Despite the intention to protect renters and prevent homelessness, the San Diego City Council’s proposed “no fault” rent protections will do more harm than good. Landlords may be forced to sell their income properties due to punitive eviction mandates and further limit the supply of rentals in our region.
A “No Fault” eviction occurs when a landlord ends a lease with the tenant for reasons that do not involve nonpayment of rent or a lease violation by the tenant. The City of San Diego currently allows “no fault” evictions if the landlord removes the property from the rental market or wants to take possession of the rental for repairs. A no fault eviction can also occur if the landlord intends to live in the property as their primary residence.
One of the no fault eviction protection provisions being proposed is to require landlords pay 3-month’s rent to the tenant before moving out. But such mandatory tenant relocation fees are fines and infringements on private property rights.
Another provision being proposed would entitle renters to a per-diem to cover their expenses if they are temporarily relocated while improvements are made to the property. A bathroom or kitchen remodel can take up to six months to complete and in some cases longer. The proposed renter per-diem will put undue financial hardship on the property owner and could discourage a landlord from performing upgrades, thereby impacting the value of the property.
Penalizing landlords for selling or moving into their rental property is not the solution to San Diego’s housing and crisis, which was brought on by government’s inability to build enough units to meet the needs of San Diego County. A regional housing study projected San Diego will need more than 13,500 housing units every year to meet the demand of all income levels by the end of the decade. In 2022, the city only authorized construction on a third of that.
Local government is attempting to solve the housing problem it created by fining rental property owners and stripping away a layer of private property rights.
San Diego’s elected leaders and government bureaucrats have been working on affordable housing solutions for years, but sadly their efforts have been largely unsuccessful. Our city now tops the list for having the nation’s most unaffordable housing market.
The affordable housing dilemma in San Diego is a supply and demand issue that was self-inflicted and levying fees on landlords through no fault evictions is not going to solve it. And if San Diego cannot build enough homes for people who can afford them, how are we ever going to manage the homeless crisis?
According to the National Association of Realtors, 41% of rental properties are owned by individuals and many landlords own just one rental property. Some senior property owners may need to rely on their rental property as a source of retirement income.
As our baby boomer population in San Diego gets older some will need to relocate to assisted living facilities or pay for costly senior healthcare assistance. Baby boomers may be forced to sell their rental property to meet the high costs associated with assisted living and healthcare and they should not be penalized through draconian eviction mandates if a sale is necessary.
Landlords should not be required to offset the moving expenses of their renters, and the proposed 3-month rent fine will do just that. Providing tenants with financial relocation assistance is a good business practice, but it should not be mandated by government, it should be negotiated between renter and landlord.
Private property rights set the foundation for a successful economy, and there is a direct correlation between economic prosperity and the strength of property rights. Eviction mandates such as those being proposed by local government may appear to be in the best interest of the public, but they chip away at private property rights.
The importance of private property rights is indisputable and government interference or failure to protect them will ultimately erode our way of life.
Mark Powell is a licensed California Real Estate Broker and a former San Diego County Board of Education member.