Rent control into retirement

[+ friendofsheila]

Any experiences or insights on staying under rent control to save money on housing costs?

 

Some people in my building pay half what I do, because they've been here 20 years. Me, I can't imagine being able to afford a house in the Bay Area, so maybe it's worth my while staying put (I've got at least 10-15 years before retirement).

 

And I like my building, even if my unit doesn't get as much sun as I'd like.

[rguer]

I can imagine being able to afford a house in the Bay Area. It won't happen, but I can imagine it. A rich fantasy life is important, especially if you're poor.

 

One problem in San Francisco now is that landlords are finding ways to kick tenants out, rent control or no.

[maninsoma]

The big problem with rent control as part of one's retirement planning is that there is no guarantee that you will continue to be able to stay in your rental at the same rate plus the allowable annual increase. I learned this the hard way twice. The first time, I was living in an apartment in a building owned by a gay couple who lived in one of the other units. First one of the owners died, then the second died. The estate didn't want to continue to be landlords, so they sold the building. Because the building's value was so much higher than could be supported by the rents being paid by the existing tenants, the only economic solution for any new owner was to serve everyone an Ellis Act eviction notice and then turn the units into TICs. Because of this, I had to move into a similar unit in another building that cost me over twice as much as my previous rent. Then, a year later, the owners of the building I had recently moved into sold the building. After another year, the new owners took advantage of something previously unknown to me wherein they were able to pass through to tenants "increased operating and maintenance expenses." I fought their petition with the rent board, but the "hearing" opened my eyes as to the alleged pro-tenant bias at the rent board. Basically the landlord only had to provide pieces of paper that documented expenses. Even though some of those expenses were bogus (e.g., the new owner paying his lover four times as much money to clean the common area even though he seldom did any cleaning), as long as they provided a document the hearing officer allowed it. In the end, my rent went up another couple of hundred dollars per month.

 

I was fortunate to be looking for a new place to live (since those owners maintained the building horribly, I was extremely motivated to move) when both housing prices were lower and interest rates were good. Even though I thought I'd never be able to afford to buy anything in San Francisco, I found that I was able to afford a small condo in a nice building in an okay but not great neighborhood. Given that the real estate market has turned around so dramatically -- at least here -- there's no way I'd even be able to afford to buy my place now, even though it's only been four years since I moved in. Lesson #1: timing is everything. Lesson #2: if you can afford to buy something livable somewhere, it's a more secure decision than counting on being able to remain in a rental throughout the rest of your life.

[bigvalboy]

Personally I am a big fan of rent control, but maninsoma is absolutely correct, so without knowing the specifics of your financial situation it is difficult to advise on something that is so critical. On the surface, staying put sounds like a good idea, but my thought also is that you risk going into retirement without owning property, or if you buy in a few years, you will own property without a lot of equity. While it is true that not everyone needs to own property in their retirement years, because there are pit falls, statically speaking, those senior that are free of a mortgage are better off, and generally speaking enjoy a higher standard of living. I'm generally a big proponent of owning real estate, so I would say buy now, buy anything, even if it means lowering your standard of living for a few years...disclaimer...that's just me, your mileage may vary.

 

Ten to fifteen years is not a lot of time. There isn't much room for error. I would strongly suggest that you seek financial advice from someone who can properly assess your finances now, and determine what is the best course for your retirement. A good financial planner is worth his/her weight in gold. Good luck.

[Tonyko]

IDK what it's like in other cities but here (NYC) it's VERY hard for landlords to get Rent Controlled/Rent Stabilized- tennents OUT. ALL the nefarious methods of the past have long since been exposed and lawsuits were incurred etc. It's VERY hard now regardless of change in ownnership etc. (Years ago a certain Mr. Trump even tried to empty the remaining tennants out of a building he'd bought to convert by the OHHHH SOOO generous act of allowing HOMELESS to stay in the empty units. (Wasn't that kind of him ??? Despite the drug, trash and urine filled hallways that the remaining tennants soon had to deal with, it didn't work. He got them out by PAYING THEM a shitload to agree to leave which is the only legal way) I also know one older dude in his 60's who LEGALLY ADOPTED his 49yo lover of 20 years as his SON so if anything happened to him the partner would have legal rights to their stabilized apt

[+ Charlie]

There are so many ways that apartments and buildings can fall out of rent control, that I wouldn't want to depend on what the situation in a particular building will be like ten or fifteen years from now. The one thing that probably is predictable is that San Francisco will continue to be an extremely expensive place to live.

 

You also need to consider whether your current apartment, which you like now, will still be the place that is most suitable for you to live in retirement.

[Rod Hagen]

Not to sound negative, but also remember that just because your unit is rent control, it might not remain a rental, rent control or not.. Most cities allow the building owner to kick out the tenants and transform the units into condos for sale IF the landlord does it to all units. So, if your building owners things he or she can make more money buy upgrading and selling your units rather than renting them, you're gone. This doesn't happen the majority of the time of course, it's in fact rare, but it is possible so keep it in mind when your looking for rent-stabilized building, try to get something in an area you just can't imagine anyone wanting to pay condo prices for, even if renovated.

[+ stevenkesslar]

The big problem with rent control as part of one's retirement planning is that there is no guarantee that you will continue to be able to stay in your rental at the same rate plus the allowable annual increase. I learned this the hard way twice. The first time, I was living in an apartment in a building owned by a gay couple who lived in one of the other units. First one of the owners died, then the second died. The estate didn't want to continue to be landlords, so they sold the building. Because the building's value was so much higher than could be supported by the rents being paid by the existing tenants, the only economic solution for any new owner was to serve everyone an Ellis Act eviction notice and then turn the units into TICs. Because of this, I had to move into a similar unit in another building that cost me over twice as much as my previous rent. Then, a year later, the owners of the building I had recently moved into sold the building. After another year, the new owners took advantage of something previously unknown to me wherein they were able to pass through to tenants "increased operating and maintenance expenses." I fought their petition with the rent board, but the "hearing" opened my eyes as to the alleged pro-tenant bias at the rent board. Basically the landlord only had to provide pieces of paper that documented expenses. Even though some of those expenses were bogus (e.g., the new owner paying his lover four times as much money to clean the common area even though he seldom did any cleaning), as long as they provided a document the hearing officer allowed it. In the end, my rent went up another couple of hundred dollars per month.

 

I was fortunate to be looking for a new place to live (since those owners maintained the building horribly, I was extremely motivated to move) when both housing prices were lower and interest rates were good. Even though I thought I'd never be able to afford to buy anything in San Francisco, I found that I was able to afford a small condo in a nice building in an okay but not great neighborhood. Given that the real estate market has turned around so dramatically -- at least here -- there's no way I'd even be able to afford to buy my place now, even though it's only been four years since I moved in. Lesson #1: timing is everything. Lesson #2: if you can afford to buy something livable somewhere, it's a more secure decision than counting on being able to remain in a rental throughout the rest of your life.

 

Big 2nd to all of this.

 

I moved into my rent controlled unit in SF when it was $1450 a month in 2002 and moved out a decade later when it cost $1700 due to rent control. Market rent when I moved out 3 years ago was $2500 or so and is probably over $3000 now. So rent control "saved" me a lot even though I dumped about $200k on rent over a decade.

 

One of the drivers to me deciding to leave SF and buy in a more affordable area (Palm Springs) was helping maninsoma, who is a friend of mine, move to his condo. He had fabulous luck on his timing and he has to stay in SF whereas I did not have to stay. If for some reason I had calculated I had to stay in SF I probably would have done what he did. I opted for a 4 br house with a pool in PS instead of a junior 1 br condo in SF with a big closet. Having said that, we both made fabulous decisions given the options and limits we had. And neither of us have to depend on the contingencies of rent control. When he can retire he will no doubt be able to sell his little condo and buy a house in PS nicer and bigger than mine for cash. And I will have a lot of equity in my inferior home. No loser in that equation.

 

Having said that, rent control worked well for me for a decade and I have no regrets. And if you have to stay in SF due to your career, which it sounds like you do, it may be the best of a set of less than perfect options. Prices have gone up a lot in 3 years and SF is no longer a bargain. Maninsoma didn't say it, but he could buy a place for about what he was paying in rent (as could I in PS) and we both have gotten a lot of equity through appreciation in 3 years. Whether that is an option for you is unclear from what you said. My guess is in today's SF market your housing expense might go up a lot, assuming you could buy, but at least - hopefully - you would benefit from further appreciation in the future.

 

I also leveraged my bets by buying multiple houses in Sacramento that I rented. It was a huge pain in the ass, but at least I got the benefit of home price appreciation (in affordable Sacramento) while I rented in (unaffordable) SF. If you are committed to staying in SF but want to own a home somewhere and are willing to rent it out you could consider that. I bought multiple houses as an owner occupant meaning I got the lowest rates and best terms on loans even though my ultimate intent was to rent them. Call me a liar, or a whore. Guilty as charged. You have multiple choices, none easy but all with some advantages for your long term financial stability.

[bigvalboy]

I bought multiple houses as an owner occupant meaning I got the lowest rates and best terms on loans even though my ultimate intent was to rent them. Call me a liar, or a whore. Guilty as charged. You have multiple choices, none easy but all with some advantages for your long term financial stability.

 

"I'm shocked, shocked I tell you"....that you deceived these poor innocent banking institutions the way you did. Getting loans as an owner and then renting them out. That's what's wrong with this damn country. Have you no decency man? You leave me no choice but to indeed call you a liar and a whore....

 

[+ stevenkesslar]

"I'm shocked, shocked I tell you"....that you deceived these poor innocent banking institutions the way you did. Getting loans as an owner and then renting them out. That's what's wrong with this damn country. Have you no decency man? You leave me no choice but to indeed call you a liar and a whore....

 

 

Oh, sweetie. You SOOO underestimate me. I am NOT just a lying whore. I am a cheap, conniving, calculating, deceitful, lying, boorish and unethical whore. But you're special, since I like you a lot. You can call me what my friends do. A total piece of shit.

[bigvalboy]

I am a cheap, conniving, calculating, deceitful, lying, boorish and unethical whore. But you're special, since I like you a lot. You can call me what my friends do. A total piece of shit.

 

Now that I like...sorta just rolls off the tongue don't it...

[AdamSmith]

A total piece of shit.

 

Now that I like...sorta just rolls off the tongue don't it...

 

 

[+ stevenkesslar]

Now that I like...sorta just rolls off the tongue don't it...

 

Cheap or not, every girl who grows up to be a whore knows how to use her tongue, and what to do with it.

 

Thank you for recognizing I am no exception.

 

Now, back to the subject....

[bigvalboy]

Cheap or not, every girl who grows up to be a whore knows how to use her tongue, and what to do with it.

 

Thank you for recognizing I am no exception.

 

Now, back to the subject....

 

Yes indeed back to the subject..I hope that FOS takes heed to all the advice here.. I say buy now, whatever you can afford or scrape together, or as SK says, get creative if you have to with financing. Don't be too proud to ask for help from friends or family. Will it be a pain in the ass, of course it will, and... it will be fucking nerve racking, but in the end you will look back and be grateful for the effort....

 

(Climbing down off the soap box now.)

[+ stevenkesslar]

 

(Climbing down off the soap box now.)

 

Please don't get down BVB.

 

You look so pretty up there on the box, with that girlish figure of yours.

[+ friendofsheila]

Gosh, one of the few serious threads I started that didn't get hijacked by horniness with no substantive answers.

[+ friendofsheila]

A good bit of advice here assumes I'm earning buckets of money. My rent is about half my salary (in a safe, reasonably-comfortable area, with good transit, but not ritzy), and not to be helped much.

 

The idea of buying a place here (or a couple of places elsewhere) is out of my league.

[+ stevenkesslar]

A good bit of advice here assumes I'm earning buckets of money. My rent is about half my salary (in a safe, reasonably-comfortable area, with good transit, but not ritzy), and not to be helped much.

 

The idea of buying a place here (or a couple of places elsewhere) is out of my league.

 

Well, I assumed correctly I guess that you could not afford a mortgage on a more expensive home in SF. And you may mean buying a rental property elsewhere is out of your league in terms of risk taking or patience required, which is fine.

 

I assure you that if you can afford rent in SF you could probably afford to buy a modest home in Sacramento with very little down as long as you can plausibly claim you'll live in it. Right now I net hundreds of dollars each month on rent on my Sacramento homes, so I suspect you could make cash flow work, too, but more importantly to me I will have a ton of equity when I need it to retire. As BVB and I are both saying it would involve some pain in the ass days but at least speaking for myself it is worth it.

 

And you are incorrect. I did hijack this thread simply to satisfy my horniness. I have been sitting in parks in Paris and Prague naked and masturbating while I type these threads. Local people are frankly wondering what the fuck is going on. Thinking about things like loan to value ratios and real estate what not oddly gives me massive and uncontrollable erections that require immediate attention.

 

That, and the fact that I am an unethical and conniving lying whore, make me special. Even if BVB and the rest of you sorry losers do not appreciate cheap whore girls like me.

[bigvalboy]

Please don't get down BVB.

 

You look so pretty up there on the box, with that girlish figure of yours.

 

http://k42.kn3.net/D5B593DF0.jpg

 

Muah....

"Thank you thank you thank you for the compliment dahling"

[AdamSmith]

Muah....

 

"Thank you thank you thank you for the compliment dahling"

 

You're blonde?!

 

[+ stevenkesslar]

http://k42.kn3.net/D5B593DF0.jpg

 

Muah....

 

"Thank you thank you thank you for the compliment dahling"

 

And don't try to convince me that you are a person of color. Your sorry ass is as white as snow, or white as the sperm I have been depositing in parks across Europe. It takes a lying whore like me to know one.

[bigvalboy]

or white as the sperm I have been depositing in parks across Europe.

 

Have you been to Belgium?

[AdamSmith]

or white as the sperm I have been depositing in parks across Europe.

 

http://photos1.blogger.com/blogger/5009/780/320/zman.jpg

"You will drink the black sperm of my vengeance!"

-- Ronnie 'Z-Man' Barzell (John Lazar), 'Beyond the Valley of the Dolls'

[+ stevenkesslar]

Have you been to Belgium?

 

No. I avoid countries that have had Steven Draker sightings.

 

There is really only so much whore girl behavior that any one country can bear. I am all about sacrifice when it comes to helping my fellow men and women. Granted, I have to suffer, but the world is a better place because Belgium only has to endure Draker, and not me.

[Zman]

As one who has lived in NYC and California, it's worth noting that the two are somewhat different when it comes to rent control (RC). If you hold onto a rent controlled/stabilized apartment in NYC long enough, chances are you will pay way below market rent. In retirement, your RS lease may be one of your best financial assets. Even if the landlord wants to demolish your building you will still have rights to be compensated (bought out) and/or moved to a comparable apartment for comparable rent. There's a legendary story of a tenant being bought out for millions (I think) so they could build 15 CPW. Of course, shady landlords abound with dirty tricks to try and get you out. Unfortunately, for people moving into the city the only RC'd apartments likely to be available are the one's nobody wants or have hidden problems.

 

California rent control is only in the cities that impose it by local ordinance, the biggies being LA, SF. (I forget if Oakland has RC). Berkeley, Santa Monica, and West Hollywood also have it. (West Hollywood came into being in part to keep RC in place.) Like NYC, a RC lease could be a boon in your retirement and you may well be paying below market rates. But, as has been mentioned, Cali has the Ellis Law and if the landlord demolishes the building he has the right to kick everybody out with only minor compensation and get rid of all the RC leases.)

 

When I moved to LA I got an apartment in LA proper on purpose so I'd have RC. My rent can't go up more than 3% this year. If the landlord could kick me out, he could easily get 10% more for the apartment. So I still think it's a good to have RC if you are a renter. I'm not in a position to buy and frankly don't want to. So this is the best option for me.