President’s report

Tried-and-True

written by Chris Bricker

California property owners are as diverse at the state itself. Write letters to legislators, participate in hearings, and make it known at City Hall that rental property owners are hardworking, everyday San Franciscans, and not the greedy investors they’re made out to be.

Sadly, when those same SFAA members check the news today, they see their expectations don’t necessarily match up with the political reality of the Prop 10 vote, of rent control as an again-in-vogue idea, and with the regulation of even mom and pop landlords in California in 2019.

Conversely, the public’s own expectations about landlords and the rental industry has fueled the push for rent regulation in cities and counties up and down the state. What has been particularly disheartening is that these expectations and stereotypes of housing providers differ greatly from the boots-on-the-ground reality of many mom and pop landlords and professional owner-operators.

In the days and weeks after the Prop 10 victory, the SFAA staff and board of directors fielded calls and suggestions from SFAA members about the next play, the next win, and the next issue where we as an industry could fight back against misguided regulations and deliver a resounding victory for rental housing providers. The expectation was clear: the voters had spoken and told us that they hated rent control. Now was the time to move the ball forward for the industry.

In reality, election night was much more complicated, and the results foreshadowed a much less optimistic future for California rental housing providers. Yes, it’s true that Californians rejected the measure, ostensibly rejecting rent control with the same vote. But truthfully, the measure was fatally flawed—regulating both single family homeowners who have never had a tenant and imposing vacancy control to forever freeze rents. And yes, every county except two in the Bay Area rejected the proposal. However, on the very same night, the same jurisdictions that rejected Prop 10 overwhelmingly voted for liberal Democrats running over moderate ones, and for moderate Democrats over even tenured Republicans. As the Democrats solidified supermajorities in both the House and the Senate, sometimes beating out more moderate Democrats and even making inroads in places like Orange County and Walnut Creek, the table had been set for a flurry of legislative and rent-control related proposals in 2019.

The hard reality of the current political environment is a tough pill to swallow for many SFAA members, especially so soon after a major industry win. Fast forward to summer of 2019, and our elected officials in Sacramento are considering statewide rent control and two dozen other ideas. In the same way that many members’ expectations didn’t mesh with the current political climate for the industry, the public’s expectations and misconceptions about who rental housing providers really are is a big part of the heavy handed and misguided attempts at regulating both large and small rental housing providers.

Part of the reason why politicians in San Francisco and Sacramento never leave landlords alone is because of how they perceive the industry and what they expect the typical landlord to look like. The expectation is that if you own property you’re either the mustachioed monopoly man or the Wall Street investor sending 1000% rent increases to 95-year-old women, but in reality, rental property owners are as diverse as California is and can’t be painted with a single stroke.

Just like with any other group of people, SFAA members operate beloved restaurants, make music, teach, work for the city, or clean houses for a living. Over its 101 years of existence, SFAA has counted in its membership Black Panthers and beatniks and hippies and yuppies and techies. We have members whose families have owned rental property in San Francisco since after the 1906 Earthquake, and members who scraped everything they could to buy a single family home at just the right time. It’s true that SFAA members have a substantial investment in their property, but at their core, they made an investment in San Francisco, and provide below-market-rate housing for San Franciscans. In truth, rental housing providers are an integral part of the city’s fabric, even as our politicians create laws to further regulate the industry.

Part of the reason that perception of rental property owners is so far disconnected from our reality is because of rising property values in San Francisco. As property values (and purchase prices) have gone through the roof, the assumption is that anyone who owns property is monolithic— the wealthy, landed gentry who is motivated primarily by money. The disconnect is clear—its true that property values have increased—but the reality is that we operate in a rent controlled city.

At an industry meeting last month, a colleague lamented to me that he worked “in property management, not politics,” and I had to stop him—in 2019 in San Francisco it’s more than likely that if you’re working in housing, you are working in politics. Every time a housing provider sends an obscene rent increase, or pursues a baseless eviction, or neglects or harasses a tenant, they are contributing to what has sadly become the perception of the industry. These stories become viral, shortened into tropes about downtrodden tenants and the mustachioed monopoly man collecting the rent. They make their way from social media to newspapers and eventually over to City Hall in the form of a new regulation, a new prohibition, and new penalties.

So, if the perception of the industry and the actions of a few bad actors is leading to harmful, overzealous regulations that are bad for our businesses, bad for the housing stock, and bad for the state, what can we as an industry do to fight back? What is the best way to tell our reality?

For one, we should try to be a part of the solution in addition to fighting off the most harmful aspects of proposed regulations. The source of California’s rising housing costs is a massive housing shortage, and this industry can and should support the production of new housing—not only because it’s the right thing to do, but because when the cost of housing comes down across the board, the punitive proposals will also slow down.

In addition, we have to be willing to advocate for ourselves and to share our stories and show the reality and diversity of San Francisco’s housing providers. When SFAA sends a legislative update about a hearing, write a letter and try to speak at the hearing. When we organize a bus to Sacramento, consider participating if you can take the day off. And never be shy to talk to your elected officials—they represent you and have a responsibility to hear your concerns.

SFAA staff works on your behalf at City Hall and interfaces with the Mayor’s Office and members of the Board of Supervisors, but it’s always more compelling when they hear from real, diverse, everyday San Franciscans. It is my firm belief that the industry will cease to be the primary target of legislators in San Francisco and Sacramento only when we are better positioned to connect the reality and life stories of the diversity of property owners with the perception of the industry as a whole.  

Chris Bricker is the Board President of the San Francisco Apartment Association.