Oakland will cap rent increases at 3% under new ordinance

Oakland will cap rent increases at 3% under new ordinance

OAKLAND — In a victory for tenants, the Oakland City Council voted Tuesday to cap rent increases at 3% instead of 6.7%, which the current law would have allowed come July.

“Tenants are facing an unprecedented rent hike,” Councilmember Carroll Fife, who proposed the change to limit the rent increase, said before the vote Tuesday as she urged her colleagues to approve it.

Under rent control policy in Oakland, the city allows for an annual rent increase based on the Consumer Price Index, or inflation. This year, that formula allows for increasing the rent (for the same tenants) by 1.9%, but it would jump to 6.7% in July, thanks to increases in indices that are accounted for in Oakland’s formula.

A 6.7% rent increase would be the largest increase allowed under the ordinance in its decades-long history. For the last 20 years, the allowable rent rate increases have ranged from 0.6% and 3.6%, depending upon the CPI.

Fife’s ordinance — which was approved by six members of the council, excluding Noel Gallo, who voted “no,” and Loren Taylor, who abstained — changes the allowable rent increase under Oakland’s charter either 60% of the percentage increase in the Consumer Price Index or 3%, whichever is lower.

Like all rent control laws in California, the ordinance can only apply to certain types of housing units. It generally applies to residential rental buildings with two or more units built before 1983 and does not cover housing units built after Jan. 1, 1983, those that are regulated or subsidized by the government, those in a nonprofit co-op that are owned and occupied by a majority of residents, and all single-family homes.

Chanee Franklin Minor, the manager of Oakland’s Rent Adjustment Program, called FIfe’s proposal “sound public policy.”

“The (rent control) formula was drafted 20 years ago, and now we find ourselves in a very different situation with the prolonged housing crisis, as well as the pandemic,” Franklin Minor said. “We’ve heard from many renters fearful of becoming homeless.”

For more than two hours, dozens of people called in to the council meeting to comment on the proposal. Tenants pleaded with the council to pass the ordinance, with many explaining that a 6.7% rent increase would push them out of their homes.

“My landlord increases the rent by the maximum amount every year, even while ignoring needed repairs,” said one educator named Alexander who spoke to the council, noting that his salary does not keep up with the rapid pace of the rent increases.

Others said that rent controlled apartments are the only way they are able to stay in Oakland, or that they often have to move in order to chase affordable rents across the city.

“I was born and raised in Oakland, and between ages of 10 and 18, my family had to move six times,” one Oakland resident who identified herself as Sierra during the public comment period told the council.

“As a nonprofit worker, I would not be able to continue to afford living in Oakland without my rent-controlled unit,” resident Lauren Chiarulli said during the meeting.

Landlords, on the other hand, urged the council to reject or modify it as they seek to keep up with the costs of inflation.

Danny Gonzalez, a resident who said he owns a duplex, said “small” landlords like himself are being squeezed by the increase in inflation and other costs.

“It seems to me that the city is closing off pathways for us — Black and Brown people — to close the racial wealth gap through property ownership,” he said, asking the council to consider an amendment in allowing landlords to “bank” the 3.7% of the 6.7% increase that would be cut this year, in order to increase the rent in the next few years, regardless of the CPI.

Councilmember Loren Taylor expressed a similar sentiment, noting that “We are leaning toward more corporate and turning the majority of our housing stock into those that will be owned by large corporations because they can absorb the cost. It gets too difficult to run a rental property here in Oakland and others.”

Taylor, who is running for mayor this year, offered an alternate proposal to allow for 3% rent increases under city law instead of the formula that depends upon CPI. That motion was rejected by all the councilmembers except for Noel Gallo, who voted in support.

Taylor owns a single-family rental property that is not covered by the Rent Adjustment Ordinance.

Franklin Minor, the Rent Adjustment Program manager, pointed out that landlords have multiple options for petitioning the city to allow them to pass along costs to their tenants for things like utility increases, capital improvements or other operating costs. She encouraged property owners to get in touch, and said the program staff conducts regular outreach for “small” landlords.

Many of the councilmembers who voted in support of the ordinance remarked on the urgency and scope of the housing crisis in Oakland, and the desperate situation for many renters.

“This is one concrete way I think we can ensure more families don’t become homeless,” said Council President Nikki Fortunato Bas, of Fife’s ordinance. Fortunato Bas also said the issue points to the need for the city to have a rent registry to keep good data of renters, landlords and price changes across the city — an issue the City Council will take up in the future.

“There is a tendency in the state to shift dramatically to the lens of the rental property owner,” said Councilmember Dan Kalb. “Shifting to that takes away from the more urgent lens of the renter.

“No ordinance is going to have only great consequences and no negative consequences for anyone – those laws don’t exist, or if they do, they were passed decades ago,” Kalb continued. “So we have to decide where we are going to land, and focus on those who may need protection the most. To me, that falls on looking through the lens of the renter.”

Soruce : https://www.mercurynews.com/2022/05/31/rent-control-oakland-will-cap-rent-increases-at-3-under-new-ordinance/

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