By Ian Gibson
As a landlord, my tenants are my clients. I have built my business on working hard every day to provide a high standard of living for residents in National City, Normal Heights and other communities in our county. If California’s Proposition 10 or National City’s Measure W pass, rent control would become law, and thousands of landlords like me would be forced to stop our investments in local communities.
Being a landlord involves a lot more than collecting checks at the end of the month. Before entering this field full time in 2008, I was a commercial real estate broker for nearly a decade. I approach each of my properties as an investment opportunity. I look for fixer-uppers, the most affordable property in the best up-and-coming area I can find.
Then the real fun begins: I pride myself on adding value such as new fixtures, security features, safety improvements, community spaces and beautifying the building and landscaping. I view each of my rentals through the tenant’s perspective: if I lived here, what would I want to improve?
If you take the time to read Measure W and Prop 10, it’s clear that each is written in such a way that landlords would not have the same incentive to continue making investments like I and so many others make on a regular basis. There simply would be no way for us to recoup additional value from improving apartments. Measure W is especially egregious because it would halt years of economic growth and progress in National City that has been supported by elected leaders and residents, all of which has led to stronger local businesses and more vibrant neighborhoods.
As an independent property owner, I am a small fish in a big real estate pond. But the story is the same regardless of scale. As landlords improve their properties, they benefit renters with a higher standard of living and help to improve communities with more attractive buildings, safer homes and new investments. It is no surprise that as these improvements happen in a neighborhood it becomes more desirable to live there, and rents do tend to increase as more people compete for a spot in this area. These changes literally breathe new life into the community.
In National City, I have recently renovated four of eight apartments in a building I recently purchased. New tenants were practically beating down my door to rent one of my renovated apartments. This is not a surprising effect; it happens in each community I restore.
I am regularly looking for new properties to invest in, and when I checked with my broker, I was shocked to see the impact National City’s rent control campaign has had. Based on the speculation about rent control alone, the value of my National City property dropped by 20 percent. Few things can scare away investment in apartments like rent control.
The potential impacts of rent control are a huge risk for me to contend with as I consider future investment. Because of this, I am forced to keep all four of my un-renovated units in National City vacant as I wait and see the outcome of these campaigns.
As an independent landlord, I take on a significant amount of risk to buy and renovate these buildings with my own money and borrowed money. If Measure W passes, I will not continue reinvesting in National City, and I am not alone. Other landlords I’ve spoken to tell me they would make the same decision. If Prop 10 passes, I will face a similar situation with my properties in San Diego and elsewhere in California, and I am considering taking these units off the rental market and converting them to condos I would sell.
This is not the effect that rent control advocates want. Embedded in California’s housing crisis are socioeconomic issues that are larger than the price of rent, so the onus of addressing this crisis should not be forced solely on the shoulders of landlords or any other single group. There are other solutions that can address housing affordability without exacerbating our housing crisis, like making it easier for renters to obtain Section 8 vouchers and making it easier for landlords to accept them. Our leaders in Sacramento could address this without an expensive and uncertain ballot campaign.
Communities like National City depend on property renovation to spur and maintain growth. These enhancements also increase property values, which brings in much-needed revenue for schools, police, fire, parks, libraries and recreation centers. I am urging voters to consider the positive impacts landlords make to improve our neighborhoods and vote no on Prop 10 and Measure W.
Ian Gibson is an independent landlord who owns and manages apartments in National City and San Diego. He is a member of the San Diego County Apartment Association.
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