Seeing the Light

(Image from Fullerton Observer)

A basic rule of finance is that when risk increases, prices rise in the affected market. As some businesses depart the sector, those that remain must charge more to compensate for their losses. There are many examples: insurance companies that no longer write fire policies, retail stores that close because of rising theft, doctors retiring because of increasing litigation, etc.

Another example is the risk to all landlords from the eviction moratorium, originally imposed for three months and now stretching to two years. Once the taking-from-landlords started it was very difficult to shut off. As we wrote one year ago

This law, through its one-size-fits-all approach, has permanently changed the rental market in California. It has permanently increased the risk of being a landlord by showing how easily California can override contracts for a year in the name of a health crisis...I doubt the State intended for landlords to remove rental units from the market, but that's a very foreseeable consequence of imposing a new risk on an industry.

Landlords are also selling their properties to owner-occupants. A reduction in the supply of rental housing is an inevitable consequence of government intervention in the market, as was rent control.

Landlord Ruth Schwarz (Chron photo)

The Chronicle reports that an individual Oakland landlord has been trying to evict her tenant since February 2020. [bold added]

After September 2019, Schwartz alleges in court filings, Lewis stopped paying rent. Lewis declined to comment....

With the attempted eviction at Schwartz’s house stalled by the pandemic, the situation escalated again in September 2020. Schwartz claimed in a court filing that she returned home from a trip to find a large, unpermitted shed in the front yard — and then noticed that the structure with a shingle roof and electrical wiring also had a bed, indoor plants and art on the walls, according to photos filed in county court.

The twist in the story is that the landlord, Ruth

Schwartz, 59, says the rent debt has climbed to nearly $34,000. For the former AIDS activist and Bernie Sanders supporter, it’s a strange reversal to be advocating for landlords in a changing Bay Area.

“This is the best place in the world to be who I am, and I love that there are such strong tenants’ rights,” she said. “Except in a situation like this.”

To Progressives property is theft and should be controlled by the government, but not if it's their own property.