SYNOPSIS: In a rent-controlled world, how do you collect above-market rental rates when there is a Rent Cap in place? The truth is, you can’t…unless you vacate a unit legally by completing “substantial improvements.” How do you determine if a unit warrants substantial improvement?
Bottom Line – I want to help landlords obtain maximum cash-flow (especially in a rent-controlled market). In my opinion, owning multi-family investments should be extremely financially rewarding, while at the same time not be overly consuming of your time. Second, by completing these types of improvements, when it is time to sell, a buyer will happily over-pay for your property because your rental rates & the condition of the property justifies above-market pricing!!! -Kristopher German, The Apartment Dealer
EDITOR’S NOTE: This is not a promoted post. This is great information from Kristopher German. He’s insightful and is producing some unique content I believe will be beneficial to my core audience.
California has a statewide rent cap limiting how much a property owner can raise rent annually. Certain cities have existing Rent Stabilization Ordinances, also known as, Rent Control. Some of those cities have had rent control for decades.
The list of cities enacting their own RSOs has been growing a lot more since the signing of AB 1482 and the Endemic Lockdowns.
With all the existing rent control zones and the statewide rent caps, rents are still the highest in the country and housing supply remains limited. More on the latter part another time. For now, please watch this excellent summary for as to How Rent Control Hurts Renters.
It’s like I always said, “Rent Control has failed every time it’s tried.” So why keep pushing for it if it doesn’t do what it’s intended to do?
Subscribers that tune into my program should recognize this as the REALTOR Code of Ethics and Standards of Practices section that I have covered on several occasions.
Jesse Williams references certain incidents and claims of racism to support NAR’s Article 10-5 and hyperlinks them where applicable. No issues there. I implore anyone reading the article to see the references for more context. There are certain unsourced claims that have no place in the article, and some cases that merit a counter-argument.
Please bear in mind, I do not intend to rebuttal the concerns of racism today, rather my aim is to address certain unsubstantiated claims and provide context that give weight to the counter-points against Article 10-5 itself.
According To Hoyle
First off, the RISMedia article alludes to REALTOR conduct during the Black Lives Matters riots in 2020. Jesse Williams mentions that during that time, certain REALTORS were “using slurs and airing ugly, racist ideas, stereotypes, attacks, and incitements – sometimes in person, often on social media.” While no sources were cited, I was left wondering what those attacks and incitements were Jesse was referring to.
Or is the issue Jesse has problems with the REALTORS “hate speech?” Are these claims of “hate speech” a bigger issue than the fact that people were killed, livelihoods were destroyed, neighborhoods were razed, businesses ruined, and Americans divided?
I bring up this point not only since it was mentioned a few times in the article, but also because Jesse Williams brings up the unreferenced and unsubstantiated claims of racial slurs against Black police officers during the January 6 riot.
Both of these events are a stain on our history. One cannot simply condone one and condemn the other. And for the printed record, I’ve condemned both violent riots on my program.
I highlight these very important sections of the article, because it explains the tone and, in my opinion, exposes the intent of the article.
The second point I want to address is the oft mentioned infamous “steering” case in Long Island, New York, published by Newsday. This 3-year long investigative project was published in 2019, but got more traction in 2020, because of the above referenced events. This alleged case of steering was taken at face value and further emboldened the NAR to take action against REALTORS as a whole. This despite the fact that New York is one of the strictest, if not THE strictest state with REALTOR regulations. Keep this in mind.
What about any follow up to that story? Whatever became of those REALTORS “caught on tape” steering minorities away from certain neighborhoods? Any punishments issued?
Let me be clear: I support holding accountable those breaking Fair Housing Laws.
Which brings me to the third and final point that I’ll make: Article 10-5 is quite literally meant to target REALTORS and control their private lives. Failure to comply with this egregious breach of 1st Amendment rights could result in members being disbarred from all REALTOR association chapters. The ramifications being losing the ability to conduct most of any real estate business. Case in point: Pastor Brandon Huber vs The Missoula Association of Realtors lawsuit.
Despite it’s good intentions, NAR’s Article 10-5, as I warned on November 2020, has been used against Christian REALTORS. The Jesse Williams’ article seems to conclude that NAR should double-down on it. This is not the solution to address hate speech and racism. In today’s hyper political and polarized environment, it is hard to have conversations with one another. Most things now are subjective rather than objective. When it comes to regulating and monitoring “hate speech” – online or in person – who then defines it? We can’t even agree on movies anymore.
Article 10-5 is bad policy, and it’s taken less than a year in effect to prove it’s ineffectiveness and political weaponization.