If I’m Rich, Am I Still Protected By Rent Control?

by | Feb 18, 2011 | Tenant Law

I live in a two-unit building where the owner lives in one unit. The building was built in 1900. They are both legal units and I pay $3,900.00 per month.

Is it true the rent can only go up .5%? I make over 400K per year but don’t want to pay any more than I have to.

When I read the laws of rent control my interpretation is that for a building like mine that only portions of the rent control apply to my situation covering evictions and such but don’t cover the actual rental fee. I know my landlord doesn’t cover his costs monthly on the rental and he will want to raise the rent if he can.

I love this question! It’s a great set-up (intended or not.) Rich tenant exploiting struggling landlord. Shouldn’t we all have their problems? I feel like I’m sitting behind a desk at ACORN; a prostitute and her pimp asking me for advice about buying a house and hiding their source of income… Okay, I’ll bite.

Unless the units were converted to condominiums, your tenancy is protected by both major provisions of the Rent Ordinance. Your rent can only be increased by the allowable annual increases established by the Rent Board and you can only be evicted for for one of the 15 just causes. If your unit is not a condominium you are correct. Beginning March 1, 2011, the annual allowable increase is .5%, half a percent. Last year’s increase was .1%.

If your unit is a condominium (a legal single-family dwelling) then your tenancy is only covered by the just cause provisions of the Ordinance. The landlord can raise the rent to “market rate.”

Really, the landlord could raise the rent as much as he wanted, but if he tried to raise your rent to, say $10,000.00 a month, that indicates that his “dominant motive” is to evict you–a violation of the Rent Ordinance.

Of course there are other allowable increases a landlord can levy: capital improvement passtroughs; operation and maintenance costs; utility cost passthroughs, etc. Generally, however, you won’t have to pay a penny more than $3,919.50 if your rent is increased after March 1, 2011.

A rent increase of 20 bucks for a tenant who makes $400,000.00 per year, is this fair?

The Rent Ordinance was enacted in 1979 because:

“Tenants displaced as a result of their inability to pay increased rents must relocate but as a result of such housing shortage are unable to find decent, safe and sanitary housing at affordable rent levels. Aware of the difficulty in finding decent housing, some tenants attempt to pay requested rent increases, but as a consequence must expend less on other necessities of life. This situation has had a detrimental effect on substantial numbers of renters in the City, especially creating hardships on senior citizens, persons on fixed incomes and low and moderate income households.” (San Francisco Rent Ordinance §37.1(b)(2).)

Every once and a while landlords squeeze into their green tights and with Robin Hood-like indignation point at tenants like our reader and demand “means testing” for rent control.

They claim that our reader and his ilk are always going to be able to afford increased rents and that he doesn’t deserve the protections of rent control. His unit, they cry, should be removed from the statutory protections. At first blush, this may seem fair…until you take a closer look.

Means testing, the application of an income threshold to remove a unit from control,would not create a single new affordable rental unit. Instead it would serve to remove vast numbers of units from rent control protections forever.

Think about it, a landlord with a wealthy tenant can raise the rent to whatever he wants, whenever he wants to. By virtue of those increases alone, only wealthy people will be able to afford his unit, insuring that the unit will stay at “market rate” forever. A landlord in that position has no incentive to rent to a tenant whose income may fall below the threshold.

If means testing is enacted, all tenants will have to prove eligibility for rent control. If you don’t like sending your tax returns to the IRS, how are you going to feel sending a second set to your landlord?

Finally, imagine the bureaucracy necessary to enact a means control scheme. The Rent Board would be flooded with petitions seeking to review renters’ tax returns.

Tenants, don’t get fooled about “fairness.” Means testing won’t create more affordable units nor will it provide revenue to do so. Means testing is simply a scheme to rob from the rich and give to the richer–another ploy to eviscerate the Rent Ordinance.

If we’re truly concerned about the rich paying their fair share, it’s time to revive the graduated income tax with upper level tax rates of 80-90%, just like in the days of that old socialist, Richard Nixon.

Let the IRS sort it out, not the Rent Board.

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