20, 2014

Speaking as a former renter who had the good fortune to buy a few years ago, I agree with C. in her reply to Alameda Landlord. We rented a two-bedroom house on the east end for several years, and the rent only went up three times; each in $50 increments. It was a lot better than getting $150 increase all at once. I can only imagine what a $300 increase would be like.
I think what a lot of landlords don't take into account is that wages in the bay area are stagnant and have been since 2007. I'm not talking about tech workers here, I'm talking about the bulk of people who live in Alameda-- retail, sales, office assistants, teachers, etc-- those people are trying to live in 2014 on 2007 wages. Their salaries simply haven't kept up with inflation in housing, food, transportation and utility costs (and yes, when we rented, we paid all utilities including water and garbage). How are people supposed to do that? The "live somewhere else" is a "let them eat cake" attitude. Where shall they go? Stockton? Tracy? Many have children in local schools, jobs in the east bay or SF, deep roots here.
So Alameda Landlord, if one's monthly household income is, for example, $5000/month (that is pretty average, after taxes, for most of the people I know; my household included), and your rent is raised, for example, from $2300 to $2800 a month, one is now paying over half of their income in rent. So after rent, utilities, food, transportation, etc., you are left with zero or less at the end of the month.
I know for a fact that our old house is being rented out for more than my current monthly mortgage payment; and sure, while we have property taxes, we have advantages that we didn't have as renters. Renters can't deduct their rent when filing taxes; we can deduct our mortgage interest. Renters tend not to itemize (unless they are running a business), so they can't deduct for charitable contributions, DMV vehicle renewals, etc. Renters (many, but not all) pay for their utilities on top of their rent; our current utilities bill PLUS our mortgage is LESS THAN what rent is on our old house. Think on those things, Alameda Landlord, before you make assumptions about renters in Alameda.

Submitted by Rita (not verified) on Thu, Nov 20, 2014

We have been tenants in Alameda for the past 7 years. When ownership changed to a property management company a few years ago from private ownership the annual rent increase letter is what comes every year like clockwork! Been this way for the past 3 years! Only problem is the building is old, not earthquake retrofit, apartment is very outdated and if you complain, are only told we are paying under market value! Total joke! Just because you can get the money from long-time loyal tenants, doesn't mean you always should. Very disappointing.

Submitted by Elsa (not verified) on Thu, Nov 20, 2014

Thank you, Kristin. You made a lot of good points.

Submitted by frank on Thu, Nov 20, 2014

Having read all the replies I see none from "Alameda Landlord". I do see one from "Family Landlord" where he states that after eight years he raised Rent by $200.00. In "C's" reply this $200.00 became $300.00 and this was picked up by a following reply (Kristen). Maybe I'm missing something here or perhaps people should read the replies more carefully.

Submitted by KevinS (not verified) on Thu, Nov 20, 2014

Don Lindsey, founder and chairman of Gallagher & Lindsey said last night that G&L spends about $2000 every time a unit turns over. Having toured several G&L properties in the last couple months I would really like to know where that $2000 is going. Most of the units I looked at hadn't even had the floors swept, let-alone carpets replaced or even shampooed. They were out-dated and dirty.

Submitted by JB (not verified) on Thu, Nov 20, 2014

I found it a bit odd that Don Lindsey only offered data on about one fifth of the properties that G&L manages. It seemed that targeting one very specific subset of their properties seemed a tad disingenuous. While I appreciated him saying that large increases are unreasonable, I find it a bit fishy that he would offer such narrow data. What's in the data that was omitted from this narrative? Also, Lisa Fowler's bit on reasons for leaving their rentals was quite anecdotal. While there's nothing wrong with that on the surface, using anecdotes and calling it data is also a bit disingenuous.

Also, the good landlords who spoke last night are not the problem. It's the shady ones who wouldn't show their faces in public that is a problem. And how many economic evictions are enough to warrant some kind of action on the part of our city to do something to protect renters, who make up slightly more than half of the population? If it happened to one person, that's too many!

Tenants need to unite and organize. The mayoral election was decided by 152 votes. The needs of a highly organized group of renters would have to be addressed.

Submitted by Renter (not verified) on Thu, Nov 20, 2014

One thing I found problematic with the "data" offered by the property managers was the glaring lack of reporting on two and three bedroom units. These are the housing units that can garner the most money from the market's high rates. It's much harder for people in these homes to move because usually they are families with children who wish to remain in the school district and when they are thrown out in the street with $300+ rental increases there's nothing else affordable in the market for them to turn to.

One other thing that was said was how the market is cyclical, but who knows when the next bubble will burst and how far Alamedans will be scattered in the meantime.

To that end, many renters support new housing initiatives Bay-Area wide because housing is so desperately needed. This is where many jobs are... just not so many homes. :(

Submitted by Kristen (not verified) on Thu, Nov 20, 2014

Sorry about mistaking Family Landlord for Alameda Landlord. My bad. But the sentiments Family Landlord expressed needed addressing because the attitude of "well, you can't afford it here, too bad, move away" is becoming more and more common, and since more than half of Alamedans are renters, their concerns-- which are legitimate-- ought to be addressed and not pooh-poohed.

I like what JB says above; good landlords are not the problem. It's the economic evictions that are the problem, though I realize landlords benefiting from the current market are not likely to see it in those terms.

I agree that we need to build more housing in Alameda. But we also should keep Alameda as a place where the working class/middle class are not priced out. Otherwise we risk becoming a bland, homogeneous enclave, like Lafayette or Orinda, and I for one would hate to see that.

Submitted by kathryn (not verified) on Thu, Nov 20, 2014

I would like to comment on Ms. Fowler's "data". She presented a review of "reasons renters move", a line item on the Gallahher and Lindsey move-out form. Although this information adds a little to the big picture, please do not call that "data". It is anecdotal and unverifiable. As a former renter, I only filled out such forms if I had rented through an agency, never through a private party. Further, in answer to that question, I put down only "leaving area " or "new job". I did not consider it anyone's business, especially on an impersonal form.

In addition I would like to ask: if the cost of doing business took 40-50% of your income, then does that mean the property owner's / management companies earn 50-60% profit? I would have liked to find out, but the time constraints were so tight there was no time for any questions. Very disappointing. None of the landowners addressed the problem of actual rent increases of 20-50% that tenants are being hit with. Everyone just denied that they were doing that. None of the tenants claim that all landlords are taking this action, but many are. I suspect they chose not to come because they are not local and have no "stake" in this community other than to squeeze it dry. Landlords and tenants are likely facing a common "enemy" -- outsiders taking over local properties and driving the market and the rents up artificially. This was the same strategy that drove the housing collapse and will do the same to the rental market. Look it up. A lot of people are concerned nationwide. If the rental market collapses, the local landlords will be who get hurt. Look up Blackstone. Just google it. Finally, to those who say "live where you can afford": Alameda was affordable. Where do you suggest 55% if Alameda residents go? Iowa? Do you really want a Closed Fated community? You have yours so everyone else can leave? My husband and his father before him were burn and raised here. That's over 90 years of residence. This is OUR town. Further, we are homeowners by the grace of God, and we do not want this community taken over by neo-cons and techies. We want the diversity this city provides -- including people who do not earn six figures. In fact, for the landlords who say live it or leave it, how about this: go form your fated heaven somewhere else, where nobody except your kind can live in homogeneous peace.

Submitted by frank on Thu, Nov 20, 2014

I would think that most tenants would be happy if after eight years of having the same rent it was raised $200.00. I would consider that a 'good landlord'. I was once a good landlord and had Tenants for eighteen years and only raised their rent once. They eventually saved enough to buy a house. I was working and really the rentals helped to keep my taxes down and the $$/ Rent were not that important. I live on my property and have a two bedroom which I haven't rented out in years. It just isn't worth the drama to me and no matter what you do someone will demonize you. There are existing ordinances in Alameda which regulate just how much rent can be raised for existing tenants. They have been Posted here before. There are a lot of OLD and EXCELLENT and compassionate landlords in Alameda. However we are getting old and there and the demographics in this City are changing and perhaps we just want to live our days in peace. I still rent out a detached studio cottage that is behind the Main House. It is perhaps one of the least expensive Rentals in the City and last time I advertised it on Craigslist I had 100 replies in twelve hours.. I have no idea what the solution to this problem is. It is not just an Alameda problem but the entire Bay Area. I see more and more people taking their Units off the Market and Posting on Airbnb. This also reduces the supply.

Submitted by b. (not verified) on Thu, Nov 20, 2014

Thank you Kathryn. It is about the community. What the rental crisis is doing is tearing apart communities. The people who live around the block from one another. The people who live across the street. The people you see at the grocery store or at Pagano's. The rental crisis is displacing those people. The people who make Alameda what it is.

In the end it comes down to choosing to respect the community or not. And in the case of developers and corporate "landlords," they don't care about the community. Local landlords would have an investment in keeping good folks around.

Somewhere there has to be an HONEST common ground. Not "data" presented to show there really isn't a problem at all. Honest communication between human beings.

Community or greed. Which do YOU choose?

Submitted by David Jackson (not verified) on Thu, Nov 20, 2014

I am not a renter or a landlord but I am a business man. If someone chooses to invest their cash into real estate and provide housing, they have the right to charge what ever they want. Just as renters have the right to pick who and where they rent from.

I would love to live in Marin by my job, however I chose alameda because I can't afford the Marin. If you can't afford the rent, move to an area you can afford, it's that simple. If you want rent control, move to Oakland. Oh, it's too dangerous? Well, that's what happens when you manipulate fair trade, you get one area with crime and blight.

If you can't afford an IPhone, buy a LG, don't tell apple their products are too expensive. There are always options, if one is too expensive, find another.

If the City truely cared, they would buy the properties up as they come available and give them to who ever they want. There are also social programs that offer low or free rent. The man who cleans my office has a section 8 credit and pays $145 for a two bedroom apartment in Marin, the government pays the other $1750....or we pay it in our taxes.

Oh, one last comment, when I was renting in alameda several years ago, when I moved in I got one free month of rent and the following year the rent was reduced by $150 so I wouldn't move, then I had no increase the last 2 yeas I lived there. I imagine the owner lost their short during that down turn so yes, he should be able to make it up when the market is good.

There are social programs available, use them. Stop criticizing the business man trying to make a living. What if you invested all your money into a business, followed the rules, then someone came in and said "your product is too expensive and too many people what it so we are going to limit what you can sell it for". I bet you would be pissed.
Live where you can afford and if you want to live off the government, use social hand outs, stop messing with free trade!

Submitted by Li_ (not verified) on Thu, Nov 20, 2014

Seems there are two separate issues here. a) rent increases during occupation by one renter and b) rent increases between renters. Might be easier for us all to understand and look for solutions if the committee separated the two concerns. The people concerned about a) need to at least talk about small frequent raises vs large infrequent raises, renting from landlord vs renting from management company, repairs and who/how to do them. The people concerned about b) need to at least talk about what their philosophical concerns are about becoming a known desirable place to live, whether concerns about booting old Alamedans out should trump the rights of landlords to manage their private property as they see fit, whether rental prices do/should rise in relation to the retail housing market, which as you know went up fast at the end of the 20th cent. Both a) and b) need to discuss renovation/remodeling costs and taxes and fees and how best to pass them on to the tenants. That's just for starts.

Submitted by SER (not verified) on Thu, Nov 20, 2014

I'm a current tenant with a great landlord. We live in a 2/1 duplex, we also had a increase in October of $180 a month. While it stunk to be paying 2k a month, I know the price is current market value. That has opened by options on moving to another Tech community as the affordability of this area is eeking out of my family's grasp. I love Alameda, I'd be sad to leave it.

Submitted by Anna S. (not verified) on Thu, Nov 20, 2014

I agree with MJ and with David Jackson. In addition, studies have shown that where there’s rent control, the kind that does not give landlords enough room for capital recovery, the quality of the units diminish greatly because landlords skimp greatly on capital improvements.

I am a landlord who owns several units in Alameda. I have not raised the rent for several of my tenants because I like them. A couple of the units are rented by nice families who take care of their surroundings. Their rents have remained flat because I don’t feel right displacing them simply because I want more money. But I have also pulled a few units off the long-term rental market in favor of short-term rentals (airbnb and/or corporate rental) because, I make more money from these and, frankly, they give me less headaches. Now, should there ever be rent control I’ll simply take all units off long-term rental. Or I’ll consider selling the properties to corporate investors who will not care at all about the fabric of this community.

Incidentally, there’s rent control in San Francisco but that has not prevented rents from skyrocketing. Go figure.

Submitted by Julie (not verified) on Fri, Nov 21, 2014

If you want "community" then rally the City to own and operate the low income housing. You can't tell private owners how to run their business. Just because you live in a neighborhood, why should you be intitled to below market rent at the cost of the owner?
Your a renter, by nature, transient. Home ownership is special because it provides you with taking "ownership" in that neighborhood. You share when things are good and bad and you have skin in the game. As a renter, you don't have the same rights as you don't have an investment. Ever see how renters treat their apartments? They trash them as they don't have any ownership. That comes at a price and you can't expect the same rights as a renter as the owner does, that's reserved for the owner or "landlord".
I agree some people have hardships but there is reduced cost housing and aid available, don't expect the owner to have to subidise you because you don't make enough, leave that to the government programs.

Submitted by EHirshberg (not verified) on Fri, Nov 21, 2014

Any limit on rent is rent control. It has had a poor outcome every time it has been tried. Read the economists studies on the subject. They are all available on line. This boom will be followed by a bust. They always are. This is why so many landlords are not taking large increases. They innately know that these booms come to an abrupt end. Best that we remain free people with free markets.

Submitted by JB (not verified) on Fri, Nov 21, 2014

EHirshberg,
We do not have a free market. One major factor contributing to the high rents is a demand outpacing the supply, and this was caused by tinkering with the market via Measure A. Unless the city opens up the market by allowing more housing, the only solution is more regulation.

Your statement that any control is a bad thing screams of extremism. There are plenty of minor regulations that can protect tenants and landlords while not delving into the much demonized "Berkeley-style" rent control.

Submitted by Mark_Irons (not verified) on Fri, Nov 21, 2014

As a thirty year home owner and a residential building contractor I find the figure of 40-50 percent of rental income being spent on properties annually to be dubious. It defies good business logic to invest in property which will require laying out that kind of money annually and if you interviewed tenants about the improvements their land lords have done over the course of a lease I don't think many would verify those figures. Property is like a used automobile. There are lemons, but most people who buy rental property have a business plan which may involve large upgrades on the front end such as foundations or roof, by which they calculate their rents. They may have a slimmer margin in the beginning but with rent increases over time and paying down mortgage their cash flow should increase. Long time land lords may end up having to do a foundation or roof or other major improvement like a bathroom or kitchen, sand floors etc. between tenants but again, at 4.4% compounded annually they should easily be able to absorb those costs. They also get security deposits. And as to that 4.4%. It is compounded annually, so the net gain is much greater over a decade. The recent 5% tuition increase for state schools is frankly an outrage but that's off topic. Just because "the market" for rents increases at such and such a rate, and property rental is a business, which does not mean that in terms of social justice that these increases are "fair" if wages are not increases at similar rates, which on average they are not. See Robert Reich movie Inequality for All. The result is that the renters who do have money for higher rates change and so do demographics. It's called gentrification and it's great for property values.

Submitted by Anna (not verified) on Fri, Nov 21, 2014

Yes, Julie.... Renter's are "transients" who don't care about their homes or not concerned in where we raise our kids. Thank heaven's we have all these homeowner's like yourself that care about the community to make sure Alameda keeps running smoothly and looking pretty because we treat our places like junk! Truly offensive and awful comment to make!

Submitted by Lonni (not verified) on Fri, Nov 21, 2014

I don't know what landlords were referred to in this article but my rent was raised $200.00. It is ridiculous.

Submitted by DeanP (not verified) on Fri, Nov 21, 2014

Rent control stops unfair rent increases. Those landlords claiming they don't raise rent much anyway have nothing to fear from rent control. The question should be what % is the right limit, rather than whether or not to adopt it.

Submitted by DeanP (not verified) on Fri, Nov 21, 2014

Lonni, sorry to hear that. Increase sounds ridiculous. What % increase was that?

Submitted by kathryn (not verified) on Fri, Nov 21, 2014

Comment continued....
children in or leaving college? Where will they live? No new grad I know of can afford these rents. But maybe you all don't have children just starting out. I'm a homeowner. I was also a renter. I was not, nor were my renter friends, transient. We all worked hard and took care of our homes. We all vote. We all have a stake in this community. But the attitudes expressed here about tenants is the immoral hangover attitude held over from the 18th century when only certain people could own property and only property owners could vote (if they were also white and male). It's time to reach for a higher morality.

Submitted by kathryn (not verified) on Fri, Nov 21, 2014

Wow. People's comments about tenants being "transients" who do not have "skin in the game" and how renters should go live where they can afford to live or get "government assistance" display the kind of arrogant privilege that disregards the dignity of renters and of the community we live in. Many former homeowners lost everything in the housing collapse and are now renters. Many people have lost jobs and can't keep their homes and now rent. Most people do not, for various reasons, qualify for subsidized housing, and even if they qualify end up on a list years long. And to the point the business man made about being "told how much they can sell a product for": you're right. And if the "market" cannot afford your product because you charge too much, then your product will not be bought -- eventually. Certainly the market can bear inflated prices for awhile, but only while there's an artificial boom. Come "bust" time you're S.O.L. And businesses who did not exploit the market cycle will have continued a steady customer base and sustained a good reputation for fair prices. You will not have. But go ahead. Exploit the market as much as you can and you can take pride in contributing to the inevitable crash that comes whenever people squeeze the "market" dry. Read what's happening nationwide. And go ahead and align yourself with the deeper problem of what happens when markets are exploited for temporary high profits. Again, read about what's happening right now with Wall Street property owners and the Blackstone people. All that said, there is a question nobody is. mentioning. I hesitate
because the pushback will be harsh. But oh well, here goes. There is the principle of "charge what the market will bear." But there is a larger, deeper principle having to do with the morality of that "philosophy". One person here said he/ she has not raised rent on some tenanted because he/ she liked them. So if you don't "like" a tenant you feel justified in raising rents? Obviously, there is no fairness in that kind of thinking. And obviously, that is the kind of landlord tenants are rightfully afraid of. Then there are those who. dismiss their HUMAN consumers by telling them to go elsewhere, as if the tenants' HOME can be equated with a high priced liar of bread. A local landlord recently made the point that landlords are marketing a product that is unique to all other products in that they are dealing with people's homes and lives. As landlords, she said, "we need to be aware of the difference." Just because the market can temporarily bear high rents does not make it morally right. Just because you "can" does not mean you "should" as a member of this community and of the human race. Do none of you have children in or leaving college

Submitted by EHirshberg (not verified) on Fri, Nov 21, 2014

Regarding costs of operation:
Taxes including license fee 20%
Insurance 4%
Utilities 5%
Repairs 10%-15%
Management 6%
Depreciation per taxcode 3.7%
Note that this adds up to approximately 50% of the gross. It is what we expect to see when we analyze a property. Taxes used to be about 10% of the gross, but they have risen steeply in the last decade. Ours have gone up by an average of 106% in Alameda.

Submitted by kathryn (not verified) on Fri, Nov 21, 2014

EHirshberg: so these numbers are annual? And tax deductible, right? And the net of 50% is profit, correct?

Submitted by b. (not verified) on Fri, Nov 21, 2014

Interesting to see that with some of these people there can be no "common ground"...humanity doesn't even come into the picture with these people. It's just $$$$$. We, as a people have GOT to come up with a different "model" for this entire thing. To sit and scream "NO RENT CONTROL" and spew vitriol at anyone who questions your "profit" shows absolutely no concern or compassion for the renter.

Time for a new model. Time for people to talk about all this in a different way. The old way no longer works. All it does it create more problems. You milk it until it falls apart, and by your own admissions it WILL fall apart.

Dont' any of you think there has to be a different way to do this?

Submitted by SG (not verified) on Fri, Nov 21, 2014

I was a renter through Gallgher & Lindsey for over 2 years and, at least for my building, they only raised the rent $50/year which was very reasonable. I don’t know what they do for their other buildings. Now, I’m in a small building run by the landlord and not a property management company. The other tenants told me the landlord doesn’t increase rent much but I guess I’ll find out when my lease is up. I’m hoping it’s true. I think there should be a percentage cap on raising rent. I think 5% each year is reasonable.

Julie, I grew up here and I’m a renter. I am not a transient. I do not trash my apartments. Alameda is a community and that includes renters, not just homeowners.

Submitted by Steve Gerstle on Fri, Nov 21, 2014

I fail to understand why renters would have confidence in a City driven process to represent their interests.

The Battle for Harbor Island.
http://vimeo.com/12085156

Submitted by Noah (not verified) on Sat, Nov 22, 2014

$325 rent increase and my family and I have lived in our compkex for over 8 years. Im starting to wonder what is to actually come of this. Yes, rent increases are happening all over the city, when is it going to be enough! I saw a post for $3000 dollars for a 2 bedroom apartment!! Really???? As much as we love raising our kids in Alameda, if this continues..we will be forced to leave. Not because were poor and need subsidized housing or GA. .but because we work in jobs that don't adjust the cost of living as it seems the cost of living is adjusting us! Normal hard working people that just wanted to raise our family in this wonderful city. Tranients as one woman mentioned!! Shame on her!

Submitted by Karen (not verified) on Sat, Nov 22, 2014

I’ve been a landlord for over 25 years, and I have historically given my tenants small to medium size rent increases over the years, and for many years I did not give rent increases at all. Over the past 25 years, I only had one tenant resist the rent increase because he had his hours reduced at work and could not afford a rent increase, so I made arrangements to move him into one of my smaller units for less rent.

I will retire in about 10 years and the reason for purchasing income property 25 years ago was to supplement my social security income when I retire. I was 23 years old when I purchased my income property – giving up the luxury of travel, and other luxuries like fancy clothes and cars so I could afford to pay for the repairs and maintenance on my 100 year old property. I drove the same car for over 16 years because I wanted to put the money I earned from rents back into my property.

The flexibility I have as a landlord to keep my rents below market because I like my tenants will be taken away from me with rent control. I will be forced to raise my rents to market and to give annual rent increases – because after rent control I will loose the right to raise rents to market if I wanted to or needed to.

I personally think we should focus our attention on building more apartments and affordable housing in Alameda instead of name calling and labeling landlords greedy. The irony is that some of the same people advocating for rent control have come out against developing any new housing in Alameda.

This housing crisis is a regional crisis and local landlords should not be asked to pay for something we didn’t create.

Submitted by Michele Ellson on Sat, Nov 22, 2014

Hey folks: We're getting a slew of comments that violate our comment policy, which prohibits name-calling and personal attacks on fellow commenters in order to preserve a safe space for people to express their views on the issues our stories address. As a result, I'm unfortunately going to have to shut down comments for this post. If your comment is still in the queue, please accept my apologies for shutting things down before getting the chance to post. But we'll continue to cover this issue, so you'll have more opportunities to weigh in. In the meantime, thank you to everyone who offered their perspectives and information - they are an invaluable part of this evolving story.