By Chris Kavanagh

How did the City of Oakland become a municipal exception or “outlier” when compared to every other major Bay Area city that operates a rent stabilization (rent control) ordinance?

For 30 years, rent-controlled cities such as San Francisco, San Jose and Berkeley have maintained limits on the amount a rental property owner could charge — or “pass through” to — a renter for “capital improvements” (i.e., new building paint job, new roof, new gating/fencing, landscape improvements, etc.).

San Francisco, San Jose and Berkeley require that a rental property owner share the cost of capital improvement projects between the owner and his/her tenants.

Inexplicably, the City of Oakland has no such requirement. An Oakland rental property owner can pass through 100 percent of capital improvement costs on to a tenant (above and beyond  the tenant’s set rent level).

Oakland’s situation is exactly the opposite of Berkeley’s capital improvement pass through requirements. Under Berkeley’s 1980 Rent Stabilization Ordinance, a property owner is required to first file a petition with the City before passing through costs to tenants.

For example, a Berkeley property owner is required to provide financial documents, spreadsheets, and the like, to verify capital improvement costs along with the property owner’s current and projected rental “net income” revenue amounts. Property owner pass-through costs are determined on a case-by-case basis based on the documentation provided to the Berkeley Rent Stabilization Agency.

As of 2014, a Berkeley property owner can only impose an annual 7 percent pass through amount limit above and beyond a Berkeley tenant’s set rent level.

It’s important to bear in mind that capital improvements increase the value of a rental property. Moreover, property owners receive state and federal tax exemptions (or write-offs), and rental property in the Bay Area continues to appreciate every year.

On Tuesday, April 22, the Oakland City Council will consider new legislation to address Oakland’s capital improvement pass through guidelines — or lack thereof. The City Council’s pass-through language is designed to harmonize Oakland’s Rent Stabilization Ordinance with those of other Bay Area cities.

It is past time for Oakland to join its fellow Bay Area cities and provide fair and reasonable pass-through guidelines for Oakland’s 60,000 rental units.

Chris Kavanagh is an Oakland Greens member and former Berkeley Rent Stabilization Board commissioner.

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31 Responses

  1. NOTnecessaryNOThelpful

    Having spent 15 years as a renter in the bay area, and now 10 years as a landlord, I’ve seen both sides of the issue. I lived in a rent controlled apartment that was half what my neighbor’s paid. (They subsidized my rent, in reality.) I also lived in “normal” markets where the landlord was at the mercy of the “voting” renters. The rents in those neighborhoods was ALWAYS cheaper.

    Once I decided to buy a home (with additional units, so I could afford the “rent”), I looked in ALL East Bay, SF, and Penn. locations. It was easy to see which neighborhoods were rent controlled. The houses were falling apart. I was disgusted with the landlords in Berkeley, where tenant rights severely restrict landlords. These landlords were nothing more than slumlords as there were no incentives for them to fix things like brick foundations, single paned windows, insulation, or even just cosmetic fixes.

    So I chose Oakland. And the truth of the matter is that Oakland has rent control, for multi-unit properties. It also has a very helpful, and fair, tenant union. When I needed to spend $200K on my property, as the previous owner hadn’t spent much in the 25 years she owned it, I met with the tenants and explained that I would have to raise their rents “to market standards” in order to provide a safe, warm, and comfortable place for them to live.

    I, also, gave them 6 months to find new housing.

    Not one tenant moved. Why? Because paying “market rates” is fair.

    What the Pro Rent Control crowd neglects to see is that we are sacrificing our future, for saving pennies today. For every young renter in SF who subsidizes the housing of a middle aged, or elderly tenant, paying half of market rents, there is a landlord who must decide who to rent to in that stack of applicants. Who would you choose? The couple in their twenties who just moved in together, or the married couple in their 40s?

    That’s an easy choice for a rent controlled building, you always go with the younger, less stable couple. They are more likely to move in 2-4 years and you can jack up the rents again. The middle aged couple gets pushed out as too risky, as they’ll likely end up living there into their 60s, or beyond.

    In a market without rent control, the landlord would choose the 40 year old couple for stability and hopefully less wear and tear on the apartment.

    Who needs more financial support? The couple in their 20s or the one in their 40s? Right, the couple in their 40s who’ve passed their peak earning years.

    Who gets screwed in Rent Controlled markets? Right, the middle aged couples, the elderly, and the poor who need FAIRNESS the most.

    Having seen, and lived, both sides of the Rent Control fence, I would NEVER support Rent Control. It creates more financial hardship than it seeks to prevent, in exactly those populations it is trying to protect.

    Reply
  2. jackbdazzle

    Unfortunately, my experience as a landlord was brutal. The rent board will not let you kick out bad tenants….ever. You have to pay them off to leave.

    We are not talking about poor people who can’t pay the rent. We are talking people who understand that there is nothing a LL can do to get you out if you disturb the other tenants, destroy the property, or conduct illegal activities.

    All someone needs to say is that there is mold, no heat, etc. It doesn’t matter to the rent board whether it is true or not, or if the tenant actually caused the mold or broke the heat.

    This has led to a lot of small landlords getting out of the business. This really hurts Oakland, because the small landlords don’t have any pride in their buildings. They just want money.

    The more you hurt the small Landlords, the worse it is for tenants and the less rental properties available. I took mine off the market and sold the rental units as homes.

    there are consequences to actions.

    Reply
  3. Tonya

    I am missing something and maybe rental property owners can help me to understand.

    As a owner: why do you buy buildings that you can’t afford to maintain or upkeep without having the renter’s share in the costs?

    The previous poster said that under rent control, owners have no incentive to maintain their buildings. Are you saying that owners just choose to be slumlords, and making sure that the building that they bought and paid for is safe/attractive for their tenants is of no concern to them unless they get someone else to pay for it?

    If renters could afford to pay for a home and make capital improvements, don’t you think they would just go ahead and buy their own home instead of paying exorbitant prices every month? Why would people choose to contribute equity to someone else if they could afford not to?

    It sounds to me that you are asking low-income people to not only pay for their homes, but to help the owners grow their own personal wealth.

    I guess that is what capitalism is all about. If you are poor you not only have to support yourself, but support other people as they get richer.

    Reply
  4. Josh

    Tonya,
    I have been a renter my entire life and was brought up in a Section 8 home. I also know people who own rental properties and I have worked at a property management firm.

    In many cases the landlords do not make a significant amount off of the rent. One thing that a lot of renters (including myself at one time) assume is that landlords own their properties outright; this is not always true, many landlords are still paying mortgage on the rental properties. Add on top of that irresponsible tenants who vandalize their units – a broken pipe – replacing carpet every 2 or 3 tenants – pay court fees for eviction, and any subsequent lawsuits by tenants – as well as (and here is another kicker) paying the water bill for the entire building – and UNLESS the owner has no mortgage and the building is at full capacity, they are most likely not even making enough to support themselves (total generalization, but has been my experience most of the time).

    Some landlords do own multiple buildings and do make some money, don’t get me wrong – but other landlords LOSE money on their buildings. Paying an extra $25-$50 rent is not so bad for me as long as I see results (i.e. building/unit improvements).

    I lived in one unit in Oakland for 4 years and they increased my rent every year by rent control standard and I never saw any improvements to the building – I would rather pay for improvements then general market increase any day.

    Reply
  5. D. Ross

    As liberals, we often complain about Republican’s willingness to ignore science in favor of their entrenched views but seldom do we allow the intrusion of science into our own beliefs. Rent control has never worked. It protects a tiny minority while making the situation worse for everybody else. And even the minority it protects find their living situation deteriorates slowly and inexorably.

    It is hard when your heart bleeds not to take what, on the surface, appears to be the caring solution, but when almost every study has shown that rent control harms both renters and owners and the economy in general, we need to move past these entrenched biases.

    http://econjwatch.org/articles/rent-control-do-economists-agree

    Reply
  6. LibbyCali

    Tonya-

    What do you think the rent is for? The cost of maintenance is really expensive here in the Bay Area. A new roof is $10,000, minimum. An exterior paint job is the same. A new foundation is $40,000. Are saying that a landlord should just expect to be able to pay for that out of their own pocket without any hope of return on the investment?

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  7. Tonya

    LIbbyCali,

    Um..yes. It’s called: You bought it you pay for it.

    I can understand renters paying for normal wear an tear inside the apartment..if they cause the mess then they should have to pay for it if they want it improved while living there or maybe take it out of their deposit.

    BUT if you buy something, you should be able to afford to pay for the upkeep of it. Homeowners have to pay for it. Why do landlords get to get away with making money off of other people? That makes no sense to me.

    Instead of it being rental property, it sounds more like a co-opt. If renters have to pay for capital improvements they should be allowed to have percentage ownership too! It’s basically a condo with no ownership. Essentially, that’s what renters are doing- paying the mortgage via rent, capital improvements via increased rent.. because apparently owning a building doesn’t mean YOU have to pay for it. Plus, as an owner you get to reap the benefits of equity!

    It’s the privilege of those who have money and/or have good credit.

    All of that sounds really fair. Not.

    Reply
  8. Faith

    Yeah, it never really made sense to me that the new landlord was able to raise my rent almost $200 a month to renovate the other units in the building, that they could rent them for double and still it is they who get the tax write off not I.

    Reply
  9. A

    “BUT if you buy something, you should be able to afford to pay for the upkeep of it. Homeowners have to pay for it.”
    – Who is making the investment and bears that risk? Renter or Owner? If you actually owned a unit and have to rent way below market rates, are you really going to put in a lot of money for something you won’t recoup for a long time if not within your lifetime? That’s called bad business. You might not like it, but landlords are not charities or not-for-profits.

    Why do landlords get to get away with making money off of other people? That makes no sense to me.”
    – Do you have a job? Aren’t employers making money off other people? Are you not getting something in return? Employers are in business and guess what? Renting is a business.

    “Essentially, that’s what renters are doing- paying the mortgage via rent, capital improvements via increased rent.. because apparently owning a building doesn’t mean YOU have to pay for it. Plus, as an owner you get to reap the benefits of equity! ”
    – If it’s that easy, why don’t people own homes or why aren’t there more landlords? I can tell you that it’s not easy and that there is A LOT of risk involved. If you have risks, do you try to manage the risk to protect your investment or do you just throw caution into the win and lose out? Think hard about that.

    “It’s the privilege of those who have money and/or have good credit. ”
    – If working hard to earn enough money to own a rental is privilege then so be it. I know this may be hard to believe, but there’s a lot of people in the world who came from very humble beginnings but yet work very hard to improve themselves and have the ability to afford these types of investments. It’s the entitled who actually believe that they deserve something without putting in the effort.

    Reply
  10. faith

    In my particular case I am now paying roughly 2400 annually over what was prior rent. My landlord will not even replace the 15+ yr old carpet that was here before I moved in. I took the issue to the renters board, according to the law as it stands, those improvements that I am paying for need only be for the building not my specifically my unit.
    To respond to what I read as an antagonistic tone from A on. I am a full time student who also works full time in end of life care.I am paying 60% of my income in rent. While it might be a neat and comforting narrative ‘ pull yourself up by the bootstrap, work hard and you will be rewarded.’ is not an accurate perspective on the socio-economic reality of living in Oakland today.
    So yes, absolutely we need to improve Oaklands rent ordinance.

    Reply
  11. NOTnecessaryNOThelpful

    @Faith, you received bad legal advice. Go to the UC Law school or other free services. Both paint and carpet are amortized expenses and therefore have a legal lifespan. I previously forced my landlord to replace a 10 year old carpet, so I know it can be done.

    Reply
  12. Tonya

    Many of the responses are picking apart my post and attempting to argue parts of it but aren’t answering my essential questions at all. Or at least not in a satisfying manner.

    My question that I posted (and the second I tweeted): why do owners get to buy buildings they can’t afford and why is it “fair” to pass on capital improvement costs onto renters.

    Again, I’m not talking about sharing the costs of the improvement to the apartment itself or raising rent because of cost of living expenses etc..I’m talking about as LibbyCali suggested “roofing, foundation, etc” Or to pay for improvements to “other units”..that is really part of the costs of ownership.

    The answers I’m getting is:
    1. Because small owners don’t make “that much money” (and this I gather they mean in the short term).
    2. It’s a high risk investment so the renters should help bear the costs of the investment.
    3. It’s hard work, it’s not easy.

    You see, to me..terms like “risk” and “return on investment” doesn’t say “fair” to me. It still smacks of being able to legally get away with getting other people to pay for YOUR investment, in a way that folks who buy their homes don’t get to benefit from.

    Answer me this, do rental property owners not get to benefit from long term equity like single family homeowners? Do rental properties not to get to buy insurance?

    But I guess these laws that allow small owners (well all of them really) to “pass on the cost” is to help small owners get into the field. If the market is saturated by big property owners rents would be too expensive?

    The forced to “rent below market value”- when I read this I immediately thought of developers and property managers who are required to provide a portion of low-income housing. However they get other incentives like discounts on taxes, development fees or subsidies from the city. Somehow they are able to make return on their investments. But hey maybe it’s because they get to do the same thing when it comes time for capital improvements..

    The response that did answer my question “why owners get to make money off of renters” and essentially all of my questions ..is that it’s the cost of (and the privilege of) doing business. Not that it’s fair..or decent, but that’s just how it goes.

    (The “do you have a job” argument meant nothing to me, because we all know that corporations get away with making lots of money while workers get the shaft..#shrug).

    It’s again, the nature of capitalism. I can accept that..what I can’t accept is the argument that “owners have it hard” or “it’s fair to ask for renters share the cost of improvements so that I can make an investment” argument. Or “this benefits renters..and I’m a good guy”.

    No.. It’s not about fairness. It’s about making money.

    Ok.

    Reply
  13. NOTnecessaryNOThelpful

    Yes, it is about making money. But, encouraging small investors to invest in real estate is also a stabilizing force in the general economy – producing more taxes, jobs, and in a “free” (non rent controlled) market low cost housing. It is expensive to own a Single Family Residence and, in most economies, it is cheaper in the long run to rent. Many of these landlords are hard working middle class families who are investing in something they know/understand, rather than investing in stocks or bonds. This benefits all of us, as the mortgage they buy provides economic stability. Without stability, we cannot have growth because optimism is suppressed. (Google “quits rate” and the labor market to understand this.)

    (This is an unusual economy as we just experienced a depression, therefore the interest rates are low and rent rates are low. In 5 years, you’re going to wish you bought as rent rates will double, for many reasons. We’ve had a stagnant economy and with things like the ACA and raising interest rates, you’re going to see dramatic increases in salaries, which leads to increases in rents.)

    Regarding passing costs on to tenants, if the rent becomes MORE than a “free” market states is fair, the tenant will move into a fairly priced unit and the landlord will find that they can’t overprice their unit. They will also learn that turnover hurts profitability in a “free” market. It is only in Rent Controlled environments where tenants become either too scared to move, or are encouraged not to move through suppressed rental rates that are being subsidized by their neighboring tenants. This is also where you see landlords jacking up the rental rates.

    Reply
  14. A

    “I am a full time student who also works full time in end of life care.I am paying 60% of my income in rent. While it might be a neat and comforting narrative ‘ pull yourself up by the bootstrap, work hard and you will be rewarded.’ is not an accurate perspective on the socio-economic reality of living in Oakland today. So yes, absolutely we need to improve Oaklands rent ordinance.”

    Let me ask you, how do you ever expect to better yourself or your situation if you’re spending 60% of your income on rent? Not to be rude, but it’s a choice that you make.

    If you subscribe to the notion that a car is a necessity, what are your thoughts if we replace rent with car. I spend 60% of my income on a car because I want to drive a BMW. There’s other less expensive vehicles that I could drive, but I WANT to drive a BMW. I could do some ride sharing like zipcar, take the bus, or even buy a used car, but I don’t because I WANT to drive a BMW even though it makes me poor and unable to advance in life because of it.

    Would you suggest that car dealers somehow must lower their prices to fit my need or would you suggest that I put together a better financial plan so that I’m not spending my future and well being on a luxury choice? I could use another example regarding phones, food, or whatever, but I hope you see the point that it’s our choice and that the hard work and sacrifice isn’t something easy. If it was, everyone would be doing it right?

    Reply
  15. Len Raphael

    Tonya, have you read the link that Ross gave to a survey of what are probably mostly academic economists about the costs and benefits of different kinds of rent control? As the author of the survey concludes, there is a rare consensus of most economists that rent control does more harm than good.

    The theory behind the empirical findings is similar to the reasoning why free car parking and farm subsidies are bad, both of which most rent control advocates would agree are bad.

    Essentially rent control screws up the economic mechanism of prices that are used in both capitalist and many socialist countries to decide the most efficient use of investment and consumption. Yes it could slow gentrification. But it also encourages people to stay in an area with cheap rent controlled housing when they could move to a cheaper area with better job opportunities.

    i was a renter for 35 years and a petty landlord for 8. I know the terror of having to move because our rent was going to increase to unaffordable levels. I also know that rent control is not capable of being targeted at the people who most need a safety net. I also saw how one effect of rent control was rewarding landlords to do just the barest minimum to keep properties from totally rotting away.

    Flag down any pest control truck and ask the driver how many older Oakland rental houses and apartment building have severe dry rot and termites just under their stucco.

    Your question of why do people buy rental property subject to rent control if they don’t think they can collect enough rent to properly maintain them? The answer is that many of them can make money if they had large downpayments (so their cost of borrowing is low) and they do the minimum work required by law and they have economies of scale to have their own repair crews. And they count on enough turn over that under current city and maybe state law (costa hawkins?) enables vacant units to go to market rate.

    The other answer to your question was not directly addressed in that economist survey. I would expect that a powerful rental control law that restricted increases even after vacancies, would drop the price of rental real estate here. I’d even say that would lower the rent for the occupants of any bulidings under that rent control.

    Don’t assume that’s a good thing. As the survey and some of the posters above pointed out rent control is very hard to target the benefits to people who most need them. Reduced rental real estate values would reduce the property tax revenue going mostly to schools but also to the City’s general fund.

    What you’re trying to fix via rent control are really the consequences of a combo of income and wealth inequality, exaccerabated by lack of economic growth. So housing vouchers, giving money to the people who need help, is a much more efficient way to provide safety net than blanket rent control.

    But politically California cities cannot impose any income taxes to pay for direct housing subsidies. They can only impose (regressive) parcel taxes, fees, fines, utility, and limited (regressive again) sales taxes. And they can impose taxes on gross, not net, business sales and rents.

    There’s no way a city such as Oakland could raise any of those taxes without devastating consequences to local investment and job growth.

    The politically expedient approach is rent control. But it’s a poor substitute with unintended bad consequences.

    Reply
  16. Faith

    So you are clearly not aware of (let alone empathetic to) the massive wage stagnation which has profoundly limited opportunities for upward mobility in this county since the 1970’s. Yes people have choices, choices which are largely informed by their opportunities, opportunities which are largely informed by their circumstances.
    When the property I occupy was purchased after foreclosure two years ago, the new owner began a series of actions, which while technically legal, displaced nearly all of the original tenants.
    I am not sure how aware you are to the rapid changes to the bay area economy or the very serious consequences of those changes.
    My choice is to stay in my home of ten years and pay this (massive) increase or to move into a house with roommates and pay nearly the same amount or move out of my hometown completely.

    The topic digression aside. What is at hand is a question. Is the current law a just law? Let us examine.
    Is there a reasonable cap on the costs being passed on to renters?
    No.
    Is there an opportunity for a tax deduction given the renters added expense? No.
    Is there reasonable accountability that the improvements directly benefit the renter?
    No.
    I am very happy for you that you are afforded the choice of a luxury vehicle. This does not necessarily mean you work harder than others who get paid less. This also does not mean that you are more deserving then others whose prospects are different . . This has nothing to do with an ordinance which when abused profoundly upsets communities as well as individuals.

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  17. chris

    As the author of the above article on Oakland’s Rent Stabilization Ordinance (specifically the capital improvement “pass through” legislation), I’d like to respond to some of the comments posted above.

    To those who argue that rent control does not work, “distorts” the rental housing market or “causes more harm than good”—-this is a myth, a gigantic fallacy.

    Imagine for a moment that rent control in Oakland (or in San Francisco, Berkeley, San Jose, etc) was recinded/made null and void tomorrow. The impact/effect would be catastrophic.

    Overnight, tens of thousands of renters would be at risk of displacement or plunged into a personal affordable housing crisis given that rental property owners would be allowed to impose new, arbitrary higher rents levels upon Oakland’s 60,000 rental units.

    Oakland’s (and San Francisco’s) fixed-income and low income renters would be at risk. Oakland’s celebrated diversity would be put at jeporady.

    I will have more to say on this subject in my next posting shortly.

    Chris Kavanagh

    Reply
  18. Tim

    @chris – That lots of people currently protected by rent control would be facing massive rent hikes if we ended rent control is quite clearly evidence that it does in fact “distort the market.” If there isn’t a market for those higher rents, then obviously they wouldn’t be charged. And while there are drawbacks for people paying way under market rate (namely, they’re stuck where they are and can’t move for any reason), the main burden of rent control falls on everyone else who either pay higher rents than they would otherwise, can’t find any housing available or landlords who make less money than they would otherwise.

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  19. Len Raphael

    Chris, I wouldn’t say no one is proposing eliminating rent control, but I’m definitely not because the immediate misery would be terrible.

    But that doesn’t mean rent control achieves anything closer to economic justice in the longer run of years with a targeted redistribution of wealth or income to those who most need it other than by whether you’re lucked out with a rent controlled apartment that isn’t falling apart.

    What it can be good for is what economists call “smoothing” of rapid rent increases that fundamentally are caused by a combo of rapid increase in higher income tennants and various real and artificial limitations on construction of new housing.

    Question to me becomes what changes should be made to provide effective smoothing. Not easy to get consensus. Eg. gets contentious on what is an improvement, what is deferred maintenance. One tennant might say they don’t need or want an improvement which the owner might say is needed.

    But harder one for me, but I’m sure not you, is the Oakland allowance for a rent hike for acquisition debt principle service.

    Rent control at it’s best gives people time to either find cheaper housing or earn higher incomes. It is a bad long term solution for low wages and insufficient decent housing stock.

    Reply
  20. Tim

    The people who can’t find housing in Oakland and end up in Hayward or Richmond or Concord are not as convenient a group to advocate for but they shouldn’t be ignored. Those are customers who won’t be patronizing Oakland businesses, taxpayers who won’t be paying Oakland taxes and possible entrepreneurs who won’t be opening businesses in Oakland.

    Reply
  21. LibbyCali

    It should be surprising, but somehow it’s just disheartening that the housing advocates in Oakland are advocating for both San Franciscoesque rental laws AND restrictions on new construction. Do you not see how they have not worked to achieve the goals you seek? San Francisco has the strictest rent control ordinance in the country and has the most expensive rental market in the country. You want San Francisco style housing controls, be prepared for San Francisco style prices. It happened to Brooklyn and there are hardly any rentals (affordable or not) left in Manhattan anymore because it because it was far more profitable to go out of the rental business for property owners. Now the same thing has happened in Brooklyn and San Francisco. Every year, there are less and less available rentals at any price.

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  22. Oscar

    Brooklyn currently has no rent control. Because of this entire neighborhoods have been displaced. Schools in Bushwick have closed because there are not enough students to attend. What was a neighborhood of families is now a playground for 20somethings. I literally watched rent go from $1500 to $2100 on a studio in the span of two months.

    Reply
  23. Tim

    The first is about average asking rents, which are obviously very high because lots of people want to live in NYC and as the second article points out, a huge percentage (50%in Manhattan) of the housing is off the market because it is rent stabilized and tenants would be nuts to leave.

    A good explainer on NYC rents based on Scott Stringer’s new report on the situation http://nextcity.org/daily/entry/gentrification-is-not-the-main-reason-rents-are-rising-and-7-other-things-t

    “The median rent in 2012 was $1,100 a month, a number that, like all of those in the report, is inclusive of all units in the city, including ones that are rent stabilized, in public housing complexes, and in neighborhoods where big commercial brokerages do not tread.”

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  24. A

    Faith,

    Do you have control of the wage stagnation that has occurred? Not likely. You do have a choice though on how you spend your money regardless of the macro economic situation. My *example* is about choice of spending your hard earn money and what is considered luxuries. In simplistic terms, needs versus wants. Your choice to sacrifice your future and well being so that you can stay in Oakland is exactly what you said, a choice/want. In my *example*, would you have empathy for me if I had to give up the BMW? Or if I couldn’t afford it?

    Also, at no time in my *example* did I state I deserve more, actually own a luxury car, or that people who work hard deserve less. You can infer all you want, but that’s not what I said or suggested. In the future, I’ll make that explicit disclaimer.

    To your points about the law, what is considered reasonable? If you kept up with the talks, the proposals from the renters side were far from reasonable. By making such demands, it has been shown time and time again, landlords are less willing to make any improvements to their properties. Is that really benefiting all tenants or just a select few?

    As Libby has mentioned, you better be prepared for San Francisco prices and issues if you want to follow their model. I find particularly funny since it’s been mentioned by several people on this board that Oakland isn’t trying to be SF.

    One last note, when considering renting versus buying, one of the key factors to decide is risks. There’s pros and cons for each. Can you guess what are the biggest risks that a renter faces is……………that’s right increases in rent and/or the possibility of being evicted. Fair or not, those are the risks involved and accepted when you decide to do either.

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  25. chris

    As the author of the original article at the top of this thread, I appreciate the number and amount of comments that have been generated regarding Oakland’s rent stabilization ordinance and the concerns expressed about the city’s renter affordability.

    Without rent control, as Ive stated above, literally tens of thousands of Oakland renters would be at risk of displacement or be plunged into a housing affordability crisis/stress.

    Without rent control, Oakland’s fixed income renters, low income renters, artists, seniors and working families (among others) would be at risk.

    Because of Oakland’s rent control ordinance—since 1980—Oakland has managed to preserve its celebrated diversity and unique qualities—-this is undeniable.

    Its important to bear in mind WHY rent control was introduced into Oakland (and San Francisco, Berkeley, etc) back in 1980. At that time, rents suddenly skyrocketed.

    This was result of the 1979 Iranian Revolution which caused a dramatic spike in oil prices and a corresponding jump in energy prices and inflation in the US.

    Inflation reached 12 percent annually in the US at the time causing rents to increase dramatically. Renters across the Bay Area cried out for relief. This is why the cities of Oakland, San Francisco, Berkeley, San Jose, etc passed rent control ordinances to stop the uncontrolled, arbitrary rent increases at the time.

    Without rent control, Oakland, SF and Berkeley would now be significantly different cities….

    Reply
  26. Tom W

    I oppose rent control because it always backfires in so many ways. It gives landlords an incentive to keep their buildings as decrepit as possible. It prevents new rental units from being constructed, because owners fear being subject to rent control in the future. It gives owners a strong incentive to get their tenants to move out by whatever means possible. It causes landlords to evict everyone under the Ellis Act, and to convert the entire building to condos, thereby reducing the number of rental units in Oakland still further.

    The last point regarding the Ellis Act is especially important. Landlords are able to evict everyone and covert a building to condos at any time, under the Ellis Act. The Ellis Act is state law, and cannot be repealed by the voters of Oakland. Rent control legislation gives owners a strong incentive to invoke the Ellis Act, especially when rents are far below market rates.

    For these reasons, rent control has backfired badly everywhere it has been tried in California.

    -Tom W

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