Interesting article in the The San Francisco Business Journal concerning Skyline Realty, the embattled San Francisco housing portfolio. Using Massive leverage in the 1990s and 2000s, the Lembi family gobbled up housing at a tremendous rate, using high leverage and hard-ball tactics to drive rent control tenants out to take advantage of vacancy decontrol.

Maybe The Costa-Hawkins Residential Housing Act, the law that got the ball rolling on incentivizing landlord harassment of tenants, should be revised to limit this incentive to break rent control with crazy schemes?  Leaving behind a mountain of debt and having senselessly evicted many tenants, the slow-motion collapse of the Lembi fortune shows the dangers of reverse leverage and the perversity of seeking high- and fast- profits in established residential housing.

At any rate, too much news on the mortgage crisis has focused on blaming the little guy: but what about these commercial based mortgage securities?  What about those who cultivated the central myth of predatory equity schemes, which was that rents would actually go up in times of mortgage crisis?