California and the West : In a Tight Market, San Francisco Boosts Rent Controls : Housing: Measure closes loophole that allowed owners to evict tenants who replaced roommates.
A day in this city’s unkind rental market can make winning the lottery look like a sure thing.
Dozens of prospective tenants vie for each opening. The vacancy rate hovers at 1%. A two-bedroom apartment in a desirable neighborhood typically rents for more than $2,000 a month--and stays on the market for less than a day.
Small wonder then that the latest wrinkle in rent control in San Francisco addresses the seemingly simple matter of renters bringing in roommates to replace those who moved out.
According to the fine print of many rental agreements, a change of roommates is the same as subletting, a no-no that voids the lease and lets the landlord adjust the rent to market value. As a result, dozens of San Francisco renters who replaced roommates were evicted last year, setting off a new battle in the city’s rental wars.
San Francisco supervisors recently responded by passing a measure that outlaws landlords from evicting tenants who replace roommates.
“This seemed to be a last opportunity for a landlord to make an eviction to get a property to market rate,” said Supervisor Mark Leno, author of the measure that passed last month. “If you lose your rent-controlled unit, you are literally on the street or out of town.”
Anyone attending a recent open house of a 450-square-foot efficiency for rent in Noe Valley got the picture. At 9 a.m., more than 50 people jostled in front of the unit, a tiny room and even tinier bathroom beneath a day-care center.
Prospective renters were led inside in groups of three, filling the small space. They glanced at the bed pushed against the wall, the grimy windows, the galley kitchen, and they marveled at the rent. Just $700. An hour later, it was rented.
“The real estate market here is very competitive and it’s highly inflated, far above what normal inflation is,” said Ted Gullickson, a spokesman for the San Francisco Tenants Union. The group represents renters in landlord disputes, and helped lobby for Leno’s measure.
Savvy renters sign up with several rental agencies, scour newspaper ads and attend open houses armed with certified credit reports and resumes for themselves and for their pets. Tenants looking for roommates conduct in-depth interviews. They ask about cooking, eating, dating, cleaning and recreation habits. Some ask roomies to sign contracts that outline who cleans what when, and on which shelf of the refrigerator each will keep their milk.
“It’s like a marriage,” Gullickson said. “And it’s very hard to find a place to live here--rents go up 30% to 40% per year. That is in the realm of obscene profits.”
Landlords see things differently. They cannot raise the rent any more than 2% a year unless someone moves out and a new tenant signs a lease. That means property owners with long-term tenants cannot set rental properties at market rates. Many feel the city’s rent control laws prevent them from earning a fair return on their investments.
Yet the San Francisco Apartment Assn., an advocacy group for landlords, signed off in the new roommate-friendly legislation, after some tinkering.
Renters must inform the landlord in writing when they plan to replace a roommate. The landlord may refuse the person if their credit record or references fail to check out. Once all roommates from an original lease have moved, the lease is considered to be broken and the rent can be raised.
Janan New, executive director of the association, said her group is satisfied with the measure.
But she wonders what all the fuss is about.
“This issue affects such a small group of people that we have been mystified as to why this has become such a banner piece of legislation,” New said. “It’s such a small group in a niche market, we just wonder why [Leno] bothers.”
She also wonders how many more restrictions landlords can take. The city’s rent control laws allow an annual rent hike of 2%, which is often not enough to cover the rising cost of repairs and maintenance. Although landlords can adjust rents to market rates when tenants move, many renters remain in the same apartments for years.
“A lot of landlords have tenants paying $700 for a unit that can bring $2,200,” she said. “They may have that person as a tenant for life, so it’s only good business sense that you would push the rent as high as you can.”
If rents go much higher, people like Brandi Buckley will have to move out of the city.
Buckley, who works at Amoeba Records in Haight Ashbury, pays about $700 a month for a one-bedroom apartment in the gritty South of Market neighborhood. She shares the place with her boyfriend and a roommate, who sleeps in the living room.
Amenities include the jail next door, infrequent repairs and regular 3 a.m. wake-up calls from a janitor who camps out in the basement. She considers herself lucky.
“It’s pretty much a miracle what I have with that apartment,” Buckley said. “I know people who look for months and never find anything. It’s so expensive, and there’s hardly anything out there. This is such a hard place to be a renter.”
