Rising rents drive elderly couple from home

Rising rents drive elderly couple from home

Michele Ellson

Jose and Aura Gonzalez lived in a rear unit of this Benton Street home for 17 years, until a rent increase forced them to move. Photo by Michele Ellson.

Jose and Aura Lyla Gonzalez lived in a bright, roomy unit at the rear of 1514 Benton Street for 17 years that was surrounded by trees, birds and good neighbors. But a few months ago the couple, who are in their late 70s, received word that the building had been sold to a new owner and then, a letter that their rent was going to increase by $600 a month – a 67 percent jump from the $900 a month they were paying.

The couple struggled to pay the new rent for two months so that they could remain in their home, their daughter, Amparo Adlao, said. But even with the help of their children, Adlao said, once the rent was paid, the couple had little money left even to eat.

Adlao said her parents were nervous about the letter at first; the prospect of not having a roof over their head “is very scary for someone their age.” Adlao, her sisters and other tenants in the building reached out to the city for help, but since Alameda doesn’t have rent control, there was little the city could do. A few weeks ago, the Gonzalezes and their 41-year-old daughter, Gloria – who is epileptic – moved out of their longtime home.

“It has been devastating,” Adlao said. “Basically, they were forced to move out.”

From Benton Street

Cases like the Gonzalezes’ are becoming increasingly common as the Bay Area rental market tightens. Angie Watson-Hajjem of ECHO Housing, a fair housing organization whose services include tenant-landlord counseling and mediation, said the agency has seen a 10 percent increase in calls from Alameda about rent increases this year – increases some said are essentially eviction notices from landlords seeking higher rents.

“We’re getting a lot more calls from Alameda,” said Watson-Hajjem, who said many are from people who have received big rent increases. “It’s a tough market for renters.”

Tenants in the four Benton Street units saw rent increases of between 23 and 67 percent, a city document shows, for monthly increases of between $225 and the $600 the Gonzalezes were paying. Prior to the increases, rents were between $900 and $1,200 a month for the tenants, who have lived at the home for between seven and 17 years.

The city has mechanisms in place to mediate such disputes, and those are usually effective, said Debbie Potter, manager of housing development and programs for the Alameda Housing Authority. But even they are seeing an increase in cases – including the Benton Street case – where landlords refuse to participate in what is a voluntary process.

Apartment Owners Association of California president Daniel C. Faller acknowledged that such a steep rent increase can be tough for renters, but said that a new owner paying market rate for property may need to put big increases in place in order to cover their mortgage and bills.

“If you owned an automobile and you go to sell it, you’re not going to sell it for less than fair market,” Faller said. “Even if a little old lady comes along and needs the car, you’re going to ask the fair market.”

But tenants portrayed the building as run-down and said they kept it up in exchange for the low rent, and they said its new owner has made few repairs since purchasing it. Adlao said her stepfather painted his unit and made minor repairs, and that when her parents left it still had the same carpet in place when they moved in 17 years ago.

“No upgrades in 17 years. The building is falling apart,” Thelma Gonzalez, one of the couple’s daughters, wrote on an estoppel certificate signed in late August, before the home was sold.

The Benton Street tenants reached out to ECHO and to the city, which scheduled a hearing before the city’s Rent Review Advisory Committee in December. Potter said the committee, which reviews complaints about excessive rent increases, has heard hundreds of cases over the years it’s been in place and mediated most of them successfully.

The cases that typically aren’t worked, out, she said, are the ones where landlords refuse to participate – something Potter said appears to be happening more frequently than in the past.

“The start with a posture of, ‘You don’t have rent control, I can do whatever I want.’ Or they don’t feel like engaging in the process,” she said.

Disputes that aren’t worked out by the committee can be sent to the City Council for review; the council is slated to hear the Benton Street case and another at its February 19 meeting. But the council can’t force landlords to charge tenants less, either.

“The action City Council can take is essentially sending a letter encouraging the owner to take into consideration – to uphold what (the committee) is recommending for a rent increase,” Potter said.

Claudia Bowman of House Source LLC, the Benton Street property's new owner, faxed the city a letter dated November 28 saying that she didn’t plan to participate in the committee’s hearing. She did not respond to a reporter’s phone call or an e-mail seeking comment.

“The increase in rents is strictly a business decision and we will continue to address any communication from you but do not see the need to appear in person since participation is voluntary and we have responsibly responded to tenants concerns for repairs and will continue to do so,” Bowman wrote.

In her letter, Bowman wrote that the rents being paid before House Source LLC bought the building reflected the fact that it had been in the hands of its previous owner for more than four decades and said the limited liability corporation needed to charge more to cover her mortgage, taxes and other expenses.

“We were in competition with other buyers and had to pay the highest price in a 2012 market to get our offer accepted. We are also paying reassessed property taxes,” Bowman wrote.

An online real estate site and other records show House Source LLC purchased the four-unit, 4,521-square-foot property for $652,000; property taxes could approach $11,000 a year, based on that purchase price and additional assessments listed on its most recent tax bill. Additional records provided to The Alamedan showed that a handyman has so far made about $2,100 in repairs to three of the units.

ECHO's Watson-Hajjem said she understands property owners need rents to cover their costs, but said it would be fairer to tenants to phase in increases over a matter of months.

"Getting a very high rent increase at one time is just a financial shock to most tenants," she said. "They really could have done these increases in way that would have hurt a little less and made a big difference in the lives of these folks."

The five-person rent committee – which includes renters, property owners and a neutral party – voted to recommend Bowman only raise rents 10 percent and then, to send the case to the City Council, draft minutes from the committee’s December and January meetings showed. Members called the rent increases unfair.

“Vice Chair Perry moved to refer this case to the City Council, noting that this was the highest rent increase he has seen by far. He stated that he was concerned about no landlord representation with authorization to negotiate for two meetings,” draft minutes from the January meeting say. “This is similar to what San Francisco experienced and is the kind of thing that leads to rent control.”

Faller said that cases like this one typically follow a situation where tenants haven’t seen rent increases for years; the rent committee’s documents show it had been four to nearly seven years since the Benton Street tenants had last seen rent increases. He said that instead of feeling bad, they should “rejoice” for the money they saved.

“Market rates is what you have to look at. They should just be thankful they were able to stay in there so long for such a low price,” Faller said.

Bay Area rents have risen sharply over the past year but are leveling off, according to one consulting firm that tracks rents. Another rent-watching website, Rent-o-meter, showed the average rent for two-bedroom units in the area surrounding 1514 Benton to be $1,403; recent listings for two-bedroom units in Alameda on Craigslist showed rents of $1,399 a month to $2,340.

Faller suggested the Gonzalezes might find cheaper rents in nearly Oakland or 25 to 35 miles away “in the country, so to speak, small towns where the rents would fit them.”

Harbor Bay Realty, which manages the property for House Source, moved the couple to another property they manage in Alameda, Adlao said, where the rent is $1,200 a month.

“I talked to my mom, and they all were depressed the whole week at the new place. I just looked at them and said, ‘It’ll get better,’” Adlao said.

Still, she said, the situation has left her and her family – most of whom live here on the Island – uneasy.

“I love Alameda, it been our town forever. But it’s just like, ‘Wow. This can happen to you and I,’” she said she told her sister recently. “The landlord can just raise the rent on us because there’s no rent control.”

Comments

Submitted by Karen Bey on Fri, Feb 8, 2013

Seventeen years is a long time to live in a property with little to no rent increases. That would have been the perfect time for someone to save their money to purchase something of their own someday because nothing lasts forever.

The upside for them is that they were able to stay in Alameda and find another place for a rent they could afford.

Submitted by Maria on Fri, Feb 8, 2013

This family is likely on a fixed income, as someone who is also an elder, I cannot imagine being able to save for purchase of a home at current prices. Since incomes and pensions have not kept pace with home prices it is unrealistic to expect such a thing. Bit of a "let them eat cake" argument. There should be some form of rent control for the elderly and disabled.

Submitted by Karen Bey on Fri, Feb 8, 2013

It would be nice to see the Alameda Housing Authority build more senior housing; they have built in rent controls for seniors based on income. But I think it’s unfair to expect someone to keep their rents low for 17 years if they’re not being subsidized. Someone has to pay the mortgage, taxes, ins. etc.

Submitted by Michele Ellson on Fri, Feb 8, 2013

Hey Karen: Just one small clarification - the renters here same their last increases between four and about seven years ago, per info from the January RRAC packet.

Submitted by Karen Bey on Fri, Feb 8, 2013

Thanks Michele for the clarification!

Submitted by Karen Bey on Fri, Feb 8, 2013

Michele,

My concern here is making the landlord out to be the bad guy when all they are trying to do is cover their rental operation expenses and get a reasonable return on their investment if they're lucky. I think I met this Claudia person once, and she is a real nice person who works hard on fixing up her properties. I don't think we want to be in the business of discouraging this type of investment in Alameda.

To me the real issue here is that there is a shortage of affordable senior housing. Hopefully this will be addressed through the housing element and the construction of affordable senior housing, where housing costs are subsidized through development and not on the backs of small time landlords who are just trying to get by themselves.

Submitted by Michele Ellson on Fri, Feb 8, 2013

Thanks, Karen. Appreciate your comments!

Submitted by L1573N on Sat, Feb 9, 2013

What House Source is really saying, is that they couldn't afford the house they bought (they hard to get a mortgage), so they want the Gonzalez family to pay for it. But House Source would get to keep all the equity in the house that Gonzalez family would be paying for and the Gonzalez family would get none.

Submitted by Laura Thomas on Mon, Feb 11, 2013

Thank you for covering this story Michele. The experience of the Gonzalez family is an unfortunate but frequent one in the Bay area where a tight housing market has favored investors and those with good incomes for several decades. It is an important example of the need to build more multi-family and affordable housing in Alameda and elsewhere. The city has taken a step in the right direction with its new housing element and Alamedans should be able to see how crucial this policy is to the long-term stability and economic health of our city. People who spend all their money on rent cannot spend it supporting local businesses and if they are forced to leave Alameda with their children so does ADA for the schools, a little-recognized side effect of Alameda's inclination to favor only single family homes and the people who can afford them.

Submitted by Bowman on Wed, Feb 20, 2013

2 additional comments
1. We were told by Harbor Bay Realty when the building was purchased by House Source that the Gonzalezes' were looking for another apartment and they would be moving as soon as they found another place (Harbor Bay was looking on their behalf) as they could no longer negotiate the stairs (this is an upstairs apartment).
2. The apartment is a 3 bedroom and 2 bath unit (about 1500 sq ft).

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