Tenants are not a commodity: disputes about housing market regulation

Senior Evictions in a broader context of housing crisis
David Bogachik

Hearing to repeal Costa Hawkins


On October 24th the State Capitol in Sacramento hosted hundreds of supporters and opponents of idea to repeal Costa Hawkins. They came to express their positions at the hearing “The House Affordability Crisis: Exploring the Effects of Renter Displacement.” Introduction of AB 1506 bill by Assembly members Richard Bloom, Rob Bonta and David Chiu rose hope among tenants and housing rights advocates community. Costa Hawkins abolishment would stop thousands of evictions.


Costa Hawkins is a law that prevents establishment of vacancy control on municipal level, so the rent which potential new tenants would pay dramatically surpass what old tenants pay. It pulls the trigger at the temple of common sense and humanity and opens wide gates for many speculations on the SF rental/housing market which engage misconducts, harassment, misuse of the Ellis Act, fake owner-move-in evictions. It invites speculators and lawyers to invent new means in a sophisticated battle with long-term tenants, including 71% of seniors and disabled, targeted for eviction. It destroys the community life, even for those who pay here the “market value” rent: nobody enjoys living in the neighborhood changing it’s habitants, stores, small businesses, services as disposable gloves.

Revocation of Costa Hawkins and establishment of vacancy control would stop the anthropological catastrophe at once, simply because under vacancy control it doesn’t make much sense for a property owner to evict long-term tenants. In a few years, we would make round eyes hearing such stories as Iris Canada’s as anybody else makes – anybody from Europe, Australia and Canada.


About the perspectives of AB 1506 we recently talked with Dean Preston. He expects it to be a long road to accept it, and now we at the very beginning. The most initiatives to curb the housing crisis had died on a level of the Assembly Committee on Housing and Community Development.


This hearing had informational status collecting public opinions on the initiative to repeal Costa Hawkins. David Chiu presided, and Rob Bonta was among the commissioners. The room was overcrowded by supporters and opponents of the idea. Among supporters – housing rights activists, Tenants Together, Alliance of Californians for Community Empowerment, Housing Rights Committee, SF Tenants Union, Anti-eviction Mapping Project, and others. Opponents were a big group of landlords from Chinatown San Francisco.


Merika Reagan from Oakland opened the hearing with a tenant testimonial sharing her own experience of displacement. She told about dramatic effect of housing crisis on people’s lives. She told about homeless people who suffer from health problem as well as from a lack of access to health care system. She told about people who are not homeless but live their lives in a fear to become homeless: they face depression and anxiety, suffer from chronic fatigue working several jobs, being never able to fully relax. The constant anxiety, she said, prevents people from thinking clearly and resolve their life, working, and housing situations.


Dr. Eric Andrew, California Assembly Housing Committee, focused on specific problems with education flowing from housing crisis. The unbearable rent impacts mainly teachers and thus education system. 75% of more than 200 districts in California have difficulties with filling school positions. Many teachers cannot afford to live in the community they work. So they leave either the state or their profession. Those who believe that property rights are so sacred that it’s justifiable for them to take the most odious shapes can still experience the impact of this logical nonsense on their own lives. We can meet soon a prospect of towns where people would not be able to provide their children with education of decent level.


“Tenants are not a commodity.” This message from tenants facing displacement was delivered by Dr. Muntu Davis, an Alameda County Health Officer and Public Health Director. He talked about disruptive impact of rising rents and displacement on public health. Enormous housing cost burden, overcrowding, housing instability, evictions, displacement and, eventually, homelessness lead to increase of chronic stress, heart disease, respiratory infections, tuberculosis, headache, fever, skin disease, asthma, mental disorders statewide. In Alameda county renters consist 47,3 of population, and among them 51,1 % pay more than 30% of income for rent, and 25% of renters pay more than 50%. For last two years, median rent has increases by 25%, while median household income – only by 5%. Homelessness increased by 39% since 2015. He also presented data showing correlation between decreasing housing stability and increasing of hypertension hospitalization rate, sever mental illness emergency department visit rate, and asthma emergency department visit rate. Ensuring tenant rights and protections is a public health issue, as well as preservation and producing of quality affordable housing.


6th world economy and one of the highest poverty in nation: this is California today. Her most shameful problem is the largest homeless population in the U.S., which has been dashingly growing, especially in the last two years. “On a single night in January, 2017, 3,365 individuals only in Sacramento experienced homelessness,” – Dr. Arturo Baioccki, California State University, reported. 1,613 persons were in shelters, while 2,052 were found sleeping outdoors. Statewide: 118,000 homeless in one night in 2016. Which amounts ¼ of homeless in the U.S. and ½ of unsheltered homeless in the U.S. 6th world economy.


Psychotic sense and how we treat it


When I first talked to Tim Redmond about the idea to trace legal controversies in the Iris Canada’s case he said that he didn’t need paralegal investigation to understand that everything there was completely wrong. I think, he was right. Research, attempts to discover some hidden sense – it works for cases of neurosis, for something more or less normal. And all these stories seniors abused and dying in eviction processes, and these numbers of homeless people in the richest state look more as psychotic phenomena. There is no hidden sense, but lots of delirious sense. Everybody knows about it, meets every day, it’s open to the sky and still we don’t know what to do with it.

The simple answer is – to put the limits for delirium. That’s how psychotic disorders are usually treated. And repeal Costa Hawkins would work like powerful medication. For this, the society has to assume a position of a symbolic psychiatrist instead of joining symptoms of the disease. But in many ways we do the latter.


California and her people were seized by a huge psychotic matter that exceeded ability to understand and deal with it with normal tools – logic, social norms, imagination of public good. What was supposed to bring prosperity in the area – dot-com boom – suddenly turned into unintentional consequences – housing and affordability crisis. The public perception of what was normal – crashed by thousands people on the street. Too strong impact and too short time to deal with it. It was hard to adopt new laws and calculate effects of certain housing policy in the new reality. We have laws that were adopted before the boom – the Ellis Act in 1985, and Costa Hawkins in 1995. Both were not designed to address new circumstances in the Bay Area and California by and large. In case with Costa Hawkins we have a tragic coincidence of the dramatically increased demand on rental market in the region and the state restrictions to regulate it.


This combination paralyzed ability for constructive thinking – that always means to address the reality. In Costa Hawkins and the Ellis Act new reality was not taken into consideration.

Since then we can observe many irrational ways people resort to to cushion the problem, in their perception. Part of the society blames homeless posting up on roadside columns ridiculous appeals to get out of their porch, sight, and heart. This kind of reaction – attack on victims – reveals the existential horror before the idea that human beings can be doomed to lie on a street in urine vapor. Humans could never be subjected to this, thus we exclude them from the species of homo sapience – this is a logic stemming from archaic fear of annihilation. Dehumanization and aggression toward victims of the social disaster. The similar irrational logic inspired many not nazi but regular people to anti-Jewish pogroms in Poland after concentration camps survivors were released.

Another recognizable kind of defense tends to rationalize homelessness through the idea of social achievements and efforts that would secure person from getting on the street. Homeless people deserve their destiny because they were not socially ambitious enough or were just lazy to get good education and high payed jobs. This kind of defense based on magical faith that one can escape the catastrophe if s/he performs certain social rituals. Such minutiae as population of teachers, who seem educated enough but live at the edge of risk to become homeless or leave the state doesn’t destroy magic believes.


There are plenty another ways to rationalize and thus normalize homelessness – through pseudo-economic reflections, etc.


One thing deserves special attention – formation of overvalued ideas. Such ideas tries to patch huge holes yawning in the surface of common sense in surrounding reality. For this purpose, we can use normal ideas that once originated in normal circumstances, and turn it into an overvalued idea to protect ourselves from the threatening reality. In our public discourse one of such “patching ideas” is “property rights.” It’s not discussed, it’s never checked with reality. Politicians are afraid to revise this concept because it has always been a slippery move to challenge a sacred cow. Who dare talk about it are declared “communists.” However namely these ideas need permanent revision in their foundations and correlations with reality. Normal idea differs from overvalued one that it always has been developed, specified and changed due to amendments made by new circumstances. That means normal process of symbolization.

“Everything that was not symbolized would occur in reality, likely in a form of accident,” Lacan said. All the stories which we described and which we didn’t, when in unequal battle with so-called “property rights” the most vulnerable community members lose their lives – this is precisely such a chain of accidents. Misusing laws, developing psychological defense from the problem instead of tackling it, we invited a disaster. This disaster appears in vast speculations on housing market, neglecting all conceivable rights except for “property”, and we are loosing control over our own lives.


We need really summon our civil courage to face facts instead of protecting ourselves from the outrageous reality. And start to change the situation. One can see how housing rights activists keep fighting at their limits. They deal with matters that swallow up a lot of psychic energy. So this is not an easy way. But, without facing the cruel facts, revising concepts we operate with in public discourse, and uniting efforts of different social groups we are not gonna arrive at any decent resolution.


Back to the hearing

The public commentaries section was dramatically limited giving only 30 sec for each comment. It was disappointing for everybody in public, but anyway. The line was huge.


Despite the restriction, commentaries of supporters Costa Hawkins repeal lined up in one well-versed witness statement illuminating the problem from different sides. “I want to tell a story of my neighborhood where entire families have been displaced every month.” – “Sorry, your time is out. Thank you.” – “Okay, I just wanna say: repeal Costa Hawkins.” “We are losing our teachers, they cannot afford to live in the community they serve.” “We are losing our communities and culture.” “I am a real estate agent. I am asking you: repeal Costa Hawkins.” “I live in San Francisco” “I was displaced from San Francisco.” “I am an Alameda resident.” “I am from Santa Monica.”


The opponent’s arguments and geography of their residence didn’t show the same diversity. “I live in Chinatown, San Francisco. If you repeal Costa Hawkins private business will leave rental market.” “I am a landlord. I pay my taxes. Save Costa Hawkins.” “When I just came to this country, I was a tenant. And I wanted to pay less. If I still were a tenant, my interest would be to pay as fewer rent as possible.” “We, small landlords, will leave the rental market if you repeal Costa Hawkins.”


“They are not here by coincidence, – said Dean Preston after the hearing. – They were organized by a handful organizers, but what was notable today that other than San Francisco landlords, you didn’t see any other landlords speaking out. If to judge by strength of turn out, we succeed by showing a broad coalition for tenants rights. Real estate industry don’t think they need a broad coalition: they know their money goes along with elected officials in this building. So the group of San Francisco landlords just helped them to put a human face on the big speculators who actually drive anti-tenant policy.

Legislators got a lot of information and hopefully it will wake them up to what people are experiencing. But this an informational hearing, it’s great if it helped to build awareness but bad if legislators think this is all they have to do. I am waiting for the authors of the bill to commit a legislative hearing. Repeal Costa Hawkins is a big fight. Real estate industry is powerful in this building, and it takes time to educate folks here about the consequences if they stay with the industry.”


“The framework of health impacts, introduced today, is very important argument to think about, – said Deepa Varma, a Director of SF Tenants Union. – And it was really telling that realtors did not speak at all. They have no arguments for how this is not a crisis. I feel that tenants really brought it today and showed that they can run the history here. This hearing is about pushing legislators to prioritize this bill despite the opposition. The chances to repeal Costa Hawkins are better now than they have been since I work in housing though they are not that good that I want them to be. But this is not the reason to not fight this fight.”


“It was hard to speak for 30 seconds, but I felt that we build something bigger adding our arguments. – said Fred (Sarah Sherburn-Zimmer), Executive Director of the Housing Rights Committee San Francisco. – Today, the legislators wanted to see whether this could die quietly, and we showed them that this is a real issue. Now it is a real issue for them, and now we need to push further – organizing, giving calls to the assembly members. It took ten years to pass Costa Hawkins. They couldn’t end the rent control in California so they passed Costa Hawkins to weaken it. We need not only to repeal Costa Hawkins but we all need go home and pass really powerful control. To stop mass evictions and speculators who are buying everything now, and it’s getting worse for everybody. We need to strengthen our movement, and we have to win.”


“This was an amazing and powerful turn out of activists, tenants who live here, people who know what we need to solve the housing crisis. It’s very powerful to get together building more connections and grow as a movement. It was important data shared by the experts, but I don’t think it was enough – in terms of giving voice to tenants and people doing their work on the ground. And I didn’t really understand why tenants advocates were not giving an opportunity to bring their strong and clear arguments and advocate for repealing Costa Hawkins,” said Ariel Appel, the Anti-Eviction Mapping Project.


Rent control disputes


The arguments provided by the group of San Francisco landlords narrowed down to the idea that strong rent control forces private sector out of the rental market.


This argument crops up in every discussion around the world where rent control remains one of the most discussable and contestable issues. What is interesting that it often emerges in debates in those countries which have no rent control or very weak one. For example, in the UK, whose rental market is considered as the most unaffordable in the world. It’s always have been articulated that in a period when England had strict rent control between 1915 and 1985, private share on the market shrunk from 9/10 to 1/10.


At the same time, the situation in the UK has been often compared with Germany which has the most regulated and the most stable rental and real estate markets in Europe. First of all, here you can see that housing prices have been stable since 1970th in Germany while Britain experienced four boom/bust cycles and deteriorating housing affordability for this period. Second, German debunks the argument about private business leaving market by the simple fact that the majority of rental dwellings in the country are private. Third, in the comparative analysis, secure rental tenancy experts call one of the main factors of housing market stabilization.


So why we still hear that rent control expels private landlords and thus create shortage on the rental market?

One of the answers might be found in a discussion that took place at the Great Canadian Housing and Real Estate Conference where in 2016 there was vigorously debated the question whether housing can be a commodity. Recent survey in Canada (conducted by Mortgage Professionals Canada) shows that 25-30 % of Canadians view their homes investment while 70-75% a place to live. While a participant from the U.S., Porter Collins, a co-founder of an investment company Seawolf capital, made a point that considering housing as commodity by many Americans was a major factor in the U.S. housing bubble in 2007-2009.


It’s questionable whether it’s a good idea to invest in housing – when it comes to small investments, e.g., of people who want to secure their old age. But when it comes to big real estate guys, it always invites a disaster. One of the conclusion of the conference was: “Historically, value in use was the primary reason to own real estate, however “gateway cities” transform real estate into an investable, exchangeable commodity sought by global capital.” And many problems start right here.


Even opponents of the idea that housing shouldn’t be used as a commodity, recognize the problem of “wrong type of investors” who enter the market when prices rise rapidly. These “speculative short-term investors” are completely different story than small landlords, though they are also classified as “private business.” It explains why rent control establishing may lead to change in data showing shrink of private share: it simply means that strict rules frighten away speculators, and that’s good for everybody. Including those guys – San Francisco Chinatown small landlords who spoke to save Costa Hawkins at the hearing in Sacramento.


I will never tire to say that one of main factors contributing in California rent regulation misfortune is association of homeowners, potential home buyers and small landlords with big real estate industry. The latter frighten them by tenants rights as encroaching on property rights. Real estate industry need them for several reasons – as Dean Preston said, they need “human face” protecting inhuman idea of prevent any changes that would stop housing/senior deaths/homeless disaster in California. And, besides politicians in Sacramento, they need voters. However, in each article I put new examples showing that interests of homeowners in many points get along with tenant’s protection. This is correlation of stability on housing market and rental market; this is affordability that strictly depends on rental prices; This is stability and development of community, infrastructure, good climate for entrepreneurs and many other things that regards everybody who lives in the city – tenants, homeowners, small landlords – and definitely not big real estate industry players. I believe, this is a field that needs more attention: development relations and better understanding between tenants and homeowners – small landlords. And this is an antidote for unprecedented sway the real estate industry has here over public opinion.

We will continue the discussion, and at the moment, if to talk about housing as a commodity – pro and contra – we should at least understand the big difference between “private sector” on rental market that means small local landlords, and “private sector” of real estate industry. For first viewing housing as a commodity can be balanced by their other interests. For second – there are no restrictions. In this perspective what becomes a commodity is human life.