Andres is not short on passion when it comes to the topic of real estate and especially the effects of rent control. Listen in to hear his thoughts.
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Eric Worral: (00:00)
Hey everybody. Welcome back to another episode of RentPrep for Landlords. I’m your host, Eric Worral and this is episode #302. We have a guest on today’s episode. We’re going to be talking about rent control out in California. All right. Our guest is Andres Segovia, who is a not only a property manager, but also an investor and a broker out in California and he is in the LA area and he’s giving his insights on what he’s seen since rent control has been introduced statewide and California as of January 1st, 2020, the fallout, so to speak, the pros and cons of what’s going on out there. I thought I’d be interested in to have him on the podcast. He actually is a client of RentPrep and he reached out and I said, Hey, why don’t you come on the podcast, tell us what you see going on out there, give us some of your insights and you’ll see that I kind of just let Andres just kind of run the show on this episode. He did a great job of breaking down some of the laws, some of the things that I wasn’t familiar with, with rent control and California, but also why if you’re in another state that you may be interested in what’s going on out there as that may trickle down to your state or even on a federal level. So we’re going to get to that right after this.
Voice Over: (01:04)
Welcome to the RentPrep for Landlords podcast and now your host Eric Worral.
Andres Segovia: (01:13)
The problem is that rent control is nothing new here. Los Angeles has it since 1978, San Francisco for example and the two worst places of homelessness cases where it’s an epidemic, quite literally. And where we had the highest rental prices in the country are in Los Angeles and San Francisco.
Eric Worral: (01:35)
Now, do you think that that’s like a, what’s the phrase? Is that cause or correlation you think, cause obviously maybe that was implemented in those areas because there was a problem already or do you think that it’s because that was implemented? There is a problem now.
Andres Segovia: (01:49)
It was implemented then because there was a problem. Now, this was before my time, so I didn’t live to see that play out. And how someone said there was a price-gouging on rentals. The thing is that rent control itself was meant to cap rental rates. That’s the intention. And also to reduce homelessness because people were being pressed out of their units. So why is it that this is the worst place for rental rates and for the worst cases of homelessness? So if, if the program didn’t work, rent control is not the solution. The thing is that the statewide rent cap that went to effect January 1st that made national headline news. We’re the second state to have a statewide rank cap that the first one was Oregon. The thing is this, we knew it was coming because in 2018 we were battling at the ballot.
Andres Segovia: (02:43)
Proposition 10, proposition 10 would have instituted a statewide rank cap in the first place. It was perpetuated by a lot of people take it to the streets and, and legislative or city councils and complaining about their rent being too damn high. They would say. So that became like the rallying cry for tenant activists that were joined by the unions to really push this through. It lost support towards the end because those that supported it didn’t read what it was meant to do. It was literally going to be rent control across every property including single-family homes, condominiums that are our home, a homeowner and primary residence. What that for those who are not familiar with rent control, rent control is, yeah, it’s a rent cap and you can only increase rent on a schedule that in this case, like the city for example, cause they’re the ones that really control and set these things up.
Andres Segovia: (03:40)
They issue a calendar or a schedule that how much of rent you can increase a two or 3% it tends to be the average norm. But that’s state of California. What is it, 5% it’s capped at, I think I read it. It’s a total of 10 right. But it’s like it’s 5% cap plus the consumer price index. So whatever inflation is and the, the numbers being thrown off 3%. So this year people can raise it up to 8% max. The state law is basically like a, like just the basis. LA is super strict. So to give an example of what rent control truly is. That’s why I turned to LA because that’s the sample, the S the strongest example that anybody can have. It’s not just a cap, it’s also that multiple bureaucratic departments get involved in your property. You have the department of building and safety, that’s usually called upon by the housing department.
Andres Segovia: (04:40)
The housing department is the one that basically is overseeing your property because they want to make sure that you are maintaining your unit to health and safety standards to have people living in them. So they do an annual inspection to the property. Yeah, they tend to send notices, but there are surprise inspections too. So the landlord pays for those inspections and the landlord has to register every single, every single year that unit is a rental unit. So it’s kinda like a business registration to that extent. And on top of that, there’s a business tax associated with that. So those are three things that are associated with in this whole rest stabilization ordinance or rent control. That’s the thing that we don’t know who the inspectors tend to be. And so, and most of these are not a building inspectors. So they go and they have an opinion, for example, of a doorknob.
Andres Segovia: (05:34)
Is this doorknob illegal? I need you to change it. You have a citation, here’s a fee, get it fixed and get the department of building safety to, to sign off on this. Then the department of building and safety would go out there and say, ah, this store dab is fine. You can’t replay for the other one because that other doorknob is illegal. So we take that notice, go to the housing department, and the department said, no, we told you what we want. True story. Is this an example? I’m giving you an example of what we had to deal with this. Yeah. So this was last year. I’m wondering if you were just coming up with a story on the top of your head or that’s something you actually had to deal with. No, but I do have the ad. This one I dealt with, but I also have the address, not my property that I, that I actually dealt with through.
Andres Segovia: (06:17)
Oh, with my father was a contractor of our, of our country construction business that we dealt together in East Los Angeles. I remember the address at the time, I am not going to rattle off, but it was a case that lasted about 18 months. It was a bank-owned property. It was about four units. There was a lot of issues there because of the, the tenants had their own attorneys and there is something called a reap program. This thing sounds weird. It says rental escrow account program. Basically it’s the tenants going on strike. I’m not paying you the rent. So this reprogram defends the tenants from having to pay the rent. So during, during those 18 months, these tenants didn’t pay one dime to the bank cause they supposedly were paying them back. And in the meanwhile, we had housing and building and safety at each other’s throats.
Andres Segovia: (07:08)
Both of these is the city of Los Angeles, the department of building city Los Angeles and the Los Angeles housing department. That’s not even a state, the community department, which is sometimes involved too. It’s like they’ll flip what is all this pure bureaucracy. It lasted 18 months because none of these morons we’ll talk to each other and work. We were tasked to be brought in to try to alleviate this issue. So we did get it resolved, took it in months, but it did get resolved and the thing is you had reap defending the tenants against the greedy landlord, in this case, being the bank and hating on us, the construction company and the property managers because we were in league with the greedy 1%. They saw [inaudible] and your building and safety. Who these guys just didn’t care like one way or another cause they were, they were finding and giving citations every single time.
Andres Segovia: (08:03)
If something is not resolved in a timely manner, the department of building and safety can escalate the case to code enforcement, which is above that in the department of building safety. If code enforcement, if you don’t comply with them, but at a certain a certain case or a certain timeframe, they can do what is called a substandard. It’s a condemnation of the property. You can’t do anything with it and is just short of eminent domain. The ones that can do eminent domain is the housing department because if you fail to comply, that means you the land or we’re not being responsible for the property and you’re not taking care of the tenants. So, therefore, you lost our rights to the property. You get no rent and housing takes over AKA the government takes off of your property. That is Los Angeles in a nutshell. So the proposition 10 that the voters voted down and it went down and flames actually, which is hallelujah, there’s still some sanity in California.
Andres Segovia: (09:05)
We shot it down 2018 the tenant activists and the unions that were supporting it didn’t realize that they were going to allow all of those things immediately just by passing prop 10, which would have been a repeal of a, of our only landlord protection here called Costa Hawkins, the Costa Hawkins. Zack was instituted in 1995 in response to strict rent control. And basically anything built before 1995 could not be under rent control. So new buildings after that were not subject to rent control and the city of Los Angeles, but it’sa statewide law. And prop 10 was trying to undo that, but by undoing that it would have imposed the strictest rent control of the country has ever seen. Well, the state said that the people made a mistake. So last year, assembly bill 1482 is the one that made the rounds and it got signed into law. When I got rumblings of this thing, I’m like, are you kidding me? They, the people at 60% voted no on prop 10. And the States that, ah, you guys were wrong. So they instituted a statewide rent cap isn’t as strict, but it’s just a template.
Eric Worral: (10:20)
Hmm. No, I’m curious. So that’s the one that just went into effect here. January one you’re referencing? Yeah. As far as you know, I think a lot of times before things are out in the horizon, you know, people get pretty worked up about it or they’re worried about this or that. What is your experience been leading up to that and then actually seeing the fallout and what has happened since then? I’m maybe it’s not as great for you being in LA because you’ve already been dealing with pretty strict laws, but I mean what kind of fallout have you seen? Said, went to become a law January one.
Andres Segovia: (10:51)
Well, I’ll just explain how big the snowball got when proposition 10 was being threatened. People were getting notices of rent increases because if the law was going to be repealed by proposition 10 landlords took cash in cause they were, they were waking up to this fact that there was, there was a group I hope I get their name right. It’s either better homes for long beach or better housing for long beach, a joint where’s there? Their present. I interviewed them. It was my first interview actually for my show because I supported their efforts. She basically dropped off everything she was doing, mom and pop rental shop and just to become a, an activist for landlords. And she revealed to me that a lot of brokers, a lot of real estate agents that have landlords to contact are not informing them about rent control.
Andres Segovia: (11:40)
So a lot of people are being naive about this cause they’re afraid. What if I tell my client and they just ended up selling their property and move out of state? I just lost my income. Well, you’re not doing a service to your client. You’re not informing them of what’s coming down the pipeline. So when the rumblings were, were being felt by the landlords, that this could be very real, we could have a statewide rent cap. Some of them looked at their units finally and said, Holy smokes, I have depressed rental rates. If I only been written the rent $5 a year for the past 20 years, you weren’t raising them as you showed up. So landlords were, we’re not managing the property. We’re not taking care of the property as it should, like running it like a business.
Andres Segovia: (12:16)
They were looking at it more as like, no, it’s just passive income. But now in seeing that, well in the rate of inflation, everything’s gone up and just the present commodities and all that, it’s like, well, if some of those landlords were now reaching retirement or our retirees, they realize this is my fixed income and not enough for me to live off of cause social security isn’t paying me enough. So some of them go woke up and started raising the rents and in order for you to raise rents more like an astronomical number, that’s a 60-day notice of rental, a rent increase. That’s where the news started picking up a lot of press. You’ll find some of these clippings on Google. If you look for him, some people getting 60-day notices, like my rent’s doubled. No, cause if it’s doubled, that’s because the landlord wasn’t paying attention to the times and wasn’t written to rent accordingly.
Andres Segovia: (13:08)
So they’re bringing up to market rate, but the tenants are not seeing that. And that’s also unreasonable to expect a tenant to even pay that. And some of them can be forced onto the street if they’ve been, they’ve been so used to such a low rent rate because that sets the expectation for what’s out there. And then when they go out of state, there aren’t low prices and rents. Where else can they go when they see that they’re stuck, they end up going to the legislator and say, I need help. And that’s where a lot of this check came from. So last year when the assembly was, was getting this bill a lot of realtors were getting noticed of this over here. We have multiple associations for real estate, but the state one is the California Association of Realtors.
Andres Segovia: (13:53)
I was at odds with them. In October I did a, I was invited to one of the, one of the member meetings. It was a very tense meeting because it’s no disrespect to the association. I do blame them for the misinformation that basically allowed proponents of rent control to vote accidentally in favor of rent control. Because CAR as their acronym is, was, was involved in helping set legislation and how could it help? This 1482 can benefit landlords at the same time protecting tenants. But all the provisions for the landlords are thrown out and all the tenant protections were kept in. And because it happened, some of the supporters of the bill that supposedly were protecting landlords too. But I thought this is what you wanted. They said to CAR. So now the fallout is that, okay we lost this battle, not let’s get something on the ballot to get it repealed.
Andres Segovia: (14:54)
And CAR said that they’re not going to fight this. Like why we just this ticket to the ballot box. Let’s get a proposition lobby for a proposition that the P the general public can vote for to overturn AB 1482 and the association said they’re not going to do it. Like, well, this is ridiculous. So I walked out of that meeting and I immediately recorded a podcast because I’m like, okay, here are my predictions. This was the first week of October last year. And I said, get ready for an increase of homelessness due to mass evictions because landlords are now going to realize that once they get wind that this Bill’s erected the governor’s desk by mid-October and he, I don’t know that he was gonna sign it. There’s, they’re going to have to Jack up their rents because now it’s for sure. And because of that, Thanksgiving and Christmas are ruined, the holidays totally been ruined. You’re going to have an increase in homelessness. And guess what? That’s exactly what happened. Mass evictions. It got so bad in Los Angeles issued a moratorium that they were not going to recognize the legal evictions landlords were doing. The 60-day notice is an eviction. The night they notice is there. We’re not honoring those. Don’t worry about it. You’re staying in your home. And others and other city councils started doing the same.
Eric Worral: (16:12)
So obviously, you know, the city of LA is thinking of it in terms of like maybe somebody who’s been a good tenant and the only reason they’re being evicted is because they can’t, you know, pay this rent that’s getting doubled. But I’m sure you’ve heard stories of landlords who are probably going through just a natural eviction because a tenant, you know, stopped paying rent or was damaging the property or something like that. So that must’ve been really awful. If you were somebody who landed in that position where you’re just evicting a bad tenant and not because you’re like trying to double up the rent. Did you hear any stories like that coming through or…
Andres Segovia: (16:40)
Oh, absolutely. And that’s the problem that bad apples give bad names to everybody. And all landlords are lumped into this. Like all landlords are bad because of idiots that weren’t paying attention to the times and only look at the green and caused causes ruckus like, so if you don’t understand that your thing is a business and that the golden principle of business, the 80% of your business come for 20% of your customers. If you have a good tenant that’s never damaged your property, ever maybe pay in depressed rental rates, but they never been a headache to you and you want to replace them with another tenant that will supposedly pay you the market rent and then they come in and just destroy your property. How does that benefit you? Yup. Yup. Cause there, there are a legit cases of of evictions that there’s this thing called no-fault evictions is what was included with the rent cap that you can’t just evict for, for just anything supposedly like, Oh 10 I guess what, I got family coming over.
Andres Segovia: (17:41)
I’m gonna need a unit. So you’re out a ticket. That’s not good enough. And I honestly, it’s, I don’t like that either, but that’s, that was it’s the tenants that the owner, so they should know that too. But it just made, it just made things bad all around. And because the news of rent control was happening around the summer, a lot of people, a lot of landlords that were capable of, we’re raising the rent between then and the end of the year. And then the, the, the bill got signed to like, okay, I only have two months to get something in place to get market rent. So then once the new year kicks in, January 1st comes, rolls around, I have a rent at the market rate and then it’s capped at that point, so I’ll be okay. But in sorts of places, you couldn’t evict anymore.
Andres Segovia: (18:33)
So there were stuck with that and because the state knew that that was going to happen, that’s where they introduced Roll-Back Rent. So as of January 1st the law kicks in, but the rent cap is in effect all the way to March 15th of 2019. So if you raise that rents in those nine months, you go all the way back, take it to the original number. You had a March 14th and then adjust at the 8% from there. Oh, I didn’t know that. I did not hear that. Well, yeah, that’s the old back rent. Yeah, there is. Oh, it’s Santa Monica here in California also has rent control three it’s old Santa Monica separate school in Los Angeles. Some of the oldest rent control you’ll find here. One of the things that in the, I think Santa Monica is still has it, which is why this rent cap isn’t enough for tenant activists.
Andres Segovia: (19:26)
There’s something called vacancy decontrol. Are you familiar with this? Okay. Vacancy decontrol is this, if you have a unit that is basically depressed in terms of its rental rate, if the tenant leaps or the tenants evicted for whatever reason, whether there’s repairs onto the unit or not, the landlord can then start a new lease agreement at the rental rate as it should be. The market rent, not the previous one. That vacancy decontrol is trying to be removed because that’s to say that the rates of the previous tenant will carry over to the new one [inaudible] unless you’ve done extensive renovations to the unit to justify the increase. So some rent control places do have that Institute of lav and one of them. But you would think that the rent cap would be good news for everybody? No, because last month the tenant activists were able to get the signatures for what it looks like.
Andres Segovia: (20:32)
It’s going to be called the rental affordability act that the state controller will more the auditor, I forget what they’re called. They’re going to analyze in June to then approve and a sign of proposition number two it, so then the public could vote on it. It’s like, okay, you got the statewide ranked cap. What is this rental affordability? I think you’re talking about, and people don’t know yet, but for anybody that has an idea, the first I could tell you is that that must be the repeal of Costa Hawkins. Why would you ask for a rental affordability act after the statewide rent cap is in place because it’s not good enough for people. The statewide rank cap basically weekends, Costa Hawkins to say that the Costa Hawkins, the statewide law says there’s no rent control for buildings go up to 1995. But there’s a lot of new buildings have been put up since then.
Andres Segovia: (21:29)
So it’s like, how do we get rent control there? Well, let’s soften that up and move the goalpost. Now it’s the year 2005. So as of this year, the buildings that are 15 years old do not get rent control, but it’s a moving goalpost cause in 2000 in 2021 now the properties that are acted on five now fall into the rent control. So they keep moving the goalposts. So they want to eliminate that all altogether to say that any old and new buildings will be under rent control. And so some local cities are trying to Institute their own version of the ordinance because they become stricter. They use the state as a basis and they just right above that. And LA being a great example of the strategic you can get along with San Francisco. And I think it should be a no surprise that the homelessness epidemic is that people hear about are in Los Angeles and San Francisco, San Francisco being among the worst, perhaps you have an average of 25 to 28,000 pieces of human excrement being picked up on a monthly basis.
Andres Segovia: (22:29)
They have a literal poop patrol up there just assigned to picking up poop up the streets. And in Los Angeles, this is, this was the I believe LA was ground zero for the hepatitis breakout from the homelessness camps that spread all the way to San Diego and not vice versa. And for outside Anaheim, Anaheim is home to the angels that are known as the Los Angeles angels of Anaheim because LA can’t keep their hands off Orange County. So when you would drive on the freeway, you could see what it’s called, the big A, the big A, and the baseball stadium for a long time last year you couldn’t see it anymore because it was all blocked by cause there’s a river bed that runs by it. You would just see a homelessness camp all across that just blocking the view of the stadium and the new mayor had to deal with that.
Andres Segovia: (23:11)
There was like three tons of waste that was removed from there after the people were after the, there was ever relocated, they were relocated to temporary housing and there was just a huge debate as to where they should ultimately go because the shelters were full. So we do have a homelessness epidemic here as well. So it’s like there’s no one easy solution to rent control. But what I can say, I mean it’s a tool to do housing affordability credit, but what I can say, rent control without the one that will solve it, it’s the one that’s made it worse. And there were San Francisco girls, California girls, and when you have the governor that was the same guy that ruined San Francisco in the first place, he’s going to ruin and continue ruining California. And we are supposedly the example for the rest of the country.
Andres Segovia: (23:57)
So if we’re California goes, the rest of the country might go, you have some presidential candidates right now talking about federal rent control. Like, excuse me. It’s like, so now it’s taking to the federal level and if some of these get their away, you might end up seeing that. So regardless of what happened in New York, because I don’t know if it was in New York state or New York city, the instituted the rent cap last year. Was that the West city or has the state the statewide. Yeah. Okay. and, and when you see the articles that were, that were put up, this is one article from progressive websites. It says, Oh, landlords are crying about the statewide rent cap, put their tears into an Ivy and hook it up to my arm, cause that they wanted to live off the landlords.
Andres Segovia: (24:49)
Grief. That’s the problem that there is, there really isn’t a conversation about all this. It’s only going in one direction and landlords are asleep at the wheel on this. And when some of them wake up to this, they’re doing more damage than good when they’re not managing their properties. Right. That’s why I, I recommend it to people. And I guess there’s a plugin for rent prep. I’ve only, I exclusively use RentPrep for screening out tenants. And so far it’s worked out very well for us. It’s been two years now since I’ve been using the service. And that is not enough though to do a tenant screening. What I learned from my parents was I get to know these people. They just always so much you can do, but three is a job interview. You’re inviting people to take care of your property.
Andres Segovia: (25:34)
This is a relationship you’re going to entrust the care of your property to these people. Don’t just see the catching here comes money. No, you want people that can take care of it. And some of the reports that we’ve gotten back verified at some of these people that, that that we looked at, they have just horrible, horrible credit. And most people that have come to apply for at least will tell me that they look my credits back. I’ll tell you, you have an equal shot as someone who has excellent credit. So go ahead and guess what the, the tenants that we’ve signed into the lease years, years ago that have awful credit have not once felt to pay us the rent, including rent increases. [inaudible] So it’s not to judge someone just because they have bad credit. It’s not to judge somebody like God the way they looked at that.
Andres Segovia: (26:28)
We have to treat this as a job interview. And that’s what I think is what people that try to own property and run them don’t understand. So if we’re not careful, we’re going to see something like here in California happen throughout the rest of the, where every single tool that’s available for a landlord to own, manage and protect their property is basically being removed. You can’t evict them. You can’t raise the rent on them. And that’s why we haven’t exited some landlords. [inaudible] This is a census year. I’m really curious to see this because the last census was the first time in the, in, in history. And let me get my notes here. I don’t want them to be misquoted. That’s, yeah. 2010, California felt to gain a new seat in the house of representatives, even though we have supposedly an increase in population, but we have a migration issue where people are leaving, they’re leaving for other States.
Andres Segovia: (27:20)
They’re leaving for lower taxes, better way of living, or better cost of living. But what did they take with them? The housing affordability crisis. Because now those places are being hurt. Texas isn’t welcoming. The Kelly’s, they’re not happy about that, sections in Idaho, they’re not happy about that. There were a these senior citizens, they got together, I in, in the Heartland that went to the legislator to, to ask for rent control because the rents were going up. And then when you look, see what’s going on, what’s causing those things to go up is because people that are leaving from here or landing out there, it’s like, Oh, it’s cheaper for me to go out there. 38,000 bucks. Buy me a house in Tennessee. Yeah, I’m going to go over there to like over here, 38,000 bucks. That’s your rent a year. So, and that’s what’s, that’s what’s happening.
Andres Segovia: (28:04)
And based on this is from the hill.com there. They’re talking about that it’s estimated that California as of 2019 will actually lose a seat in the house of representatives. That is our, our migration issue. There are some companies that are as big as mine, like 40 or 50 units. They’ve already left. So there’s nothing for me here. I’m leaving. And for those like, well, let’s just go after those greedy commercial companies. Well, yeah, you could try to hurt their bottom line, but guess what? They have the ability to liquidate their assets and just move. And because of diversify the product, you’re not going to hurt them. They’re already either gone or already have some fail-safes in place. And that’s what’s sad because the ones that are caught in the crossfire are the landlords. There was a, there was a battle here in Anaheim for rent control before the rent control, the statewide rent control cap.
Andres Segovia: (28:59)
Last summer there was a, this case called Casa grenade. And the residents there are these about 20 units. They went to the city council. There were, there were begging for the city to get him involved in this and does the city did because it was a new property owner and they tried to stack-up their rents. It was literally double but doubling up was still less than the market rent is like two to $300 less than the market rent. And there was a big heated battle. Some council members were just throwing racial slurs in the, in the council against other people of color too is like what is going on too because no one’s, they don’t that rank control will work in favor of Anaheim. But anyway, it was a very contentious issue. The council, the majority voted to not Institute rent control, but the mayor brought the new property owner and the citizens together to the, the residents together to, to have a conversation a hope on a, co-mingling these tuitions.
Andres Segovia: (30:01)
Cause there were two issues. One of them is Casa grounded, the most part, the biggest one. There was another one about mobile homes and he was able to broker some kind of agreement between them. But it’s of course the conflict with him bringing them together, he was actually able to mediate and kind of find some common ground and actually worked through it. Yes. So that wasn’t the case of a, of the mobile homes and the case of the Casa Granda units. What ended up happening was that the, the tenants realizing that, Hey, I don’t have to stay here and pay this rent. A lot of them when they go on to go shop around and saw just the reality of what rental prices were, 19 out of the 20 signed on the lease with a one being the holdout. One of them being the hold-down is actually one of the ones that have been pushing for the rental housing affordability act.
Andres Segovia: (30:45)
That’s a looks to be legitimized for the ballot box. And on top of that, if you, if it just has not reached word to New York, the, it should’ve, there’s this group called moms for housing. And this happened Oakland, California and back in November, it was two families, two single moms with kids. And there was a, there was a house that was vacant and they broke into the house. Well, let me rephrase. The door was unlocked. So they basically entered the house and squatted. They kept the house and because they basically became a symbol of the resistance. The community at large was their supporters [inaudible] supporters and they actually had people that work, the security guards volunteering to protect them from the property, from the landlord and any officials coming over to try to evict them.
Andres Segovia: (31:41)
This was a, yeah, it was back in November. They were finally evicted in January. This was Alameda County. The Sheriff’s department had arrived there in force. A lot of people were present and the people were, were evicted, but their story, their plight resonated with the community, which is, was helping to continue to push for more housing affordability and basically encouraging that if you do see a, an empty unit to this, the housing affordability crisis being in an epidemic or pandemic at this point that just go squat in there because we need to send a note to the landlords that they cannot gouges anymore. So that’s been the the encouragement through there. I’m not judging anybody here, I’m just simply saying that breaking the law is not something that I would encourage anybody to do. Sure. Yeah. Well, it’s a, I feel like we’re already like a half hour in and you could probably talk about this for four
Eric Worral: (32:40)
More hours as far as the different angles and different ways you can look at it. And I think that’s why people do spend a lot of time talking about this because it’s a, it’s so covetable to people’s lives, whether you’re a landlord or in your case property manager, you’re an investor or you’re a tenant. And it’s so so important and crucial because it’s whether it’s, you know, how you’re making your retirement income or how you’re living your life as it is. So it’s a really tough conversation to kind of navigate and figure out, but I feel like we’ll have more information on it too. As the months start rolling by and you kind of see what the rollout effects of this as longterm too, I’d imagine.
Andres Segovia: (33:14)
Well, absolutely. Because just going to see an increase in homelessness, no doubt it’s going to happen because you, the only way to avoid a wreck on chores basically have a new property. Then your solution if you have the means and ability to do so is to remove the tenants, demolish the building and build the new. And you might find that it’s cheaper to do that and start renting at the market rate from there. But just take where rent cap that will eventually be in place. Like Holy smokes. Then, the only solution that is viable is to build actual housing that can affect the prices of homes to CRE. You have a high demand for people to be able to buy. Then you need to have houses that people can buy. And when you’re, like I said, you’re turning over 50 to 100-year-old properties, then who’s, who’s buying?
Andres Segovia: (34:06)
I mean, who can buy? And there’s another mindset where high earners are not buying because they prefer to live in 10 population areas and just use mass transit. They don’t, they don’t believe in buying because there were no that they’d think there’ll be part of the, there’ll be agree or whatever. The majority of people still believe buying a home is a, is the American dream. And I say, go for it. So I’ve just laid it on these to free up some land to actually build and reduce EPA regulations to bring the cost of construction down. And that’s the only way we’ll be able to see a, a, a dent into this housing affordability crisis. Because you do see a bunch of high rises going everywhere. But all these are our luxury apartments now and if, and if there wasn’t a demand for those that wouldn’t be building them. That’s why Gavin Newsome is trying to Sue cities and say some of those have to be low-income units. You can’t make this stuff up. Yeah. It’s got a formula for ya.
Eric Worral: (35:02)
Well on your podcast, you want to tell people about that, cause I’m sure you’ve had content on this that people want to consume more on this side of topics.
Andres Segovia: (35:10)
Oh, absolutely. Anybody can check out my, my podcast is available across every major distributor that you can think of. The Andres Segovia Show and you can look that up and if you just type Andres Segovia, you’re going to get the world-famous guitarist so you have to type THE Andres Segovia and you’ll get me, you can find me on Google too. I’m, I’m on YouTube as well, where I do more tech related videos because that’s more like, let me show you instead of talking about it. But every now and then I do. I do address things with some graphics about what’s gone on in real estate. But that’s the place where I talk about real estate. I talk about tech and I talk about life coaching. It’s for everybody alike, from tenants to landlords and property managers, anyone in between.
Andres Segovia: (35:52)
But yeah, they can let me check my stuff out there. I do just basic real estate stuff. Lately, I have been having to cover this real estate stuff. So my last episode was about the housing affordability crisis. I record a four and a half hours of material, only use 50 minutes of it. So it’s just so much to talk about and you just can’t condense it. And I’m just hoping that both sides are able to come to the table because that’s the only way to make it happen.
Eric Worral: (36:15)
Yeah. Yeah. Well, thank you very much, Andres. I appreciate the insights. I’m sure our audience does as well.
Andres Segovia: (36:20)
Yeah, yeah. Thank you for having me honored.