Thursday, September 6, 2018

UC Berkeley professor blames rent control for California’s housing shortage.

Kenneth Rosen, a UC Berkeley economist and real estate consultant, published a paper Wednesday titled The Case For Preserving Costa Hawkins, in hopes of swaying voters against Proposition 10.
Proposition 10, which will go before voters in November, would repeal the 1995 Costa-Hawkins Act, a state law that severely curtails rent control in California cities. For example, under Costa-Hawkins, only San Francisco apartments built before 1979 may be subject to rent control.

Passing Proposition 10 would not in and of itself create any new rent control housing, but it would allow cities to expand rent control stock for the first time in decades if they so choose.
Rosen, however, argues that turning the clock back to 1994 will stifle new housing and drain apartment stock.

Here’s how his case breaks down:
  • Rosen cites the usual supply and demand argument about housing costs:“Following decades of strong population growth and persistent underbuilding, California is in the midst of a housing crisis. The statewide failure to keep up with new demand for housing, even through the recent period of rapid economic growth, resulted in a shortage of available housing and rapidly rising housing costs.”
  • In fact, Rosen goes one step further and blames the housing shortage partly on rent control: “Rent control incentivizes property owners to convert rental units to other uses, such as for-sale housing units or non-residential buildings. [...] Rent control limits the creation of new rental supply by discouraging development activity, especially without guaranteed exemptions for new properties.”
  • Of course, there are other factors at play: “Persistent low levels of construction reflect a wide range of factors including a combination of high construction costs, restrictive land use zoning, community obstruction and prohibitive or costly regulatory hurdles.”
  • The threat of landlords yanking homes from the rental market looms over the debate: “The supply of rent-controlled units also declined in California cities since the enactment of rent control, as property owners converted apartment buildings to other uses.” Note that this declaration is a little nonsensical—after all, the supply of rent controlled units would be zero before the enactment of rent control—but the gist seems to be that rental stock is lost.
  • Rosen cites a popular Stanford study, penned by economists Rebecca Diamond and Tim McQuade, to bolster these claims: “A recent Stanford University study examined the effects of a 1994 ballot initiative (Proposition I) passed in San Francisco. [...] Nearly 10% of the properties newly covered by the updated ordinance were redeveloped dur-ing the period from 1994 through 2016.”
  • Throughout the report he characterizes Costa-Hawkins as a “compromise”:Note that this is highly subjective, as rent control boosters usually frame the 1995 law as onerous deregulation that principally or exclusively benefits landlords. Rosen, on the other hand, hopes voters will see it as a middle ground.
  • He predicts disaster if Proposition 10 passes: “Costa-Hawkins established between local and statewide interests a degree of certainty for the housing market and supported the development of new apartment supply in recent years. Today, however, repealing Costa-Hawkins could create a haphazard patchwork.”
Rosen’s analysis mostly covers familiar arguments—as such the pro-Proposition 10 crowd has rejoinders on standby.

For example, Rosen suggests that developers won’t want to build in California if there’s a chance new units will be subject to rent control. But at a July debate, Yes On 10’s Amy Schur said she had never heard of any city putting rent control on new construction and argued that this was a paper tiger.

Rosen’s sources offer some competing conclusions as well. For example, the oft-cited Stanford study did conclude that rent control drove up housing costs in SF.

But economists Diamond and McQuade also concluded that the net benefit to rent controlled tenants was slightly larger during the studied period than the costs elsewhere, and that many renters would have been unable to live in the city at all otherwise.

Rosen also writes, “A 2006 Brigham Young University study found that rent control in the Greater Boston area led to an increased number of units converting” to non-rentals, which is true.

However, in that same study, BYU economist David Sims also concluded that “rent control had little effect on the construction of new housing [...] and reduced rents substantially,” which undermines some of Rosen’s arguments.

Rosen cites a 1998 survey conducted by the city of Berkeley that found “rent control encourages alternative use of rental space by reducing the opportunity cost of conversion,” which, again, is accurate.

However, the rest of that same sentence notes that “conversion can be restrained by the creation of new condominiums to meet the demand for ownership and by regulatory restrictions on conversion of existing rental properties with multiple units.”

By Adam Brinklow

Thursday, August 30, 2018

Coming soon!

Located in the heart of Telegraph Hill, this wonderful and cozy renovated condo offers two bedrooms one bath approx. 580 square feet, a bright living room, and a comfy kitchen with new granite counters. New tiling in the bathroom, new flooring and fresh interior paint. Pleasant and warm home! Located close to public transportation, spectacular restaurants and North Beach eateries and great shopping. Walk Score 100! Excellent location and value. City living at its finest!

Wednesday, August 22, 2018

New Listing! 53 Florentine St, San Francisco CA

Beautiful three bedrooms + office, two bath remodeled Crocker Amazon home. Top floor offers two bedrooms one bath, living room with wood burning fireplace and formal dining room. Updated kitchen features new stainless steel refrigerator, stove, dishwasher, vent hood and breakfast area. Newly renovated marble and modern tile bathroom with contemporary vanity, new toilet & fixtures. Stylish design complete with refinished hardwood floors, new lighting, recessed lights, double pane windows, new furnace, new soft close garage door, new interior and exterior paint. Lower floor has 2 rooms one bath, a spacious family room, cabinet storage, wet bar & new flooring. 1 car garage + storage. One block to Mission shops & restaurants. Short distance to BART, transportation, 280.

Thursday, August 16, 2018

The 3 Most Common Home Improvement Scams—and How to Avoid Them

If you’re reading this, chances are you or someone you know has been scammed at some point. The Better Business Bureau has already recorded 12,894 scams and counting so far this year—the crazy part is, that’s almost 10,000 less than at the same time in 2017.

You might think you know what to watch out for but buying a home opens up a whole new avenue of potential fraud most have never considered. Home improvement scams prey on optimistic homeowners, grateful for the chance to renovate or restore their home on the cheap. What seems like a great deal quickly turns into a disaster.

Here are three of the most common home improvement scams—and how to recognize them before it’s too late.

1. Natural Disaster Specialists
After a flood, tornado or hurricane, it’s common to see contractors going door-to-door offering their services. For distraught homeowners, this kind of offer can look like a blessing—especially when other companies are busy with a long waitlist for service.

Unfortunately, shady opportunists pop up after natural disasters like mold in flooded basements. These scammers prey on people when they’re at their most vulnerable and desperate. Usually, their work is second-rate and by the time you discover the problem, it’s too late. They’ve already left with your insurance money, and you have to pay another crew to fix their mistakes.

2. Leftover Supplies
One popular scam is the contractor who knocks on your door to say they just completed a job for your neighbor, have some leftover supplies and can offer you a great deal on a new project.

It’s perfect timing. You’ve been wanting a new deck for a while, but there hasn’t been enough room in your budget. Now you can get the perfect backyard deck for half the price.

Reputable home improvement companies don’t just wander around neighborhoods trying to find customers to pawn off their extra materials on. The contractor who tries this trick is hoping you’ll fall for the good deal without checking their credentials. Chances are, they’ll either take your money and run or simply do a bad job.

3. Free Mold Testing

This is another example of a door-to-door sales scam. A man knocks on your door and says he’s offering free mold testing. You let him in, and he finds several areas of your home where mold is growing unbeknownst to you. Thankfully, he says he can remove the mold right then and there.

No one wants to live in a house filled with mold, especially people with children or pets. Unfortunately, this contractor is likely not a mold removal specialist. He’s someone who makes a living convincing people there’s a problem and then immediately promising to fix it. Often, the house in question doesn’t have any mold – and if it does, he doesn’t have the right tools to take care of it on the spot. He may be scouting your house to rob it or trying to get you to commit to paying immediately to scam you out of money.

How to Avoid Home Improvement Scams
Most home improvement scams are committed by contractors and companies you don’t know personally. Before signing a contract or putting down a deposit, verify the firm’s credentials by checking their state license and bonding status, asking for proof of insurance, and visiting the Better Business Bureau website. You can also ask friends, family and neighbors for referrals or use sites like Nextdoor, Yelp, or Angie’s List to get reviews.

Only consider contractors who have a performance surety bond, which will protect the homeowner if the contractor fails to complete the job. If this happens, the homeowner can file a claim on the bond and recoup their losses.

Other common warning signs include contractors who want to be paid in cash, refuse to sign a contract, want to forego building permits or expect 100% payment up front. Be wary of people whose bids are far lower than other companies, as it might be a sign they don’t actually intend to complete the work. If it sounds too good to be true, it usually is.

Scammers may try calling as well as going door-to-door so be cautious when you get a phone call with a really low offer to fix, repair, or renovate something in your home.

It’s also a good idea to get any estimates or project scopes in writing that clearly state the work that will be done, deposit and payment amount, as well as the timeframe for the project.

What to Do If You’re a Victim
If you believe you’ve been scammed by your contractor, address it with them first before you go the legal route. They may be willing to refund your money in order to avoid a long, drawn-out legal process. Always communicate with them in writing and not by phone, which won’t hold up in court. If you send them a letter, use certified mail so you can prove they received it.

If they fail to respond, your next best recourse is to file a suit in small claims court, as long as the amount you’re owed falls within those guidelines. Each state has different guidelines on what you can do and what amounts you can collect in small claims court, so check with your state’s Attorney General site. Bring documentation of what they promised to do and photos of what they actually did. You can also file an official complaint with the city or state consumer protection office and with your local home builders association.

Many news stations have a reporter who specializes in consumer issues, and they love stories of innocent people being ripped off by shady contractors. Leaving Google, Yelp and Facebook reviews on the contractor’s page won’t get you your money back, but it could get the company’s attention in order to not have bad comments showing and might dissuade other consumers from falling for the same trick.
By Zina Kumok

Friday, August 10, 2018

Thank you Coldwell Banker!

Thank you Coldwell Banker! Thankful for my marketing and operations team for helping make dreams come true for our clients. Proud to be ranked in the Top 15 Nationwide with the Asian Real Estate of America.