Sebastopol to consider extending the rent moratorium this Tuesday, December 6th

[jerichsalud]

Hello Sebastopol community,

As recently reported by the Press Democrat, rents in Sonoma County have increased 49.5% in the past 5 years and Sonoma County has 3 times the national homeless rate. We are in the middle of an unprecedented housing crisis where households and families are struggling to keep a roof over their head, living paycheck to paycheck, living out of their cars, couchsurfing homeless etc.

We have a City Council meeting this coming Tuesday, December 6th at 6 PM in which the decision to extend the rent moratorium for another 6 months will be made so that landlords (who have 3 or more housing units), cannot raise the rent on their units beyond 3% a year until the moratorium is over. We need 4 out of the 5 council members to vote in favor of the moratorium to have it extended which will allow more time to come up with solutions to the current housing crisis while also supporting vulnerable households and families in the meantime.

If you are so moved, please consider coming to the meeting to hold a sign, to speak, to be there in solidarity, or writing a letter or making a phone call to one or preferably all of the below council members. In addition to council member contact info, a letter that I am working on is pasted below that you could borrow from if you’d like. Here is a link to an article by UC Berkeley researchers about rent control in case that is of interestRent Control: The Key to Neighborhood Stabilization .

Also, if you have any questions, concerns etc, feel free to reach out to me.

Thank you,

Jacob

Sebastopol City Council members:

Neysa Hinton: [email protected] / 707 495-9087

Michael Carnacchi: [email protected] / 707 823-7204

Una Glass: [email protected] / 707 292-0631

Sarah Glade Gurney: [email protected] / 707 823-6500

Patrick Slater: [email protected] / 707 829-9090

Dear Councilmember ____________,

We are in the middle of an unprecedented housing crisis where households and families are struggling to keep a roof over their head, living paycheck to paycheck, living out of their cars, couchsurfing homeless etc. As recently reported by the Press Democrat, rents in Sonoma County have increased 49.5% in the past 5 years and Sonoma County has 3 times the national homeless rate. In consideration of the many families and community members like myself who struggle to continue to be able to continue to afford to live here, I ask that you extend the rent moratorium for another 6 months. Extending the rent moratorium will allow more time to come up with solutions to the current housing crisis while also protecting vulnerable community members from rent increases in the meantime.

With budgets stretched to the breaking point, households are increasingly vulnerable to displacement from their homes and neighborhoods. In addition to increased risk of displacement, housing insecurity comes with a multitude of consequences and is especially intense for children, causing behavioral problems, educational delays, depression, low birth weights, and other health conditions such as asthma.

Not only does this have impacts on low-income families and households the skyrocketing costs of housing is making it increasingly difficult for the people who power our local economy and provide essential services including teachers, retail and hospitality workers, builders, postal workers etc.

Sebastopol has a an extensive history of being a progressive stronghold that values inclusivity, equity and equality. I really hope that the Sebastopol City Council lives up to those values and extends the rent moratorium for another 6 months so that we can support many of Sebastopol’s vulnerable community members who are at risk in the midst of the current housing crisis.

Thank you for considering this,

[tommy]

Rent control will make the situation worse.

It'll be like having a second set of housing on Airbnb.

Do the research and find out why almost all economists oppose rent control. The only people benefiting are those few with rent controlled apartments. They never move out. It creates a shortage. It drives up the rents for the other 3/4 of renters, since there's less supply. The majority of 3/4s of renters subsidize the 1/4 on rent control. How fair is that?

The solution is to build more affordable housing, not to create additional shortages.

[jerichsalud]

Hi Tommy,

Rent in Sonoma County on average has risen 50% in the last 5 years and we have three times the national rate of homeless and those are of course totally related. The current housing crisis is unprecedented and merits thinking about things differently and significant policy intervention. We already have a huge housing shortage and low and middle income households are struggling to continue to afford to keep a roof over their head.

If we leave everything up to market forces and wait to build more housing we will continue to see a flood of people forced out of their homes unless something is done. For that reason rent control was on the ballot in 5 Bay Area Counties winning in Richmond and Mountain View and in Oakland, property owners must go before the rent board to raise rents above the consumer index (basically inflation) while in nearby Alameda County, landlords must go through mediation to raise rents by more than 5%.

Here is a Pacific Standard article that casts a more positive perspective on rent control-
Here is an article by UC Berkeley researchers about the positive effects of rent control they found in the Bay Area along with reference to research by Columbia University researchers who found similar-

If we weren't in the middle of such a historic housing crisis with dire impacts on so many peoples lives I would not be so behind this moratorium and Sebastopol considering rent control but the housing crisis is unprecedented and requires interventions that otherwise might not be considered. Rent control is not a silver bullet, but we need to take a comprehensive and proactive approach that includes protecting tenants. I'd also encourage you to look at the list of measures that were passed in the Bay Area recently and I hope Sonoma County follows the trend-

I hope you consider looking at this issue differently and from the perspective of those who are especially vulnerable during the housing crisis.

Jacob

[farmerdan]

This was all inevitable because the home builders all went bust in 2006-7 when the housing market tanked.
For all of this time, there has been almost no new home construction but of course Sonoma County is still an ideal place to live so what you get is more demand than supply.

There are of course many other forces at play, including zealot city councils who continue to make it more and more difficult to build housing at any price, banks who do not want to lend on housing projects knowing that city councils will vote in rent control and building moratoriums, and the anti-growth crowd who think that the first two are the devil. I like to remind them that likely they live in a house a developer built.

The only short term solution lies in some chaos, which is making it easy and affordable to build a second unit on residential and ag properties and actually ENCOURAGING people to do this. These can be cookie cutter 800sqft that serve young couples, the elderly and working poor. In retrospect, we didn't all need the 3 bedroom 2 bath home on a big lot that was built everywhere so adding on to the existing home and taking one of the bedrooms to make two two bedroom houses is also a good idea. (my first home was 450 feet and was fine until we had a daughter.) There is no way to build an 'affordable' stand alone home today what with the fees the cities charge and the cost of construction not to speak of the in terminal process to get approval. And, if you want to stop all multi-family rental construction as well, pass rent control, that does the job every time.

It works especially well if you do it only on 3 units and up. That way all of the multi-family builders will avoid your town like the plague while everyone with 1-2 units will jack their prices sky high.

[Michael Anthony]

The only short term solution lies in some chaos, which is making it easy and affordable to build a second unit on residential and ag properties and actually ENCOURAGING people to do this.

An idea that I put forward during the Sebastopol City Council forums is to allow homeowners to amortize payment of the city's impact fees for a second dwelling [approximately $20,000] on their water and sewer bills. In exchange, the homeowner agrees to rent that second unit for an affordable rate. If the homeowner raises the rent above that amount agreed to with the city during their amortization period, the impact fees come due immediately plus a serious penalty.

This proposed idea will allow the homeowners to invest the monies which they would have paid for the impact fees into the building of the new unit, thereby encouraging the creation of more affordable housing and increasing Sebastopol's rental inventory.

[jerichsalud]

Hi Farmer Dan and Michael,

It sounds like you are both referring to Accessory Dwelling Units. California recently eased the rules on those (see article). It is up to local jurisdictions to adopt it into their zoning/code. I know that County PRMD is in the process of doing this. I believe the Sebastopol Planning Department is giving a presentation to the Council on the 20th about housing options to consider and I imagine one of those options will be something related to this. As you probably both know, another huge barrier to creating new housing is funding. I'm not sure of the ins and outs of housing bonds, but that seems to be the way several places have gone recently to create funding for affordable housing that I hope Sonoma County follows suit on. Of course, I'd also like to see Sebastopol up its TOT and mark more of that for housing.

Cheers, Jacob

[farmerdan]

Thanks so much for this information, very helpful!
What I saw in another post is that the city fees for a second dwelling are $20,000.
This is absurd given the following:

1) Since we are all now on water conservation, there is no need to upgrade sewer capacity.
2) There is no need to upgrade water hookups for the same reason.
3) The city will benefit from a higher tax base.
4) The city will benefit from higher sewer fees.
5) The city will benefit from higher water fees.
6) The city will get fees for building permits.
7) This solves a big problem for the city for affordable housing.

Wonder why you can't find affordable housing in Sebastopol?
$25 a square foot for building a second unit is an obstacle.
Fees should be more in the $5,000 range given that the city has no real costs (that aren't covered by higher taxes and ongoing fees).

Hi Farmer Dan and Michael,

It sounds like you are both referring to Accessory Dwelling Units. California recently eased the rules on those (see article)....

[tommy]

Jacob.

As you're a proponent of rent control, do you think it matters that almost all economists are opposed to it? Here's what Paul Krugman says in the NYT about rent control: "The analysis of rent control is among the best-understood issues in all of economics, and -- among economists, anyway -- one of the least controversial. In 1992 a poll of the American Economic Association found 93 percent of its members agreeing that 'a ceiling on rents reduces the quality and quantity of housing.'"

We live in a market economy. When the government tinkers with the market, the "Law of Unintended Consequences" takes effect. While rent control may have laudatory goals, the facts are:

- Many studies have demonstrated that tenants with rent control have higher income than tenants without. People with higher incomes have a much greater ability to search and find rent controlled apartments. Rent control doesn't help the people in greatest need. One famous example is Whitey Bulger, the organized crime boss, indicted for 19 murders, was arrested in 2011 in Santa Monica, while living in a rent controlled apartment... and having million stashed away.

- Rent control makes matters worse, by increasing rents. Cities with highest rents all have rent control: New York, Washington DC, San Francisco, Oakland, San Jose, and Los Angeles. Because people in rent controlled apartments rarely move, it creates a shortage, driving up demand, and rents. For the vast majority of the poor and minorities, rent control forces them to move further away from employment centers, and spend longer time commuting.

- Economists have found that rent control creates an incentive to demolish old buildings w low rents, and replace them with new buildings, reducing the stock of housing w low rents.

- Rent control increases homelessness by causing a shortage of housing and higher rents.

- Tenant protection creates protection for unsociable types, criminals, drug dealers, etc... (in addition to good people). A landlord can not get them to move. The good tenants move out. You're left with the rotten apple.

- Proven ways to increase the housing stock are legalizing Secondary Units, Housing Trust Bonds to finance affordable housing, Inclusionary Housing, identification of stalled developments, use of publicly owned property for affordable housing, increase in Section 8 funding, and increasing local taxes such as Transient Occupancy Tax to fund affordable housing. These policies are currently in consideration by the Santa Rosa Housing Action Plan, and the Sonoma County CDC "Homes for All Summit". Perhaps you're involved in some of these efforts.

The reason rent control was on the ballots of five Bay Area cities is that it's a PC issue. Tenant organizing groups such as the North Bay Organizing Project here, the national group "Housing for All", and the CA group "CA Tenants Together" (which put together a rent control took kit) know that rent control is a good organizing tactic.

I hope you will consider looking at this issue differently, from the perspective of reality, unintended consequences, and long term efforts to create more housing... rather than PC measures like rent control that make matters worse.

[podfish]

Rent control will make the situation worse... The only people benefiting are those few with rent controlled apartments. They never move out. It creates a shortage.....

this part of the argument I never understood. It's like saying that giving everyone health care will lead to a shortage of doctors. Uh, in that example, you either have to have more doctors or accept that people don't get health care. In the case of rentals, the people who are not moving out would, if they did move, presumably still need housing. That argument relies on them being forced to leave because they can't afford the more expensive housing and being replaced by those who can.

there are other reasons rent control might be counter-productive, but the Irish baby solution doesn't appeal to me.

[jerichsalud]

Hi Tommy,

I appreciate all the information you provided. Obviously you are paying attention and I appreciate that and I certainly understand that rent control is not the end-all solution. At the same time I'm not sure it is as straight-forward as many argue and as you make it sound. I don't think rent control was approved and even considered in a bunch of jurisdictions just because it is a pc issue. I think it is out of real concern for their communities and one quick way to slow the current displacement of residents while other measures can also be considered and pursued. Given the nature of the unprecendented housing crisis in the Bay Area, created by a very distorted "free-market", in my mind calls for unprecedented action if we want to support our local households. Below is some information taken from this Pacific Standard article In Defense of Rent Control (April 1, 2015) , which I think casts a different and evidence based perspective including that "More important, rent regulations have been the single greatest source of affordable housing for middle‐ and low‐income households"

The common critique, elucidated in Krugman’s column, is that regulating rents on some housing units will drive up rents on those that are not controlled, while resulting in less new housing development because real estate interests are disinclined to build if they can’t be guaranteed market rate returns. According to this logic, housing stability for older residents should not take precedence over the ability of new residents to move to a highly desirable community. And, as the argument often goes, building more market rate housing creates more affordable housing eventually. (Maybe in some places, but not in tight markets like Silicon Valley and New York.)

“I should note that many of these findings came as a surprise to me. When I first joined the Rent Guidelines Board staff in 1987, I believed that rent regulations in New York City probably did have some long‐term harmful effects. I was proven wrong.”

But a comprehensive review of literature by New York housing lawyer Timothy Collins found that the received wisdom regarding rent regulations is overly simplistic — partially because hard ceilings on rents are often imagined, while the reality is more often (as in New York’s case) a more measured approach meant to discourage landlords from dramatically raising rents and displacing tenants.

Collins argues that New York’s two largest building booms took place during times of strict rent controls: the 1920s and the post-war period between 1947 and 1965. (He is not arguing that the regulations provoked the building, just that they didn’t restrain it in the same way strict zoning codes did in the mid-1960s.)

“New York’s moderate rent regulations have had few, if any, of the negative side effects so confidently predicted by industry advocates,” Collins writes. “More important, rent regulations have been the single greatest source of affordable housing for middle‐ and low‐income households. I should note that many of these findings came as a surprise to me. When I first joined the Rent Guidelines Board staff in 1987, I believed that rent regulations in New York City probably did have some long‐term harmful effects. I was proven wrong.”

Outside the city, one economist found that housing construction in New Jersey fell by 52 percent in cities that enacted rent control regulations in the early 1970s — but fell 88 percent in those that didn’t. The policy also did not affect the landlords’ desire to keep their properties in good condition. One study from 1988 found that “there is no basis for economists’ strongly-held belief that rent control leads to worse maintenance.”
Collins also found that all the apartments that experts expected to open up with the introduction of rent regulations did not materialize after rent control was removed from Boston. In 1994, real estate interests in Massachusetts organized a statewide referendum to end rent control — which only existed in Boston, Cambridge, and Brookline — and just barely won. But Census data shows that Boston’s vacancy rate was four percent before the regulations were phased out and 2.9 percent four years after they were done away with — scrapping rent control had, at the very least, not generated a measurable effect on apartment availability. The median price for a two-bedroom apartment doubled in the meantime.

An Economist article on the end of rent control in Cambridge reported that 40 percent of covered tenants moved out of their apartments after the end of rent regulations in the city — rents had increased by 50 percent — and reports of evictions rose by a third. A 2012 study seems to show that the removal of rent regulations did nothing to lower housing prices and ended Cambridge’s tenure as a mixed-income neighborhood.

Simply building more units to bring down overall prices might work in some settings. But in tight housing markets that are already heavily developed, as most major Northeastern or West Coast cities are, it’s unclear whether rents are primarily driven by supply.

In neighborhoods that are in commuting distance of economically vibrant areas, the level of demand may be too high to accommodate by simply building new units. This is especially applicable to mass transit nodes near job centers like New York or San Francisco: There are far too few of both for supply to reliably set prices that working class — let alone impoverished — residents can afford.

As you're a proponent of rent control, do you think it matters that almost all economists are opposed to it? Here's what Paul Krugman says in the NYT about rent control: ....

[jbox]

Tenants in rent controlled housing don't move because if they stay long enough they will become part of the subsidized group of tenants benefiting from the lower rents, assuming the market increases outpace the allowed increases under rent control. Rent control creates two classes of tenants, those who stay long term at an artificially low rent and don't move, and the rest who pay more than the market would otherwise charge in the absence of rent control. The private market always finds its equilibrium, mostly due to supply and demand. New York has folks living in apartments the same family has held since WW II because it is really cheap. I lived in Berkeley when rent control came in around 1980 and within a year it was impossible to find a single family house to rent. Why should a property owner rent if they can't do what they need? They sold the house and took that unit off the books, compressing supply and increasing demand and prices.

What is needed to help the housing crisis is higher wages, or people willing to do what is necessary to compete rather than blame the system. There are lots of qualified renters out there, and like it or not, Sonoma County is still affordable compared to the rest of the Bay Area.

[jerichsalud]

Yes, there are many things that could be done to help address the housing crisis and unfortunately the majoriy including increased wages and new development will take too long for many community members struggling to keep up with skyrocketing rents. The extension of the rent moratorium is like applying a torniquet in an emergency, not ideal, but when there is an emergency and there are no other viable options or too much blood will be lost or in this case more people will be displaced and more people will be homeless, stepping in to stabilize rents is one temporary solution and that is why they are doing similar in many other jurisdictions in the Bay Area.

If we weren't in such a dire housing crisis I am not sure I would be in favor of such a measure, but I think it makes sense given the current circumstances. Now that that was approved in Sebastopol, which I applaud, there is much more to do. Tomorrow night is the first Sonoma County Housing trust fund meeting and Sebastopol will be putting together a housing committee and hearing from the planning department on a bunch of housing options to consider. All in all, some examples of being headed in the right direction yet much more remains to be done and for us to stay appraised of.

Thank you!

Jacob

[tommy]

The thing I most dislike about Rent Control is that it creates a very contentious relationship between tenant and landlord. When I was preparing for the City Council mtg last night on rent control... reading various articles on rent control, I started to feel sick in my stomach. Of course those supporting rent control could say this is what happens to tenants, or those looking for housing in this market ... perhaps the effect of tenants getting more power, which is upsetting to me as a landlord.

However, it's no doubt that Rent Control sets up the government in between the landlord & tenant. It was stated at the mtg last night, that Sebastopol would probably need to have a full time lawyer devoted to rent control, if it is passed. A full time lawyer means alot of litigation, alot of arguments, alot of people battling each other... with the government as the arbitrator.

A more positive approach to the problems in the housing market is to create more housing, especially affordable housing... all kinds of housing. Rent Control does nothing to address the shortage of housing. Creating more housing makes my tummy feel real good.