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Message

From:

Matt Sridhar [matt@sridharequities.com]

To:

Tony Daysog [tdaysog@alamedaca.gov], Jim Oddie [joddie@alamedaca.gov], Frank Matarrese

Subject:

[fmatarrese@alamedaca.gov], Marilyn Ezzy Ashcraft [mezzyashcraft@alamedaca.gov], Trish Spencer [tspencer@alamedaca.gov] Rent Control in Alameda - Ridiculous

Created:

04-Nov-2015 22:02:28 UTC-08:00

Delivered:

04-Nov-2015 22:02:28 UTC-08:00

Stored:

05-Nov-2015 22:41:55 UTC-08:00

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Folder:

Tony Daysog > Inbox

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Dear Mayor and City Council Members:

I am a larger property owner in town. We own well over 500 residential units in CA (much of it in

Northern CA) and a substantial amount of commercial real estate. We have a solid reputation of

renovating projects and improving the neighborhood. We specialize in turning around dilapidated

properties. Our projects typically include complete interior and exterior renovation. We recently

purchased 33 units at 470 Central Ave and have plans to complete a large scale, modern

renovation. Every project we do improves the lives and quality of our residents. I have personally

assisted and helped a number of tenants in our city (including paying for one tenants

kidney dialysis because he was uninsured).

I also own property in “tenant-friendly” jurisdictions like San Francisco, Oakland and Los Angeles,

and as such, have a substantial amount of experience in rent-controlled jurisdictions. I am

surprised and disappointed that Alameda would entertain this politically-motivated and reactionary

agenda that simply interferes with free market enterprise and creates substantial government

bureaucracy. I will tell you with certainty that if you pass rent control, I will SELL my

property in Alameda and move on to improve another town.

All the political opinions and dogma aside, it is undisputed that 95% of our nations top economic minds do not support rent control. I suggest you simply take a short drive from San Leandro into Oakland (non-rent controlled to rent-control). You will see property dilapidation and the effects of rent-control. Is this what you want for our city? I don’t think people understand the non-sense that comes with this type of regulation. Please allow me to outline just a few inevitable outcomes:

1) Emergence of Legal Blackmail / Overcrowding of Courts - Non–profit and

supposed not-for-profit firms like EDC (Oakland) and BASTA (Los Angeles) will appear and encourage tenants to demand JURY TRIALS for every simple eviction case. They will file motion after motion to delay evictions for months and then “shake down” landlords for $10,000 - $15,000 to move out. Typical provisions in their settlement stipulations are agreements to seal the eviction record, waive all back rent, provide good/neutral references, and return security deposit. Landlords are forced to settle due to the high cost of litigation. And bad tenants are rewarded for their behavior with free rent, a windfall of cash, and the unfettered ability (with a sealed record) to take advantage of the next unsuspecting landlord. While this is something I can afford to fight and do so regularly, what will the “mom and pop” and retired owners do? Do you know that 80% of residential rental property in Oakland is owned by “mom and pops” who own maybe 1 or 2 little properties? The City of Oakland is too stupid to realize who they are hurting. The larger

landlords will lawyer up and the smaller landlords will suffer. Minor eviction cases that should take a 1/2 hour of a judge’s time will now take months and clog up our court system. Owners will then become reluctant to “take a chance” on prospective tenants with less than perfect credit. Rent control hurts the many people it professes to protect.

2) Reduction in Rental Property Stock – Recently I had to evict some tenants in a building in Los Angeles, CA. So after the tenants left, I was considering renovating the property and subsequently re-renting. But Los Angeles rent control is so onerous, that I decided to demolish the property altogether and build for-sale product that would now be outside of rent control (Costa Hawkins). Now there are 9 fewer rental units in the city. This is a city-wide epidemic in Los Angeles and San Francisco; both cities are LOSING rental stock at an alarming rate. If you’re considering rent control in Alameda, get ready to lose units and get ready for Ellis Act evictions.

3) Empowerment of the Bureaucrats – Get ready to beef up your code enforcement and rent board staff. You will need to increase your staff up to 10-fold to deal with the deluge of complaints, allegations, questions, etc that will follow as a result of these policies. All the money we spend on this bureaucracy could be spent helping the homeless.

PLEASE ADDRESS THE REAL PROBLEM; DEAL WITH THE ENTITLEMENT PROCESS IN ALAMEDA

The only way to address affordable housing is to deal with the zoning and planning policies of Alameda. We need to increase density so that multifamily development can become a financial reality. Right now, the only substantial multifamily developments occurring are Class A apartments and condo projects. The onerous entitlement process combined with all the off-site and development costs imposed by the city are HINDERING affordable housing.

Lets solve the real problem and stop the political bantering. Telling the workforce “that your rent is not going up” is a great way to garner votes, but horrible for the city in the long term. Cities with the strictest rent control laws (New York, Los Angeles, San Francisco) have the some of the highest rates of rental stock attrition and tend to be the most bureaucratic and saddled with poorly-maintained units. Rent control may seem interesting now, given the rents are very high. But rents will eventually go back down (they always do); and when they do, you’ll be STUCK WITH RENT CONTROL.

Lets not forget the obvious : San Francisco, New York and Los Angeles have some of the most unaffordable rents in the country. Rent control is NOT WORKING. Listen to our country’s topic economists; don’t listen to me. I will just sell my Alameda inventory and re-invest in other areas of

California.

Thanks, Matt

------------------------------------------------

Matt Sridhar

Chief Executive Officer

Sridhar Equities

1777 Saratoga Ave # 209

San Jose, CA 95129

phone: (408)725-9500

fax: (408)725-9503

email: matt@sridharequities.com