WHY IS RENT SO HIGH IN CALIFORNIA?

The chart below explains it all. It tells the whole sad story. We need to build 180,000 new housing units in California every year to keep up with population growth, but we are only building 80,000, and this has been going on for 20 years. All of the housing problems we have in California, all of them, can be traced back to this one simple fact. Every year, our housing shortage gets worse, and this ever-worsening housing shortage explains why rents keep rising faster than inflation, why the vacancy rate is so low, why people are doubling up in apartments and houses, why people are paying a higher and higher percentage of their income on housing, why college graduates in California move back home with their parents after they graduate, and why thousands of people in the Bay Area are living in RVs, tents, cars, and trucks. Unless we build enough housing to keep up with population, all of these problems will just get worse.

California’s Population Explosion. In 1945, the population of California was 8 million. Today it is 40 million. That means that for every 1 person who was living in California at the end of World War 2, there are now 5 people living here. I live in a house that was built in 1902. In 1902, the population of California was 1.5 million. That means that for every 1 person who lived in California when my house was built, there are now 26 people living in this state. Like most people in the Bay Area, I am not happy about this tremendous population growth. I too wish that fewer people were moving to California, but they are coming here whether we like it or not. And its easy to see why they are coming. This truly is the Golden State! Suppose you were living in a city in a Rust Belt state full of closed factories, where the unemployment rate was 20% and the minimum wage was still $7.25 an hour. Wouldn’t you want to pack your bags and move to California? The unemployment rate in California is 4%, and the minimum wage in California will soon be $15.00 an hour.

America’s Black Hole. My sister Judy once called California ‘America’s Black Hole.’ I never forgot that because it’s true. What she meant was that moving to California is like entering a Black Hole. Nothing that enters a Black Hole comes back out. Once people move to California, they never go back to where they came from.

Adios Baltimore! I grew up in Baltimore, a Rust Belt city. The population of Baltimore peaked in 1950 and has been declining ever since. The heavy industries that once supported Baltimore’s prosperous working class are gone. Baltimore’s shipyards that once employed 50,000 people are gone. The Glen L. Martin aircraft factory that once employed another 50,000 people is also long-gone. The Bethlehem steel mill that once produced 10,000 tons of steel a day is gone. As the jobs dried up, so did Baltimore’s population. Thousands of row houses in Baltimore with their famous white marble stoops are just rotting away. All of Baltimore’s once-fashionable downtown department stores are now abandoned. There are dozens of cities just like Baltimore all over this country, once bustling industrial centers that have been in decline for generations. Without the jobs, what is to keep people in Baltimore? Baltimore is hot and muggy in summer and can be bitterly cold in winter. There are no interesting geographical features in Baltimore like mountains or waterfalls or palm tree lined beaches. We can’t stop people from leaving places like Baltimore and moving to California, and it is a fantasy to imagine that people won’t come here from places like Baltimore if we just don’t build housing for them.

Not In My Back Yard. We need more housing, a lot more housing in California, housing that ordinary working people can afford, but we’re not building it. Most of the city councils around the Bay Area are dominated by NIMBYs. (Not In My Back Yard). These politicians and the voters who elected them support laws that discourage new housing from being built, like downzoning, height limits, and and inclusionary housing laws. They also support laws that encourage landlords to remove existing rental units from the market, like rent and eviction control laws. Rent control gives owners of rental properties, particularly small rental properties, a financial incentive to get rid of their tenants and sell their properties to owner-occupants or to use their rentals for other purposes, like turning apartments into AirBNB rentals or offices. We need to accept this one fact – a lot of people are coming to California whether we like it or not. We are only hurting ourselves by discouraging developers from building new housing and by encouraging landlords to go out of business.

SHOULD YOU GET A HOME SECURITY SYSTEM?

Tenants often ask me this question; however, it’s not a question that I can answer. One thing I can and do tell all my tenants – a home security system is not a substitute for common sense. That means:

1. Lock your doors and windows when you are not home. About 1/3 of burglars enter their victims’ homes through unlocked doors and windows.
2. Don’t discuss your travel plans on social media web sites until you return. 4 out of 5 professional home burglars check Facebook, Foursquare, and Twitter regularly to find out who is on vacation.
3. Put a lamp on a timer while you’re away. Even a dim-witted burglar can figure out that nobody is home if there are no lights on in the early evening night after night. I will give you a lamp timer if you don’t have one.
4. Don’t let mail and parcels pile up on your porch while you are on vacation. Have the post office hold your mail and have a friend check your porch daily.

Occam’s Razor. I am a big believer in Occam’s Razor which states that the most obvious solution to any problem is usually the correct one. Burglars use this principle to their advantage. Example – Why would a burglar try to get into somebody’s house by picking the front door lock if he can see that a ground floor window in the house next door is wide open? A burglar wants to rob a house, but he doesn’t want to get caught. What is the most obvious solution to the burglar’s problem?

I once had a tenant in Oakland who left her front door wide open while she went to the laundromat a few blocks away. This was back in the days before I put washers and dryers in all my units. She was robbed more than once by people who simply walked into her living room and took stuff. She thought that her problem was that Rockridge was a dangerous neighborhood. I tried to get her to see the connection between leaving her front door wide open and these robberies, but I was never able to do that.

SHOULD SCHOOLTEACHERS CARRY GUNS?

On March 13, 2018; Dennis Alexander, a math teacher at Seaside High School (Monterey County, California) brought his gun to class to give his students a lecture on gun safety. During his lecture, Mr. Alexander’s gun accidentally discharged, firing a bullet into the ceiling. A piece of the ceiling flew off, hitting a 17 year old male student and lodging in his neck. The student was taken to the hospital and is expected to recover. Mr. Alexander is very experienced in gun use. He is a reserve police officer and a member of the Seaside city council. He supports President Trump’s call to arm schoolteachers who, like himself, have gun training. I teach American history at Orinda Intermediate School, and my students are unanimously opposed to arming teachers (including me!)

32 MARIJUANA STORES IN BERKELEY?

I have long believed that in order to get elected to public office Berkeley, you have to have delusions of grandeur. The Berkeley city council is now considering how many marijuana stores to license. Most council mayors, including the mayor, support capping the number at 32, but that is opposed by the Berkeley Cannabis Commission, which wants a much higher number on the grounds that limiting the number of marijuana stores in Berkeley to 32 would ‘stifle innovation.” To put this into perspective, Berkeley has 1 Trader Joe’s, 2 Target stores, 3 Safeways, 6 Starbucks, 6 Walgreens, and 11 ice cream and frozen yogurt stores. All these stores added together still doesn’t get you up to 32. The idea of 32 marijuana stores in a city the size of Berkeley is insane.

Executing Drug Dealers? On the other side of drug madness, President Trump is proposing executing drug dealers, citing southeast Asian countries, where such executions are common. Trump isn’t the only politician advocating executing drug dealers, but this idea overlooks the fact that most Americans who are addicted to opiates don’t get their drugs on the black market.  In movies and TV shows, addicts usually get their drugs from sleazy criminals working for the Mafia or a Mexican drug cartel, but the reality is that most opioid addicts in the United States get their drugs at Walgreens or CVS with prescriptions. Unfortunately, there are a lot of doctors and dentists in this country who dole out prescriptions for opiates like they were Tic Tacs. I am sure that those doctors and dentists are not the people who President Trump is talking about executing. About 5% of the world’s population live in the United States, but we consume 80% of the world’s opiates. We are not going to get control over our nation’s opioid epidemic until the government makes it much, much harder for doctors to prescribe these drugs.

DOES ANYBODY REALLY NEED A THERAPY PEACOCK ON AN AIRPLANE?

Airlines are, at long last, beginning to say No to animals that shouldn’t be on airplanes. Delta announced that they will no longer allow therapy animals on flights that are untrained, and United just refused to allow a passenger to bring a therapy peacock onto a plane. Below is a photo taken at Newark Airport at the United check-in. How would you like to find this bird sitting on the seat next to you? I hope this is the beginning of bringing some sanity to this issue! People have been going on airplanes with therapy and emotional support pigs, turkeys, ducks, parrots, snakes, and giant lizards. It’s easy at laugh at these stories, but would you laugh if you were living in an apartment house and found a peacock like this one in the hallway standing between you and the door to your apartment – and the peacock was in a bad mood. Would you think that was funny? I know a landlord in Santa Rosa who had to allow one of his tenants to keep a 100 pound therapy Burmese python in his apartment – until it escaped. A snake like that can swallow a whole pig or an alligator or a child. An animal like that shouldn’t be in an apartment anywhere!

In 2015, a woman casually walked into a McDonald’s in Beaver Dam, Wisconsin with a kangaroo. The customers panicked, fled the restaurant, and called the police. The police arrived, but they couldn’t do anything. They couldn’t arrest the woman or forcibly remove the kangaroo from the restaurant  because it was a therapy kangaroo. The woman had a note from her doctor saying that she needed it. The woman owns 4 other therapy kangaroos in addition to the one took she took to McDonald’s. She says she takes her kangaroos everywhere with her – to shopping malls, movie theaters, and to church. As I say, I hope that what United and Delta are doing will start to bring some sanity to this issue, and federal regulations on therapy animals are truly insane.

ARE THERAPY ANIMALS REALLY DANGEROUS OR IS THIS JUST LANDLORD FEAR MONGERING?

In June, 2016; 39 year old Marlin Jackson arrived at his row on a Delta flight from Atlanta to San Diego. The middle seat was occupied by a man with a large emotional support dog on his lap. Mr. Jackson squeezed past them to get to his window seat. As he did so, the Labrador mix lunged at his face. The attack lasted about 30 seconds, and left Mr Jackson with facial wounds that required 28 stitches. His scars are still visible. This was not an isolated case. Delta said that this was just one of thousands of such incidents. As a result, Delta, the nation’s largest airline, has tightened its rules for passengers flying with service, comfort, and emotional support animals. In announcing the changes, Delta said it flew 250,000 animals in these categories last year, up 150 percent from 2015, while incidents such as biting and defecating on the plane have nearly doubled just since 2016. I have a photo of Mr. Jackson’s face, but take my word for it, you don’t want to see it. As I said, the government’s policy on therapy animals is just plain madness.

SOCIAL SECURITY NUMBERS AND IDENTITY THIEVES.

A Social Security number is the Holy Grail of identity thieves. Nothing else comes close to a Social Security number in value on the black market. That’s because even if an identity thief has your address, phone number, date of birth, and driver’s license number; he still can’t get credit cards or open bank accounts in your name without your Social Security number. Protect your Social Security number!

  1. Go through your wallet. Your Social Security number should not be on anything that you carry around with you. There is no reason to carry your Social Security card with you. It says on Social Security cards ‘Not to be used for identification’, so why carry the card with you?
  2. Get your Social Security number off account numbers. For example, some insurance companies make your Social Security number your account number with them. Contact these companies and demand a new account number, one that is completely different from your Social Security number.
  3. Give your Social Security number to people and businesses on a need-to-know basis only. Some businesses actually do need to know your Social Security number, for example, landlords – like me. Sometimes an applicant for an apartment will refuse to tell me his Social Security number. I tell those people that while I understand their privacy concerns, I cannot run a credit check on someone without his Social Security number, and if I cannot run a credit check on someone, that person will not be getting an apartment from me. Every landlord I know has the same policy. On the other hand, some businesses ask people for their Social Security numbers without a real need-to-know. For example, when you visit a doctor for the first time, you have to fill out a New Patient form. These forms often ask you for your Social Security number, but there is usually no good reason why a doctor needs to know your Social Security number. Leave that line blank. If there is a reason why the doctor needs to know your Social Security number, ask him what it is.

WORST APPLICANT EVER.

My Name is Mary. I once had a memorable applicant named Mary. Mary was a polite, well-dressed middle-aged woman. She filled out my rental application form; however, the only questions that she answered were ‘Do you smoke?’ and ‘Do you have a pet?’ I said: “Mary, you forgot to write down your last name. You also forgot to fill in most of the rest of the form.” She said: “I didn’t forget. I don’t like to give personal information about myself to strangers.” I said: “Well Mary, if I rented this apartment to you, what name would I put on the lease?” She said: “Mary, just plain Mary.” I said: “Mary, I cannot run a credit check on you if all I know about you is that your name is Mary and that you don’t smoke or have a pet.” She said: “That’s OK with me. It’s OK with me if you don’t run a credit check on me. In fact, I would prefer that you didn’t.” I said: “Mary, what I am trying to tell you is this. I cannot rent an apartment to someone who I cannot identify.” She said: “You have to rent this apartment to me.” I said: “Why?” She said: “Because the reason I won’t tell you my name is because of my disability. I’m protected by the ADA (Americans with Disabilities Act.) I have a letter here from my psychiatrist.” She showed me the letter; however, she had cut out all the names and addresses. The letter said that she suffered from ‘chronic paranoia’ – but I already knew that. It was obvious that this woman was paranoid. However, Mary was wrong about the ADA. A landlord actually can refuse to rent an apartment to someone who he cannot identify, whether that person is disabled or not. I rented the place to somebody else. I later found out that Mary tried to rent an apartment in Oakland from another landlord I know, but she told him that her name was ‘just plain Wendy.’

DUMPING NET NEUTRALITY RULES IS BAD FOR CONSUMERS.

Net neutrality means that all internet content is treated equally by internet service providers. Under the old net neutrality rules, internet service providers like Comcast and Verizon were prohibited from speeding, up, slowing down, or blocking certain web sites. Internet service providers couldn’t steer customers towards certain web sites just because it was more profitable for them. Donald Trump has ordered the FCC (Federal Communications Commission) to dump these rules, something that internet service providers have wanted for a long time. Once net neutrality rules are gone, when you go on the internet, you will likely see fewer web sites pop up that are relevant to what you are searching for and more irrelevant, but high profit web sites at the top of the list instead, web sites for things like online gambling, fantasy football, herbal nutritional supplements (aka snake oil), payday loans, etc. These business run on high profit margins and can afford to pay internet service providers for listing priority. Personally, I am not looking forward to this. A number of state legislatures have passed laws requiring net neutrality within their states.

“WHY CAN’T I PAY MY RENT WITH A CREDIT CARD?”

Every now and then, a tenant will ask me if he can pay his rent with a credit card. My answer is No. All of my leases state that the rent must be paid by check or money order. I don’t accept credit cards. Why? It’s the bank fees. Most of the new apartment houses in Berkeley and San Francisco allow tenants to pay their rent with credit cards, but that’s because credit card fees are an insignificant expense for them. A 2 bedroom apartment in a new building in downtown Berkeley rents for $4,000 to $5,000 a month, but I’ve seen some that are over $6,000 a month. If I was getting that kind of rent, I would accept credit cards too!

BITCOIN.

A growing number of landlords are allowing their tenants to pay their rent with Bitcoin. I really, really don’t understand that. Cryptocurrencies like Bitcoin are not currencies, they are not money, and they are not legal tender. I don’t know what they are, but I do know that I can’t pay my property taxes, garbage bills, fire insurance, etc. with Bitcoin. I can’t buy cocoa beans with Bitcoin either. I think some businessmen accept Bitcoin because they think it’s tax-free income; however, income that you don’t report on your tax return is not tax-free income. That’s called income tax evasion, not tax-free income. You don’t need to be a CPA to know there’s a difference. Supposedly, Bitcoin transactions and transfers are completely secret and untraceable, but I wonder if that’s really true. I suspect that the IRS has figured out how to crack Bitcoin’s computer codes.

Military Grade Encryption. People tell me that there is no way the U.S. government can get into Bitcoin computer records because they use military grade encryption. But what does that mean? Does ‘military grade encryption’ mean ‘unbreakable’? As you know, I teach history, and history tells me to be very suspicious of unbreakable military codes. For over 5,000 years, governments have been trying to create unbreakable military codes, but without much success. During World War 2, the Germans thought they had an unbreakable military code, but Winston Churchill and Franklin Roosevelt got decoded copies of Hitler’s most secret coded messages to his generals before the generals to whom they were addressed got their decoded copies! That went on all through the war too. During World War 2, the U.S. also broke the Soviet diplomatic code and several Japanese codes.

The Battle of Midway. The biggest naval battle of World War 2 was the Battle of Midway. There will never be another naval battle like that again. The Japanese were hoping to win a decisive victory that would knock the U.S. out of the war. The Japanese thought they were going to catch the U.S. fleet by surprise; however, the U.S. Navy had broken the Japanese naval code, so they knew where and when the Japanese were coming. Instead of ambushing the U.S. Navy, it was the Japanese that got ambushed instead. The U.S. Navy sank all the Japanese aircraft carriers at Midway. As a result, Japan also lost hundreds of their best pilots. After all the Japanese aircraft carriers were sunk, Japanese pilots had no place to land. When they ran out of fuel, Japanese pilots crashed their planes into the sea and drowned. Midway was a disastrous defeat for Japan from which they never recovered. Prior to Midway, Japan was always on the attack. After Midway, they were always on the defense. OK you say, that was then, but what about now? Now we have military grade computer encryption. Well Yes, we do have that, but you know, Vladimir Putin didn’t seem to have much difficulty getting past U.S. computer encryption during the 2016 presidential election. I think that people who do business in Bitcoin in the belief that they are fooling the IRS may actually just be fooling themselves instead.