Rental Cap Amendment

click here for a copy of the proposed Rental Cap Amendment Draft

I have a few questions about the Rental Cap Amendment:

  1. Have you ever heard the refrain “_______________ [Blacks, Jews, Hispanics, Gays, … (take Your pick)] are BAD for our neighborhood and if we get too many of THEM, there goes our neighborhood and property values DOWN THE DRAIN”?  In our case, have we chosen to fill in that blank with “Renters”?  Will you look into the eyes of your mother, father, child, grandchild, childhood friend who wants to rent in our neighborhood to be close to you after the rental cap is met, and tell them that our neighborhood has determined that they are “undesireable” and will ruin your property values if they rented in our neighborhood?
  2. Shouldn’t we rather focus on the BEHAVIOR of the residents (be they homeowner or renter)?  As long as the yard is mowed, the shutters are fixed, they don’t bring glass bottles to the pool, and don’t block your driveway, do you really care who they are, if they are related, how much money they have, and who owns the house?  And while there are stories of bad renters, there are also many stories of bad homeowners (as I am sure the HOA will attest).  So since we are willing to punish the whole group of “Renters” because of a few bad apples, shall we go ahead and limit the number of “Homeowners that can live in their houses in our subdivision too because of a few bad apple homeowners?  If we have people in our neighborhood that are not good neighbors, do we want to try to come up with better enforcement Covenants, or do we instead prefer to ban that entire group of people that fit their stereotype?  Do we really want to demonizing a whole class of people because they “aren’t as financially well off as we are” and whose only sin is being a “renter”?
  3. Do we really want our neighbors poking inside the walls of our house and start asking – Who lives in this house?  How are you related?  Are we ready to have neighbors spy upon each other, and question what we are doing and who is living INSIDE OUR OWN HOUSE?
  4. Do you really want to have to grovel before another group of people to get “permission” to rent your own house?  Are you ready to turn over your tax returns, and income statements, and expenses, to “prove” to strangers that you have a financial hardship and then beg to be allowed to rent to get income to pay your bills or make some money?
  5. Do you really want anyone to limit who you sell your house to and make the most profit?  This house is YOUR investment.  If you can get the best price from a corporation, or if corporation will bail you out instead of you going broke, do you really want anyone to interfere in your property rights?.  I myself have lived in our house for 33 years!  This house is part of my retirement plan and for income when I retire.  Would you feel it was fair if some newcomers to the neighborhood that have lived here less than half as long as you have can just come in and pass an Amendment to effectively deprive you of your 3 decades of financial planning, equity and property rights? And for those of you that support this Amendment today, what if you need to rent the home to make ends meet 5 years from now? Or you have a financial downturn and have to sell the house quickly – and your only choice is to go bankrupt or sell to a Corporation? (I am told this has happened already – where a quick sale to a corporation saved a family)? Do you really want your future options limited based on a fear-mongering campaign against “bad renters”?
  6. The Board has been working on this for a year.  And only a few close-knit group of individuals were privy to the details.  Sure, the Board minutes make some  scant mention of this, but no details were given and it is only now we are getting a first look.  Do you feel this Amendment of such severe magnitude has been developed with adequate open-ness and homeowner participation?  What is the rush?  Would it be better if a Committee of homeowners were appointed who held OPEN and FULLY TRANSPARENT meetings and got feedback from ALL the homeowners before drafting a document?  Or do you like the current process where only a handful of people met behind closed doors to draft such a far-reaching document?
  7. Does anyone know what will be the cost to enforce this will be?  The Board can barely keep up with people not mowing their lawns and not paying their HOA dues and staying within budget.  Is the Board really prepared to look inside the walls of EVERY HOME to make sure the people inside are properly related?  Is the Board really going to be able to have the hardship hearings in addition to their due process hearings?  They have a hard time finding volunteers for the Board now, who will want to serve with all this extra responsibility?  And how much will our dues be need to be raised to pay the Property Management company to take on this herculean task of investigating the relationships inside EVERY home and investigate ALL hardship exceptions?  Do you feel that extra efforts and costs related to monitoring and enforcing this Amendment should be investigated and revealed to you BEFORE a vote?
  8. At the end of the day, is this how we want Amendments to our Neighborhood to be passed – where a very small group of individuals appointed by the Board get an idea, meet essentially in secret, then give you a document that now MUST be passed with only 2 months notice and without in depth exploration of all issues and costs?

Comments

  1. I could not agree with this more. I see no harm in delaying this vote to involve more community members in discussing this amendment and formulating a more transparent process.

  2. I agree with your comments 100%. I hope to see them posted on the Southall official neighborhood website. I want people to have access to true information needed to vote on this vital issue, without prejudice, fear or pressure.
    Elissa oken

  3. We’re Donnie and Susan Redmond of 2705 Westhampton Pl. We’ve owned the property since 1991, though the property was converted to a rental for 18 of those 32 years.

    We have a number of issues with the draft rental agreement.

    Why Is It Needed?
    The board offered anecdotes of neighborhoods being “ruined” by corporations buying up houses and converting them to rentals. But no actual data was presented to support this view. Where has this actually happened? How many houses were converted? What was the impact on property values? Was there an actual increase in crime? Before we place such restrictions on homeowners, the board needs to provide hard data to make its case, not just scary stories about what “could” happen.

    Board Bias Against Renters
    Several board member comments seemed to disparage renters. Yes, there are bad renters, but there are also bad owners. For various reasons we’ve all been renters at some time, were we bad people then? Such bias shades this amendment as a tool to restrict renters rather than to prevent problems.

    Unintended Consequences
    Especially in today’s environment of high interest rates, it’s likely that the pool of qualified buyers is smaller than normal. In such an environment, if I can’t get the price I want for my house, I may decide to rent for some period of time until the market improves. However, this amendment may restrict my ability to do so. Instead of renting the house out, my only option would be to slash the price. Thus, this amendment may actually serve to drive down property values!

    Exceptions to the Rule
    Several times board members suggested that the board could consider exceptions on a case-by-case basis. We do not want to be at the mercy of an HOA board’s whim, especially since those whims may change as the board membership changes. You look at any government regulation and the exceptions and exemptions are clearly spelled out. If you want our support on this amendment, you need to take the time to define the circumstances and the process to gain an exception.

    Board Review of Any Lease
    It’s unreasonable to require 30-day written notice to the board providing details of the tenants, etc. Having owned rental properties for over 20 years, I can tell you it is unusual to have that much lead time between leases. I usually had to scramble to paint and clean with less than two weeks between tenants. What is the board’s intent with this requirement? If it’s to keep track of how many rental units are in the neighborhood, then perhaps a 30-day notice of intent to rent (with no tenant details) would satisfy the board. Providing details of the tenants 30 days in advance of the lease start is unworkable — I would lose tenants because of that! They aren’t going to wait around for an HOA to approve the lease — they’ll just move on to another neighborhood to rent. While my property sits vacant.

    Renting a Portion of a House
    An elderly parent moved in with us several years ago following the death of their spouse. We built an attached suite for her, with bedroom, bath, separate entry, etc. We won’t need this room for her indefinitely. The City of Raleigh would allow us to rent this suite, but Southall’s rental amendment would prohibit it. What is the board’s goal in implementing this restriction? Is there a better way to achieve that goal?

    Minimum 12-Month Lease
    As noted in the chat last night, we are retired and travel often. If we decide to go abroad for a few months, we may want to rent our house out while we’re gone instead of having it sit vacant for so long. What is the board’s intent with a minimum 12-month lease? If it’s to keep out AirBnB’s (another issue entirely), then it doesn’t need to be 12-months. Please consider changing this to 1- or 3-months.

    $100 Fee to the Board
    What does this fee fund exactly? The City of Raleigh had a rental registration program a few years ago until it was banned by the General Assembly. How is Southall’s rental amendment any different than Raleigh’s rental registration program? Will we not run into the same challenges as they did? Will there be a community-wide assessment to defend the board in case of a legal challenge?

    Rental Cap
    The amendment incorporates a limit to the number of rental properties within the community — a limit that we have already reached. That means no other homeowners can convert their property to rental. And this artificial barrier to more rentals may increase rents for existing units, giving current landlords incentive to continue renting their property when they might otherwise sell. Further consideration and justification are needed for setting the rental cap.

    Exemption for Current Homeowners
    Current homeowners should be exempt from the rental amendment. They will remain subject only to the covenants in place at the time they purchased their home. If the amendment is approved, it will only apply to those homes purchased after the amendment’s effective date.

    My main concern is this amendment will take away options for what I can do with my property. Though board members have stated that exceptions could be granted, there is too much uncertainty to depend on that. A complete list of exceptions would be difficult to draft and would likely omit reasonable yet unforeseen situations. So just exempt current homeowners and have the amendment apply only to future buyers. They can decide for themselves whether to accept the rental amendment.

    The board’s stated position is they want to discourage corporations from buying up properties. Having the amendment apply only to future homeowners would discourage corporations from buying in Southall — without restricting my ability to do what I choose with the property I’ve owned for 32 years.

    I’m still not totally onboard with the concept or need for the rental amendment. I think having these restrictions on future owners could still impact my ability to sell the property. However, being exempt from the amendment would make it somewhat acceptable to me.

    In summary, we do not believe the board has justified the NEED for this amendment, nor has it provided a defendable amendment to implement its goals (whatever they are).

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