SAN FRANCISCO (KPIX 5) – Small landlords across the Bay Area are warning they’ve reached a breaking point.
With rent collection taking a dive and the end of an eviction moratorium approaching, small property owners are saying if they can’t collect rent soon, they’ll have no choice but to evict tenants.
“We are here waking up every day, trying to figure out how to house people, we are not in the eviction business,” Sid Lakireddy a small landlord and the President of the California Rental Housing association said.
Lakireddi worries lack of rent payments will create a domino effect that could devastate the state’s economy and the real estate industry as a whole.
Investors and small landlords are finding themselves using language often reserved for tenant’s rights groups. “I think shelter is a human right, and I think that we’re the richest country in the world and we can afford to shelter our people,” Jillienne Helman, CEO of Realty Mogul said.
“Eviction is a last resort. I mean, it costs tens of thousands of dollars, it takes an inordinate amount of time and energy, especially if you’re doing it yourself. Nobody wants to do an eviction,” Lakireddy said.
They’re urging lawmakers to give their tenants cash or rental vouchers so they don’t have to push people out.
“This isn’t going to break the real estate industry for the large landlords. It might ruin the retirement and ruin the livelihood of a small landlord, and that’s a real risk,” Helman said.
The Center for Disease Control’s eviction moratorium expires on December 31st, California’s eviction moratorium expires at the end of January.
Rent collection has dropped from 80.4% nationally at this time last year to 75.4% at the start of December. Meanwhile tenants are fleeing urban centers left and right.
“I’ve even seen properties where they’ve dropped the rent 50% and they still can’t fill up the units,” Lakireddy said.
“San Francisco has a very big problem now. With Twitter announcing they’re going to be remote and Facebook allowing for remote and Salesforce allowing for remote, you’re going to have a lot of folks that choose not to come back to San Francisco,” Helman said.
State Sen. Scott Wiener told KPIX 5, “The risk is that we have a cascading disaster.”
Wiener (D-San Francisco) said his main concern is low-income tenants being pushed out, but understands that if small landlords aren’t protected, there could be a repeat of what happened after the crash in 2008: small landlords being pushed out and investors buying even more property here.
“And that’s not healthy for our rental market and for our real estate industry, so this is about protecting renters and also protecting our small mom-and-pop landlords to make sure that they can continue to exist,” Wiener said.
“It’s telling me it’s not just an affordability problem out the gate, you know? There’s something wrong with the system as a whole,” Lakireddy said.