Blogging Bayport Alameda

January 5, 2016

Feather in the cap

Filed under: Alameda — Lauren Do @ 6:05 am

A quick warning to everyone (except folks that are interested in the status quo) if Trish Spencer holds true to her form from School Board meetings here’s how she usually navigates contentious issues.  She will signal, based on her comments, her lack of commitment to an issue (in this case rent stabilization) but when the eventual vote comes down after her comments serve to water down whatever the ordinance eventually is she will then vote against it and say that it doesn’t go far enough.  This has successfully insulated her in the past from difficult decisions such as Lesson 9 when she later changed the narrative as to why she voted against it particularly after some time had lapsed and no one really bothered to challenge her revisionist history.

It’s going to be really important for the rest of the City Council to determine what is important from a policy position and not attempt to water anything down to win a unanimous vote.  In fact it might be better to handle each portion (1) Rent Review or Rent Stabilization and (2) Other tenant protections as separate motions.

Ordinance #1 is the status quo ordinance.  It adds very little except for a relocation assistance payment which is overly complicated and favors the housing provider that it was clearly written by a housing provider.  Disappointingly this overly complex relocation assistance payment has been added to the other two ordinances.  A much more straightforward tenant protection would be to have flat fee without strings much like the City of Los Angeles.

In general it is unclear why Alameda has glommed on to the 8% annual increases as being okay.  Even the comparison in the staff report shows that most cities use a percentage of the CPI to cap annual rent increases.  Alameda has decided to select the highest maximum of 8% (thanks Tony Daysog).

comparison

The thing about relying on San Jose as an example is that San Jose is actively looking at lowering that 8% number and their City Council voted 9 – 2 to update their ordinance.   Other than Housing Providers saying that 8% is the magic number for Alameda and the San Jose example, the notion that annual 8% increases are necessary for “mom and pop” landlords or for an adequate return on investment has not been proven.

By far the Ordinance #3 has the greatest level of tenant protection which wouldn’t allow for “no cause” evictions including the substantial rehabilitation reason that was recently attempted.  I’m not sure if there is sufficient consensus — even among the reasonable members of the City Council — to actually get anything along the lines of Ordinance #3 passes.  But as suggested by a commenter yesterday anything that retains just the RRAC as an option for renter protection will probably see a ballot measure that would go much further than even Ordinance #3.

Prediction: late night marathon City Council meeting.  Something akin to Ordinance #2 gets passed in a 4 – 1 vote.  City Council might be amenable to something less than the 8% cap if renters can sway Jim Oddie and Frank Matarrese.

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23 Comments

  1. I wonder how many multifamily buildings will be converted to condominiums in the next year or two.

    Comment by dave — January 5, 2016 @ 6:41 am

  2. This is spot on. The renter coalition met with City staff (twice), the mayor and each council member. Not ONCE did any of them provide any statistical or financial justification for the 8% increase. Responses to coalition questions typically revolved around the ‘right to a fair return’ for landlords. Indeed, a lot of the conversation lately has been on the topic of fair returns for landlords.

    However, this isn’t what the mayor and council have been asked to solve. The problems to be solved are rapid and large increases in rents and the increase of no-cause evictions. These are what renters brought to the council for nearly two years. It was the persistence of renters coming to council for months and years about this, not the landlords. The landlords weren’t coming to council complaining they weren’t making enough money and that “something needs to be done!” So, the current undertaking is for the purpose of keeping rents affordable and to help keep people in their homes – not ensuring fair returns to landlords.

    Of the 8% increase proposal, the fair question to ask, then, is: Does it solve the problem that the mayor and council have been asked to solve? The answer is clearly and obviously, “No.” If your rent today is $2,000, in 25 months after three consecutive 8% rent increases, your rent will be $2,519. How could anyone possibly think this is the solution? Moreover, in two more years after five years of 8% rent increases, your rent will be $2,939 – nearly $1,000 higher than today. If the mayor and council wanted to make people’s heads explode, this is how to do it.

    The San Jose ordinance is a fairly discredited rent control ordinance because the cap is so high. The renters told this to staff and council members at every turn. Along with this, and as the article notes, the mayor and council were told San Jose will soon lower its rent increase cap to a CPI-related amount or to just 2%. Yet, despite all of this, they all persist with the 8% proposal as if they’d never heard otherwise.

    So, the mayor and council know all of this. They know 8% doesn’t solve the problem. They know 8% is way too high. They know San Jose’s current cap will be drastically reduced soon. They know that rent stabilization is the topic of the day and it is everywhere, and they are beginning to learn just how out-of-touch and out-of-step their 8% proposal is. The only thing they don’t know is how to say ‘no’ to the landlords.

    Heads explode.

    Comment by John K — January 5, 2016 @ 7:13 am

  3. I’m assuming it is not considered a no-fault eviction if the lease term is up and the landlord chooses not to renew at that time. Is that correct? If so, wouldn’t the relocation package provision discourage landlords from renewing leases? If a landlord has to pay a tenant a figure equal to one montb’s rent for every year the tenant has been in residence plus $1,500 when he sells the building if the new owner doesn’t want to assume the current tenants, wouldn’t they be discouraged from renewing leases? We’ve heard of people renting the same apartment or house for 5 or 10 years. Allowing a tenant to renew year after year puts the landlord in a situation where he would be on the hook for a lot of money should he have to sell in a hurry. If when every tenant’s lease is up, the landlord finds another tenant so he can avoid that liability, how does that serve tenants? Who wants to move every year?

    Comment by Denise Shelton — January 5, 2016 @ 7:40 am

  4. Ordinance 1 requires a one year lease to be offered “one time only.” Ordinances 2 and 3 require annual renewal of one year leases. Houses can be sold occupied by tenants. Clearly that would be less appealing to purchasers that want to owner occupy but if it’s being purchased as an investment property it would simply be part of the investment math.

    Comment by Lauren Do — January 5, 2016 @ 7:50 am

  5. Most cities do not tie what adult landlords and adult tenants agree to as rent to the CPI (and what is that anyway — my health insurance premium went up 12% this year). Most cities do not have rent control. Hopefully, council members will have the humility to sunset whatever they pass so that a reassessment can be made in light of all of the unintended consequences sure to follow (one word: Berkeley; yeah, try to find an “affordable” place there). If this is all such a good idea, surely there will be no problem in reenacting it upon sunset.

    Comment by MP — January 5, 2016 @ 8:09 am

  6. Given that ordinances can be repealed or replaced with a majority vote a sunset is unnecessary. Annual reporting requirements and review will reveal if whatever passed is not doing its job.

    Alternately the City Council could place too many strings and conditions that renters go out for a ballot measure which would be nearly impossible to change, politically.

    Comment by Lauren Do — January 5, 2016 @ 8:21 am

  7. Lots of things may be necessary or unnecessary, but it would be wise from a policy point of view. If it’s “doing its job” and its benefits self-evident, it will surely be reenacted upon sunset. Caution should be the approach to any big change such as that proposed. From a political point of view, I doubt that a sunset provision would be the tipping point for a very uncertain ballot measure, but I could be wrong.

    Comment by MP — January 5, 2016 @ 8:35 am

  8. Sunset provision, insistence on 8% annual cap on rent increases, keeping RRAC structure in place without any additional meaningful tenant protections…these will all lead to ballot measure.

    Comment by Lauren Do — January 5, 2016 @ 8:40 am

  9. With 3 different ordinances and 5 council members with differing ideas on how to fix the problem you think the vote will be 4-1? HA! The only ordinance that will pass is the one to extend the moratorium.

    Comment by Eyeroll — January 5, 2016 @ 8:47 am

  10. What worries me is that these proposed regulations seem to assume that every landlord is loaded with dough and can afford all these added provisions. I know several people who just rent out a house they inherited or bought for a little extra cash flow. Having to pay for longtime tenants relocation would be a huge financial hit to them. If something happened that required them to do a major upgrade, they’d have that expense on top of everything else. We’re going from 0 to 60 here with all these add ons. They should just institute a 5% per year increase maximum and forbid no-fault evictions with a few exceptions and leave it at that. The more complicated they make this the more unintended consequences we’re going to see.

    Comment by Denise Shelton — January 5, 2016 @ 8:59 am

  11. If you own a property that you don’t need to live in and rent out that property for income chances are you’re doing significantly better than the renter who can’t afford an annual 7.99% increase.

    Simply put, if you don’t want to pay for relocation costs, don’t evict your tenant without cause.

    Comment by Lauren Do — January 5, 2016 @ 9:08 am

  12. #10. If a landlord truly needs more money, she can file an appeal or for an exemption to the cap, have a hearing and prove the need for a higher rent. Pretty simply, really.

    Comment by John K — January 5, 2016 @ 9:20 am

  13. How much of the on-street parking are the news vans going to monopolize during this meeting? Avoid this block if driving to and from Park Street from West-Central Alameda tonight.

    Comment by vigi — January 5, 2016 @ 10:02 am

  14. 11. Aren’t there instances when the eviction is not the tenant’s fault but because the landlord needs to do upgrades or major repairs? Isn’t it possible that properties will not be improved or repaired because landlords won’t want to pay to relocate tenants?

    Comment by Denise Shelton — January 5, 2016 @ 10:08 am

  15. 5. how is comparing one dysfunctional realm ( health care) to another, relevant to justify a position on the latter? Like, gee, rents aren’t as bad as health care so quit complaining.

    Bernie, Bernie, Bernie.

    Comment by Mark Irons — January 5, 2016 @ 10:14 am

  16. 14. Sure but all of the ordinances would require a capital improvement plan for substantial rehabilitation to be on file with the City (personally permits should be in the pipeline as well) prior to any tenant evictions. This would be a cost of maintenance on an asset owned by the property owner.

    Of course minor repairs and some upgrades can be done without eviction. If a property owner opts to not improve or repair their property because they don’t want to pay relocation benefits well that’s up to them.

    Comment by Lauren Do — January 5, 2016 @ 10:20 am

  17. No one has addressed the key questions yet in this discussion…..What type of city do we want? What is best for the financial health of the City of Alameda? What is best for local city and property taxes? What is best for the development of Alameda Point? What is best for our local schools and the inevitable parcel taxes and bonds? This is what I want the Council to wrestle with…

    I do agree there will be a lot more automatic 8% raises to allow landlords to pay for the relocation costs and save up for major repairs. It would be illogical to think anything else. But a bad ordinance will invite a lawsuit exposing the City to liability as the School District already learned the hard way. And Spencer was the only one who saw it and tried to warn them. So if she takes time to think about this issue deeply, it’s OK by me.

    Comment by Captain Obvious — January 5, 2016 @ 12:19 pm

  18. Trish Spencer didn’t seem to concerned about exposing the City of Alameda to liability when she voted against the contractual obligation to fund the negotiated health plan. Without the three other adults in the room recognizing their obligations if the vote were to have gone with Trish Spencer being in the majority we would have a lawsuit on our hands from our own public safety groups.

    Comment by Lauren Do — January 5, 2016 @ 12:28 pm

  19. correct. should have used a more relevant dysfunctional realm to compare: B-Town

    Comment by MP — January 5, 2016 @ 2:46 pm

  20. Hi all, We heard that some community members had concerns about the lack of public wifi in Kofman for tonight’s meeting. Please know that the AUSD tech department established a public system there today. It is named “AUSD Public,” and it requires no password to access. I tweeted this a few minutes ago via @AUSDNews — I would be grateful if people could help spread the word!

    Comment by Susan Davis (Community Affairs, AUSD) — January 5, 2016 @ 4:14 pm

  21. #18, who voted with her????.

    Comment by John P. — January 5, 2016 @ 4:39 pm

  22. 21. My bad. I was answering 15

    Comment by MP — January 5, 2016 @ 4:46 pm

  23. John P.: Tony Daysog, who else?

    Comment by Lauren Do — January 5, 2016 @ 4:55 pm


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