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“The city has not prioritized tenants rights as a priority for where the city funds should go, yet tenants are a majority in Oakland,” said Robbie Clark, Regional Housing Rights Campaign Lead Organizer with Causa Justa :: Just Cause.
The Community and Economic Development Committee of the Oakland City Council meeting on February 25, 2014, ran past its scheduled 4 p.m. end time as tenants and landlords lined up to testify about the hot-button issue of proposed changes to Oakland’s rent control laws, which affect many of the City’s 60,000 units of rental housing.
Under the current law, a landlord may increase the rent on a rent-controlled apartment beyond the statutory annual increase (currently 2.1 percent) to pay for capital improvements. There is no cap on the amount of the increase. The cost of the improvements is spread over 60 months. The burden falls on the tenants to protest the rent increase, if they feel it is unfair. If the tenants fail to file a petition against the rent increase within 60 days, they are stuck with the increase.
“Every other rent controlled jurisdiction puts the burden on the landlord,” said Marc Janowitz, a staff attorney and clinical instructor in the housing practice of the East Bay Community Law Center (EBCLC).
“If the landlord wants to raise the rent, they should have to petition,” said Clarke. “The rent law is a good example of a law that is broken.” The existing process, she noted, “is overall extremely flawed because the tenant has to be the one to petition for anything.” She added, “There’s nothing in the enforcement mechanisms that insure the landlords are even following noticing requirements.”
“One of the most important changes that we are proposing is that the landlords themselves must initiate the petition if they want to make the tenants pay to increased rent to cover the cost of capital improvements rather than putting the burden on the tenants to, number one, know what their rights are, and two, exercise their rights,” Janowitz said.
The proposal for the capital improvements is to limit the pass-through rent increase to 10 percent in any 12-month period, and to distribute the costs over 30 years rather than the current five years, while allowing 100 percent of the cost of the improvements to be passed through to tenants.
Council member Dan Kalb, who does not sit on the committee, but spoke at the hearing, proposed limiting the pass-through to 50 percent of the cost of the capital improvements. “The landlord also benefits from capital improvement,” he said. “To me it doesn’t seem fair or appropriate to have the entire cost passed on to tenants.”
“We are in a place now in Oakland…that we haven’t seen before,” Kalb said at the hearing. “In my opinion, that calls for further protections” for tenants.
Clifton and Mercedes Harrison know first-hand about pass-throughs. “The clock is ticking on me now,” said Clifton in emotional testimony at the hearing, which happened one day after he was served with a notice from his landlord of a pass-through that would double his rent. He asked for a moratorium on pass-throughs until the law is changed.
The Harrisons’ troubles began at the end of 2011, when a leaky roof caused water damage to the bathroom ceiling in their apartment on Vernon Street in Adams Point. The landlord had the roof repaired within a couple of weeks, but did nothing to remediate the water damage in the bathroom, which, according to the Harrisons, grew worse over time.
What followed was 18 months of back-and-forth with the landlord, Kathleen Solares of Solares Properties. Solares didn’t return a call for comment for this story.
Frustrated with the lack of action by the landlord, the Harrisons finally petitioned the Rent Control Board. An inspector visited the apartment in September and cited Solares for the condition of the bathroom.
Shortly after the citation from the city, Solares handed the Harrisons a 60-day Notice of Termination of Tenancy.
The Harrisons are not ordinary renters. Before taking early retirement, Mercedes, 56, was a systems analyst and Clifton, 58, worked as a paralegal. The built-in bookshelves in their tidy apartment are lined with law books. They knew their landlord could not evict them from their home of 27 years without cause, and they pushed back.
In the end, the landlord served the couple with a notice to vacate the apartment for three months so she could complete major repairs. They moved out in June of 2013 and moved back in October of 2013. During that time, the landlord had not only fixed the water damage in the bathroom and completed some deferred maintenance by painting in the rest of the unit, but also remodeled the kitchen with granite counter tops, new cabinets and flooring, and shiny new appliances.
“All we wanted her to do was fix the bathroom,” Mercedes said. “Just fix the bathroom ceiling and let us stand in peace.”
The Harrisons received notice from their landlord that their current rent of $1,147 would increase to $2,245, including $1,006 per month in capital improvement pass-through. They are fighting the pass-through — claiming that it is deferred maintenance rather than a capital pass-through — with the help of Centro Legal de la Raza.
“I’m not giving up,” said Clifton. “I’m hoping the City Council will make some changes.”
The Harrisons want to share the neighborhood they love with another generation. “We helped build this area,” said Clifton. “We raised two kids here.” Now, one seven-year-old granddaughter lives with them and two others visit often.
The other landlord-tenant law under consideration is the debt pass-through provision, which allows a landlord to pass through up to 95 percent of mortgage payments that cause a negative cash flow, as when a new owner buys a property and takes on a large mortgage.
“No other jurisdiction in the State of California allows landlords to pass on increased costs of the debt or the debt service,” said Janowitz. “It is appalling, it is absurd and it makes a mockery of the concept of rent control.”
The proposals before the committee would either eliminate the debt pass-through entirely or limit it to seven percent of debt service.
Council member Larry Reid announced before the public testimony that the committee would not make a decision on the proposals at that hearing and that he wanted landlord and tenant representatives to meet and try to come up with a compromise first.
Several speakers pointed out that previous meetings between the parties had not led to any agreement. Janowitz participated in the meeting of both sides after the February 25 hearing. “It’s difficult to say, quite frankly, if any progress was made,” he said. “The interests of both parties are fairly well entrenched.” He added that the city council members are “going to have to make some tough decisions.”
“This is in your hands and you have to deal with it,” James Van of the Oakland Tenants Union told the council members present at the hearing. “You are going to have a different city if you don’t deal with it.”
“We’re talking about real families, our community, our neighborhoods,” Janowitz said, noting the value of stability in a city made up primarily of renters. “Those are the things that rent control at its best provides: it allows people to stay in their homes and build their community.”
In her hearing testimony, Clark said, “Now is the time to take action because people are being put out now.”
Update March 11, 2014:
Despite calls for action from numerous speakers at the March 11 meeting of the City Council Community and Economic Development Committee, members voted to move all proposals for changing Oakland’s rent stabilization laws to the meeting of the full City Council on Tuesday, March 18 at 6:30 pm. Council member Reid abstained, stating that he wanted representatives of landlords and tenants to have additional meetings to come to a compromise before taking action. Council member Libby Schaaf promised to try to get the parties together for additional mediation before the issue comes before the council. She noted that additional proposals can be presented by council members at the March 18th meeting and that the deadline for members of the public to add to the agenda is Thursday, March 13.