THE WAR ON COLLEGE EDUCATION.

In 2007, Congress changed the federal bankruptcy law to exclude student loans from the debts that are discharged in bankruptcy. As a result, if you run up $200,000 in debt to become a doctor (and that is not hard to do) and declare bankruptcy, you will leave the bankruptcy court still owing the full $200,000. However, if you run up $200,000 in credit card debt traveling around the world and declare bankruptcy, that debt will be wiped out completely.

Last month, the House of Representatives passed a tax bill that made college tuition waivers taxable income. Senate leaders removed this provision from the final draft of the tax law just after strong national public uproar against this provision. Had this provision remained in the final law, tens of thousands of graduate students would have been forced to drop out of college because they would not be able to pay this new tax. The tax on tuition waivers would have taxed the discount graduate students receive for working in labs and teaching classes. The problem is that you can’t pay income tax if you have no income, and a discount is not income. The House bill would have eliminated the deduction for interest on student loans as well, but this too was eliminated in the final law due to public outcry.

All over the country, state legislatures are passing laws designed to make college education less affordable. Did you know that in a lot of states, if you don’t pay your student loans on time, you can lose your job? For example, if you are a physical therapist and you get behind in your student loans payments, your license to work can be revoked in 20 states. If you default on a student loan, you can be fired as a schoolteacher in 11 states. And in South Dakota, Iowa, and Oklahoma; if you don’t make your student loan payments on time, the state can take away your driver’s license. In other words, if you went to college and are not making your student loan payments on time, the state can take away your ability to work in your profession. Then how do you repay your student loans?

SOUTH DAKOTA. South Dakota has perhaps the most punitive student loan default laws. If you default on a student loan in South Dakota, they can take away your driver’s license. However, if you default on your mortgage on a multi-million dollar mansion overlooking Mount Rushmore – well – that’s OK. The state’s DMV can’t take away your driver’s license for just that. Taking away a person’s driver’s license, and in a largely rural state like South Dakota, for failing to repay a student loan on time seems just plain mean-spirited to me. Also, in South Dakota, if you get behind in repaying your student loans, you can also lose your license to work as a registered nurse, a physical therapist, or a speech pathologist; and if you are employed as a public schoolteacher in South Dakota, you can be immediately fired. Plus, at last count, about 1,500 people living in South Dakota were denied hunting and fishing licenses for failing to repay student loans on time. So, if you are behind in your student loan payments in South Dakota and you work in a licensed occupation, not only are you barred from working in your profession, but in addition, you can’t legally hunt or fish for your dinner. You can legally eat vegetables that you grow in your backyard. Sounds ridiculous, doesn’t it?

HATS OFF TO MONTANA. Things are getting better in one state. Montana used to have the harshest student loan laws in the country. Not only could you lose your job and your driver’s license for failure to repay student loans on time, you could also go to prison for it! However, in 2015, the Montana legislature passed a law with rare bipartisan support that decriminalized failure to repay student loans. The new law also allows Montana residents to keep their driver’s licenses and their jobs when they are behind in their student loan payments. The argument for the new law was that it doesn’t make any sense to punish a person for failing to repay a loan on time by taking away his ability to earn a living. That just makes it more unlikely that the person will ever repay the loan. Unfortunately, Montana seems to be the only state moving in a more enlightened direction on this issue.

BERKELEY. Here in Berkeley, the main driver of college student debt is the cost of housing. A 2 bedroom apartment in a new building near campus costs $4,000 to $5,000 a month, but I’ve seen some that cost over $6,000 a month. Everyone in Berkeley city government is aware of this, but no one seems to be concerned about it. Quite the opposite. The mayor and Berkeley city council are constantly passing new laws and regulations designed to raise, not lower, the cost of building new apartments near campus. For example, a permit to build a new apartment house in Berkeley near campus now costs between $100,000 and $200,000 per apartment – and the council is planning to raise the price of permits next year. Now – who do you suppose ultimately pays for these astronomically expensive building permits? It’s just who you think it is! It’s the tenants who live in these buildings.

College students all over the U.S. are graduating with more and more student debt, and the cost of repaying that debt keeps rising. Every American should be very concerned about this. If a college education becomes just a privilege of the rich, as it was in Colonial times, we are in serious trouble as a nation. An industrialized society that does not value higher education is doomed to poverty and becoming a third rate and third world nation.

PARTY MYTHS

There are 2 widely-held myths about parties in college towns everywhere that I regularly have to speak to my tenants about.

#1. THERE IS NO ‘RIGHT TO PARTY.’ A lot of tenants (not just college students) think that as an American citizen, you have a legal right to have parties in your apartment, but that is not true. There is nothing in the Constitution about a ‘right to party.’ It’s not in any state or local law either. Lots of leases contain provisions prohibiting tenants from having parties of any kind on the premises or that limit the number of people who can attend a party or that set limits on the dates and hours of parties. Lease clauses restricting and prohibiting parties are legal and enforceable in every state.

#2. YOUR NEIGHBORS HAVE A LEGAL RIGHT TO GO TO SLEEP AT A REASONABLE HOUR EVERY NIGHT. Disturbing the peace is illegal. You can be cited and fined for it, and in some cases even arrested. You are not being considerate or courteous to your neighbors by telling them in advance that you are going to have a party that will prevent them from sleeping. It is legally useless and could be dangerous for you.

Robbing Bank of America. Simply announcing in advance that you intend to do something that is illegal does not give you the right to do it. For example, it is not O.K. to rob a bank providing that you tell the bank in advance that you intend to rob them. Somebody actually did that here in Berkeley. There used to be a Bank of America on Ashby Avenue across the street from the Ashby BART station, 2 blocks from my house. It was where I did my banking. A man once robbed that bank with a gun. He didn’t wear a mask because he didn’t see any surveillance cameras in the bank, and so he assumed that there weren’t any, but he was wrong. This guy wasn’t very smart and was quickly caught. At his trial, the bank robber compounded his folly by acting as his own lawyer. He thought he had an airtight defense that was going to get him off. The bank robber told the jury that that he mailed a letter to the manager of the bank a week before the robbery stating that he intended to rob the bank. He included the date of his planned robbery in the letter. The manager of the bank testified that he received the letter but did nothing about it. He thought the letter was a practical joke or a fraternity initiation prank. The judge told the jury that simply informing the manager of the bank in advance that the defendant intended to rob the bank was not a defense. The bank robber went to prison. Surprisingly, this happens fairly often – that a criminal informs his victim in advance of the crime that he intends to commit in the belief that by doing so, it will give him some sort of legal cover if he is caught. That doesn’t work. As I often tell people – playing amateur lawyer is dangerous.

The idea that it is O.K. to have a loud party late at night providing that you told the neighbors in advance is an urban legend that gets college students into trouble all the time. Berkeley has one of the toughest noise pollution laws in the United States, and they enforce it. Berkeley policeman have decibel meters in their patrol cars. People having loud parties late at night in Berkeley are regularly issued large fines. Also, it can be dangerous to tell your neighbors in advance about your parties. Some people will interpret your notice as an invitation to come to your party, which can lead to awkward situations. Even worse, dishonest neighbors may come to your party to rob your place. Yes, that does happen.

THE HOMELESS EXPLOSION EXPLAINED.

 
30 years ago, there were no huge homeless encampments in Berkeley, Oakland, or San Francisco. Now, thousands of people live in them, and they are getting bigger all the time. A lot of people are baffled by this, but the explanation seems obvious to me. The number of extremely poor people in the U.S. has exploded over the past 30 years. The real inflation-adjusted income of the average American has been declining since the 1970s. The minimum wage adjusted for inflation has fallen by over 25% since 1970. For reasons that I don’t understand, very few people make a mental connection between the declining income of poor and middle class Americans and the rise in homelessness.

In 1960, the largest private employer in the United States was General Motors. The average non-managerial employee at GM made $25.00 an hour, adjusted for inflation. Like most unionized industrial workers of the time, GM employees also got a generous fringe benefits package.

Today, in 2017, the largest private employer in the United States is Walmart. The average non-managerial employee at Walmart makes $9.15 an hour, and with relatively few fringe benefits.

When I see people working at Starbucks and Walgreens here in Berkeley, I sometimes wonder: “Where do these people live?” These people make $11 to $14 an hour, and a 1 bedroom apartment in Berkeley costs $2,000 to $3,000 a month. So where do these people live? In a city where the average 1 bedroom apartment costs over $2,000 a month, where can a person who makes $13 an hour live besides a tent, a friend’s garage, or the back seat of a car? What I can’t understand is why so few politicians and TV commentators see any connection at all between rising poverty and rising homelessness. The connection seems very obvious to me. What am I missing?

$70 TO GET INTO YOSEMITE NATIONAL PARK?

Here’s an example of how the lives of poor people are becoming even poorer in America. Our national parks were intended to be places that anyone could go to. The poor as well as the rich could visit a national park. Things were different in Europe, where the most beautiful places and scenic vistas were made royal estates, available only to aristocrats and their friends. Last week, Interior Secretary Ryan Zinke announced that the price of admission to Yosemite, Grand Canyon, Glacier, Yellowstone, and many other national parks will be going up from $25 now to $70 next year. This story didn’t get a lot of publicity, but I think it should have. For a lot of people, $70 is a lot of money. $70 is more than a whole day’s take-home pay for somebody working at minimum wage. Obviously, far fewer poor people will be able to go to a national park once it costs $70 to get in. I think that’s sad. Don’t you?

WORST APPLICATION EVER.

“I Have a Jack Daniels Terrier.” I recently rented a big house here in Berkeley. I once got an application for this house from a woman that immediately aroused my suspicion, but as my sister Bonnie says, I have a suspicious nature. Why, I asked myself, would a single woman want to rent a 5 bedroom house by herself? Of course that’s legal, but it’s not normal. After reviewing her application form, I said: “I see you have a pet. You wrote down that your pet is a Jack Daniels Terrier. Don’t you mean a Jack Russell Terrier?” She seemed annoyed by my question. She said: “No. I meant what I said. I have a Jack Daniels Terrier.” I said: “Uh, you own a dog, right?” She said: “Yes, you know I do,” sounding increasingly annoyed. I said: “Well, I’ve never heard of a Jack Daniels Terrier before. Are you sure you don’t mean a Jack Russell Terrier?” Then she blew a gasket! She said angrily: “I’ve told you 3 times now that I own a Jack Daniels Terrier. You’re one of them, aren’t you?” I didn’t reply to that question. I didn’t know what she meant. Then she stood up and gathered up her stuff and said as she left: “I know you’re one of them.” She said that several times, but she never explained what she meant by that. When I went home, I looked up ‘Jack Daniels Terrier’ on Google, just to make sure that there really is no such breed, and as I suspected, there isn’t. I decided not to rent my house to that woman – or her Jack Daniels Terrier. I rented the house to a nice bunch of U.C. Berkeley chemistry grad students instead. Here is a photo of a Jack Russell Terrier. Notice the distinctive upturned tail, a characteristic of this breed. I wonder what a Jack Daniels Terrier might look like.

San Francisco Rental Ad From 1970.

Below is a section of the For Rent ads from the San Francisco Chronicle in 1970. Look at the prices. Although it may seem hard to believe, back in those days, San Francisco and Berkeley were considered cheap places to live, that is, compared to big cities back East like New York and Boston. One of the main reasons why the hippies came to San Francisco and Berkeley in the 1960s was because they could find cheap housing here. Counter-culture people in every generation move to places where they can find cheap housing. Then they move elsewhere when housing gets expensive. That is something that never changes. Tourists, mostly from foreign countries, still go to the Haight Ashbury district in San Francisco expecting to see hippies and ‘flower children’, but there aren’t any. A 1 bedroom apartment in the Haight Ashbury district now rents for $3,000 to $4,000 a month. Of course, a portion of the increase in rents in the Bay Area can be attributed to inflation, but only a portion. When I arrived in Berkeley in 1972, I rented an apartment downtown for $80 a month, and I knew people who were paying much less than that.

What Is A Luxury Apartment in Berkeley?

I went to campus on Cal Day, April 22. Several of the new apartment houses in Berkeley near campus had booths there. There was one thing that these booths all had in common. They all claimed that they were renting luxury apartments, and only luxury apartments. The word ‘luxury’ was on everything. It was on the sales literature, the promotional giveaways, and the clothes that the sales agents were wearing. See the photo below of a shopping bag that I picked up on Cal Day. I asked a man working at one of these booths: “Your literature says that all your apartments are luxury apartments. What does that mean? I toured your building last week. I walked through a couple of 2 bedroom apartments. (One apartment was $4,500 a month. The other, which had a better view, was $4,800. a month including a parking space). They weren’t very big, and they didn’t seem to have anything luxurious about them, you know, like fine woodwork or marble floors, drapes, etc. In fact, neither of them even had a separate living room. What makes them luxury apartments?” The man working at this booth had an answer for me. I could see that he had been asked this question before. He said: “By luxury, we mean that our apartments are luxury priced.” AHA! So now I know what the word ‘luxury’ means, at least in Berkeley! ‘Luxury’ just means very EXPENSIVE! It tells you nothing about the apartment. Now frankly, I don’t think that ‘expensive’ is a reasonable definition of the word ‘luxury.’ Do you?

Berkeley Bans Fur.

In April, the Berkeley city council passed a law banning the sale of fur clothing. The city council says this law is just symbolic because they claim: “there are no stores in Berkeley that sell fur clothing”. However, that isn’t true! There are lots of stores in Berkeley that sell fur clothing, especially shoe stores. I have been wearing sheepskin moccasin bedroom slippers for years. They sell them at a number of stores in Berkeley. Mine are wool lined inside, like most moccasins. It is now illegal to sell moccasins like these in Berkeley unless you scrape the wool off the sheepskin first, which nobody is going to do. Besides, what the difference? Whether the wool is attached to the sheepskin or not, the sheep it came from is just as dead either way.

Rabbit Foot Keyrings. This is one fur product that has always been a mystery to me. I do not understand the appeal of this product. I sometimes see rabbit foot key rings for sale in stores. Do people really believe that carrying a dead rabbit’s foot in your pocket will bring you good luck? Yes! I once saw a man playing blackjack in Las Vegas, holding a rabbit’s foot in his left hand. When he won a big bet, he kissed the rabbit’s foot! As I left, I wondered: ‘Why would anyone imagine that a rabbit’s foot will bring you good luck?’ Obviously, cutting the feet off a rabbit didn’t bring the rabbit good luck! Well – did it?

 
CALIFORNIA SEA OTTERS. Some good news

In the late 1800s, sea otters in many places around the world were hunted to extinction for their soft luxurious fur. At the time of the California Gold Rush, it is estimated that there were 20,000 California sea otters, but by 1900, they were all gone. There were no sightings of sea otters in California for decades. They were believed to be extinct. Then in 1938, a small colony of California sea otters was sighted in a remote cove near Big Sur. The California Department of Fish and Wildlife immediately (and wisely) imposed a complete ban on capturing, killing, or harassing sea otters – and enforcing it with patrols. Today, there are several thousand California sea otters along the central and northern coast of the state. Frankly, I am a sucker for sea otters. I can watch sea otters for hours without getting bored. I sometimes see them near Seal Rocks in San Francisco. You can hear sea otters at some distance when they are eating oysters. It is fascinating how they do this. A sea otter will pick up an oyster with one paw and a rock with the other paw and then come to the surface. The otter then rolls over onto his back, places the rock on his stomach and then hits the oyster on the rock until he breaks the shell. It is amazing to me that sea otters figured out how to use rocks as tools to eat oysters. Here is a You Tube video showing a sea otter near Santa Cruz eating clams this way: Sea Otter Eating Clams.

HEIDI AND THE ANTS.

In most American cities, when a tenant tells his landlord that he has ants in his kitchen, it is usually because he wants the landlord to kill them, but this is Berkeley where things are different. I was just reviewing a series of emails that I got several years ago from a tenant who had ants in her kitchen and wanted me to get rid of them – but without harming them. I think you might enjoy reading this exchange. Here are some of the emails I received from her about this subject. There were more emails about this from her, but I can’t find them all. I changed her name in the letters below. Her name wasn’t actually Heidi. My stepmother had a dog named Heidi, but I never had a tenant named Heidi.

Dear Mark:
The ants are back. I have tried everything, but nothing works. I have even tried yelling at them.
Heidi

Dear Heidi:
I have been meaning to talk to you about this for some time. I know that you have been yelling at the ants in your kitchen. I can hear you from my office. However, yelling “Get out! Get out!” at ants doesn’t work. I don’t know if ants have ears, but I am sure that they don’t understand English. I will come over and spray something in your kitchen to get rid of them.

Dear Mark:
Will this spray kill the ants?
Heidi

Heidi:
Yes. I use a product that is made from the oil of orange peels. It is not harmful to people, but it destroys the respiratory system of ants and other insects. They die quickly because they can’t breathe.
Mark

Dear Mark:
I don’t want you to do that. That sounds awful. How would you feel if you couldn’t breathe? Let me think about this for a while. I was hoping you had a spray that would just keep the ants away, like mosquito repellent keep mosquitoes away.
Heidi

Dear Heidi:
I don’t have ant repellent. I don’t even know if such a product exists. I use orange peel oil because it is non-toxic to people and safe to use in restaurants and home kitchens. However, this product does kill ants. I doesn’t just repel them.
Mark

Dear Mark:
I need time to think this over. Please don’t do anything until I say so.
Heidi

Dear Heidi:
OK. Think it over. I will spray or not spray your kitchen as you wish. There are many products on the market that will kill or repel ants, but I don’t know of any, aside from orange peel oil, that are safe to use in a kitchen or around food. I have investigated this matter.
Mark

Dear Mark:
I found 6 more dead ants in my kitchen this morning. I found 4 dead ants in my kitchen yesterday. Did you spray that stuff in my kitchen? I don’t think there is anything in my kitchen that would kill ants. I found most of the ants on the top of the sink near the soap. Do you think the ants might have eaten the soap and died? Is soap poisonous to ants? If it is, do you know of a brand of soap that won’t kill ants if they eat it.
Heidi

Heidi:
I did not spray your kitchen. You told me not to. Frankly, I think it is silly for you to worry about the health of the ants in your kitchen. You have probably killed hundreds of ants by just walking on the grass in your yard.
Mark

Dear Mark:
Wow! I have been thinking about what you said about walking on ants in the yard. You are probably right. It makes you wonder if it is OK to walk in the yard. I have been taking the ants in my kitchen outside and putting them in the yard, but I don’t know if that’s the right thing to do. It is depressing, but I know you are right. I am now taking the ants to the back porch and dropping them off into the yard. Some of them may get hurt in the fall, but that’s better than walking on other ants in order to save the kitchen ants. Don’t you think? What do you think I should do?
Heidi

Heidi:
Do whatever you think is best.
Mark

Dear Mark:
I asked my mother for her advice about the ants. She thinks that trying to save ants is stupid. She says that she kills ants all the time. My mother thinks that I have too much time on my hands. She says that instead of trying to save the ants in my kitchen that I should come over to the church today and help her make brownies for gift baskets for our very old members. What do you think?
Heidi

Dear Heidi:
I agree with your mother. If you change your mind and want me to spray your kitchen, let me know.
Mark

Dear Mark:
Would you like some brownies? My mother and I made a lot of them today at the church for gift baskets. We made too many of them. They are very good. If you want to spray my kitchen, go ahead. I have lost interest in the ants.
Heidi

In any other city in the U.S., a tenant like Heidi would be considered bizarre, perhaps even unbelievable, but nobody who has lived in Berkeley for a long time would be surprised by a story like this. Landlords in Berkeley have to deal with tenants like Heidi all the time. When inexperienced Berkeley landlords ask me for advice, I tell them that the key to successfully dealing with someone like Heidi is patience, lots and lots of patience. – Mark Tarses

How Much Money Do You Have To Earn In Order To Rent An Apartment In A New Building In Berkeley?

As I said last month, Parker Berkeley on Shattuck Avenue is now open and renting apartments. It is 4 blocks from my house. This place is huge. It covers a whole block and half of the next block. 2 bedroom apartments at Parker Berkeley rent for $4,500 a month. Parking and utilities are extra. The rent is even higher if you have a cat. (You know, I have been a landlord for a long time, and it seems to me that if a landlord is getting $4,500 a month for a 2 bedroom apartment, he can afford to let a tenant have a cat for free.)

So – how much do you have to earn in order to rent one of these apartments? By my calculations, you would need to make at least $200,000 a year. You see, a person making $200,000 a year is only going to take home $100,000 after withholding. He is going to spend 33% of his income on federal income tax, plus 10% for California state income tax, plus 6% for Social Security. That leaves this guy with $100,000 a year or $8,300 a month in take-home pay. Landlords don’t like to rent apartments to people who are going to be spending over half their take-home pay in rent. So – what kind of people are going to live in this building or any of the other pricey new apartment houses going up in Berkeley? How many people in Berkeley make $200,000 a year? A lot more apartment houses like Parker Berkeley are going up. Many are already under construction. I think this a bubble, and I think it will end badly. The thing that I especially dislike like about these new apartment houses in Berkeley and San Francisco is that they only contain housing for the rich, the poor, and the elderly. Nothing, absolutely nothing, is being built for normal working people.

Where Will The Middle Class Live?

Parker Berkeley is the newest apartment house in town. This place is huge! Parker Berkeley covers a whole block plus part of the block across the street. It is not on a spiffy section of Shattuck Avenue, and it is a long way from campus, but it is walking distance to the Ashby BART station. My guess is that the owners of this building are planning to rent to commuters who work in San Francisco. The rental office is now open and here are the rents:

Studio $2,900.
One bedroom $3,400
Two bedroom $4,500
Three bedroom $6,300
Parking is extra, plus the rent is higher if you have a cat or a dog.

If these rents seem high to you, remember that rents for similar apartments in downtown San Francisco are much higher than this. Like all new apartment houses in Berkeley and San Francisco, Parker Berkeley has inclusionary apartments for the poor, but all the other apartments are rented at market rate. So here is my question. If all the new apartment houses in town only have apartments in them for the rich and the poor, then where will the middle class live? I have been asking that question for 30 years. Consider a schoolteacher who makes $70,000 a year. This teacher doesn’t make enough money to rent a market rate apartment at Parker Berkeley but makes far too much money to qualify for an inclusionary apartment. So where will this schoolteacher live? Certainly not at Parker Berkeley or  any of the new apartment houses going up in Berkeley or San Francisco. America has long been a middle class society, but we are building no housing here for the middle class. None at all. Zero. Zip. What kind of society are we going to live in if we only build housing for the rich and the poor? I never, never hear local politicians talking about this issue, the complete lack of new housing for the working middle class. It never comes up. I wonder why.