East Bay Housing Advocates Ignore the Collapse of Small Rental Owners

by Chris Tipton

Across East Bay cities, housing advocacy groups are increasingly vocal about the urgent need for more affordable housing. They argue that addressing the housing crisis requires aggressive policies to increase the supply of affordable units, more renter protections, higher fees and taxes for owners, and rent stabilization/control ordinances. While these goals resonate with the general public, small rental housing owners (those who actually own and provide 80% of housing services to renters) are slowly being defunded and their properties devalued. In most cases, policies championed by renter advocate groups risk reducing the supply of housing and losing the very owners who make deeply affordable rental housing available. This is especially true for our most vulnerable residents (seniors, people with disabilities, immigrant communities, and communities of color).

Providing more rental housing is not just about building new units. It also requires a comprehensive approach that encourages production and provides incentives to property owners. However, ignoring the critical role of small community-based rental owners/operators undermines urgent needs and long-term housing goals. Small housing providers are the backbone of the rental market. They purchase properties, bear the financial risks of operating rentals, and stimulate the larger economy by spending money on maintenance, repairs, supplies, insurance, waste services, utilities, and taxes. Without their participation and support, our housing goals will fall short.

Some housing advocacy groups and municipal leaders believe that government-run housing and non-profit organizations are the saviors and solution in providing affordable housing. Creating policies that defund operators, devalue properties, and drive our small legacy owners out of the rental business is necessary to advance a social housing agenda. This belief is a perfect example of how some housing advocates do not understand the economic realities involved in operating housing. In a recent EBRHA member survey, about 35% of small rental owners indicated that they are exiting the rental business in the next 24 months. Clearly, these beliefs and policies are having an impact. This data is alarming and should be an urgent call to action. 

Even non-profit and government-run housing organizations need to operate with financial models that are sustainable. A small private owner will often use sweat equity to maintain and operate their rental units, because providing rental housing is a 24/7, 365-day-a-year responsibility that never ends. Emergencies can arise at any time, and properties require constant oversight. Governments and NGOs can’t rely on sweat equity. They must pay for around-the-clock staff, maintenance, and repairs where costs are often bloated with bureaucratic overhead or administration and unionized labor requirements. Just like private owners, they’ll also need to have net-positive income to create adequate reserves for future upgrades, unplanned repairs, or major renovations. While their goals may focus on affordability and a “community-driven mission”, they cannot function without generating a positive return to keep their buildings safe, functional, and well-maintained. Profit or positive return creates financial stability and is essential for government-run, non-profit organizations, AND private owners to provide sustainable housing long-term.

Renter advocate groups also push for “fixes” such as rent control tied to CPI caps, eviction restrictions, and tenant protections, amplifying renter needs while dismissing the impact on housing providers. These strict regulations and extreme rent control measures actually discourage development, defund rental housing providers, and devalue properties over time when costs exceed the rents they receive. According to a recent report by the Metropolitan Transportation Commission (MTC) and the Association of Bay Area Governments (ABAG), cities and counties across the Bay Area gave out permits for about 9,100 new housing units in 2024. That’s one of the lowest numbers in the past 15 years, about 75% less than the 32,500 units issued permits in 2018, and almost 90% less than the 66,600 units issued permits in 1971. About 60% of the 2024 permits were for multifamily housing. This includes buildings like apartments, duplexes, and triplexes.

So, how do we support rental housing providers and grow supply?

To create and encourage new affordable housing, states and local governments need more carrot and less stick. This can be accomplished through direct funding and incentives to owners, which include grants, low-interest loans, and subsidies aimed specifically at creating more affordable units for low and moderate-income renters, which EBRHA is advocating with the strategic use of Alameda County Measure W and CA Proposition 1 funds. By investing in more rapid ADU construction, conversions, and vacant unit rehabilitation/repair, governments can increase the supply of housing and reduce homelessness without placing additional burdens on existing rental owners.

Developers often face substantial financial barriers, from high lending costs, property taxes, development costs, and permit fees. Offering tax breaks, fee waivers, or deferred payments can lower these costs and encourage more production. Importantly, small rental owners can also benefit from targeted tax relief programs or repair grants, helping to maintain affordable units or bring vacant units back into the market.

Lengthy zoning and permitting processes can significantly delay new housing projects, driving up costs and discouraging investment. Streamlining approvals and providing clear, standardized processes can make it easier for developers, homeowners, and existing rental owners who wish to expand and contribute to the housing supply.

Addressing the housing crisis effectively requires balancing the needs of renters with the realities of operating rental properties. Expanding affordable rental housing is a complex challenge. Housing advocates rightly highlight the urgent need for more units, but focusing exclusively on renter protections while underfunding the preservation of our older housing stock or burdening legacy rental owners undermines long-term goals. Rental housing providers are not adversaries. They are essential partners in creating and preserving affordable housing.

In the end, a sustainable rental market is one where both renters and owners thrive. Penalizing small owners/operators while demanding more units is a recipe for failure, underinvestment, and continued housing shortages. Effective housing policy must equally balance protections for renters with incentives and support for the legacy owners/operators who make affordable rental housing possible. The East Bay Rental Housing Association (EBRHA) will continue urging local city and county governments to address both sides of the housing equation, with the hope that renter advocacy groups will also lend their support and work in cooperation with EBRHA to truly solve the housing crisis.

This story originally appeared in the October 2025 Rentrospect. Chris Tipton is the Marketing, Communications & PR Manager at EBRHA.