rent by the bedroom – The San Marxist

Two fantastic workshops. For real. It’s my favorite thing in the world, to be spoonfed these amazing presentations.

First up: Rent by the Bedroom

Backstory: this became a flashpoint last spring, when a developer wanted to tear down some small complexes here:

and put in a big rent-by-the-bedroom student housing complex.

There was a pretty big community outcry.

Council approved it, but vowed to look at the predatory leasing practices and see what could be done. So here we are!

For what it’s worth, I think Council handled this correctly.
– We need physical housing to be built.
– We need landlord reform.

You shouldn’t hold the former hostage in order to accomplish the second, but the second is also urgently needed.

…

So let’s dive in! The speaker was Shannon Fitzpatrick (and these are her slides). She’s been a lawyer for Texas State, working with students, for the past 25 years or so. (Go listen here! I’m not doing it justice. It’s so interesting.)

Here’s what we’re basically comparing:

This part isn’t that bad. A student might not want to be on the hook for their roommates’ share of the rent.

Installment Contracts

This is where things start to get sleazy:

First, this “installments” contract.

The point is that it’s a different legal concept than a regular lease. This lets landlords skip out on the state laws that protect renters. And listen: Texas barely has any renter protections, so if you’re finding ways to cheat those, you are seriously trying to slumlord your way to profit.

Okay, so this installments contract. The basic idea is that you could sign a contract for $11,400, and then they break it into 12 monthly payments.

They show up on campus in October, and sell students hard on these apartments:

They’re going fast! You’re not going to have a place to live next year!
Your mom will be so proud that you’re making a grown up decision by yourself!
No security deposit if you sign right now! (We’ll come back to this.)

So the kid flips through some pages (OF A 60 PAGE LEASE!) and signs.

Already, things are rotten and different than normal:

In general, you have to qualify to lease an apartment. If your income is too low to qualify, or your guarantor’s (parent, aunt, etc) income is too low to qualify, then you can’t rent the apartment.

BUT HERE, YOU’VE ALREADY SIGNED! So you can’t live there and you still owe $11K!

Next: regular leases have a “mitigation” clause. If you break your lease, you have to cover the rent until they re-rent the apartment. The landlord has to attempt to rent out the apartment.

Installment contracts do not have this clause. You break your lease, the company still gets their $11k. They can re-rent the apartment, and now they’re getting another $11K for the same room.

Also: They don’t pro-rate partial months. So you would owe rent on August 1st, even if you can’t move in until August 20th.

Next: “As-Is” Clauses

So the kid signed the lease in October.

Usually when you sign a lease, you look at the apartment. You say things like, “Are there any apartments on the second or third floor?” The leaser says, “Sure” and shows you one. You say something like, “Nah, I don’t want to be this close to the dumpster, I’ll go with the first floor apartment, after all.”

The point is that you’ve seen the actual apartment, and you know if it has mushrooms sprouting in the closets.

“As-is” clauses mean “You get the apartment in its current state, not in a pristine state.” But those are only valid if the tenant can inspect the premises. Since these kids are signing in October without seeing the actual apartment, they’ve signed all kinds of rights away.

They show up in August, see the mold, mushrooms, broken furniture, broken locks, etc, and they have no recourse. They’re not able to request a different apartment, because of the “as-is” clause.

Security Deposits

“Sign now and we’ll waive your Security Deposit! You’d be a fool not to sign!” – me, pretending to be a sleazy landlord.

So this is another scam. They waive the security deposit, and tenants lose some rights. Texas has specific laws that state that if you put down a security deposit, you’re entitled to some protections.

For example, you lose your right to a 30-day move out inspection. So they can come after you for up to four years for damages to your apartment. And they sometimes do! The speaker said that what happens is these complexes get sold every three or four years. Sometimes the new owners look at the past few years of tenants and shake them down for damages.

Also: #notallcollegekids but some college kids are little shits. Since they didn’t pay a security deposit, they don’t think they’re on the hook for damages. Chairs in the pool, trash the place, etc.

Roommate matching

In theory, this is fine. This is what happens in a conventional dorm.

But here, it’s done… maliciously? it’s pretty surreal. Here’s the understated tone from the speaker:

In practice it means that they don’t give a shit if you have allergies and the roommate has a cat, or if you are a quiet person and the roommate throws keggers.

But then it gets worse!

You can’t move to a different apartment if you need to. She told a story of a kid who found his roommate, killed, gory, awful, in the living room. They made him stay in that unit.
You can be moved even if you don’t want to! You dared to complain? Fine, you’re being moved. Pack up.

The companies are generally retaliatory and vindictive. You called us in for having cockroaches? We’re going to try to charge you for fumigating the building. Etc.

Just straight up being illegal:

For example:

Legally, they have to tell tenants who the owner is. But they don’t.

The very few protections that Texas law does offer, they can just skip out on doing them. Nobody holds them accountable. (Of course, this applies to all of San Marcos rentals! Not just students!)

What about the rest of San Marcos?

It is really important that we don’t limit this to college students! All renters need protections. San Marcos is mostly renters!

Many, many landlords are vindictive and retaliatory, or don’t provide a safe, clean environment. There’s a huge power imbalance between landlords and tenants. Tenants get exploited.

So what can be done?

Here’s what the speaker suggests:

and

The city lawyer is quick to mention that these are all uncharted territory. Most cities are not in this situation. We can research and explore these ideas further, but there’s not much in the way of precedents.

Council also discusses:

Capping security deposits so they don’t get exploitative
Publishing a list of complexes and grade them, based on complaints to Code Compliance
Making a central complaint spot, where tenants can then get directed to one of the legal aid resources or code compliance, or whatever
Requiring three months notice before forcing someone to move, or forcing companies to give choices (break your lease, stay, or move to this other unit)

Finally, Texas State is trying to do some stuff too.

Council decides that they want to look into all these ideas. This will come back around!

Items 15-16: Burying power lines

All new developments have to bury their power lines.

In other words, this is bad:

whereas this is good:

There’s a lot of reasons why this is good practice:

Ok, great.

Whisper South and Whisper South Industrial are here:

Whisper South has requested skipping burying their electrical lines. Staff denied the request. So they appealed to City Council.

City Council agreed with staff, and denied the request as well.

Good job, Council!

…

Items 17-18: The Neighborhood Commission

Maybe the Neighborhood Commission is my arch-nemesis? I disagree so hard with them that steam is coming out my ears.

They sent Council two resolutions, on Occupancy Restrictions and Purpose Built Student Housing.

Occupancy Restrictions

Back in April 2022, Council voted to loosen occupancy restrictions from a max of 2 unrelated people in a house, to a max of 3 unrelated people in a house. Unfortunately, the code wasn’t updated for another 18 months. By this point, Max Baker was off Council and Matthew Mendoza was on it.

Matthew was in a panic over the idea of 3 unrelated people living together. He tried to get everyone to vote against it, and it failed, and then tried one more time. He clutched his pearls so hard that he’s probably infertile now.

It finally passed, officially, in October. So it has been in effect for six months. But in a sore loser move, a subcommittee was put together “to study the issue further”.

The Neighborhood Commission is pissed off.

They want the rule to revert to a max of two unrelated people.

Listen: a cap of two unrelated people is batshit crazy. They clearly hate students, but banning students effectively bans poor people as well. (I really don’t care if that’s accidental or on purpose.) This prevents poor people from pooling their resources and being able to afford the rent in a quiet neighborhood. That’s super gross!

Who actually thinks City Council should be in the business of policing who is married? Why are we micro-managing people’s private lives this way?!

Usually people will say “It’s about parking!” or “It’s about noise!” or “It’s about wild parties!” But there are other mechanisms for dealing with noise and parties. (Namely code enforcement and rental registries for landlords.)

What about the extra cars, parking on the street? Listen: your desire to keep street spots empty is less important than other people’s right to affordable housing. I don’t know why we allow “empty street spots” to be a weapon that existing home owners can wield against renters. Home owners do not have a right to keep street spots empty.

But let me be fair: surely the neighborhood commission gave thoughtful reasons, right?

Unless I’m missing something, they’re saying that three friends living together is causing all this:

Rising costs of home ownership
Impact on residents remaining in their homes
Impact of landlords attempting to put 3 unrelated students in a home
Negative impact on the neighborhood

Wow. That is high on blame and short on details. If something is going on, spell it out explicitly, because right now it looks unhinged. (Also home prices are currently falling.)

What does Council do?

Remember the subcommittee that was formed? It hasn’t met yet, mostly because it doesn’t have a purpose.

Jane Hughson calls for the subcommittee to meet within 30 days. The subcommittee is Matthew Mendoza, Mark Gleason, and Alyssa Garza.

Shall they meet?

Yes, they must meet!! Jane, Matthew, Mark
No, it’s over, this is dumb: Alyssa, Shane, Jude

So the informal vote fails. They do not need to meet.

But wait! There’s more from the Neighborhood Commission!

They hate Purpose Built Student Housing and rent-by-the-bedroom leases.

There is an argument that RBB leases are predatory. (I don’t exactly agree, but we’ll talk about this extensively in the Bonus P&Z section.) But for now, it’s safe to say that the Neighborhood Commission is not upset because students are being exploited.

The Neighborhood Commission is saying this:

They do not want student housing complexes. I think this is clear.

So let’s summarize: they do not want students renting houses in neighborhoods. They also do not want apartment complexes to cater to students.

This is just delusional. Look, we have a university! With a lot of students! They are entitled to live in this town!

If students are throwing obnoxious parties, then we need to properly fund Code Enforcement to shut those down. If you have a problem with rentals, hold landlords accountable. This commission thinks that shutting off the actual supply of housing – this human right that we all deserve – will somehow lead to different behavior by students.

What does Council do?

It’s a little perplexing. Jane Hughson moves to postpone the discussion.

Her explanation is that they didn’t put Rent by the Bedroom (RBB) on the agenda, and so legally Council cannot discuss it. She wants to put both RBB and Purpose Built Student Housing on the agenda, so that Council can have the appropriate discussion.

But this is just wrong. Look at the agenda:

Rent by the bedroom is actually right there, on the agenda! How did no one correct her? They literally read that blurb out loud at 1:30:56, here.

(I mean, I truly don’t care. Let’s postpone. It’s not urgent.)

….

Council or city staff: if you’re reading this, I do have one practical suggestion:

If you’re going to regulate RBB leases, you should require that leases include an option to rent by semester, for a modest surcharge. Students need some flexibility to be able to take internships, or graduate in December, or move home for the summer.

Since the complexes are profiting off of being quasi-dorms, they should provide this benefit specific to students, like a dorm would.

Tag: rent by the bedroom

Bonus! 3 pm workshops, 11/19/24

Hours 1:00 – 1:42, 3/5/24