My husband and I have been buying and selling small apartment buildings for over 47 years. Recently, we sold our last two apartment buildings. We are done with owning and managing multi-family housing.
It’s bittersweet for us. I loved being a hands-on owner. I loved upgrading properties to make them a nicer place to live. Our tenants were our priority. What was needed in the buildings took precedence over what was needed in our house.
In our last two buildings, we have worked to create a sense of community. We hosted off-site tenant appreciation nights for our residents, movie nights and published regular newsletters. We had wedding receptions in our backyard. The tenants became engaged and married while living in our properties.
Two individuals met in our building and recently got married in our backyard. In my heart, I celebrated these wonderful occasions. Our residents became my “apartment family” and I was the “apartment mom”.
For me, owning and managing apartments was not a business; it was a way of providing housing with value added benefits for our residents. We issued modest rent increases every couple of years – and yes, all of our apartments were below market rate.
However, in recent years, in the eyes of some, owning apartments has become synonymous with being a greedy landlord. Local, state and federal lawmakers felt they had to protect vulnerable tenants from their expensive landlords.
Some of the most egregious laws have not been passed:
- One would require owners who were planning to sell their building to first offer it to their tenants and associations and give them a year to find financing.
- Landlords of five or more rental units would be required to provide specific information in a state registry requiring an abundance of private information, invading tenant privacy, and at significant cost to landlords – and to what end?
- Landlords should ignore any applicant’s criminal history.
- The state has proposed regulating the type of outdoor LED light fixtures used in apartments to reduce light pollution.
- Any building with a dwelling unit would be required to provide a cooling system or it would be deemed substandard.
Many legislative proposals at all levels of government have been passed and below are just a few examples:
- Rent control was the first.
- During COVID, with job losses, landlords were mandated to find out which tenants could not pay their rent and needed a rent discount or special repayment arrangements.
- For tenants eligible for assistance, a maze of government bureaucracies awaited landlords who had to go through the process or not see the rent they were owed.
- Confusing and conflicting laws in local jurisdictions, as well as at the state and federal levels, prohibited the eviction of any tenant, even when they posed a danger to neighbors.
- Apartment buildings meeting specified criteria had to install new fire alarms, an unfunded mandate, which cost us over $35,000 for a single small property
- More local inspections of our buildings by the fire department have been instituted, at owners’ expense.
- Locally, our residents have seen their nearby street parking virtually eliminated.
- Balcony and deck inspection deadlines are fast approaching, and costly gas-to-electric conversion is looming on the horizon.
We felt like we had lost control of our properties. We have lost the ability to provide certainty to our tenants. What was the next step?
At that time, we had been retired from our full-time jobs for several years. We were just a little “mom and pop” operation. We had hoped that owning an apartment building would help build a little nest egg to get us through our retirement years, and maybe even allow us to retire a little earlier. However, with the rents we were charging and the expenses we were paying, retiring early was a pipe dream.
How many other responsible apartment owners have decided to quit under the burden of unfunded and unreasonable government mandates. And who will be left?
Diane Strum is a former rental property owner who lives in San Diego.