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Home | Episode #71
The Up and Up of Rent
May 2018 | Student Producers:

Leah Drost, Luna Labelle and Gabriella Schram (An Impact Linda Vista Initiative Story)
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The Up and Up of Rent
Linda Vista rent prices are a struggle between resident affordability and landlords' drive for profit. (9 minutes)

Leah: Rental issues in San Diego seems like a boring conversation, right? Wrong. Rental differences in communities are quite a saga. Two divided perspectives, issues related to capitalism, loyalty, and money, can one side overcome the other? Or will this problem exist for years to come? In order to work through this conversation, we reached out to the Linda Vista community. 

Luna: We asked a longtime resident, Anali, about the topic of rent. We found something extraordinary.

Anali: In our situation, in our family, like I mentioned, sometimes people do get lucky with the owners. We've only had our rent increase about $50 within the past 11 years, you know, but

Leah: but some people get screwed over more.

Anali: I know that my mom has a really close friend that had to move from different places in Linda Vista because the first month they were charged a hundred dollars and then three months later, another a hundred dollars. And it's the same apartment, nothing has changed. It's just the notice that we're going to increase rent.

Leah: From Anali's experience, it seems that rent increases keep rising, not just at a steady level, but very fast, which is forcing many residents in Linda Vista to have no choice but to move to a different neighborhood. And it's not just a small amount of increase each month. It's a substantial amount.

Matt: Well, owners, landlords are always trying to get as much of that income as they can because it's an investment. Well, not always, but they're always trying to push their rents because they can.

Leah: This is Matt, a commercial real estate broker from San Diego.

Matt: If it's, as the vacancies go down, if somebody doesn't want to pay the rent, the person will move out, there'll be somebody there that's willing to pay that rent. So it's just basically cause they can.

Leah: From Matt's business perspective, we started to understand that rent increases are forcing people out of their homes, but because there's such a high demand for housing and little vacancies, owners know that the residents leaving won't affect the reputation or finances of their business. This then led us to find out exactly why Southern California is desired by so many.

Brian: I would say that it has lots to do with the quote end quote sunshine tax. People want to live in California very badly. More specifically they want to live in Southern California.

Leah: This is Brian, a commercial real estate broker from Lee and Associates.

Brian: I mean, you hear all the time about people that sacrifice, you know, living in a nice spacious house in the Midwest just to move into an apartment in San Diego, simply for the fact of living in San Diego. And the landlords and property owners are aware of that fact. So they can jack up their rental rates and jack up the prices of homes. And it's kind of a simple fact of supply and demand. I lived in an apartment in Encinitas about five years ago and I paid $1,600 a month for rent for a two bedroom, two bath. And I moved out of that apartment that same year. So that was five years ago. And one of my good friends lives in that same apartment complex, coincidentally, and now he pays $1850 for that same space and that same amount. So, you know, I told him that I paid $1,600 a month at one point. And he thought that was unbelievable. But the rent just needs to keep going with whatever the market demands.

Leah: We learned from Brian that rent is also forcing people out of their homes because San Diego is such a desirable place to live. So basically the rent will continue to rise as the demand to live in San Diego also rises. For example, imagine being the owner of an apartment complex in San Diego, if you knew that your apartments would always stay in business because of the location, then wouldn't it make sense to make more profit?

Anali: The apartment complex where we live, we pay a certain amount of rent. However, when people leave and new people come in, we've heard that there has been an increase of rent and we're at the same apartment complex.

Leah: Anali explains the biggest issue of all. There is tension between new and existing renters. 

Anali: Sometimes people get eviction notices of just 30 days and that's it. And imagine like a family of four or five, it's hard to find another location to live in. Plus the deposit and whatnot.

Luna: From Anali's experience, we gathered that those who've lived in the same apartment units for several years don't pay the new price increase the original monthly rent fee that they signed a lease on continues or stays the same. New renters feel that the apartment owners should have everyone pay the same rental price, regardless if you're new or have been living there for several years. 

Leah: For instance, let's say you leased an apartment and after two months of living there, you could no longer afford paying the rent. So you got evicted, but then you found out later on that your neighbors are paying $400 less for the same exact room. Is this fair? Let's hear the business side of the story.

Matt: Yeah. My family owns some rental properties and if you have a good tenant that's been there a long time. They've always paid on time. They don't complain. You know, you'd probably be willing to keep their rent where it was rather than pushing the rent up cause they're good tenants. So there's still value in having somebody there, even at a lower price. You know, somebody new comes in, they're more likely to push it because you don't know them. And you know, there's value in getting more income versus on a lower rent for somebody there's value in having a good tenant that you can trust that doesn't cause problems, that pays on time.

Brian: You have to kind of put yourself in the landlord’s situation. If the landlord increases rental rates, then that's not because the landlord is some evil person that's trying to take advantage of you and take all your money away. They're simply just trying to keep up with the demand and the cost of living in San Diego in general. You know, the landlords charge more for new apartment users, because, again, they know that they'll pay for that.

Luna: There's two sides of it. Anali sees the issue through a personal perspective and those who live in the community. Matt and Brian see this through a finance business perspective about loyalty and profit. Can this dividing tension be remedied?

Brian: Unfortunately, I really think that they're just going to keep going up. San Diego will always be expensive. It will always be an ultra desirable place to live. Landlords will always be able to charge as much as they want and people will come. The only thing that will change that is if, you know, the government in California cuts regulations and cuts the bureaucracy and cuts the EPA down because the reason why there's such a demand for housing yet such a limited supply is because the process of building homes and building apartments is so expensive. It takes such a long time that a lot of developers are simply turned off of the idea of doing so.

Matt: Depends what you're talking about. I know apartments, I think the apartment vacancy is something like less than 5%. And anytime vacancy is that low, rents are gonna keep going up. Cause landlords are going to push rent cause, there's other people that want to buy it or want to lease it if the tenant doesn't want to pay that.

Gabriella: It's hard to imagine a world where capitalism does not reign superior and in a small community like Linda Vista, there should be at least a glimmer of hope for residents, right? While learning more about this issue in the community right next door to us, we have to come to find that this is an issue that must be addressed. 

 

Luna: Rent is money, and we understand that, but rent is also people's livelihoods. And we really hope that through dialogue, such as this, we can move towards a more permanent solution for this problem.