How To Be a Landlord in San Francisco
Being a landlord in San Francisco is like being a coke-dealer in the 80s. People are basically throwing money at you for doing nothing. It’s like finding a cauldron of gold doubloons buried in your backyard. It’s pretty sweet.
Photo via Flickr user David McSpadden
A fact about Frisco living is that we deal with a predictable litany of questions when we encounter someone from outside our urban womb: "You're from San Francisco? How are the gays?" Or: "You're from San Francisco? How are the earthquakes?"
But nowadays, instead, I get: "You're from San Francisco? How are the evictions?" Evictions are the new earthquakes.
These days, San Francisco's gonzo housing market is international knowledge. And yet, an unspoken truth about San Francisco housing is that the easiest job in the world is to be a landlord here. On the list of easy jobs, it edges out press secretary for the Secret Service, where the only words you ever get to say are, "That's classified."
I would know what an easy job it is because I am a San Francisco landlord. That's why I started Small Property Owners for Reasonable Control as a PAC of insignificant landlords. We are small landlords (we own four or fewer rental units), and we support tenant protections, rent control, and limits on evictions because, as landlords, we know we've got it way too good.
Ten years ago, I bought a house in North Bernal with an in-law unit using a down payment I inherited and a mortgage I shouldn't have been allowed to get. You know the kind of mortgage that caused the housing bubble and wrecked the world economy? I had one. Then, through no acumen of my own, my neighborhood became the Hottest Real Estate Neighborhood in America™. I got out of my sketchy mortgage and into a low-rate 30-year fixed because my home value rode a wave of appreciation fueled by the relentless power of startup pixie dust and tech VC hot air.
Now, because it is so groovy and desirable and close to the Google (and Apple and Yahoo and Genentech and Facebook) buses, no one I know can afford to live in my neighborhood. So instead of having friends nearby, I get to charge obscenely high rent. I don't want to charge obscenely high rent. I'd rather have friends.
Photo via Flickr user Roman Boed
Speaking on behalf of 100 percent of small landlords, all the "mom and pop landlords" everyone is so worried about don't need so many rights. We didn't build anything. We didn't sacrifice and work hard to make our investment so crazily valuable. We didn't execute a visionary and shrewd business plan or invent the greatest app. We don't do the cool things that make San Francisco desirable. If we were good at being landlords, we would do it somewhere it takes skill to be a landlord, like Richmond or Detroit.
Being a landlord in San Francisco is like being a coke dealer in the 80s. People are basically throwing money at you for doing nothing. It's like finding a cauldron of gold doubloons buried in your backyard. It's pretty sweet.
Which brings me to the second unspeakable truth about San Francisco housing: There is no way to make San Francisco affordable again without making real estate less profitable. Every homeowner and landlord has a ballooning financial stake in the gentrification gravy train never stopping. If the city enacted a policy that brought housing costs down, all of our property would be less valuable and we'd profit less. I'm fine with that, but let's stop bullshitting ourselves about it. We want more and cheaper housing, which means the only part of the equation to cut is profit. However we get there, there is no other way.
Photo via Flickr user Jamie McCaffrey
Let's say the "increase supply" maniacs get their way and San Francisco sweeps aside the asinine zoning restrictions and those NIMBYs fretting about the view all fall off their decks, allowing the city to add the 100,000 units needed to make a dent in housing costs. Let's say this tidbit of economic wishful-thinking pans out.
Then everyone like me loses out. If we flood the market with supply, there's less demand for my rental unit and I make less money. I lose desperate youngsters writing overwrought cover letters in the hopes of signing a lease. The escalation of my loan-to-value ratio slows. On the other hand, if housing costs were brought down by aggressive government intervention, we would also lose. Whether it's an organic increase in supply and density, a regulatory/legislative shift, or a combination of the two, if housing prices come down, regular homeowners and landlords like me lose a bit of wealth but gain a more humane city to live in.
If I wanted to live only around rich people, I would have moved to Pacific Heights in the first place. I don't and didn't. Please, Mayor Lee and Board of Supervisors, crash the real estate market on purpose. Make my investment worth less. Take away my cauldron of gold doubloons.
Landlords are not that smart and we're not special. Nobody made us be landlords. We call on all policymakers once and for all to give us the respect we deserve, which is not much.
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