By BiaoGe

Recently, a news hits the media and shock all of us. A landlord Mahran 51 lived at New York stabbed his tenant Khan 44 to death.  (http://www.nydailynews.com/new-york/nyc-crime/bronx-landlord-stabbed-tenant-death-front-victim-child-article-1.2980132)

It is a sad story for sure. Every one of us would not like to see it happen. However, what made Mahran went such extremely crazy mode? in his own word. Here is a quote from the article: “’I told you in the past, and I couldn’t get help,’ he explained, suggesting he’d complained to police about Khan before. ‘I had to take matters into my own hands. So I stabbed him.'”. This is a very important event that worth to discuss in more depth. What role the government played in this tragedy?  Will government policy always effective and fair? Are all the rental control policies sound and flawless?

In retrospect, bay area is going through a very active rental control movement due to recent housing boom. While it is a good motivation to help low income people, have we carefully considered how to make a policy that is balanced, responsible and treat people equally? Here are the ten things that bad rental control policy had done it wrong.

  1. Bad rental control policy takes away some people’s constitutional right while trying to protect some other people’s right. Home ownership is private property rights, but just cause eviction takes it away.
  2. Bad rental control puts the burden of a social warfare problem on a small group of housing providers. A high court judge already said that such regulation is unfairly asking the service provider taking the responsibility.
  3. Bad rental control is based on perception rather than based on sound data. In the recent public out reach event hosted by San Jose housing when discuss the Ellis act, a main feedback is that there is no data to prove that we need such strict policy, there is only 0.01% eviction in the while San Jose area, and I am sure the problematic eviction is zero since the court won’t let it happen, so why we need to control it?
  4. Bad rental control subsidizes the majority of rich affordable people and hurting the small property owner. In recent RC passed at Mountain View, the measure has been passed. The rent need to rollback to pre-2015 time. We all know that the rent is driven by the supply and demand. It is ridiculous  the rent is driving up by the rich high tech company employees, but the policy is to give them a break to reduce their rent.
  5. Bad rental control policy creates too many regulations. The recent Ellis act and new ordinances proposal of San Jose ask to hire a English interpreter. Why don’t we regulate the shopping center to maintain several interpreter’s for shoppers or even government offices? This really show the guiding principle of this ordinance had gone too far too much. There are a lot of words in the ordinance are confusing and up to lawful interpretation.
  6. Bad rental control policy squeezes the housing supply instead of stimulate the supply which should be the ultimate solution. Taking a look at example at San Francisco, there are more than 10000 units that left empty since the home owners scared about the rental control and afraid of loss their property forever.
  7. Bad rental control policy makes a big government body. We have seen San Jose housing department go into a amazing growth of number of workers. Are we plan to have another policy department to enforce so many newly created laws?
  8. Bad rental control policy results a loss-loss-loss for all. Tenants live in had a delusion of enjoy the low rent and lost the chance of participate in the most important life time asset accumulation opportunity.
  9. Bad rental control policy cause community problems. Study had shown there are more criminal rate happened in rental control areas.
  10. Bad rental policy brought out the devil. A bad policy causes tenant wants to take advantage of it and try every ways to stay at the house and refuse to leave. While property owners are pushed into such as bitter mode to see his own property was occupied by others and powerless to get the private property back. The tragedy at New York is exactly the cause of this.

In a word, both Mahran and Hkan are victims of the senseless, clueless, irresponsible rent control policy. We wish everyone  can see the issues that bad rental control brought in and fight against for both our landlords and tenants.

Here is our suggestion to move the policy back to the right track:

  1. Stimulate the house supply: Device ways, policies to stimulate the housing supply.
  2. Make section-8 more effective, and identify reasons why Section-8 tenants had hard time to find house and really identify solution to solve this problem.
  3. Have a time limit for just cause eviction. A tenant should return the property within one year if asked to leave. Government should take the responsibility of house problem instead of individual owners.
  4. Have a mean test for rent control, rent control will be only apply to low income tenant rather than those rich who actually  jump the rate to higher market price.
  5. Keep it simple, publish a market rate guidance each year, and limit the rent based on market price percentage. For example, no more than 90% of market.