AOA Today: From The President Dan Faller
Rent Control Destroys Housing!
The below letter by Attorney Michael Millman, was sent to the Berkeley Daily Planet, in response to an article written by Harry Brill.
The destruction of affordable housing for “very low income” individuals arises from a study of the Failure of Rent Control.
So we understand the concept – assume we own a small ten-unit building in Berkeley, California. Four of the tenants are long-term renters with “historically low” rents. The remaining six tenants are new to the building and theoretically pay market rates.
These higher rents subsidize and underwrite the management and operation of the building.
The new roof, appliances, the 100-gallon, quick recovery, modern hot water heaters, smoke and carbon monoxide alarms, seismic retrofit programs and of course, the Berkeley rent control registration fees in the amount of $234 a door, which are not recoverable or reimbursable to the tenants. Rent control requires that some tenants in a building pay for the services enjoyed by others.
Now … the solution is simple. Universally, require all tenants to pay for basic “housing services”. Tenants should pay for:
- Municipal charges and fees
- Property taxes
- Parcel taxes and bonds
Now, each and every year, the annual rental adjustment would be approximately 7.5% per unit. Now, those tenants who have rent-burdened situations, are disabled, have families, and are librarians or schoolteachers, the elderly, infirm and others could apply to the State of California and receive a rental voucher.
Let’s set the standards at something fair and realistic for the Bay area. For example – a studio would rent for $1,830; a one-bedroom would be offered for rent for $2,300 and a two-bedroom would be $2,850.00. There would be no inspections and the program would be year to year, whereby either party may opt out each and every year. Keep it simple.
Now, I agree that you are not going to build your way out of the problem. If you make developers dedicate 20% of their projects to very low income tenants, without incentive, they’ll simply build in nearby Oakland or another city. You will never build your way out of this problem. Never.
So, I think your article is excellent, but misses the point. Rent Control destroys housing and all good jobs.
Michael Millman is an Attorney and a Mar Vista activist and can be reached at (310) 477-1201.