Page 79 - AAGLA-MAY 2022

Member Update
Continued from page 76
entire property off the market, not one unit for owner move-in.
Further, while housing providers have invested in rental properties over the years for hoped for stable retirement incomes, like with stocks and other investments, an income stream (with stocks you get dividends vs. rental income) is only part of the expected returns. The other returns are from increased value in a property. If a long-time owner wishes to sell, a property value is enhanced for the new owner who may wish to improve upon a property (major remodel or re-develop), change its use, or do a number of other things to enhance value to which property owners are entitled to do. A.B. 2050 will harm sale values of properties by requiring owners to “sit out” for 5-years (or up to 10-years in some cases.) Real estate investors should be compensated for giving up this valuable property right.
Finally, there is absolutely no need for A.B. 2050 because most local jurisdictions have already “piled on” local restrictions on the use of the Ellis Act to protect tenants such as requiring notices, relocation fees, and forcing owners to pull every conceivable permit for any redevelopment project before proceeding, among other things.
2. MYTH: “A.B. 2050 interferes with a family that needs to move into their rental home and would not allow a family to timely move an ailing family member into their home. A.B. 2050 interferes with new owners’ dreams of owning and living in their own property.”
TENANT PROPOGANDA: “A.B. 2050 does not change laws around owner move-in evictions. Property owners are still able to move into their rental home with A.B. 2050.”
REALITY: See my response to Myth No. 1. Owner move-in has nothing to do with the Ellis Act. I have never heard the housing industry use this excuse as a reason for preserving the Ellis Act. Again, A.B. 2050 is more “stripping away” our valuable property rights. It’s all just more of the same old tenant rights group “B.S.”
3. MYTH: “There are sufficient tenant protections currently
in place.”
TENANT PROPOGANDA: “There are no protections against the Ellis Act. The Ellis Act has been used as a major loophole to get out of the pandemic eviction moratoriums as well as other tenant protections in place.”
REALITY: See my response to Myth No. 1. There are numerous local protections already in place including punitive relocation fees.
4. MYTH: “The Ellis Act establishes a fair balance between landlords and tenants as the invocation of the Ellis Act does not result in the loss of housing units as most units are converted to tenancies in common, which creates affordable home-ownership opportunities.”
TENANT PROPOGANDA: “Removing affordable rental units from the market is not a solution to the affordability crisis. We need to preserve existing rental units and build more housing for the middle, working class and low income residents. The Ellis Act results in the loss of rent-controlled units, and we are not building enough to make up for the amount of units we are losing.”
Now here’s a bit of truth...the Ellis Act does create more home ownership opportunities for people by converting often C-class or D-class apartment buildings into condominiums (not TICS or Co-Ops as we do not see many of these in California and good luck getting a loan on one of these – this is not New York).
Again, the continued chipping away of property rights discourages investment in rental housing which is why we have the shortages of not only housing, but of affordable housing here in California. California’s rental property owners are heading for the exit ramp and moving money outside of the state or into other investment vehicles. The days of the old lady, small landlord willing to give a break to a tenant she perceives that she likes and go for years without rent increases (a/k/a, the owner of naturally occurring affordable housing) will become extinct here in California.
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APARTMENT AGE • MAY 2022 79