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Older buildings have all kinds of maintenance issues. Even if predictable, they're still an added expense, especially for major systems. Without allowing rental

Older buildings have all kinds of maintenance issues. Even if predictable, they're still an added expense, especially for major systems. Without allowing rental unit owners to pass those costs along to the renters, either the units will be taken off the rental market or they will be allowed to disintegrate over time until they're no longer habitable.

shams93 7y ago
Yeah my la landlord just sat on my problems until my place was so bad it was unlivable then I lost my job and was forced into the street.
spoonie 7y ago
That assumes that the market is able to bear those costs. What do landlords do in stable markets where rents are flat or track inflation? Are all rentals dilapidated in those markets?
thepangolino 7y ago
In most of Europe building maintenance costs are counted outside of rent. This makes it difficult to hunt and compare flats as those costs can greatly vary.
boomlinde 7y ago
Combine it with laws that protect a decent standard for apartments and make it much harder to kick tenants out without a good reason. I.e. enforce basic tenants' protection instead of worrying about what incentives landlords have. It shouldn't matter whether the landlord wants to take a unit off the market if the tenants aren't willing or can't move. Then it lies on the landlord to create an incentive for tenants to move out, for example by extracting less rent from uncontrolled units to make them more affordable. Another good idea is for tenants to unionize and share the legal costs of e.g. questioning the legitimacy of a lease termination or challenging sub-standard living conditions.
- gamblor956 7y ago
  You've literally just described LAs renters protections and tenants rights organisations in a nutshell...
  - boomlinde 7y ago
    Maybe, but the effect has to be considered together with the proposed "hybrid approach" to rent control. Los Angeles rent stability ordinance (which lately caps rent increases at 4% since this year) only affects apartments built before the 80s, and rents are on average up 6% since last year. Using a moving free market window and a lower cap may have a different effect.
jdavis703 7y ago
Maintenance can be passed through to renters in California. The landlord just needs to ensure the maintenance is actually legitimate (i.e. they can't put in a gold toilet and charge for it), otherwise the rent board could rule the costs can't be passed through.
- refurb 7y ago
  At least in SF, there is a cap on maintenance pass through, something like $60 per month. If you’re maintaining a 100 year old building, it would be very easy for costs to exceed that cap.
  - kspaans 7y ago
    Older buildings should sell for less, to compensate for this risk. If the mortgage payments eat up too much of the rental income then the owner overpaid, and should sell at a price that's more appropriate for the risk associated with the building.
    - refurb 7y ago
      Problem is that laws change even when homes don’t change ownership. Your building might be worth$2M, then a rent control law is passed and suddenly it’s worth $1.5M.
      - kspaans 7y ago
        How does this work? The $2m valuation would be based on income from current tenants, would it not? Most rent control laws, and especially not the one in Oregon, don't retroactively change rents charged to current tenants. That is unless the $2m valuation is based on a speculative estimate of how much rents will go up in the near future?
        refurb 7y ago
        A good example would be single family homes in SF. Currently no rent control. If the rent control laws were changed to include SFHs, you’d see a pretty drastic decrease in the value of them, since yes, currently they are valued based on expected future rent increases.
asdff 7y ago
Most landlords just paint the walls and cross their fingers on an older place. You've seen these dingbats in LA? Deathtraps and most are not to code at all.

shams93 7y ago

Yeah my la landlord just sat on my problems until my place was so bad it was unlivable then I lost my job and was forced into the street.

spoonie 7y ago

That assumes that the market is able to bear those costs. What do landlords do in stable markets where rents are flat or track inflation? Are all rentals dilapidated in those markets?

thepangolino 7y ago

In most of Europe building maintenance costs are counted outside of rent. This makes it difficult to hunt and compare flats as those costs can greatly vary.

boomlinde 7y ago

Combine it with laws that protect a decent standard for apartments and make it much harder to kick tenants out without a good reason. I.e. enforce basic tenants' protection instead of worrying about what incentives landlords have. It shouldn't matter whether the landlord wants to take a unit off the market if the tenants aren't willing or can't move. Then it lies on the landlord to create an incentive for tenants to move out, for example by extracting less rent from uncontrolled units to make them more affordable. Another good idea is for tenants to unionize and share the legal costs of e.g. questioning the legitimacy of a lease termination or challenging sub-standard living conditions.

gamblor956 7y ago
You've literally just described LAs renters protections and tenants rights organisations in a nutshell...
- boomlinde 7y ago
  Maybe, but the effect has to be considered together with the proposed "hybrid approach" to rent control. Los Angeles rent stability ordinance (which lately caps rent increases at 4% since this year) only affects apartments built before the 80s, and rents are on average up 6% since last year. Using a moving free market window and a lower cap may have a different effect.

jdavis703 7y ago

Maintenance can be passed through to renters in California. The landlord just needs to ensure the maintenance is actually legitimate (i.e. they can't put in a gold toilet and charge for it), otherwise the rent board could rule the costs can't be passed through.

refurb 7y ago
At least in SF, there is a cap on maintenance pass through, something like $60 per month. If you’re maintaining a 100 year old building, it would be very easy for costs to exceed that cap.
- kspaans 7y ago
  Older buildings should sell for less, to compensate for this risk. If the mortgage payments eat up too much of the rental income then the owner overpaid, and should sell at a price that's more appropriate for the risk associated with the building.
  - refurb 7y ago
    Problem is that laws change even when homes don’t change ownership. Your building might be worth$2M, then a rent control law is passed and suddenly it’s worth $1.5M.
    - kspaans 7y ago
      How does this work? The $2m valuation would be based on income from current tenants, would it not? Most rent control laws, and especially not the one in Oregon, don't retroactively change rents charged to current tenants. That is unless the $2m valuation is based on a speculative estimate of how much rents will go up in the near future?
      - refurb 7y ago
        A good example would be single family homes in SF. Currently no rent control. If the rent control laws were changed to include SFHs, you’d see a pretty drastic decrease in the value of them, since yes, currently they are valued based on expected future rent increases.

asdff 7y ago

Most landlords just paint the walls and cross their fingers on an older place. You've seen these dingbats in LA? Deathtraps and most are not to code at all.