OB Needs to Have a Discussion About What it Means for So Much of OB to Be Concentrated in the Hands of So Few

by on October 11, 2016 · 45 comments

in Culture, Economy, Environment, History, Ocean Beach

ob-niagara-4955

Large apartment complex at 4955 Niagara owned by Michael Mills.

A bunch of us at the OB Rag feel that Ocean Beach needs to have a conversation, a discussion – let’s say – about what it means to have so much of Ocean Beach concentrated in the hands of so few people.

We recently published The Ocean Beach Empire of Michael Mills, about how one man and his trusts owned 241 units in OB.

Looking at things one way – if there are 2-3 people living behind each one of those 241 doors, that’s between 480 to 720 people. If the total population of OB something like 12,000, that would put something like 1 out of every 16 to 25 residents in a Mills building.

What does that mean? What are the consequences of that?

And there’s other large landowners in the village – probably not as large as Mills.

In fact, dear reader, if you have a tip on other big land holders that we may not be aware of, or if you think there are some with positive – or negative – reputations, let us know.

There’s also large land holdings on the commercial end of OB.

What does it mean when one family owns significant portions of the main business street?

Or what does it mean, also, when one family owns several liquor stores or markets where alcohol is sold?

 

{ 45 comments… read them below or add one }

cc October 11, 2016 at 12:14 pm

What does it mean? It means that someone learned how to invest money properly.

Reply

Lana October 11, 2016 at 3:40 pm

It means creeping “gentrification” of O.B. Renters being squeezed out. When do we fight back? (See Los Angeles Times article today – “A Flashpoint in L.A.’s gentrification drama”. Residents at the Marmion Royal apartments are demanding long-term leases with limited rent increases. L.A. has a “slow burning drama over income inequality, cultural identity, housing affordability and neighborhood preservation.”

Same as here, pretty much. What we do about it is up to us…wait until only the wealthy can afford to live here and enjoy our community by the sea built by so many? Wait until the best of O.B. gets hollowed out by wealth, Air b and b, corporate stores on Newport – in short, a boring non-town like its neighbors up the Coast?

Reply

Christo October 11, 2016 at 3:59 pm

How about a conversation about “What it means when 6 out of 7 of Obciens are renters and think they are entitled to long term benefits below market rates.”

Because that’s really the problem.

Reply

cc October 12, 2016 at 7:30 am

ding ding ding. I rented in OB and wanted to buy a place. I can’t afford to buy near the ocean in one of the most beautiful cities in the world, so I moved inland. I have owned near SDSU for 2.5 years now. I miss OB and wish I could afford there… but I’m doing just fine considering my household income (single income, 2 people) is lower than the average household income in SD.

Did I cry? no, I just realized that I shouldn’t be able to afford to live at the beach on my income. Well I’ve made almost $70k in equity now so it’s a good thing I stopped renting and didn’t sit around crying about having to move out of OB

Reply

OB Joe OB Joe October 12, 2016 at 11:27 am

Christo – OB renters are entitled to basic rights of habitability, of decency, or respect; they are rightly entitled to non-leaking roofs, toilets that flush, ovens and refrigerators that work, no holes in the walls, fresh air. As I understand it, this Mills character is a notorious OB slumlord, who even went to jail for being a derelict landlord.

Reply

Christo October 12, 2016 at 11:39 am

My friend moved into on of the Mills Apartments on Niagra 2 weeks ago. It is fully habitable and updated.

Then again- if the Rag ran an article on that, nobody would read it.

Reply

Frank Gormlie Frank Gormlie October 12, 2016 at 8:19 pm

There is that problem among news sources; the so-called “good news” that no one wants to publish or read about. But hey we’ll publish positive reports about any landlords. Send ’em in.

Reply

Christo October 13, 2016 at 9:47 am

I will ask her.

Reply

Brian Brady October 11, 2016 at 7:57 pm

All three of the above commenters make sense. Be careful what you wish for, Frank.

There are two ways you can solve this problem (and a 83% rental rate is not good for the long-term success of a community).

1- You can buy those properties, from the legal owners, and give them (through subsidies or discounted prices) to others. You will lose a ton of money doing that but it’s an awfully nice and virtuous thing to do with your money….OR….

2- you can do the same thing through force. That’s theft and it’s not, by any stretch of the imagination, nice or virtuous.

Either way, those newly anointed owners will be sitting on a gold mine in 3-5 years and probably sell. As much as a I hate to say it, OB is either going to stay a renter’s paradise or it’s going to become Carlsbad

Reply

molly molly October 12, 2016 at 11:31 am

Brian – I know you’ve heard of rent control. There is power among renters when they organize and work together. It’s worked in NYC, Santa Monica and I know folks here in SD are working on it as an issue. It’s tough to organize renters when they have different landlords (impossible?) but when renters either live in the same apartment complex – or in this case – have the same landlord – bingo! – they can realize the fabled strength in power in numbers

Reply

Brian Brady October 19, 2016 at 6:11 am

Rent control is #2, Molly. That’s just theft

Reply

mjt October 12, 2016 at 4:33 am

Too few own too much. Put a cap on how many units an owner can acquire.
Donald Trumps son in laws owns sixty thousand units, there are others who own more.
A 500 unit cap sounds good to me.
The big boys control prices, and work in tandem.

LandLORDS bilking tenants is nothing new, but as with everything these days, they become better and better at squeezing every penny from their prey.

Rising rents are an assault on communities. If there were multiple housing owners it would cushion the blow but when on person owns sixty thousand units he has undue influence on the market.

During the Cultural Revolution when Mao’s wife took charge landlords were being beaten on the streets.
Housing is where we live, and monopolies should not be allowed.

Reply

Bearded OBcean October 12, 2016 at 10:10 am

Enlightened technocrats deciding who owns what and how much. What could go wrong?

As for rising rents, that’s simply incorrect. Rents in San Diego county grew by almost 10% last year. Diverse owners or not, rents move in relation to what the market can tolerate.

Reply

mjt October 12, 2016 at 12:55 pm

Again i say that too few own too many.

Anti trusts laws began with the Sherman Act in 1890.
Clayton Antitrust Act 1914
Federal Trade Commission 1914

These laws are to protect consumers against large mergers and price fixing.

Ronald Reagan ushered in the great Brain Wash and wrapped the flag in Corporate Love.
They used to call the big Corporations Trusts and it did not take long before the Trusts monopolized and had to be pushed back.

Clinton and his Goldman Sachs boys repealed Glass-Steagall which led to the 08 banking debacle.

Again i say, the bigger the landlords get, the more control they have over prices.

Reply

Vacationer Ted from Mass. October 12, 2016 at 4:45 am

If only we humans could solve the weather inequality of our planet.

Reply

Debbie October 12, 2016 at 12:34 pm

Now that would take care of a lot of the rental problems! OB you pay for the weather and the beach….oh yes, if you want non-leaking roofs, toilets that flush, ovens and refrigerators that work, no holes in the walls, fresh air etc. that’s extra.

The only way to control your lodging expense is to save up and buy.

Reply

Oldob October 12, 2016 at 5:47 am

Wow mjt….at least you are upfront about your influences. Mao? Really? The communist revolutionary? Why don’t we just start rationing food while we barter your chicken for my cup of milk. Or, alternatively, we may continue to live in the land of the free and benefit from the opportunity it provides everyone. It’s not equal. It’s not fair and it is far from perfect. But I’ll take my chances here over communist China any day. It isn’t your God given right to live at the beach. It’s precious territory and it’s expensive. That’s life. Move to El Cajon and drive a few miles. It’s not the end of the world.

Reply

molly molly October 12, 2016 at 11:40 am

Don’t mock. Mao was an awesome dude – the George Washington of modern China – and Madam Mao as she was called – was an organizing dyno – who probably tried to go to far too fast.

“Communist” is an archaic term only used by our mainstream (capitalist) media and governments that call themselves “Communist”. Communism has never happened – so how can one call themselves something like that – it’s like calling yourself an “angel”.

Now, socialism is a different thing altogether. There have been attempts at socialism, and so far, we have various forms of “state-socialism” or even “state-capitalism”, that are ruled by huge militarized bureaucracies and the new elites that have benefited by being at the top of these vast infrastructures.

But China is not “communist”; China is a “state-capitalist” form of economic system where the government, the state, has become the biggest or even only capitalist power, and like capitalist institutions, is run top-down. Any society that brutally murders its people in the streets – as China did some years ago – is not socialist.

A good form of socialism is where the institutions of society are run democratically and justly. This is way beyond the “socialism” that Bernie Sanders was espousing, but at least he made “socialism” a house-hold word, again.

Reply

Chris October 12, 2016 at 8:28 pm

Mao was an awesome dude? I hope you’re being sarcastic.

Reply

Tyler October 13, 2016 at 9:14 am

So let’s just gloss over The Great Leap forward, shall we?

Reply

mjt October 12, 2016 at 12:38 pm

My comment had nothing to do with Communism. It was meant to show the resentment that the people had towards their landLORD.

Reply

RB October 12, 2016 at 6:46 am

It is supply (the number of units) and demand ( the number of tenants) that determine price, not the number of owners.

Reply

editordude October 12, 2016 at 11:18 am

Dear readers: If you would like to leave a comment anonymously (maybe you’re a tenant of Michael Mills?), you can – just make the comment using a valid email address with your nickname, and we’ll approve it one time, and then you can make more comments under that nickname at will (as long as our comment policy is followed, of course; no expressions of disrespect or belittling someone, other than disagreeing with them over their statements, arguments, points of discussion, etc).

Reply

OB Joe OB Joe October 12, 2016 at 11:22 am

One of the most obvious choices for the 100s of Mills’ tenants is to organize a tenants’ union among themselves, and speak to him in the language he understands – money; they can employ such tactics as withholding of rent under basic repairs are made.

If anybody who is a renter of this particular landlord, I’m sure they can abide the confidentiality offered by editordude and the OB Rag to communicate with each other.

Reply

editordude October 12, 2016 at 11:23 am

Yes, of course. If any of Mills’ tenants wish to use the OB Rag as a communications platform, please do so, using the anonymous comment method I described earlier.

Reply

triggerfinger October 12, 2016 at 11:40 am

Is there a way to encourage more home ownership in OB? All these complaining renters will be on the outside looking in in 5 years. They will be replaced with a slightly higher income class of complaining renters. Can any of them afford the smallest cheapest condo in OB? Are some of them choosing the short-term savings of renting instead?

Reply

Zen October 12, 2016 at 11:48 pm

>Is there a way to encourage more home ownership in OB?
>Can any of them afford the smallest cheapest condo in OB?

The cheapest condo in OB for sale at the moment is $839,000. (Some websites list more, but there are all listing that have sold and they have not removed yet).

Maybe one a month will go on the market for under $350,000, and usually be sold within a week.

I guess you could have more affordable condos if you made the condo conversion process easy. I looked at the city government’s “permit map” recently for a separate reason, but I came across a bunch of planned condo conversions in OB that never actually happened.

Reply

triggerfinger October 13, 2016 at 11:09 am

There are some condos just east of Nimitz listed at $270K, 384K, and several right at 400K. Close enough to OB. One on Cape May at $314K that’s been on the market for 200 days.

$2K per month for a 2/1 refinished condo in an aging complex, with no ocean view. That’s including the HOA fee. I bet a lot of couples can afford that, but would probably rather rent a place a block from the water. Their choice.

Reply

Mercy Baron OB Mercy October 13, 2016 at 8:40 pm

Yep. We owned our whole lives, in our 60’s now and just don’t care about paying a mortgage anymore and don’t want to have to take care of anything.

We have LARGE 2 bdr/2 full baths a block from water in an apt bldg and our rent is only $1500 and going up $100 in Dec. Ok with us, we have great landlords.

Reply

Zen October 14, 2016 at 11:52 pm

Yeah a few places in the complexes around Nimitz and W Pt Loma intersection are fairly cheap, but I’d call that area Loma Portal.

The $314,000 Cape May unit you mention is no longer on the market, likely there is an accepted offer and will be reported as sold in the next few weeks.

Reply

Zen October 12, 2016 at 11:20 pm

I have followed the ups and downs of OB real estate for a while, and Mills is not really making a killing looking at your list of his properties and when he purchased them.

He did really well on a few properties, but a lot of others he purchased during the big bubble a long time ago and is probably underwater, or was for a long time and now is breaking even on. It is mostly the people who sold to him at these high prices who made the big money.

I don’t think aggressive code reporting really helps the rent situation that much. The result will often be kicking the tenant out, renovating it, and renting it out at a higher rate. Rent control is a pipe dream at the local level, San Diego is too conservative and suburban, state-wide would be more realistic. Changing Prop 13 so it only applies to your primary residence is a pipe dream too, but would also do a lot to reduce inequality.

Reply

Christo October 13, 2016 at 10:08 am

Zillow lists a 1 bedroom at $270,000 on WPL. Estimated morgage is $954 per month. Probably assuming a 20% down ($54K).

2 Bedroom at $384,000. In a traditional mortgage, you are talking 80K down. $1359 per month.

Reply

Zen October 15, 2016 at 12:03 am

Zillow has a large number of listings that are not real, either taken off the market or already sold. It is a great website but has done downhill the past few years.

If you can’t walk to the sand in under 20 minutes I would not call it OB myself, but the complexes off of WPL east of Nimitz seem pretty nice

Reply

triggerfinger October 13, 2016 at 11:22 am

I don’t know the barriers to condo conversion, but people cry about those too as driving prices up. I think anything that opens up lower priced units for purchase is a good thing. Here’s an article on housing co-ops. Residents actually invested in their building. http://www.brickunderground.com/blog/2015/05/hdfc_guide

Reply

Zen October 15, 2016 at 12:09 am

A lot of condo conversions will be 50% or more purchased by investors. Still, 50% of the complex being owners is better than the 0% owner-occupants that was the case before the conversion.

There was also a problem of them being expensively renovated to the point none of the former tenants could afford to buy. Still, more condo conversions could result in 100’s of additional owner-occupants in OB.

People should be aware that with FHA loans you can put only 3.5% down, and vets can often get amazing loans the general public can’t. Usually you will pay a bit more than comparable rent, but the mortgage rate will be fixed for 30 years, then you’ll paying nothing but taxes and insurance.

Reply

Debra October 16, 2016 at 12:49 pm

^^Yes. Plus, you can deduct mortgage interest and property tax, off of your state and federal taxes.

Reply

OBreason October 13, 2016 at 11:44 am

Agree with Zen. This seems like a witch hunt. Calling out Michael Mills for raising rents isn’t a fair view of the situation. In the list of properties most of those are recent purchases, most likely with big mortgages. In this article from last years OB rag http://obrag.org/?p=94159 reported that 8 units on Del Mar sold to Matassa for $2.3M. The prior sale was… $565k from 1987. If rents had been covering a 565k debt and now they have to cover $2.3M – yes they are going up. It doesn’t mean the landlord is a slumlord or immoral.

Reply

Frank Gormlie Frank Gormlie October 13, 2016 at 2:21 pm

How would anyone assume rents haven’t gone up since 1987? I betcha though that the raise in rents from 30 years ago is higher proportionally than the 400% raise in mortgages cited.

And what’s this about feeling sorry about someone who has 200 mortgages to pay? What’s this empathy for the super-wealthy?

Mills is no friend of the middle and working class. What if he decides one day, to convert all his units to short-term vacation rentals?

Part of the point here is that we’re supposed to live in a democracy, yet on very basic levels, it appears we have more of a feudal relationship between tenants and the overlords. One man, one family can make decisions that have huge impacts on hundreds of people, without their say, their consent, or even without their knowledge.

We need more of our democratic values to filter upwards into the structures of society.

Reply

RB October 13, 2016 at 4:55 pm

If rents were too high in Mill’s properties, relative to other landlords or other areas of the city, he would have large numbers of vacancies and would have to drop his rents. His rents reflex the high cost of property at the beach, the high cost of business in California and the large increase in property taxes when properties are sold. His rents are not too high, IMO.

If you want to live at the beach……bring money…..lots of money.

Reply

Brian Brady October 19, 2016 at 6:23 am

“Mills is no friend of the middle and working class. ”

Are you kidding me, Frank? Residents of Ocean Beach live within a 15-minute walk to the Pacific Ocean and Mills makes it possible for them. Residents of South Phoenix are laughing at this thread.

Reply

Marc Snelling Marc Snelling October 19, 2016 at 8:43 am

“Mills makes it possible?” How is that exactly?

And how does being close to the beach change anything? Any neighborhood were someone controls a large number of properties is the same thing. When many properties are in one set of hands the tendency can be to minimize spending on maintenance to maximize profits. And isn’t this precisely what Mill’s sentence was for?

The closer to the Pacific you get from Phoenix the more acceptable it becomes to break rental laws?

Reply

RB October 19, 2016 at 9:52 am

Rent control is the best way to minimize spending on properties.

Profits are maximized by increasing revenues or rents not by decreasing maintenance. The biggest expenses are mortgages and property taxes, not maintenance.
Profits are maximized by having high rents and low vacancies when you sell to the next investor.

Reply

Brian Brady October 19, 2016 at 12:26 pm

“How is that exactly? ”

He leases them his property. Working class people can live in a beach town BECAUSE they don’t have to buy.

Let’s keep things in perspective here….a Southern California beach town,

Reply

Mercy Baron OB Mercy October 13, 2016 at 8:46 pm

We have fantastic landlords. We’ve been in their bldg for almost 2 and a half yrs and we’re getting our first rent raise in Dec of a $100 and we’ll gladly pay it. Why? Because they fix everything that needs fixing. Just got us a new fridge last week. A new dishwasher when we moved in.

They didn’t know the cupboard shelves were rotting when we moved in and they replaced them and took half off next month’s rent for the inconvenience!

A large 2 bd/2 full baths a block from the water for $1500 a month and then 1600 in Dec.

Frank and Maggie Brown own several bldgs in OB and they are pretty well taken care of.

Reply

Debbie October 14, 2016 at 8:15 am

In 9 years, since 2007 my water, electricity, phone, cable all increased at least 100%. My housing cost went down slightly since I was able to refinance. Buy something someplace if you want to be able to live in San Diego in the future it’s only going to get worse. The apartment I rented in 1990 was $600 it now rents for $1,850 (300% increase)! In 25 years will it cost $5,500? Probably even though that sounds wild!

Reply

Leave a Comment

Older Article:

Newer Article: