By Ryan C. Wood
Let me begin by making one thing clear. Affordable housing is an issue in the entire Bay Area, not just San Mateo County. Capitalism and an allegedly free market is our system though. You have to take the good with the bad. The market is supposed to determine price. The market in the Bay Area and San Mateo County for housing and rent is high and will only increase. This is a highly desirable place to live. The question is whether rent control in some way shape or form is the answer? I have to say no for many reasons and my personal experience. There are just too many factors that come into play to limit one single expense and expect limiting that one single expense to solve any problems.
1. Our Entire System is Based Upon Supply and Demand
Our system creates winners and losers every single day depending upon circumstances that are usually beyond our control. We have a free market right? The real estate market is the same way. A person could own a piece of property for twenty years and the market only allows rent, for example, of $1,200 a month for a one bedroom one bath apartment. On the twenty first year the city or county approves a project, there is a public transportation improvement, a new employer enters the area or some other factor that a landlord had nothing do with that changes the market in their favor. Now the market will allow this landlord to charge significantly higher rents as a result. The market changed and demand is higher so the cost of rent increases. It this not how it is supposed to work?
I suggest instead of using your time to support or vote for rent control ordinances why not research what led to the high rents to begin with and work to solve that problem. There is no reason why there cannot be affordable housing for all. So we have a low supply of housing compared to the high demand for housing on the peninsula at the moment. Why are our city leaders allowing high priced housing to be built with high rents? Why are our city leaders not advocating or requiring complexes be built with rental units that are affordable? This is simply not happening. I find the same frustration with parking spaces for new construction. Why are our city leaders approving commercial and residential buildings that clearly do not include enough parking spaces for the use of the building? Our elected city leaders have created these problems by their short-sited decisions.
2. If You Limit One Expense Then The Law Should Limit All Expenses
As a Bankruptcy Attorney that has been the attorney of record of over 550 bankruptcy cases and involved in another 2,500, or more, as the attorney for a Chapter 13 trustee or managing attorney for the attorney of record I have reviewed a lot of expenses. The issue here is how do you limit one expense and not all of someone’s expenses then? Why rent? Why not food? Why not car payments? Why not coffee? The percentage of profit on some consumer items is as high as 500%. Why not limit profit on healthcare and food prices so someone can then afford their rent instead?
A Frappuccino at Starbucks costs around $32.00 per gallon depending upon the add-ons. Yes, start comparing what you pay for certain items with other items you consume. No one is protesting the cost of a Frappuccino because it is not viewed as necessary. Everyone complains about the price of gas. Do you actually know what you pay for other things you consume in comparison? Why should Starbucks get so much profit from a clearly luxury item? Rent control is limiting the profit of landlord. Why are landlords getting limited? If you get rent control why should you be able to pay $32.00 a gallon for a luxury drink item? The same person that spends $4-$5 a day at Starbucks complains their rent is too high? Huh? Should we not limit the cost of a Frappuccino so we can all afford a Frappuccino? What about the cost of cellphones and service plans? If you have rent control can you purchase an iPhone with a monthly payment service plan? Can someone purchase a luxury vehicle? Can someone with rent control choose a massive cable plan with the NFL League Pass for $285 a month? Does anyone really need cable television at all? Plus pay each month for Netflix, Hulu, Amazon Prime and on and on. This same hypothetical person does not cook anything at home and spends $25 a day on purchased meals for their family of three. [$25 x 3 x 30 = $2,250 a month] How can any of these personal choices on how to spend money and live life be limited or judged by another? In the bankruptcy world it is different. When you seek to discharge your debts and say you cannot pay the debt anymore how you spend your money is absolutely relevant. When you have rent control kind of seems like it should be the same way right? But that is not how rent control works. A entire city is placed under some rent control ordinance with no regard as to how renters spend their income.
3. Where Rent Control Exists Bankruptcy Filings are Less Right?
When rent control ordinances are passed this will create a city where everyone can afford to live and no one files bankruptcy, right? Everyone can now have enough money to live the American Dream because they have affordable rent. I have filed bankruptcy for residents of San Francisco with rent control. From my personal experience rent control does very little to help people live more affordably. Someone either makes choices that lead to them spending less than they make each month or not. I am a huge believer in it is not how much money you make each month. It is all about how much money you spend each month. Our society has gotten away from living beneath their means.
Dr. Seuss had it right a long time ago about discrimination or haves and have nots.
Please take a moment and read “The Sneetches.”
You are just fine as you are, you do not need a star.
