Rent Control Loophole Closed

By Nuala Sawyer : sfweekly – excerpt

Until this week, it was perfectly legal for new landlords to pass on their property taxes and debt services to rent-controlled tenants.

It’s been a bad month for Veritas. The massive real-estate corporation — which owns more than 250 apartment buildings citywide — was the subject of a ruthless City Hall hearing on May 16, where dozens of tenants took the mic to complain about squalid living conditions, unexplained rent increases, and never-ending construction. Sup. Jeff Sheehy, who called the hearing out of concern over the company’s business practices, called Veritas unethical for making “people’s lives unlivable.”

If you’re into Schadenfreude, it was highly entertaining to watch Veritas’ representatives squirm on the stand. But the hearing ended without any clear calls to action, essentially offering little more than a public finger-wagging at a company that’s been pushing rent-controlled tenants out through sneaky, barely-legal tactics for years.

This week, Sup. Sandra Fewer took the admonishments a step further. On Tuesday, she introduced legislation to the Board of Supervisors that would block one of Veritas’ sneakiest legal loopholes: passing on debt services and property taxes from newly-purchased buildings to the tenants who live there. In a rare show of solidarity, the Board approved the legislation unanimously, without a single amendment.

The legislation targets “operational and maintenance pass-throughs,” called O&Ms in tenant-rights circles. Under current law, large-scale property owners can use these pass-throughs to legally raise someone’s rent, even if they live in a rent-controlled unit. Each increase is reviewed (and nearly always approved) by the city’s Rent Board, and often adds around $70 to $200 to someone’s monthly rent… (more)

 

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