RENT STABILIZATION BOARD Regular Meeting AGENDA

Rent Stabilization Board

RENT STABILIZATION BOARD Regular Meeting

Maudelle Shirek Building Monday, April 24, 2017 2134 Martin Luther King Jr. Way 7:00p.m. Council Chambers, Second Floor Broadcast Live on KPFB- 89.3 and BTV Cable Channel33 Live Webcasting at www.cityofberkeley.info/rent

Teleconference location: 15 Kabanbai Batyr Avenue, Astana, 010010, Kazakhstan

This meeting will be conducted in accordance with the Brown Act, CA Government Code Section 54953(b)(2), and Teleconferencing. Any member of the public may attend this meeting at either location. Questions regarding this matter may be addressed to Aimee Mueller, Secretary to the Board, at (51 0) 981-4932.

AGENDA

*Times allotted for each item are approximate and may be changed at the Board' s discretion during the course of this meeting.

1. Roll call- 1 min.*

2. Approval of Agenda - 1 min.*

3. Public Forum - 3 min. allotted per speaker*

4. CONSENT ITEMS - 2 min.*

a. Approval of the March 20th Regular Meeting minutes

b. Recommendation that the Board repeal Regulation 509 [Definition ofNew Construction for Legal Rental Units] and adopt Regulation 510 [Definition of New Construction for Units That Lack a Certificate of Occupancy] -Second reading (IRA/AGA/Registration Committee)

c. Recommendation that the Board adopt Regulation 520 [Exemptions for Fraternities and Sororities] - Second reading (IRA/AGA/Registration Committee)

d. Recommendation that the Board adopt Regulation 808 [Registration Fee for Seasonal Rentals in Fraternities and Sororities] -Second reading (IRA/AGA/Registration Committee)

2125 Milvia Street, Berkeley, California 94704 TEL: (510) 981-7368 (981-RENT) • TDD: (510) 981-6903 • FAX: (510) 981-4940 E-MAIL: [email protected] • DINTERNET: www.cityofberkeley. info/rent/ Berkeley Rent Stabilization Board Meeting Agenda Monday, April24, 2017 Page 2

e. Recommendation that the Board adopt Regulation 1383 [Owner Move-In and Ellis Act Relocation Assistance Disputes- B.M.C. §§ 13.76.130A.9 and 13.77.055]- Second reading (IRA! AGA/Registration Committee)

5. APPEAL- 8:30 p.m.** - 30 min.* ** This appeal will not be heard before 8:30p.m. but may be heard any time thereafter.

Case No. L-4222 (1902 Virginia Street)

The hearing examiner denied a Regulation 1267 capital improvements rent adjustment for seismic retrofit and structural work performed at the premises. Although the work qualified for a capital improvements rent adjustment, the landlord's recent vacancy rent increases completely offset the cost of the work. The landlords appeal the decision; claiming that the decision is unjust. This claim is does not constitute facts or argument in support of the appeal. Furthermore, upon review of the record, the hearing examiner's calculations are correct. Therefore, staff recommends that the decision be affirmed.

6. ACTION ITEMS

a. From Board Members, Executive Director and Committees

(1) Resolution 17-02 to be presented to Jacquelyn Morgan for her years of service to the Berkeley Rent Stabilization Program - 10 min.*

(2) Budget update and recommendation to adopt Resolution 17-03 increasing the maximum expenditure level for the 2017-2018 fiscal year (Budget & Personnel Committee and the Executive Director)- 15 min.* TO BE DELIVERED

(3) Recommendation to update the Rent Stabilization Program Fee Schedule by amending Resolution 03-24 and to set the fee for determining eligibility for short-term rentals (Executive Director)- 10 min.*

7. INFORMATION, ANNOUNCEMENTS AND NEWS ARTICLES

Please Note: The Board may move Information Items to the Action Calendar.

a. Reports from Board Members/Staff

(1) Update on Short-Term Rental Ordinance Implementation Timeline (Executive Director) - 2 min.*

(2) Market Medians Report through the Fourth Quarter of2016 (Executive Director)- 2 min.* Berkeley Rent Stabilization Board Meeting Agenda Monday, April 24, 2017 Page3

(3) Report agendized for the February 27- March 24, 2017 session of the United Nations' Human Rights Council titled, "Report of the Special Rapporteur on adequate housing as a component ofthe right to an adequate standard ofliving, and on the right to non-discrimination in this context" (Executive Director)- 2 min.*

(4) March 20,2017 memo regarding the Rent Board's Commissioner E-mail Policy (Commissioner So to-Vigil) - 2 min.*

(5) Report from California State Representatives Denny Heck, Juan Vargas and Stephanie Murphy on the New Dem Housing Task Force (Commissioner Tregub)- 2 min.*

(6) March 9, 2017 e-mail communication from Julie Ashworth, a long-term Berkeley tenant, regarding the adverse impact of Airbnb on her housing situation (Executive Director) - 2 min.*

(7) March 22, 2017 communication from Jonathan Weldon to Berkeley City Attorney questioning the legality of Ellis Act relocation fees (Executive Director) - 2 min.*

(8) March 29, 2017 Fortune. com article by Annalyn Kurtz titled, "Black and Hispanic Communities Are Spending Almost Half Their Incomes on Rent" (Executive Director) - 1 min.* http:// fortune.com/20 17/03 /3 0/rent -black -hispanic-neighborhoods/

(9) April 5, 2017 article from The Atlantic CityLab by Kriston Capps titled, "In California, Landlords Threaten Immigrant Tenants with Deportations" (Executive Director) - 1 min.* https :/ /www.citylab.com/housing/20 17 /04/landlords-are-threatening -immigrant tenants-with-ice-deportations/5213 70/

8. COMMITTEE/BOARD MEETING UPDATES AND ANNOUNCEMENTS

a. Budget and Personnel- 4 min.*

( 1) April 4th agenda

(2) April 17th agenda

(3) April 25th agenda

b. Eviction/Section 8/Foreclosure- 2 min.*

(1) April 13th agenda

(2) April 26th agenda

c. Habitable & Sustainable Housing (HASH) - 1 min.* Berkeley Rent Stabilization Board Meeting Agenda Monday, April24, 2017 Page 4

d. IRA, AGA and Registration - 1 min.*

e. Outreach - 4 min.*

(1) February 24th minutes

(2) April 7th agenda

f. 4 x 4 Joint Committee on Housing: City Council/Rent Board - 1 min.*

g. 4 x 4 Ad Hoc Committee on Safety, Occupancy and Affordability of Converted Artist Warehouses and Workspaces- 1 min.*

h. Ad Hoc Committee on the Effects of Costa-Hawkins- 1 min.*

1. Ad Hoc Committee on Technology Issues- 1 min.*

J. Ad Hoc Replacement Committee to Fill Board Vacancy - 1 min. *

k. 2 x 2 x 2 Committee on Housing: Council I Rent Board I BUSD- 1 min.*

1. Updates and Announcements regarding future Special Meetings - 1 min.* The next Special Meeting ofthe Rent Board will take place on Monday, May 1 st at 7:00p.m.

m. Discussion of items for possible placement on future agenda - 2 min.*

9. ADJOURNMENT

COMMUNICATION ACCESS INFORMATION: This meeting is being held in a wheelchair-accessible location. To request disability-related accommodation(s) to participate in the meeting, including auxiliary aids or services, please contact Aimee Mueller at 981-4932 or 981-6903 (TDD) at least three business days before the meeting date.

Please refrain from wearing scented products to this meeting. Item 4.a.

Rent Stabilization Board

RENT STABILIZATION BOARD Regular Meeting Minutes-- Unapproved

Maudelle Shirek Building Monday, March 20, 2017 2134 Martin Luther King Jr. Way 7:00p.m. Council Chambers, Second Floor Broadcast Live on KPFB- 89.3 and BTV Cable Channel33 Live Webcasting at www.cityofberkeley.info/rent

1. Roll call - Chair Selawsky called the meeting to order at 7:06 p.m. Aimee Mueller called roll. Commissioners present: Chang, Laverde-Levine, Simon-Weisberg, Soto-Vigil, Townley, Tregub (via teleconference), Selawsky Commissioners absent: Murphy Staff present: Brown, Darrow, Kelekian, Law (in audience), Mueller, Shoquist Mayor Arreguin was also present.

2. Approval of Agenda

M/S/C (Soto-Vigil/Simon-Weisberg) MOTION TO HOLD OVER ACTION ITEM 8.A.(l) TO THE APRIL 24TH REGULAR MEETING IN LIGHT OF COMMISSIONER MURPHY'S UNEXPECTED ABSENCE DUE TO A FAMILY EMERGENCY. Roll call vote. YES: Chang, Simon-Weisberg, Soto-Vigil, Tregub, Selawsky; NO: Laverde-Levine, Townley; ABSTAIN: None; ABSENT: Murphy. Carried: 5-2-0-1.

M/S/C (Simon-Weisberg/Soto-Vigil) MOTION TO ADJOURN MEETING IN MEMORY OF LESLIE GORDON AND CHRISTOPHER J. MURPHY; MOVE ACTION ITEMS 8.a.(3), 8.a.(4) AND 8.a.(5) TO CONSENT WITH Friendly Amendment by Tregub (accepted): MOVE SPECIAL PRESENTATION ITEMS 5.b.(l) AND 5.b.(2) TO CONSENT, AND ACTION ITEMS 8.a.(7), AND 8.a.(8) TO CONSENT WITH MODIFICATIONS (see Consent vote for modifications). Roll call vote. YES: Chang, Laverde-Levine, Murphy, Simon-Weisberg, Soto-Vigil, Townley, Selawsky; NO: None; ABSTAIN: None; ABSENT: Murphy. Carried: 7-0-0-1.

M/S/C (Selawsky/Simon-Weisberg) MOTION TO RECONSIDER VOTE MOVING ACTION ITEM 8.a.(l) TO THE APRIL 24,2017 REGULAR MEETING DUE TO COMMISSIONER TOWNLEY'S PLANNED ABSENCE FROM THAT MEETING FOR WHICH HE PROVIDED NOTICE AT THE TIME THE MEETING SCHEDULE WAS SET. Roll call vote. YES: Laverde Levine, Simon-Weisberg, Soto-Vigil, Townley, Tregub, Selawsky; NO: None; ABSTAIN: Chang; ABSENT: Murphy. Carried: 6-0-1-1.

2125 Milvia Street, Berkeley, California 94704 TEL: (510) 981-7368 (981-RENT) • TDD: (510) 981-6903 • FAX: (510) 981-4940 E-MAIL: [email protected] • DINTERNET: www.cityofberkeley.info/rent/ Berkeley Rent Stabilization Board Meeting Minutes Monday, March 20,2017 Page 2

M/S/C (Simon-Weisberg/Soto-Vigil) MOTION TO HOLD OVER ACTION ITEM 8.a.(l) TO THE MAY 15,2017 REGULAR MEETING. Roll call vote. YES: Chang, Laverde-Levine, Simon Weisberg, Soto-Vigil, Tregub, Selawsky; NO: None; ABSTAIN: Townley*; ABSENT: Murphy. Carried: 6-0-1-1.

*Commissioner Townley abstained out of respect for those who took the time to attend tonight's meeting in anticipation of a selection being made.

3. Public Forum- There were 14 speakers. Norma Harrison spoke in recognition of former Commissioner Katherine Harr. Pam Webster spoke in recognition of former Commissioner Katherine Harr. Moni Law spoke in recognition of former Commissioner Katherine Harr, and regarding homeless students at Cal. Francisco Martinez spoke in support ofRajib Chowdhury's candidacy for the Board vacancy. Kostantino Johal spoke in support ofRajib Chowdhury' s candidacy for the Board vacancy. Fred Dodsworth spoke in recognition of former Commissioner Katherine Harr. Matthew Lewis spoke in support of Stefan Elgstrand's candidacy for the Board vacancy. Mark Janowitz spoke about the necessity of support for tenants and tenants' rights, and in recognition of former Commissioner Katherine Harr. Christine Schwartz spoke in support of the Tenant Protection Ordinance and in recognition of former Commissioner Katherine Harr. Maria Poblet spoke in support of her candidacy for the Board vacancy and in recognition of former Commissioner Katherine Harr. Mayor Arreguin spoke in recognition of former Commissioner Katherine Harr. Brendan Darrow spoke in recognition of former Commissioner Katherine Harr. Marcia Levenson spoke in recognition of former Commissioner Katherine Harr. Elisa Cooper spoke in recognition of former Commissioner Katherine Harr.

4. SPECIAL ORDER OF BUSINESS

a. Resolution to be presented to former Commissioner Katherine Harr acknowledging her nearly seven years of service as a Rent Board Commissioner - Chair Selawsky read aloud the Resolution honoring former Commissioner Katherine Harr; staff and Commissioners made comments in appreciation of her service. Former Commissioner Harr also addressed the Board.

5. SPECIAL PRESENTATION by Brian Augusta & Associates, Rent Board Legislative Advocate, on housing-related legislation

a. State Legislative Report - Brian Augusta addressed the Board. Commissioner Simon Weisberg asked Mr. Augusta for proposals about ways Commissioners can be more involved with providing guidance to state legislators.

b. Recommendations concerning two pieces of legislation: (1) Assembly Bill1506 (Bloom)- Repeal of Costa-Hawkins Act (2) Assembly Bill 982 (Bloom) - One-Year Notice for Ellis Evictions Items S.b.(l) and 5.b.(2) were moved to Consent via an earlier vote of the Board. Berkeley Rent Stabilization Board Meeting Minutes Monday, March 20,2017 Page 3

M/S/C (Soto-Vigil/Townley) MOTION TO SUPPORT AB 1505 (BLOOM), AB 291 (CHIU), SB 721 (HILL), AND OPPOSE AB 1242 (GRAYSON). Roll call vote. YES: Chang, Laverde Levine, Simon-Weisberg, Soto-Vigil, Townley, Tregub, Selawsky; NO: None; ABSTAIN: None; ABSENT: Murphy. Carried: 7-0-0-1.

6. CONSENT ITEMS

1 a. Approval of the February 6 h Regular Meeting minutes b. Approval of the February 27th Special Meeting minutes

1 c. Stipend reimbursement request by Commissioner Soto-Vigil (held over from February 6 h meeting)

Items S.b.(l), 5.b.(2), 8.a.(3), 8.a.(4), 8.a.(5), 8.a.(7), and 8.a.(8) were moved to Consent by an earlier vote of the Board.

M/S/C (Soto-Vigil/Laverde-Levine) APPROVE SPECIAL PRESENTATION ITEMS 5.b.(l), AND 5.b.(2); CONSENT ITEMS 6.a., 6.b., AND 6.c.; ACTION ITEMS 8.a.(3), 8.a.(4), 8.a.(5), AND 8.a.(6) AS WRITTEN; AND ACTION ITEMS 8.a.(7) and 8.a.(8), MODIFYING 8.a.(7) TO CORRECT "BONITA" TO "BONTA," AND 8.a.(8) TO THANK COUNCIL FOR THEIR ACTION RATHER THAN RECOMMENDING THAT THEY TAKE ACTION. Roll call vote. YES: Chang, Laverde-Levine, Simon-Weisberg, Soto-Vigil, Townley, Tregub, Selawsky; NO: None; ABSTAIN: None; ABSENT: Murphy. Carried: 7-0-0-1.

7. APPEAL- Case No. IRD-119 (1635 Julia Street, Unit 10) Appellant: Was not present. Respondent: Albert Sukoff was present.

M/S/C (Townley/Laverde-Levine) MOTION TO UPHOLD THE HEARING EXAMINER'S DECISION. Roll call vote. YES: Chang, Laverde-Levine, Simon-Weisberg, Soto-Vigil, Townley, Tregub, Selawsky; NO: None; ABSTAIN: None; ABSENT: Murphy. Carried: 7-0-0-1.

8. ACTION ITEMS

a. From Board Members, Executive Director and Committees

(1) Discussion and possible action regarding search results and recommendation(s) to the Board of the most qualified candidate(s) for filling the vacant seat on the Board (Ad Hoc Replacement Committee to Fill Board Vacancy)

THIS ITEM WAS HELD OVER TO THE MAY 15,2017 REGULAR BOARD MEETING BY AN EARLIER VOTE OF THE BOARD. Berkeley Rent Stabilization Board Meeting Minutes Monday, March 20,2017 Page 4

(2) Recommendation that the Board repeal Regulation 509 [Definition of New Construction for Legal Rental Units] and adopt Regulation 510 [Definition of New Construction for Units That Lack a Certificate of Occupancy] on first reading (IRA/AGA/Registration Committee)

M/S/C (Tregub/Chang) MOTION TO REPEAL REGULATION 509 ON FIRST READING. Roll call vote. YES: Chang, Laverde-Levine, Simon-Weisberg, Soto Vigil, Townley, Tregub, Selawsky; NO: None; ABSTAIN: None; ABSENT: Murphy. Carried: 7-0-0-1.

M/S/C (Tregub/Chang) MOTION TO ADOPT REGULATION 510 ON FIRST READING. Roll call vote. YES: Chang, Laverde-Levine, Simon-Weisberg, Soto Vigil, Townley, Tregub, Selawsky; NO: None; ABSTAIN: None; ABSENT: Murphy. Carried: 7-0-0-1.

(3) Recommendation that the Board adopt Regulation 520 [Exemptions for Fraternities and Sororities] on first reading (IRA/AGA/Registration Committee)

This item was moved to the Consent Calendar by an earlier vote of the Board.

(4) Recommendation that the Board adopt Regulation 808 [Registration Fee for Seasonal Rentals in Fraternities and Sororities] on first reading (IRA/AGA/Registration Committee)

This item was moved to Consent by an earlier vote of the Board.

(5) Recommendation that the Board adopt Regulation 1383 [Owner Move-In and Ellis Act Relocation Assistance Disputes- B.M.C. §§ 13.76.130A.9 and 13 .77.055] on first reading (IRA/AGA/Registration Committee)

This item was moved to Consent by an earlier vote of the Board.

(6) Recommendation to have staff and the Outreach Committee take appropriate steps to publicize the Model Green Lease Addendum as a voluntary addition to new and existing leases (Habitable & Sustainable Housing Committee)

This item was included in the vote on Consent items.

(7) Recommendation that the Rent Board endorse Assembly Bill (AB) 1506 (Bonta), AB 71 (Chiu) and Senate Bill 2 (Atkins) (Commissioners Tregub and Simon Weisberg)

This item was moved to Consent by an earlier vote of the Board.

(8) Recommendation regarding Denunciation of the Presidential Executive Order to Build a Wall Along the U.S.-Mexico Border; Establishing a Policy for the Rent Board to Refrain from Entering into New or Amended Contracts with Vendors that Materially Support the Building of Said Border Wall; and Forwarding Berkeley Rent Stabilization Board Meeting Minutes Monday, March 20,2017 Page 5

Recommendation to CalPERS and the Berkeley City Council of These Actions (Commissioners Laverde-Levine, Murphy, Soto-Vigil and Tregub)

This item was moved to Consent by an earlier vote of the Board.

(9) Proposal to approve staff recommendations on the following requests for waiver of late registration penalties (Executive Director)

Ministerial Waivers Waiver No. Property Address

4611 3108 Harper Street 4612 1343 Martin Luther King, Jr. Way 4613 1721 San Pablo A venue 4614 2405 Sacramento Street 4616 1706 Derby Street 4617 2231 Cedar Street 4618 1607 Prince Street 4619 20 19 7th Street 4620 1349 Josephine Street 4621 1210 Masonic A venue

Discretionary Waivers Waiver No. Property Address

4600 2919 Fulton Street 4602 2840 Grant Street 4606 1625 8th Street 4608 1549 Ashby A venue 4615 3228 Adeline Street

Commissioner Simon-Weisberg pulled Waiver Nos. 4600,4606 and 4615.

M/S/C (Townley/Laverde-Levine) APPROVE ALL MINISTERIAL WAIVERS AND DISCRETIONARY WAIVER NUMBERS 4602 AND 4608 AS WRITTEN. Roll call vote. YES : Chang, Laverde- Levine, Simon-Weisberg, So to-Vigil, Townley, Tregub, Selawsky; NO: None; ABSTAIN: None; ABSENT: Murphy. Carried: 7-0-0-1.

M/S/C (Townley/Chang) WAIVE TWENTY-FIVE PERCENT (25%) OF THE PENALTY FOR WAIVER NUMBER 4600. Roll call vote. YES : Chang, Laverde Levine, Simon-Weisberg, Soto-Vigil, Townley, Selawsky; NO: None; ABSTAIN: Tregub; ABSENT: Murphy. Carried: 6-0-1-1.

M/S/C (Townley/Laverde-Levine) APPROVE THE STAFF RECOMMENDATION FOR WAIVER 4606, Friendly Amendment by Simon-Weisberg (accepted): TO OBTAIN THE WAIVER, THE LANDLORD MUST ATTEND A LANDLORD SEMINAR OFFERED BY THE RENT STABILIZATION PROGRAM WITHIN THREE MONTHS. IF THE LANDLORD FAILS TO ATTEND THE TRAINING Berkeley Rent Stabilization Board Meeting Minutes Monday, March 20,2017 Page 6

WITHIN THE REQUIRED TIME, THE FULL PENALTY WILL BE IMPOSED. Roll call vote. YES: Chang, Laverde-Levine, Simon-Weisberg, Soto-Vigil, Townley, Tregub, Selawsky. NO: None; ABSTAIN: None; ABSENT: Murphy. Carried: 7-0-0-1.

MSF (Tregub/Townley) FOR WAIVER 4615, SUBSTITUTE MOTION TO APPROVE THE RECOMMENDATION AS WRITTEN. Roll call vote. YES: Townley, Tregub, Selawsky; NO: Chang, Laverde- Levine, Simon-Weisberg, So to-Vigil; ABSTAIN: None; ABSENT: Murphy. Failed. 3-4-0-1.

MSF (Simon-Weisberg/Laverde-Levine) FOR WAIVER4615, MAIN MOTION TO IMPOSE THE FULL AMOUNT OF THE PENALTY. Roll call vote. YES: Chang, Laverde-Levine, Simon-Weisberg, Soto-Vigil; NO: Townley, Tregub, Selawsky; ABSTAIN: None; ABSENT: Murphy. Failed: 4-3-0-1.

M/S/C (Chang/Townley) FOR WAIVER 4615, MOVE TO WAIVE THIRTY-FIVE PERCENT (35%) OF THE PENALTY. Roll call vote. YES : Chang, Laverde-Levine, Soto-Vigil, Townley, Tregub, Selawsky; NO: Simon-Weisberg; ABSTAIN: None; ABSENT: Murphy. Carried: 6-1-0-1.

9. INFORMATION, ANNOUNCEMENTS AND NEWS ARTICLES

Please Note: The Board may move Information Items to the Action Calendar.

a. Reports from Board Members/Staff

ALL ITEMS BELOW WERE MENTIONED AND/OR BRIEFLY DISCUSSED. UNDERLINED ITEMS HAVE ADDITIONAL COMMENTS AND/OR INFORMATION.

( 1) Fiscal Year 2016/2017 Mid-Year Budget Update (Executive Director) -The Executive Director reported that budget development is underway. Of note, the cost of benefits for all City employees has increased dramatically without a corresponding increase in the level of benefits provided. Also, costs associated with "Misc. Professional Services" are higher than projected because the Board previously voted to increase funding to the East Bay Community Law Center, and the Eviction Defense Center.

(2) Update on proposed Tenant Protection Ordinance (TPO) (Executive Director)

(3) Report on presentation to City Council regarding possible revisions to the Demolition Ordinance (Executive Director)

( 4) Update on Short-Term Rental Ordinance (Executive Director)

(5) Amendment to the Affordable Housing Mitigation Fee (Executive Director)

(6) Update on Housing California Rent Control Panel (Executive Director & Commissioner Simon-Weisberg) - Verbal Berkeley Rent Stabilization Board Meeting Minutes Monday, March 20,2017 Page 7

(7) February 14, 2017 Memorandum to Council regarding the Rent Board's concerns with the proposed Short-Term Rentals Ordinance (Chair Selawsky and Executive Director)

(8) February 14, 2017 communication to Council regarding the Rent Board's support for Our Beloved Community Proposal: Alameda County Anti-Displacement Funding and Policy Plan (Chair Selawsky and Executive Director)

(9) March 3, 2017 communication to Council regarding Creating Additional Administrative Powers for Zoning Officer to Deny or Hold in Abeyance New Permit Applications Until Outstanding Code Enforcement Issues are Resolved (Chair Selawsky)

(10) March 3, 2017letter to Ben Metcalf, Director of California Department of Housing and Community Development, with Board's comments on the draft 2025 Statewide Housing Assessment (Executive Director)

(11) Flyer for March 16, 2017 workshop at the Alameda County Law Library on Recent Changes to the Berkeley Rent Control Ordinance presented by Rent Board Staff Attorneys Matt Brown and Matthew Siegel (Executive Director)

(12) March 20, 2017 memo regarding Commissioner E-mail Policy (Commissioner Soto- Vigil) .

(13) February 7, 2017 Sacramento Bee. com article by Christopher Cadelago titled, "John Chiang opens committee for 2018 affordable housing initiative" (Vice-Chair Laverde- Levine) http://www.sacbee .com/news/politics-govemment/ capitol alert/article131338709.html

(14) February 27, 2017 The Guardian.com article by Olivia Solon titled, "Scraping by on six figures? Tech workers feel poor in Silicon Valley's wealth bubble" (Vice-Chair Laverde- Levine) https://www. theguardian.com/technology/20 17 /feb/27 /silicon-aa-cost -of-living crisis-has-americas-highest-paid-feeling-poor

(15) Article in the March 2017 issue of Western City magazine titled, "Finding Solutions to the Affordable Housing Shortage" (Vice-Chair Laverde-Levine) http://www.westerncity .com/Western-City/March-2017 /Finding-Solutions-to-the Affordable-Housing-Shortage/

(16) March 2, 2017 KQED.org article by Ben Christopher titled, "To Attract Teachers, Pricey School Districts Are Becoming Their Landlords" (Vice-Chair Laverde Levine) https :1 /ww2.kged.org/news/20 17 /03 /02/to-attract-teachers-pricey-school-districts are-becoming-their-landlords/ Berkeley Rent Stabilization Board Meeting Minutes Monday, March 20,2017 Page 8

(17) March 5, 2017 MercuryNews.com article by Tracey Kaplan titled, "Mobile home park victory: A negligent owner, $10 million settlement and the San Jose residents who prevailed" (Vice-Chair Laverde-Levine) http://www.mercurynews.com/20 17/03/05/4434205/

(18) March 6, 2017 LA Times. com article by Liam Dillon titled, "California won't meet its climate change goals without a lot more housing density in its cities" (Vice-Chair Laverde- Levine) http:// www.latimes. com/politics/la-pol-ca-housing -climate-change-goals-20 1703 06- story.html

( 19) March 6, 2017 Redfin. com article by N ela Richardson titled, "How Ben Carson and HUD Can Begin to Solve America's Housing Affordability Crisis" (Vice-Chair La verde-Levine) https://www.redfin.com/blog/2017/03/how-ben-carson-and-hud-can-begin-to-solve americas-housing -affordabili ty -crisis .html

(20) March 6, 2017 Curbed. com article by Adam Brinklow titled, "California lawmakers aim to repeal anti-rent control law" (Vice-Chair Laverde-Levine) http://sf .curbed.com/20 17/3/6/148353 34/cost-hawkins-repeal-chiu

(21) March 7, 2017 Cal.StreetsBlog. org article by Jason Islas titled, "State Legislators Put California's Housing Crisis in the Crosshairs" (Vice-Chair Laverde-Levine) http:// cal.streetsblog.org/20 17/03/07 /state-legislators-put-californias-housing-crisis in-the-crosshairs/

10. COMMITTEE/BOARD MEETING UPDATES AND ANNOUNCEMENTS

a. Budget and Personnel - Committee Chair Tregub asked that Commissioners report to staff any proposed projects or undertakings that would require money or staff time so that they can be accounted for in upcoming fiscal year's budget, which is in development.

(1) February 24th agenda

(2) March 17th agenda

b. Eviction/Section 8/Foreclosure- Chair Selawsky recused himself from the Committee's March 22 meeting due to a conflict of interest regarding a contract vote. He temporarily appointed Commissioner Townley to the Committee for the purpose of having a quorum for the vote in light of the anticipated absence of Commissioner Murphy due to a family emergency.

( 1) March 22nd agenda

c. Habitable & Sustainable Housing (HASH)- Commissioner Townley remarked on the Board's passing of the Model Green Lease, and related outreach efforts. Berkeley Rent Stabilization Board Meeting Minutes Monday, March 20,2017 Page 9

( 1) March 2nd agenda

d. IRA, AGA and Registration - Staff Attorney Matt Brown reported that the Committee has been working on the regulations that were passed on first reading this evening.

(1) February 17th agenda

(2) March 8th agenda

e. Outreach - Committee Chair Chang updated the Board on developing outreach ideas, and asked Commissioners to let the Committee know of any outreach ideas or proposals that would have a budget impact.

(1) February 24th agenda

(2) March 1Oth agenda

f. 4 x 4 Joint Committee on Housing: City Council/Rent Board- Chair Selawsky informed the Board that the last proposed meeting was cancelled and not yet rescheduled.

g. 4 x 4 Ad Hoc Committee on Safety, Occupancy and Affordability of Converted Artist Warehouses and W orkspaces - Commissioner Townley reported that this Committee had not met since its last meeting.

h. Ad Hoc Committee on the Effects of Costa-Hawkins- Commissioner Laverde Levine Reported that the Committee hopes to meet in April.

1. Ad Hoc Committee on Technology Issues - Board Secretary Aimee Mueller reported that she plans to convene this Committee as soon as all new Commissioners have completed their iPad orientations and will continue to document technology issues that have been encountered thus far.

J. Ad Hoc Replacement Committee to Fill Board Vacancy- Committee Chair Selawsky reported that the work of this Committee is reflected in the memorandum accompanying Item 8.a.(l).

(1) March 3rd agenda

(2) March 3rd minutes

(3) March 7th agenda

(4) March 8th agenda Berkeley Rent Stabilization Board Meeting Minutes Monday, March 20, 2017 Page 10

(5) March 14th agenda

k. 2 x 2 x 2 Committee on Housing: Council I Rent Board I BUSD- Chair Selawsky has been in contact with BUSD and is working on getting them to the table.

1. Updates and Announcements regarding future Special Meetings - Staff Attorney Matt Brown reported that there are a number of pending appeals. The Commissioners discussed the possibility of adding a special meeting but took no action this evening.

m. Discussion of items for possible placement on future agenda- Commissioner Soto Vigil indicated that he plans to bring an item proposing that the Board speak with Rent Stabilization Program staff about what the program is doing well, ideas for improvement, etc.

11. ADJOURNMENT Item 4b.

Rent Stabilization Board Legal Department

MEMORANDUM

DATE: April24, 2017

TO: Honorable Members of the Berkeley Rent Stabilization Board

FROM: Honorable Members of the IRA/ AGA/Habitability Committee

By: Matt Brown, Staff Attorney

SUBJECT: Proposed Regulation 510 [Definition of New Construction for Units that Lack a Certificate of Occupancy] - Second Reading

Recommendation:

That the Board adopt Rent Board Regulation 510 [Definition ofNew Construction for Units that Lack a Certificate of Occupancy] and repeal Rent Board Regulation 509 [Definition ofNew Construction for Legal Rental Units) as recommended by the IRA/AGA/Habitability Committee at its March 8, 201 7 meeting. The full Board voted to adopt the proposed regulation at the first reading on March 20, 2017.

Background and Need for Rent Stabilization Board Action:

The Rent Board has always encouraged the legal construction of new rental units. Recent tragedies costing dozens of lives have directed national attention to the health and safety hazards posed by poorly constructed rental housing. These and other concerns regarding the policy ramifications of exempting illegally constructed units from rent control contributed to the decision to revise the wording of the Ordinance's new construction exemption.

Measure AA amended Section 5(i) of the Rent Ordinance to more closely conform to the language of Costa Hawkins. 1 Specifically, Costa Hawkins exempts all rental units with a

1 The Costa Hawkins Rental Housing Act imposed vacancy decontrol throughout the state. It provides a single, straightforward criterion for exemption of new construction: the date of issuance of the Certificate of Occupancy. The Board adopted Regulation 509 in 2014 to more closely mirror Costa Hawkins .

2125 Milvia Street, Berkeley, California 94704 TEL: 510.981.7368 # TDD: 510.981.6903 #FAX: 510.981.4940 E-MAIL: [email protected] # INTERNET: www.ci.berkeley.ca.us/rent/ Proposed Regulation 510 (Second Reading) April24, 2017 Page2 certificate of occupancy issued after February 1, 1995. This excludes newly constructed units that were not issued a certificate of occupancy, such as units constructed without permits, and certain units created by conversion of an existing building.

For the reasons discussed below, Regulation 510 is necessary to ensure that there are not unintended consequences for some units that were constructed after June 30 1980, especially detached units that were built from the ground up with all applicable permits that never received a certificate of occupancy.

A. Preserving the Conversion Rule

The original wording of the new construction exemption read:

"1. Newly constructed rental units which are completed and offered for rent for the first time after the effective date of this chapter, provided that such new units were not created as a result of rehabilitation or conversion as opposed to new construction. However, the exemption [is limited to rent control and registration]"

Although newly constructed units were generally exempt from rent control, those units that were "created as a result of rehabilitation or conversion as opposed to new construction" were often subject to the Ordinance's rent control and registration requirements, despite having been "completed and offered for rent for the first time after the effective date" of the Ordinance.

The new wording of the new construction exemption reads:

"1. Newly constructed rental units that have received a certificate of occupancy issued after June 30, 1980. However, the exemption [is limited to rent control and registration)"

There are two explanations for the omission of the prior law's conversion rule. First, as discussed above, state law prevents the Rent Board from controlling the rents 6f any unit that has a certificate of occupancy issued after February 1, 1995, including converted or rehabilitated units. This means that if a unit created by conversion receives a certificate of occupancy after February 1, 1995, it is exempt under state law.

Second, the City of Berkeley Building Official issued a memorandum dated June 13, 2000 that clarified that a certificate of occupancy would henceforth only be issued "for construction of entirely new buildings and for changes in occupancy from one occupancy group to another or changes from one division to another division within the same occupancy group." Since that date the Planning Department has generally issued certificates of occupancy only for projects or properties that were entirely rtew construction, or a change in occupancy type. Under this policy, units created by conversion will generally not receive certificates of occupancy.

The Board should preserve the conversion rule by excluding converted units from the exempt Proposed Regulation 510 (Second Reading) April 24, 2017 Page3 units listed in Regulation 510. See Regulation 510, subsection B.

B. February 1, 1995 Grandfather Clause.

Costa Hawkins requires that rental units that have already been exempt pursuant to an exemption for newly constructed units must remain exempt. Therefore, the Rent Board must establish criteria for preserving exemptions for those units that do not have a certificate of occupancy but were already exempt as of February 1, 1995. See California Civil Code Section 1954.52(a)(2).

For units that received a formal determination of exemption on or before February 1, 1995, it is fairly straightforward to comply with the Costa Hawkins grandfather clause by merely allowing those units to remain exempt. See Regulation 510 subsection F.

However, where a unit was constructed after June 30, 1980 but before February 1, 1995, that unit "has already been exempt from the residential rent control ordinance of a public entity on or before February 1, 1995, pursuant to a local exemption for newly constructed units" provided that it was not created as a result of conversion or substantial rehabilitation. Cal Civ. Code Section 1954.52(a)(2). Therefore, the committee recommends that Regulation 510 also include a provision that exempts units constructed before February 1, 1995. In order to exclude units created as a result of conversion or substantial rehabilitation, we limited this exemption to detached rental units constructed from the ground up. See Regulation 510, subsection C.

C. Disparities in Issuance of Certificates of Occupancy

Rather than exempting all newly-constructed rental units? the amended new-construction rule exempts only those rental units for which a certificate of occupancy has been issued after the effective date of the Rent Ordinance. See Berkeley Municipal Code (B.M.C.) Section 13.76.050!. Only units constructed with permits in conformity with applicable building codes are granted certificates of occupancy.

Although Costa Hawkins' exemption of all rental units with certificates of occupancy issued after February 1, 1995, might appear to apply to all units constructed after February 1, 1995, the California Building Code did not require issuance of certificates of occupancy for all newly constructed units at that time. Thus, some of the units that were constructed after the enactment of Costa Hawkins do not have a certificate of occupancy, and therefore are not necessarily exempt from rent control under state law.

However, the Rent Board has often expressed a policy goal of encouraging the construction of additional lawfully permitted rental units. See Resolutions 91-5 and 05-08. Such units increase the supply of housing where they are created from entirely new space, rather than as a result of conversion of existing space. Where the additional unit is constructed with permits, it will be required to be constructed to applicable building codes, and thus all applicable safety standards should have been met regardless of whether a certificate of occupancy was issued. Proposed Regulation 510 (Second Reading) April24, 2017 Page 4

Where it is clear that an additional unit was constructed with permits after February 1, 1995, the permitted unit should be exempt from the Ordinance, despite lacking a certificate of occupancy. This avoids a potential loophole whereby two otherwise identical properties might be treated differently because of inconsistent.issuance of certificates of occupancy. See Regulation 510, subsection D.

It bears emphasis that Regulation 51 0 seeks to treat all classes of rental units in the most evenhanded way possible under the circumstances. Certain provisions (such as the Costa Hawkins grandfather clause date of February 1, 1995, and Costa-Hawkins' use of Certificates of Occupancy as the sole criterion for new construction) are outside the control of the Rent Board. Others, such as the decision to preserve rent control on units that are created as a result of conversion or rehabilitation, are policy decisions.

The proposed language of Regulation 51 0 seeks to ensure that the fewest number of tenants lose the protection of rent control while ensuring that as many landlords as possible are not surprised to learn that Costa-Hawkins does not exempt them from rent control.

D. A voiding Confusion or Gamesmanship

Regulatory agencies have the authority to enact regulations for the purpose of implementing a piece of legislation. Such regulations must be consistent and not in conflict with the legislation and reasonably necessary to effectuate its purpose. (People v. Tubbs (2014) 230 Cal.App.4th 578.) Legal staff has drafted this Regulation with two goals in mind: first and foremost is the goal of ensuring that the Measure AA amendment to the new construction exemption is lawful; second is that the new exemption will not be confusing or vulnerable to abuse.

Although Regulation 510 serves an important role in avoiding any potential conflict with Costa Hawkins, the committee chose to keep this Regulation narrowly tailored and extend exemptions only to a limited set of units that lack certificates of occupancy. Staff is concerned that an open ended regulation, especially one that exempts units that were created as a result of conversion or substantial rehabilitation, would invite abuse by landlords seeking exemptions for units that are not exempt under state 14\W, and were not exempt under the original language of the Rent Ordinance.

Community members have raised concerns that properties which became duplexes as a result of permitted additions or conversions of uninhabitable space will be rent controlled under the proposed wording of Regulation 510. On the other hand, good cause for eviction protections apply to such units regardless of the wording of this regulation, as does vacancy decontrol, which allows all Berkeley landlords to set the initial rent as high as the market will bear.

Regulation 510 clarifies that rent control applies to some post- February 1, 1995 conversions that were previously believed to be exempt. However, a regulation which exempts additions and/or converted spaces from rent control will have the opposite effect, and inevitably result in removing rent control protection from tenants in those units. Proposed Regulation 510 (Second Reading) April24, 2017 Page 5

E. Repeal of Regulation 509

Regulation 509 was enacted in 2014 to more closely mirror Costa-Hawkins' standard for new construction where units were created by conversion or rehabilitation. The proposed language for Regulation 510 encompasses the entire scope ofRegulation 509, and therefore Regulation 509 can and should be repealed to avoid confusion if Regulation 510 is enacted as drafted.

Conclusion

Regulation 51 0 strikes a careful balance between achieving the purpose of Measure AA while complying with state law and avoiding unintended consequences for landlords and tenants. Regulation 509 will become redundant and incomplete upon passage of Regulation 510, and should therefore be repealed.

Regulation 509 and Proposed Regulation 510 are attached hereto.

Name and Telephone Number of Contact Person:

Matt Brown, Staff Attorney (510) 981-4930 Rent Stabilization Board Proposed Regulation 510 (Second Reading) April 24, 2017 Page 6

510. Definition of New Construction for Units that Lack a Certificate of Occupancy.

(A) Scope and Authority. Since 1980, the Rent Ordinance has distinguished between newly-constructed rental units and those created through conversion or substantial rehabilitation. Effective December 18, 2016, the new construction exemption was amended. See Berkeley Municipal Code Section 13.76.050. Consistent with California Civil Code Section 1954.50 et seq., certain newly-constructed rental units for which a Certificate of Occupancy has not been issued are exempt from Chapter 8 (Rent Registration), Chapter 10 (Establishment of Base Rent Ceiling and Posting), Chapter 11 (Annual Adjustment of Rent Ceilings), and Chapter 12 (Individual Adjustment of Rent Ceilings) of the Ordinance. This Regulation sets forth the criteria for exemption of such rental units. (B) Conversion. A rental unit that is created as the result of conversion or substantial rehabilitation of an existing structure shall not be exempt unless a Certificate of Occupancy has been issued for that unit after June 30, 1980. (C) Units constructed before February 1, 1995. A detached rental unit constructed from the ground up after June 30, 1980 but before February 1, 1995 shall be exempt from the Chapters detailed in Subsection A. (D) Units constructed after February 1, 1995. A detached rental unit constructed from the ground up after February 1, 1995 shall be exempt from the Chapters detailed in Subsection A only where all applicable building permits have been issued and finally approved by the City. (E) Definition of "ground up" construction. For the purposes of this regulation, construction from the ground up is defined as the construction of an entirely new structure, not attached to any other structure and not created by the partial demolition of an existing structure. (F) Units with a formal determination of exemption. Notwithstanding the foregoing, where a formal determination of exemption was made before February 1, 1995, the subject rental unit shall remain exempt consistent with California Civil Code Section 1954.50 et seq.

[Effective Date: ___, 20 17] Proposed Regulation 510 (Second Reading) April 24, 2017 Page7

509. Definition of New Constroetion fur Legal Rental Units

(A) Authority and 8eope. Section 5(i) of the Ordinance exempts newly constructed rental units from Chapter 8 (Rent Registration), Chapter 10 (Establishment of Base Rent Ceiling and Posting), Chapter 11 (Annual Adjustment of Rent Ceilings), and Chapter 12 (Individual Adjustments of Rent Ceilings) ofthe Ordinance. This Regulation addresses only nevrly constructed rental units for ·.v-hich the ovmer has secured the necessary and proper City permits for legal construction. (B) Definition. As defined in Section 5(i) of the Ordinance and consistent with California Civil Code Section 1954.50, et. seq., new construction of legal units shall include: ( 1) units that receive a Certificate of Occupancy issued after February 1, 1995; or (2) units that have already been exempt from the Ordinance prior to February 1, 1995, pursuant to Section 5(i) ofthe Ordinance. All units constructed as the result of rehabilitation, conversion, or partial demolition of e>cisting units and ·which do not meet either ofthe definitions as stated in Paragraphs (B)(l) or (B)(2) above shall not qualify as new construction and shall be subject to the terms of all Chapters of the Ordinance including Chapter 8 (Rent Registration), Chapter 10 (Establishment of Base Rent Ceiling and Posting), Chapter 11 (A...~.nual Adjustment of Rent Ceilings), and Chapter 12 (Individual A.djustments of Rent Ceilings).

(Adopted 11/17114 .] Item 4.c. and Item 4.d.

Rent Stabilization Board Legal Department

MEMORANDUM

DATE: April 24, 2017

TO: Honorable Members of the Berkeley Rent Stabilization Board

FROM: Honorable Members ofthe IRA/AGA/Habitability Committee

By: Matt Brown, Staff Attorney

SUBJECT: Proposed Regulations 520 [Exemption for Fraternities and Sororities] and 808 [Registration Fee for Authorized Seasonal Rentals in Fraternities and Sororities] Second Reading

Recommendation:

That the Board adopt Rent Board Regulation 520 [Exemption for Fraternities and Sororities] and Rent Board Regulation 808 [Registration Fee for Authorized Seasonal Rentals in Fraternities and Sororities] as recommended by the IRA/AGA/Habitability Committee at its March 8, 2017 meeting. The full Board voted to adopt the proposed regulations at the first reading on March 20,2017.

Background and Need for Rent Stabilization Board Action:

For decades, the Rent Board has allowed fraternities and sororities to claim exemption from the Ordinance, and beginning in 2012, the Board has set a pro-rated seasonal registration fee where rooms are rented to non-members on a seasonal basis. The passage of Measure AA on November 8, 2016 and its subsequent enactment on December 18, 2016 codified the Board's policies toward fraternities and sororities, and as such it is necessary to revise the applicable regulations.

A. History of Exemption of Fraternities and Sororities from the Ordinance

Section 13.76.050 of the Rent Stabilization and Eviction for Good Cause Ordinance specifically exempts, in full or in part, thirteen categories of properties. Prior to Measure AA, rental units or rooms occupied by members or non-members of fraternities were not expressly exempted under

2125 Milvia Street, Berkeley, California 94704 TEL: 510.981.7368 # TDD: 510.981.6903 #FAX: 510.981.4940 E-MAIL: [email protected] #INTERNET: www.ci.berkeley.ca.us/rent/ Proposed Regulations 520 and 808 (Second Reading) April24, 2017 Page 2 the Ordinance. Dating back to as early as 1982, the Rent Board and City Council received legal opinions that applied the Ordinance to fraternities and sororities because they are a type of rooming house.

Due to the unique relationship of the members, the Board and City Council exercised discretion in charging fraternities and sororities a single registration fee when the house was occupied solely by its own members rather than charging a fee for each room rented, as would have been the case with a typical rooming house. Later, in 1985 the Board reached a settlement with sororities regarding their status under the Ordinance. Then in May 1989, after lengthy discussions with fraternity representatives, the Board notified Berkeley fraternities that the same criteria used to assess the status of sororities would also apply to fraternities.

The basic criteria to be met in order to obtain an exemption were as follows:

1. Occupancy of the house is restricted to active members of the fraternity; 2. Fees charged to the members are approved by vote of the members; 3. The house is owned by a fraternity or an affiliated nonprofit legal entity whose governing body includes at least one active member and whose sole purpose is the maintenance and operation of the house; 4. Money charged to the members for house use is restricted to the maintenance and operation of the house and no profit is made by providing housing; and 5. Active members are not subject to eviction provided they remain members in good standing ofthe fraternity.

These criteria reflect the understanding that although fraternities and sororities are rooming houses, the need for regulatory oversight by the Rent Board is minimal if they are occupied solely by their own members. However, where rooms are rented to non-members, whether on a seasonal basis or year-round, a more traditional landlord-tenant relationship arises which calls for the same regulation applied to a typical rooming house.

From 1989 on, fraternities and sororities were obligated to inform the Board whether their house met the criteria for exempt status. Those that did not meet the criteria registered their house as a single-family home and paid the agency a single registration fee. Over the years, several houses have made such payments while many other houses claimed the exemption and paid no fee. In rare cases, units were rented to non-members for longer than 14 days and thus were required to register on a per-unit basis.

B. Discovery of Seasonal Rentals

Section 13.76.050B exempts rental units rented primarily to transient guests for fourteen days or less. This provision is implemented by Regulation 504(B). Rental units rented for more than fourteen days must register and tenants in such units are afforded the full protections of the Ordinance. Such protections also apply to units rented on a seasonal basis.

When fraternities and sororities were granted their exemptions per the criteria discussed above, Proposed Regulations 520 and 808 (Second Reading) April24, 2017 Page3 the Rent Board was informed that the issue of seasonal rentals was irrelevant, because the sororities represented that they shut down their houses during the summer. Similar representations were made by fraternities. However, in late 2009 and early 2010, the Rent Board was made aware that made many fraternities were renting out rooms during the summer as a source of revenue. An investigation revealed the practice to be widespread; fraternity houses were routinely renting to non-members, particularly during the summer months.

C. Amnesty Program and Seasonal Registration Fee

The Board concluded that most fraternities were unaware of their obligation to register these seasonal rentals, and therefore authorized an amnesty program in November 2010 for chapters that had been failing to register these seasonal rentals. However, fourteen lawsuits were filed in Superior Court against those houses that refused to participate in the amnesty program. Each of these lawsuits was ultimately settled.

In the course of administering the amnesty program, Rent Board staff had numerous discussions with various representatives of the fraternity and sorority community regarding the registration process. 1 These discussions clarified the unique needs and concerns of fraternities.

The Rent Board Commissioners considered the matter at various committee meetings and at the May 14, 2012 Board meeting. As a result of careful deliberation and community input, a pilot process for registration of seasonal rentals by fraternities and sororities was proposed and adopted. The original seasonal registration process was as follows:

1. Pay a reduced, pro-rated fee of $50.00 per unit for summer rentals; 2. Fill out Registration Forms specifically tailored to summer rentals; and 3. Provide the Board with a permanent contact person/liaison

In the first year of the pilot seasonal registration program, FY 12-13, the Rent Board collected $9,520 in registration fees from the various fraternities who registered a total of 176 units. Staff conducted unannounced inspections of four fraternity houses to ensure that the Fraternity Summer Registration Forms were placed in the rooms as mandated by the Board, and found that forms were in place in all the inspected units.

In the second year of the seasonal registration program, FY 13-14, the Rent Board collected $8,144 in registration fees from the various fraternities who registered a total of 160 units. Again, the program was an overwhelming success, with only two chapters paying late, and only one case of non-payment, for a single unit.

Throughout the course of this process, Rent Board staff was in regular communication with sorority houses, but no houses registered. Staff identified thirteen sorority chapters that owned

1 These representatives included chapter presidents, students, property managers, members of the Fraternity Alumni Council (FA C), the FAC itself, alumni representatives, and attorneys representing a consortium of chapters. Proposed Regulations 520 and 808 (Second Reading) April24, 2017 Page 4

and operated houses in Berkeley. The subsequent investigation confirmed the sororities' original representations that they do not rent rooms to non-members. Staff obtained declarations from chapter representatives attesting to this fact. Nevertheless, the Rent Board has kept the option for sororities to register seasonal rentals in the interest of applying the law and regulations to fraternities and sororities equally.

The Board has continued to administer the seasonal rental program on an annual basis. Now that the program has been codified by Measure AA, it is necessary to revise the regulations.

D. Regulation 520 defines the circumstances in which a fraternity or sorority is exempt

Regulation 520 articulates the criteria from the seasonal rental registration program described in the history above. Specifically, Regulation 520 makes it clear that fraternity and sorority houses will generally be exempt, except when they are used for "authorized seasonal rentals" as defined in Regulation 808. By articulating these criteria in Regulation 520, the Board avoids any conflict with existing regulations 403 and 403.5, which were drafted prior to the enactment of Measure AA. Furthermore, the regulation uses plain language to state that "Tenants who live in these units that are not active members of fraternities and sororities, however, are not exempt from any section of the Rent Ordinance." See Regulation 51 0, subsection A. This clarification will help to avoid repeating the confusion that precipitated the original seasonal rental registration program.

E. Regulation 808 defines Authorized Seasonal Rental

In order to ensure that there is no confusion regarding what types of rentals will qualify for the seasonal rental registration program, Regulation 808 explicitly defines an "authorized seasonal rental"2 as a rental unit occupied by a tenant who is not an active member of a fraternity or sorority in a property owned and operated by the fraternity or sorority ... for only part of the year." See Regulation 808, subsection A.

Regulation 808 also clarifies that fraternities and sororities pay a reduced registration fee for seasonal rentals. The Board will set the registration fee for seasonal rentals at the same time it sets the annual registration fee, as it has since the Board began charging a seasonal rental fee in 2012. The regulation provides that the "Board shall publicize the fee and identify all properties

2 After the IRA/ AGA/Registration Committee unanimously voted to recommend adoption of proposed Regulations 520 and 808, legal staff became aware of a relatively obscure regulation that uses similar terminology. Regulation I 014 was adopted in March of 1998 to allow landlords to set a rent during the summer months of 1998 for less than they would otherwise charge during the school year. The regulation defined these tenancies as "short-term seasonal rentals." This regulation had an extremely limited scope (as adopted it was only operative during the summer months of 1998) and has no applicability moving forward.

While the Board could repeal Regulation 1014, legal staff recommends that it remain, so that any discrepancies in our records from long-term rents may be explained moving forward and to account for the unlikely scenario in which a petition is filed where a tenant is still living in a unit affected by the provisions of the regulation. Legal staff added a sentence to paragraph A of Regulation 808 clarifying that an "authorized seasonal rental" defined herein is completely unrelated to a "short-term seasonal rental" as defmed in Regulation 1014. Proposed Regulations 520 and 808 (Second Reading) April 24, 2017 Page 5 subject to the reduced fee for authorized seasonal rentals. The fee shall be paid no later than July 1 of each year and be subject to all penalties (proportionally reduced based on the total amount of the fee)" available under the Ordinance. See Regulation 808, subsection B.

Conclusion

The IRA/AGA/Registration Committee recommended that Regulations 520 and 808 be adopted to clarify the requirements for registration of authorized seasonal rentals by fraternities and sororites.

Proposed Regulations 520 and 808 are attached hereto.

Name and Telephone Number of Contact Person:

Matt Brown, Staff Attorney (510) 981-4930 Rent Stabilization Board Proposed Regulations 520 and 808 (Second Reading) April24, 2017 Page 6

520. Exemption for Fraternities and Sororities

(A) Background and Purpose. The Rent Board has long exempted rental units in properties owned by fraternities and sororities (or companies that manage units occupied by active members of these organizations). Tenants who live in these units that are not active members of fraternities and sororities, however, are not exempt from any section of the Rent Ordinance. The Board recognizes that many of these rental units are occupied seasonally (typically during the summer months) by non-members and has charged the landlord a partial Registration Fee required by B.M.C. 13.76.080. This regulation clarifies this exemption and identifies the tenants that are covered by the Rent Ordinance.

(B) Exemption under B.M.C. 13. 76.050M. Rental units- as defined by Regulations 403 and 403.5- occupied as a primary residence by a member of a fraternity or sorority in which the fraternity or sorority owns the rental unit (or a unit owned by an entity whose sole purpose is the maintenance and operation of the fraternity or sorority's rental units) are exempt from Berkeley Municipal Code Chapter 13.76.

(C) Rental units not subject to exemption under B.M.C. 13.76.050M. Rental units located within a property as defined by subparagraph (B) that are occupied by a tenant who is not an active member of a fraternity or sorority are subject to all sections of Berkeley Municipal Code Chapter 13.76 including Section 13.76.080, Rent Registration.

Tenants who occupy rental units for only part of the year in properties primarily occupied by fraternities and sororities shall be considered "authorized seasonal rentals" as further defined in Regulation 808. Tenants who occupy authorized seasonal rentals shall have the same rights and responsibilities as a tenant who occupies any another rent-controlled unit not subject to an exemption identified in B.M.C. 13.76.050. The Board shall charge a reduced registration fee, however, for these authorized seasonal rentals as defined by Regulation 808.

[Effective Date: ___, 2017] Proposed Regulations 520 and 808 (Second Reading) April24, 2017 Page 7

808. Registration Fee for Authorized Seasonal Rentals in Fraternities and Sororities

(A) Definition. As defined by Regulation 520, an "authorized seasonal rental" is a rental unit occupied by a tenant who is not an active member of a fraternity or sorority in a property owned and operated by the fraternity or sorority (or a unit owned by an entity whose sole purpose is the maintenance and operation of the fraternity or sorority's rental units) for only part of the year. The vast majority of authorized seasonal rentals occur during the summer months when the University of California Berkeley has its summer session. As defined in this regulation, "authorized seasonal rentals" shall have no relation to "short-term seasonal rentals" as defined in Regulation 1014.

(B) Reduced Registration Fee for Authorized Seasonal Rentals. The Board charges landlords an annual registration fee pursuant to B.M.C. 13.76.080D. set in accordance with B.M.C. 13.76.060N. Rental units operated as authorized seasonal rentals shall be charged a reduced Registration Fee set by the Board when it passes its annual registration fee for all units. The Board shall publicize the fee and identify all properties subject to the reduced fee for authorized seasonal rentals. The fee shall be paid no later than July 1 of each year and shall be subject to all penalties (proportionally reduced based on the total amount of the fee) as defined in B.M.C. 13 .76.080, et seq.

[Effective Date: _ __, 2017] Item 4.e.

Rent Stabilization Board Legal Department MEMORANDUM

DATE: April24, 2017

TO: Honorable Members of the Berkeley Rent Stabilization Board

FROM: Honorable Members ofthe IRA/AGA/Habitability Committee

By: Matt Brown, Staff Attorney

SUBJECT: Proposed Regulation 1383 [Owner Move-In and Ellis Act Relocation Assistance Disputes (B.M.C. 13.76.130.A.9 and 13.77.055)]- Second Reading

Recommendation:

That the Board adopt Rent Board Regulation 1383 [Owner Move-In and Ellis Act Relocation Assistance Disputes (B.M.C. 13.76.130.A.9 and 13.77.055)] as recommended by the IRAIAGA/Habitability Committee at its March 8, 2017 meeting. The full Board voted to adopt the proposed regulation at the first reading on March 20, 2017.

Background and Need for Rent Stabilization Board Action:

The Bay Area housing crisis has dramatically increased the costs faced by any tenant household that is forced to relocate due to an owner move-in. However, prior to the enactment of Measure AA, owner move-in relocation assistance payments were required only for low-income households. Effective December 18, 2016, owner move-in relocation assistance payments are now required for all tenant households who are displaced from a rental unit where they have resided for over a year. Additional relocation assistance payments are now available to tenants who are elderly, disabled, families with minor children, and households who have resided in the unit since before January 1, 1999. The City Council has also amended the Ellis Act Implementation Ordinance to harmonize the amounts and eligibility for relocation assistance payments with those that apply in owner move-in cases.

In addition to increasing the amount and broadening the eligibility for relocation assistance payments, the new laws also give either party the option to resolve disputes over eligibility by filing a Rent Board petition. Given the increased amount of the relocation assistance payment, and the increased number of eligible tenants, we expect the number of disputes over eligibility to

increase as well. Regulation 13 83 is designed to clarify and streamline the procedures associated with filing a petition to determine eligibility for relocation assistance payments.

A. Tenant must notify Rent Board and Landlord of eligibility for additional relocation assistance payments

Landlords who seek to evict for reasons of owner move-in or Ellis Act must deposit $15,000 in relocation assistance payments with the Rent Board within ten days of service of the termination notice. A tenant who is eligible for additional relocation assistance payments must then notify the Rent Board and the Landlord of their eligibility within 30 days. See B.M.C. subsections 13.76.130.A.9(p)(ii) and 13.77.055.D.

B. Rent Board is required to hold disputed funds in escrow

In any dispute over the eligibility of a tenant household for relocation assistance payments (either standard or additional), the landlord must first notify the Rent Board that he or she disputes the tenant's eligibility. The Rent Board must then hold the funds in escrow until the parties either reach an agreement, or present the Rent Board with a court order to release the funds. See B.M.C. subsections 13.76130A.9.p.(i), 13.77.055.D.2., and Regulation 1383 subsection B.

Measure AA and the recent amendment to the Ellis Act Implementation Ordinance open up a third option: the filing of a Rent Board petition for determination of eligibility for relocation assistance payments. See B.M.C. subsections 13.76.130.A.9(p)(iii), 13.77.055.D.2, and Regulation 1383, subsection A. Either party may file a petition where a landlord has deposited the funds in escrow and disputed the tenant's eligibility. Furthermore, a tenant may file a petition where a landlord has refused to deposit the funds.

C. Rent Board petitions allow disputed funds to avoid costly litigation

There are many reasons why filing a lawsuit over relocation assistance payments is problematic. First, the legal process for recovery of a sum larger than $10,000 is not a summary procedure, and can take many months, more likely years. Second, the cost of obtaining legal counsel and preparing and filing the appropriate legal pleadings is high, even for a seemingly simple legal case. For example, the filing fees alone in basic case would quickly exceed $1,000, not including the costs of hiring process servers and attorneys. 1

In contrast, the Rent Board petition process is neither costly nor time-consuming. In light of the straightforward nature of most disputes over eligibility for relocation assistance payments, Regulation 1383 would further streamline our petition process, providing an accelerated timeline from filing to hearing (30 days) and from hearing to decision (30 days). Thus, most petitions seeking determinations of eligibility for relocation assistance payments could reach a final decision within 60 days of the filing ofthe petition. See Regulation 1383, subsection D.

1 Sample fees from Alameda County Superior Court Fee Schedule Effective January 1, 2015: Filing fee for Limited Civil Complaint: $375; Answer or frrst paper: $370; Motion for Summary Judgment: $500; Writ for enforcement of Judgment: $25 Proposed Regulation 1383 (Second Reading) April 24, 2017 Page3

D. The Rent Board's jurisdiction

If one of the parties chooses to raise the issue of eligibility for relocation assistance payments in court, the Rent Board may be unable to take jurisdiction of the matter away from the court, regardless of the relative advantages in speed and cost. The general rule on concurrent jurisdiction awardspriority to "the tribunal where process is first served." California Union Ins. Co. v. Trinity River Land Co. (1980) 105 Cal.App.3d 104, 109. For the sake of clarity, this rule is reiterated in Regulation 1383. If both a Rent Board petition and a lawsuit are served regarding the same dispute, the Rent Board will proceed only on petitions served before the date of service the lawsuit. In the absence of clear evidence regarding service, the filing date will determine priority. See Regulation 1383, subsection A.

E. Evidence of eligibility

The Rent Board petition process is designed to be easily navigated by a layperson with no legal experience. Rent Board hearing examiners do not apply arcane, confusing rules of procedure, nor do they enforce the rules of evidence used in court proceedings. This flexibility enables the hearings to proceed more quickly and ensures that a party without a lawyer does not have a significant technical disadvantage in making their case.

This goal is achieved, in part, through the adoption of regulations that lay out clear criteria for various claims, so that a person who comes into our office can obtain a plain explanation of the information that the hearing examiner will use to determine the outcome of a petition. To that end, it is important to include a list of the types of evidence that will be considered by the hearing examiner. See Regulation 1383, subsection E.

The purpose of Subsection E is not to set forth an exclusive list of the only types of evidence that the hearing examiner will consider. On the contrary, hearing examiners may still use their judgment to weigh the relative probative value of evidence and to reach findings of fact based upon any evidence they find to be reliable and relevant to the issues at hand. However, where a party is unable to produce any of the evidence listed in Subsection E, the hearing examiner may require an explanation as to why it is necessary to rely on other evidence.

Conclusion

Regulation 1383 clarifies and streamlines the procedures for petitions to determine eligibility for relocation assistance payments.

Proposed Regulation 1383 is attached hereto.

Name and Telephone Number of Contact Person:

Matt Brown, Staff Attorney (51 0) 981-4930 Rent Stabilization Board Proposed Regulation 1383 (Second Reading) April24, 2017 Page 4

1383. Owner Move-In and Ellis Act Relocation Assistance Disputes. (B.M.C. 13.76.130.A.9 and 13.77.055)

A) Scope and Purpose

Berkeley Municipal Code subsections 13.76.130.A.9(p)(iii) (Owner Move-In evictions) and 13.77.055.D.2 (Ellis Act evictions) provide that in the event of a dispute over a tenant's eligibility for relocation assistance, either party may file a Rent Board petition requesting a determination of eligibility or file a claim in a court of competent jurisdiction. This Regulation sets forth the procedures and grounds for a Rent Board petition to determine a tenant's eligibility for relocation assistance and/or seeking release of disputed funds.

In the event that both a Rent Board petition and a claim in a court of competent jurisdiction (lawsuit) are filed regarding the same disputed funds, the Rent Board will proceed only on petitions served before service of the lawsuit for release of funds. Petitions served after the service of any lawsuit for release of funds will be dismissed without prejudice. In the event that the date of service of the lawsuit is unclear or unavailable to the hearing examiner, the filing dates for the respective proceedings may be used in lieu of the dates of service. An unlawful detainer action shall not stay the Rent Board petition, because state law prohibits the plaintiff in that type of action from recovering disputed relocation funds without filing a separate lawsuit.

Except as provided herein, proceedings on petitions filed under this section shall be taken according to all provisions of Chapter 12, Subchapter B.

(B) Standard Relocation Assistance Disputes.

As provided in subsections 13.76.130.A.9(p)(i) and 13.77.055.D.2, a landlord alleging that the tenant is not eligible for the standard relocation assistance must notify the Rent Boardin writing that he/she disputes the tenant's eligibility before the funds are released to the tenant. The sole ground for dispute of release of standard relocation assistance is the duration of the tenancy. A tenant who has not resided in the unit for at least one year as of the expiration date of the Notice Terminating Tenancy is not eligible for the standard relocation assistance.

As provided in subsections 13.76.130.A.9(p)(ii) and 13.77.055.D, a tenant who is eligible for additional relocation assistance must notify the landlord and the Rent Board in writing that he/she is claiming low-income, disabled, elderly, tenant with minor child status, or a claim that the tenancy began prior to January 1, 1999 within 30 days of receipt of the notice of termination of tenancy. A landlord may dispute a tenant's eligibility for additional relocation assistance. In the event that the landlord disputes the tenant's eligibility or fails to deposit additional relocation funds after notice of a tenant's eligibility, either party may file a petition seeking that the Rent Board determine the tenant's eligibility and/or release the funds.

The grounds for claiming eligibility for additional relocation assistance and for filing a tenant petition for release of disputed additional relocation assistance funds are as follows: Proposed Regulation 1383 (Second Reading) April 24, 2017 Page 5

(1) The tenant's household income does not exceed the qualifying limits for lower income families as established and amended from time to time pursuant to Section 8 of the United States Housing Act of 193 7, or as otherwise defined in Health and Safety Code Section 50079.5;

(2) The tenant is disabled, meaning that he or she has a physical or mental impairment than limits one or more of his or her major life activities within the meaning of the California Fair Housing and Employment Act (Government Code Section 12926);

(3) The tenant will be sixty years of age or older at the time of the expiration of the notice of termination of tenancy;

(4) The tenant household includes a minor child under the age of 18 years of age at the time of the expiration of the notice of termination of tenancy; or

(5) The tenancy began prior to January 1, 1999;

A landlord may file a petition for release of disputed additional relocation assistance funds by alleging that the applicable tenant eligibility claim, as stated above, is false.

(D) Petitions; Notice.

Where a landlord disputes the eligibility of a tenant for relocation assistance either party may petition for release of the funds from escrow. Petitions filed under this section shall be expedited so that a hearing on the petition is held within 30 days of filing and a decision rendered within 30 days of the hearing. The parties shall be given at least 15 days' notice ofthe hearing.

(E) Evidence in support of petition.

Evidence that a tenant is or is not eligible for additional relocation assistance includes, but is not limited to, documentation of the following:

(1) Receipt of means-tested government benefits such as CalFresh, Medi-Cal, Supplemental Security Income; documentation of actual income, such as W-2 forms, appropriately redacted tax returns, and/or Social Security payments;

(2) Correspondence from a medical provider, documentation of receipt of disability-related benefits such as Supplemental Security Income, Social Security Disability Insurance, and/or department of motor vehicles records;

(3) Birth certificates, passports, and/or Department of Motor Vehicles records;

(4) School registration paperwork, medical records, caregiver's affidavits, and/or guardianship paperwork;

(5) The original lease agreement and any relevant addenda; correspondence between the parties and/or previous landlords; and/or other circumstantial evidence showing when a tenancy began. [Effective Date: , 20 17] Item 6.a.(1)

RESOLUTION 17-02

IN APPRECIATION OF JACQUELYN MORGAN FOR MORE THAN 22 YEARS OF PUBLIC SERVICE AS A RENT STABILIZATION PROGRAM STAFF MEMBER

BE IT RESOLVED by the Rent Stabilization Board of the City of Berkeley as follows:

WHEREAS, Jacquelyn Morgan, a recent graduate with a Master's Degree in Journalism from UC Berkeley, and hailing from the East Coast began working at the Rent Stabilization Board on December 12, 1994, diligently serving Berkeley tenants and landlords; and

WHEREAS, Jacquelyn produced over a dozen Berkeley Housing Update TV shows to highlight how Berkeley's Rent Stabilization Ordinance affects housing security of Berkeley residents; and

WHEREAS, Jacquelyn created the first Rent Board website utilizing HTML coding; and

WHEREAS, Jacquelyn represented the Rent Board at numerous community events and celebrations and staffed booths on weekends and nights including Juneteenth, City Library Outreach, National Night Out, UC Berkeley student outreach, and the Ashby Flea Market; and

WHEREAS, Jacquelyn took a leadership role in various aspects of the Rent Board including the Hearings Unit, Waiver communications, and Union negotiations including being elected as President of SEIU 1021; and

WHEREAS, Jacquelyn wrote the Hearings Unit Manual for staff and created a Security Deposit Handout for residents; and

NOW, THEREFORE BE IT RESOLVED that the Berkeley Rent Stabilization Board thanks Jacquelyn Morgan for her years of service to not only the Rent Board but the residents of Berkeley; and

NOW, THEREFORE BE IT FURTHER RESOLVED that the Rent Board honors Jacquelyn Morgan tonight and wishes her all the best in the months and years ahead.

Dated: April 24, 2017

Adopted by the Rent Stabilization Board of the City of Berkeley by the following vote:

YES: NO: ABSTAIN: ABSENT:

Chair, Rent Stabilization Board Attest: ------James Kelekian, Executive Director Distributed at the the Meeting Item 6.a.(2)

Rent Stabilization Board

MEMORANDUM

DATE: April 24, 2017

TO: Honorable Members of the Berkeley Rent Stabilization Board

FROM: Members of the Budget and Personnel Copjittee and Jay Kelekian, Executive Director " ( 1 SUBJECT: Budget Update and Recommendation to Increase the Authorized Level of Expenditures for FY 2016/2017

Recommendation:

That the Board adopt the attached resolution increasing the maximum authorized level of expenditures for FY 2016 -2017 from $4,862,500 to $4,950,000.

Background andNeed for Rent Stabilization Board Action:

The Budget & Personnel Committee has met fourtimes since February to review the FY 2015/16 year-end Rent Board Fund balance and the current FY 2016/17 budget. The Committee has also had several discussions about the FY 2017/18 budget and registration fee.

Last month, the full Board received a FY 2015/16 year-end report and a FY 2016/17 report stating:

1. That the Board's FY 2015/16 ending balance/ FY 2016/17 starting balance was $398,449. This amount was based upon initial informationprovided by the City and Outside Auditor.

2. That due primarily to two factors - an extremely large increase in the fringe benefitcosts incurred and increased emergency funding for eviction defenseservices - the Board may end the year spending over $5,000,000, which is nearly $150,000 over the level authorized when the budget was adopted last June.

3. That the Board's projected FY 2016/17 year-end balance may be $137,000 rather than the $318,000 anticipated when the budget was approved last June.

2125 Milvia Street, Berkeley, California 94704 TEL: 510.981.7368 # TDD: 510.981.6903 # FAX: 510.981.4940 E-MAIL: [email protected] # INTERNET: www.ci.berkeley.ea.us/rent/

Item 6.a.(3)

Rent Stabilization Board

DATE: April 24, 2017

TO: Honorable Members of the Berkeley Rent Stabilization Board

FROM: Jay Kelekian, Executive Director

SUBJECT: Authorization for the Executive Director to revise the Rent Stabilization Program Fee Schedule to correct and update Resolution number 03-24 and to set the fee for determining eligibility for short-term rentals.

RECOMMENDATION:

Authorize the Executive Director to revise the Rent Stabilization Program Fee Schedule to replace Resolution 03-24 with Resolution 17-04 and to set the fee for determining eligibility for short-term rentals.

BACKGROUND AND NEED FOR RENT BOARD ACTION:

The Board last revised its fee schedule with Resolution Number 03-24 on November 17, 2003.

The current schedule now needs to be revised to include approval of eligibility for short-term rentals fees, generally update and clarify costs, and to eliminate several fees for services that are no longer provided.

An ordinance regulating Short-Term Rentals (Berkeley Municipal Code Chapter 23C.22) was enacted at the February 14, 2017 meeting of the Berkeley City Council. The purpose of the Short-Term Rentals ordinance is to prevent long-term rental units from being replaced with Short-Term Rentals and protect affordable housing units from conversion; to preserve and protect neighborhood character and livability from nuisances that are often associated with Short-Term Rentals; to generate City revenue to share City infrastructure cost and other public expenditures by operation of Short-Term Rentals under established standards; and to provide alternative forms of lodging. Applications for Zoning Certificates will soon become available to the public and enforcement of the ordinance will begin on July 1, 2017.

At the request ofthe City, the Rent Stabilization Program will provide City of Berkeley applicants for Zoning Certificates authorizing operation of short-term rentals unit with an approval of eligibility. A property owner or a tenant may request a certificate of eligibility for a short-term rental Zoning Certificate. The Rent Stabilization Program will review our records to determine that a proposed short-term rentals units does not have a rental history between March 31, 2007 and March 31, 2017 and will verify that the owner has not filed notice of any no-fault

2125 Milvia Street, Berkeley, California 94704 TEL: (510) 981-7368 (981-RENT) • TDD: (510) 981-6903 • FAX: (510) 981-4940 E-MAIL: [email protected] • INTERNET: www.cityofberkeley.info/rent/ evictions for the unit in the past five years. Eligibility will be denied based on the findings of an eviction history, rental history, the unit is not owner-occupied, the unit is part of a multi-unit property or is an accessory unit.

While verification of eligibility of a Short-Term Rentals unit is in line with the mission of the Rent Stabilization Board, this service is not directly related to implementation of the Rent Stabilization and Eviction for Good Cause Ordinance so it is necessary for us to recoup our costs. The amount of the fee does not exceed the estimated reasonable costs incurred by the Rent Stabilization Program in providing the service.

The changes are noted in the attached Exhibit A. Provisions that are being deleted have been struck-out and additions have been set forth in bold typeface.

FINANCIAL IMPACT:

The Rent Stabilization Program does not depend on fees, and generally collects approximately $5,000 a year in fees. The City of Berkeley anticipates that up to 1,000 residents may apply for a Short-Term Rentals license and may request eligibility certificates. While our revenue will increase, the increase will match the level of costs incurred in providing the services requested.

NAME AND TELEPHONE NUMBER OF CONTACT PERSON: Jay Kelekian, Executive Director 510.981.7368

REVISING THE RENT STABILIZATION PROGRAM FEE SCHEDULE TO CORRECT AND UPDATE RESOLUTION NUMBER 03-24

BE IT RESOLVED by the Rent Stabilization Board ofthe City of Berkeley as follows:

WHEREAS, the Rent Stabilization Board last revised its fee schedule with Resolution

03-24 on November 17, 2003;

WHEREAS, the Board now wishes to include short term rental verification fees, correct omissions and errors in the current fee schedule, to eliminate obsolete fees and make other minor changes as set forth below:

Additional Petitions Fee Units Maximum

Landlord IRA $0 $0 $0 C - Certification $0 $0 $0 RC - Redetermination of Certificate $25 $25 $25 E - Exemption $25 $15 $125 T-IRA $0 $0 $0 RWN $0 $0 $0

Appeals

Appeals to Board $100 $100 $500

Agency Determinations

Eligibility for Short-Term Rentals $20 $20 $0 1st Certificate Rent Ceiling $0 $0 $0 Recertification of Rent Ceiling $30 $30 $500 Certificate of Registration $20 per property Ellis Act Administration $250 per unit

Publications/Duplication

RSB Regulations $30 RSB Regulations and one-year subscription to the updates $60 Subscription to updates only $30 Chapter 12 IRA Regulations $10 RSB Agenda subscription (one year) $30 (non-Berkeley residents/businesses only) RESOLUTION 17-04

REVISING THE RENT STABILIZATION PROGRAM FEE SCHEDULE TO CORRECT AND UPDATE RESOLUTION NUMBER 03-24 (Page 2)

RSB Agenda with attachments (one year) $300

RSB Approved Minutes (one year) $30

Photocopying or printing $.10 per page CD/DVD $10

Certified copies $5 Subpoena (court appearance) Costs incurred as defined by the City of Berkeley Administrative Regulation 8.1 pursuant to Government Code Section 68096.1 Subpoena (records only) Costs incurred as defined by the City of Berkeley administrative Regulations 8.1 pursuant to Evidence Code 1563(b )(1)

NOW, THEREFORE BE IT RESOLVED that the Rent Stabilization Board ofthe City of Berkeley hereby revises its fee schedule set forth in resolution number 03-24 as indicated above.

Dated: April 24, 2017

Adopted by the Rent Stabilization Board of the City of Berkeley by the following vote:

Yes: No: Abstain: Absent:

Chair, Rent Stabilization Board Attest: ------~------James Kelekian Executive Director EXHIBIT A

Additional Petitions Fee Units Maximum

Landlord IRA $0 $0 $0 C - Certification $0 $0 $0 RC - Redetermination of Certificate $20 $20 $200 $25 $25 $25 E - Exemption $20 $10 $100 $25 $15 $125 T-IRA $0 $0 $0 RWN $0 $0 $0

Appeals

Appeals to Board $50 $50 $250 $100 $100 $500

Agency Determinations

Eligibility for Short-Term Rentals $20 $20 $0 1st Certificate Rent Ceiling $0 $0 $0 Recertification of Rent Ceiling $15 $15 $300 $30 $30 $500 Certificate of Registration $-W per property $20 Ellis Act Administration $300 for the first two units $1 00 each additional unit $250 per unit

Publications/Duplication*

RSB Regulations $-l-5- $30 RSB Regulations and one-year $J(} Subscription to the updates $60 Subscription to updates only $-l-5- $30 Chapter 12 IRA Regulations ~ $10 RSB Agenda subscription (one year) $-l-5- (non-Berkeley residents/businesses only) $30 RSB Agenda with attachments (one year) $-l-5-0 $300 RSB Approved Minutes (one year) $-l-5- $30 Photocopying or printing $.10 per page

Audiotape duplication (per tape) $1 0 CD/DVD $10 2125 Milvia Street, Berkeley, California 94704 TEL: (510) 981-7368 (981-RENT) • TDD: (510) 981-6903 • FAX: (510) 981-4940 E-MAIL: [email protected] • INTERNET: www.cityofberkeley.info/rent/ Diskettes $30 for 360K diskettes ($15 for each additional diskette after the first two) $75 for 1.2M diskettes ($37.50 for each additional diskette after the first two) $5 for first tv;o pages of data printout ($1 for each page thereafter) $4 0 per hour if labor not covered by above fees

Certified copies $5 for first page; $1 for every page thereafter $5 Subpoena (court appearance) m Costs incurred as defined by the City of Berkeley administrative Regulations 8.1 pursuant to Government Code Section 68096.1 ** Subpoena (records only) ~ Costs incurred as defined by the City of Berkeley administrative Regulations 8.1 pursuant to Evidence Code 1563(b)(l)***

*In 2016 the Rent Stabilization Board adopted a paperless agenda and all Rent Stabilization Board publications are available for fee on line at www.ci.berkeley.ca.us/rent/. Additionally, persons with low-incomes may request a waiver of the publication fees.

**Government Code Section 68096.1 currently provides that the City is entitled to reimbursement for the custodian of record's salary during the time that the employee is making a personal appearance in a civil hearing in superior court. Therefore, the subpoena must be accompanied by a check made out to the City of Berkeley in the amount of $275.00. If no such check is attached, the custodian of records must contact the requesting party and demand tender of the check before making the personal appearance. lfthe City's actual expenses, which include the custodian of record's normal salary for the time he or she prepares for, travels to and from, remains at the place pursuant to the subpoena, plus the copy charges described in Section B(2)(a) ofthis Administrative Regulation, is less than the $275.00 tendered, the City shall refund the excess amount. If the actual expenses should later prove to be greater, the difference must be paid to the City by the requesting party.

***Evidence Code 1563(b)(l) currently provides: $.10 per page for standard copies, $24.00 per hour, calculated on the basis of $6.00 per quarter hour or fraction thereof, for the clerical time in locating and copying the records, actual postage costs for mailing the documents to the requesting party. The requesting party is entitled to a statement itemizing the costs charged by the City upon demand.

April 17th May 17th June 30th • launch STR website • Second press release • Grace-period for getting a • Open up for on line issued permit e_xpires permit applications • Initiate initial direct • Enforcement begins • Sign agreement with mailing of notifications Host Compliance to hosts identified by Host Compliance

·.. · ..

·;: ·.

April 24th June 1st July 1st • Send out press release to • If feasible, sign • Host Compliance to notify community of the satisfactory tax collection mail initial warning new STR rules and agreement with Airbnb letters to all provide answers to FAQs (through Host identifiable hosts • launch 24/ 7 hotline Compliance) found to be in non • Initiate negotiations with • Online tax collection compliance Airbnb with t he hope of forms added to the City's with the new securing a satisfactory tax website ordinance collection agreement through Host Compliance ·

~*~-**Wi¥4¥49¥4@ tfi4® fV ~~-;.~.r~~'i'_.·:-~-~~·~'1,_-,:_-~~ -.. ' l -·- .. _, \:-- ~~~~~~~$1$..$.JM~~~t&~~!W.~~i{~~:~?:!:~-~-~:l-71.1!l~'r:AJ.~ Item 7.a.(2)

Rent Stabilization Board

DATE: March 20, 2017

TO: Honorable Members of the Rent Stabilization Board

FROM: Jay Kelekian, Executive Director By: Lief Bursell, Associate Management Analyst Jeannie Wong, Assistant Management Analyst

SUBJECT: Market Medians: January 1999 through December 2016

The attached Market Medians Report for the 4th quarter of2016 updates the numbers from the 3rd quarter of2016 report submitted to the Board on December 19, 2016.

Continuing a trend from last quarter, there were approximately 6% fewer new tenancies reported during the 4rd quarter of2016 (313 new tenancies) than were reported during the 4th quarter of 2015 (334 new tenancies). Overall, there were 456 fewer tenancies reported in calendar year 2016 than were reported in 2015.

From a year-to-year comparison, our data indicates that residential rents in Berkeley (subject to rent stabilization) continued to reach new all-time highs in 2016. The average monthly rent for tenancies that began after the start of full vacancy decontrol in 1999 is now just over $1 ,825 a month.

The following tables compare the median rent for new tenancies during 2016 with median rents for new tenancies first in 2015 and then in 2011.

2015-16 Annual Market Rent Comparison Unit Size 2015 Median Rent 2016 Median Rent %increase Studio $1,475 $1,600 8.47% 1 BR $1,800 $1,995 10.83% 2BR $2,600 $2,750 5.77% 3 BR $3,450 $3,595 4.20% Market rents have increase by between 8% and 11% since 2015.

2012-16 Annual Market Rent Comparison Unit Size 2011 Median Rent 20 16 Median Rent %increase Studio $970 $1,600 65% 1 BR $1,250 $1,995 60% 2BR $1,700 $2,750 62% 3 BR $2,400 $3,595 50%

Market rents have increase by between 50% and 65% since 2011 . Additionally, please note that staff has provided a table on 2016 new tenancies by market area and a chart the average rent for post 1999 tenancies on the last page of the 4th quarter report.

Attachments: 1. 20 16 Market Medians Report Rent Stabilization Board MEMORANDUM

DATE: March 20,2017

TO: Jay Kelekian, Executive Director

FROM: LiefBursell, Associate Management Analyst Jeannie Wong, Assistant Management Analyst

SUBJECT: Market Medians: January 1999 through December 2016

The tables below update and supplement medians provided for the fourth quarter of2016. Medians reported in the first section (Medians by Calendar Quarter) are derived from only those units which have had a new tenancy · recorded in R TS during the reported period.

We have updated the "Citywide" medians (includes all "rented" units regardless of tenancy date by number of bedrooms) and "All Units" medians (reflective of neither the unit size or tenancy date) to include medians as of December 31, 2016. For comparison purposes, December 31, 1998 medians are included below. Changes to previously reported figures are denoted by an asterisk (*).

Medians for 12/31/1998 #BR Rent #Units Studio $527 3,725 1 BR $624 8,075 2BR $777 5,651 3 BR $1,083 915 Medians by Calendar Quarter (new tenancies only)

1999' newtenancies) 1"1 Q 1999 2nd Q 1999 3rd Q 1999 41h Q 1999 12/3111999 (Year) #BR Rent #Units Rent #Units Rent #Units Rent #Units Rent #Units Studio $689 297 $715 360 $745 489 $725 167 $715 1,145 1BR $880 487 $970 601 $950 683 $950 326 $950 1,927 2BR $1 ,150 303 $1,350 456 $1,350 401 $1450 161 $1,300 1,245 3BR $1,500 41 $1 ,800 69 $1,700 57 $1745 21 $1,650 172

2125 Milvia Street, Berkeley, California 94704 TEL: (510) 981-7368 (981-RENT) • TDD: (510) 981-6903 • FAX: (510) 981-4940 E-MAIL: [email protected] •DINTERNET: www.citvofberkeley.info/rent/ Jay Kelekian, Executive Director March 20, 2017 Mar·ket Medians: January 1999 through December 2016- Page 2

2000(new tenancies) pt Q 2000 2nd Q 2000 yd Q2000 4th Q 2000 12/3112000 (Year) #BR Rent #Units Rent #Units Rent #Units Rent #Units Rent #Units Studio $750 262 $800 344 $850 466 $850 130 $800 1,073 1BR $975 415 $1,100 644 $1,150 681 $1,195 292 $1 ,100 1,861 2BR $1 ,3 00 233 $1,500 454 $1 ,500 408 $1,500 146 $1,500 1, 173 3BR $1 ,650 28 $2,000 76 $2,000 56 $1 ,900 21 $1,980 171

2001 new tenancieS) pt Q 2001 2nd Q 2001 3rd Q 2001 4th Q 2001 12/3112001 (Year) #BR Rent #Units Rent #Units Rent #Units Rent #Units Rent #Units Studio $875 159 $900 302 $900 479 $880 157 $900 1,002 1BR $1,195 322 $1 ,200 557 $1 ,200 607 $1 ,200 289 $1,200 1,647 2 BR $1,550 144 $1,775 395 $1,685 357 $1,500 165 $1,650 1,007 3BR $2,000 21 $2,400 71 $2, 100 36 $1,500 12 $2, 100 133

2002 new tenancies) 1"t Q 2002 2nd Q 2002 yd Q 2002 4th Q2002 12/3112002 (Year) #BR Rent #Units Rent #Units Rent #Units Rent #Units Rent #Units Studio $875 230 $875 409 $875 544 $800 170 $850 1,251 1BR $1,100 341 $1,195 722 $1,195 661 $1,100 313 $1 ,150 1,932 2BR $1 ,500 193 $1,765 526 $1,600 416 $1,450 170 $1 ,600 1,253 3BR $1 ,900 22 $2,250 87 $2,200 51 $1,800 27 $2,150 182

. 2003~ new ten~n'!ieS). 1"t Q 2003 2nd Q 2003 3rd Q 2003 4th Q 2003 12/3112003 (Year) #BR Rent #Units Rent #Units Rent #Units Rent #Units Rent #Units Studio $820 231 $850 365 $875 478 $850 130 $850 1,142 1BR $1,100 321 $1,150 645 $1 ,100 747 $1 ,050 262 $1,100 1,892 2BR $1,400 200 $1,645 506 $1 ,495 463 $1 ,350 176 $1,500 1,326 3BR $1,850 25 $2,000 84 $2,100 52 $1 ,800 17 $1,999 185

2004'' new tenancieS)' pt Q 2004 2nd Q 2004 3rd Q 2004 4th Q 2004 12/3112004 (Year) #BR Rent #Units Rent #Units Rent #Units Rent #Units Rent #Units Studio $800 205 $825 357 $825 528 $800 140 $800 1,129 1BR $1,000 313 $1 ,100 596 $1,050 804 $1 ,000 272 $1,050 1,896 2BR $1,300 194 $1,500 521 $1 ,449 485 $1,295 149 $1 ,400 1,294 3BR $1,650 19 $2,150 77 $2,000 68 $1,550 17 $2,020 174

2005. newtenancies) pt Q 2005 2nd Q 2005 3rd Q 2005 4th Q 2005 12/3112005 (Year) #BR Rent #Units Rent #Units Rent #Units Rent #Units Rent #Units Studio $825 225 $850 322 $850 545 $830 117 $850 1,132 1BR $1 ,050 282 $1,100 594 $1 ,100 800 $1 ,050 226 $1 ,095 1,832 2BR $1,300 188 $1,545 527 $1 ,476 560 $1,350 llO $1,450 1,383 3BR $1,650 15 $2,030 71 $2,000 59 $1,900 7 $2,000 160

2125 Milvia Street, Berkeley, California 94704 TEL: (510) 981-7368 (981-RENT) • TDD: (510) 981 -6903 • FAX: (510) 981-4940 E-MAIL: [email protected] •DINTERNET: www.cityofberkeley.info/rent/ Jay Kelekian, Executive Director March 20, 201 7 Market Medians: January 1999 through December 2016- Page 3

2006 (new tenancies) 1"t Q 2006 2nd Q 2006 3rd Q2006 4th Q 2006 12/31/2006 (Year) #BR Rent #Units Rent #Units Rent #Units Rent #Units Rent #Units Studio $825 186 $890 332 $875 554 $850 90 $875 1,159 lBR $1,060 298 $1,150 664 $1,150 784 $1 , 100 176 $1,100 1,944 2BR $1,400 188 $1,650 550 $1,500 537 $1,445 108 $1,550 1,430 3BR $1,700 19 $2,240 77 $2,000 80 $2,000 9 $2,100 191

200·1 tnew.tenancies) · 1st Q 2007 2nd Q 2007 yd Q2007 4th Q 2007 12/31/2007 (Year) #BR Rent #Units Rent #Units Rent #Units Rent #Units Rent #Units Studio $900 190 $925 371 $920 496 $885 130 $900 1;099 lBR $1,100 301 $1,200 698 $1,200 826 $1 ,175 196 $1 ,200 1,930 2BR $1,495 166 $1,700 649 $1,600 525 $1,490 122 $1,600 1,421 3BR $2,400 17 $2,300 80 $2,200 98 $2,250 19 $2,250 210

·:zoos: new tenairc.ies) 1"t Q 2008 2nd Q 2008 yd Q2008 4th Q 2008 12/31/08 (Year) #BR Rent #Units Rent #Units Rent #Units Rent #Units Rent #Units Studio $925 195 $990 375 $995 506 $950 128 $980 1,116 1BR $1,185 308 $1,300 704 $1,290 860 $1,200 201 $1,275 1,980 2BR $1,570 202 $1,898 632 $1,750 522 $1 ,650 102 $1,775 1,412 3BR $2,200 24 $2,590 83 $2,400 113 $2,400 15 $2,450 230

'20b9' newiten.Qc'ies} 1"t Q 2009 2nd Q 2009 3rd Q 2009 4th Q 2009 12/31109 (Year) #BR Rent #Units Rent #Units Rent #Units Rent #Units Rent #Units Studio $925 164 $985 352 $975 447 $845 124 $950 1,081 lBR $1,150 277 $1,350 633 $1,250 757 $1,175 222 $1,250 1,887 2BR $1,585 138 $1,900 638 $1,675 462 $1,450 143 $1,700 1,406 3BR $2,450 21 $2,500 112 $2,395 86 $2,100 24 $2,400 254

201 o·(O:ew 1eruincie5). pt Q 2010 2nd Q 2010 3rd Q 2010 4th Q 2010 12/31/2010(Year) #BR Rent #Units Rent #Units Rent #Units Rent #Units Rent #Units Studio $925 173 $985 337 $950 518 $900 98 $950 1,038 1BR $1,195 244 $1,295 648 $1,195 787 $1,200 189 $1,225 1,828 2BR $1 ,500 142 $1,900 580 $1,600 523 $1,500 115 $1,660 1,365 3BR $1,850 16 $2,500 113 $2,395 98 $2,000 16 $2,395 241

2011 lnew tenancies) pt Q 2011 2nd Q 2011 3rd Q 2011 4th Q2011 12/31/201l(Year) #BR Rent #Units Rent #Units Rent #Units Rent #Units Rent #Units Studio $895 122 $975 403 $995 454 $955 98 $970 1,105 1BR $1,175 235 $1,285 662 $1,250 722 $1,250 220 $1,250 1,899 2BR $1,495 139 $1,900 621 $1,650 544 $1,595 116 $1,700 1,472 3BR $2,050 21 $2,570 106 $2,400 96 $2,400 12 $2,400 248

2012 newtenancies) 181 Q 2012 2"d Q 2012 3rd Q 2012 4th Q 2012 12/31/2012(Year) #BR Rent #Units Rent #Units Rent #Units Rent #Units Rent #Units Studio $900 152 $1,025 427 $1 ,050 408 $1,095 87 $1,050 1050 1BR $1,200 226 $1,395 578 $1,345 701 $1,300 162 $1,325 1689 2BR $1,600 123 $2,095 641 $1,750 501 $1 ,700 99 $1,850 1431 3BR $2,300 16 $2,700 113 $2,595 93 $2,600 12 $2,595 247

2013''· •new tenancies} 1"1 Q2013 2"d Q 2013 3rd Q 2013 4th Q 2013 12/31/2013 (Year) #BR Rent #Units Rent #Units Rent #Units Rent #Units Rent #Units Studio $1,000 132 $1,100 419 $1,150 384 $1,100 96 $1,100 1139 1BR $1,300 226 $1,495 664 $1 ,450 611 $1,500 207 $1,460 1906 2BR $1,750 100 $2,195 611 $1,995 480 $1,950 105 $2,046 1522 3BR $2,500 15 $2,900 147 $2,895 77 $2,700 16 $2,895 280

2014· new tenancies) ptQ2014 2"d Q 2014 3rd Q 2014 4th Q 2014 12/31/2014 (Veal") #BR Rent #Units Rent #Units Rent #Units Rent #Units Rent #Units Studio $1,050 147 $1,249 465 $1,275 446 $1,263 124 $1,250 1098 1BR $1,400 232 $1,595 721 $1,620 634 $1,650 177 $1,595 1720 2BR $1,900 113 $2,395 623 $2,248 457 $2,000 86 $2,250 1279 3BR $2,850 16 $3 ,250 112 $3,000 79 $2896 13 $3,000 235

2015 · new.tenancies)' 181 Q 2015 2"d Q 2015 3rd Q 2015 4th Q 2015 12/31/2015 (Year) #BR Rent #Units Rent #Units Rent #Units Rent #Units Rent #Units Studio . $1,295 160 $1,495 350 $1,495 358 $1,548 86 $1,475 966 1BR $1,695 235 $1,795 612 $1,860 520 $1 ,900 142 $1,800 1520 2BR $2,150 125 $2,695 582 $2,600 383 $2,300 97 $2,600 1194 3BR $2,588 18 $3,500 112 $3,498 62 $3 ,000 9 $3,450 213

I 20f6.,1new tenanCies). 1"1 Q2016 2"d Q 2016 3rd Q 2016 4th Q 2016 12/31/2016 (Year) #BR Rent #Units Rent #Units Rent #Units Rent #Units Rent #Units Studio $1,450 105 $1,695 279 $1,600 369 $1,633 90 $1,600 912 1BR $1,795 171 $2,000 480 $2,050 491 $1 ,925 125 $1,995 1387 2BR $2,395 90 $2,800 444 $2,800 282 $2,500 84 $2,750 957 3BR $3,300 13 $3,750 101 $3,495 51 $3,150 11 $3,595 190

2125 Milvia Street, Berkeley, California 94704 TEL: (510) 981-7368 (981-RENT) • TDD: (510) 981-6903 • FAX: (510) 981-4940 E-MAIL: [email protected] • DINTERNET: www.cityofberkeley.info/rent/ J ay Keleldan, Executive Director March 20, 2017 Market Medians: January 1999 through December 2016- Page 5

Annual Citywide Medians By Number of Bedrooms (All Units)

As of 12/31198 12/31199 12/3112000 12/3112001 12/3112002 12/3112003 #BR Rent Units Rent Units Rent Units Rent Units Rent Units Rent Units Studio $527 3,725 $560 3,840 $596 3,895 $650 3,871 $719 3,854 $731 3,910 1BR $624 8,075 $662 8,1 45 $714 8,185 $773 8,184 $858 8,097 $900 7,983 2BR $777 5,651 $835 5,659 $900 5,693 $975 5,643 $1,100 5,562 $1 ,200 5,500 3BR $1,083 915 $1 ,140 831 $1,245 816 $1,350 807 $1,538 784 $1,662 765

As of 12/3112004 12/3112005 12/3112006 12/3112007 12/31108 12/31/2009 #BR Rent Units Rent Units Rent Units Rent Units Rent Units Rent Units Studio $750 3,905 $775_ 3,928 $795 3,919 $825 3,834 $865 3,762 $895 3,740 1 BR $939 7,941 $950 7,899 $982 7,906 $1,026 7,911 $1 ,075 7,951 $1,100 7,945 2BR $1 ,250 5,442 $1,280 5,430 $1,321 5,451 $1,395 5,571 $1 ,450 5,667 $1,500 5,721 3BR $1,750 753 $1 ,799 733 $1,820 733 $1,930 780 $2,044 853 $2,100 887

As of 12/31/2010 12/31/2011 12/3112012 12/31/2013 12/31/2014 12/31/2015 #BR Rent Units Rent Units Rent Units Rent Units Rent Units Rent Units Studio $895 3,703 $900 3,813 $935 3,729 $975 3,668 $1,012 3,858 $1,081 3,899 1BR $1 ,101 7,895 $1,129 7,906 $1 ,177 7,855 $1,225 7,893 $1 ,293 7,928 $1 ,350 7,950 2BR $1,500 5,734 $1 ,525 5,804 $1 ,587 5,900 $1 ,650 5,975 $1 ,746 6,004 $1,846 6,036 3BR $2,150 890 $2,150 934 $2,241 987 $2,350 1,026 $2,450 1,027 $2,595 1,034

As of 12/31/2016 #BR Rent Units Studio $1 ,178 4,002 1BR $1 ,439 7,995 2BR $1 ,957 6,046 3BR $2,700 1,044

2125 Milvia Street, Berkeley, California 94704 TEL: (510) 981-7368 (981-RENT) • TDD: (510) 981-6903 • FAX: (510) 981-4940 E-MAIL: [email protected] •DINTERNET: www.cityofberkeley.info/rent/ Jay Keleldan, Executive Director March 20, 2017 Market Medians: January 1999 through December 2016- Page 6

Annual Citywide Medians and Averages (All Units- includes units with 4+ bedrooms)

12/3111998 12/3111999 12/3112000 12/3112001 12/3112002 Med I Avg I #Units Med I Avg I #Units Med I Avg I #Units Med I Avg I #Units Med I Avg I #Units $6431 $7201 19,253 $6901 $7871 18,788 $7501 $8651 19,178 $8101 $9431 18,767 $8821 $1,0081 18,784

12/3112003 12/3112004 12/3112005 12/3112006 12/3112007 Med I Avg I #Units Med I Avg I #Units Med I Avg I #Units Med I Avg I #Units Med I Avg I #Units $9001 $1 ,0281 18,617 $9321$1 ,0461 18,652 $9501 $1,0621 18,418 $9941 $1 ,0921 18,534 $1 ,0421 $1 ,1471 18,545

12/3112008 12/3112009 12/3112010 12/3112011 12/3112012 Med I Avg I #Units Med I Avg I #Units Med I Avg I #Units Med I Avg I #Units Med I Avg I #Units $1 ,1OOI $1,2131 18,798 $1 ,150I$1,26ol 18,893 $1 ,1591 $1,2741 18,797 $1,1951 $1 ,2971 19,027 $1,2361 $1,3451 19,030

12/3112013 12/3112014 12/3112015 12/3112016 Med I Avg I #Units Med I Avg I #Units Med I Avg I #Units Med I Avg I #Units $1,3ool $1,419 1 19,093 $1 ,375 I $1 ,498 1 19,087 $1,474 1 $1,606 119,252 $1 ,572 1 $1 ,710 119,411

2125 Milvia Street, Berkeley, California 94704 TEL: (510) 981-7368 (981-RENT) • TDD: (510) 981 -6903 • FAX: (510) 981-4940 E-MAIL: [email protected] •DINTERNET: www.cityotberkeley.info/rent/ Rent Stabilization Board Clty of Berkeley and Surro unding Cities Conaua T ract Ma p and Mark" t Area- City of Berkeley Number of Reported Qualifying Vacancy Registrations By Submarket Area through 1i/3112016 (As of3/14/2017) (Excludes exempt units)

Housing Tracts by Area: Area 1, tract nos. 11 , 12, 13 , 14, 15, 16, 17, 38 Area 2, tract nos. 18, 19, 22, 23, 30, 31 Area 3, tract nos. 24, 25, 27, 28, 29, 36, 37 Area 4, tract nos. 20, 21, 32 ~ City Boundary 1 Area 5, tract nos. 33, 34, 35, 39, 40 -ConsusTractBounl;lary - Markei Are.a ao un~Soory "

Total Number of Registered ("Rented") Units by Submarket Area 12/3112016 No. Units % of total units Avg . Rent Ceiling North Berkeley (Area 1) 1,467 7.56% $1 ,867.36 Central Berkeley (Area 2) 3,503 18.05% $1 ,543 .82 University Area (Area 3) 10,082 51.94% $1 ,809.48 West Berkeley (Area 4) 818 4.2 1% $1 ,412.60 South Berkeley (Area 5) 3,410 17.5 7% $1 ,561.86

Total 19,411 $1 ,7 10.06

Submarket Area No. Units % of Submarket 12/31/2016 Avg. LRC

Tenancies Starting Before 1999 2,257 units (11.63% of aU units) 1 211 14.38% $919.32 2 539 15 .39% $812.10 A vg. Rent Ceiling 3 997 9.89% $850.50 All units = $836.28 4 119 14.55% $746.75 1 BR = $764.59 (1,052 units) 5 394 11 .55% $816.01

Tenancies Starting 111/99-12/3112016 17,144 units (88.32% of all units) 1 1,256 85 .62% $2,026.62 2 2,964 84.61% $1 ,676.88 A vg. Rent Ceiling 3 9,085 90.11% $1 ,914.72 . All Units= $1,825.32 4 699 85.45% $1 ,525.96 1 BR = $1,592.93 (6,943 units) 5 3,016 88.28% $1 ,659.29 2125 Milvia Street, Berkeley, California 94704 TEL: (510) 981 -7368 (981-RENT) • TDD: (510) 981-6903 • FAX: (510) 981-4940 E-MAIL: [email protected] •DINTERNET: www.cityotberkeley.info/rent/ Jay Kelekian, Executive Director March 21, 201 6 Market Medians: January 1999 through December 201 5- Page 8

,,, :· 2016 New Tenancies·:by MarketAr.ea ·_ (AU;Uriits,-,includes units with 4+ hedroo~s)

Market 1 Market 2 Market 3 Market4 Market 5 All Markets Bedrooms Median Median Median Median Median Median Units Units Units Units Units Units Rent Rent Rent Rent Rent Rent 0 $1,583 30 $1,595 71 $1,600 709 $1,350 12 $1,585 68 $1,600 890 1 $2,200 83 $1,950 192 $2,025 906 $1,800 34 $1,800 169 $1,995 1,384 2 $2,998 60 $2,500 132 $2,895 576 $2,500 26 $2,400 153 $2,750 947 3 $3,584 26 $3,345 14 $3,670 122 $3,100 5 $3,200 19 $3,598 186 All units $2,495 203 $2,000 412 $2,100 2,356 $2,050 77 $2,000 414 $2,100 3,462

(See previous page for map of market areas)

Average Rent for post 1999 Tenancies {Q41999- Q4 2016)

Q4 2016 ' I I I i Q4 2015 ' I I I Q4 2014 Q4 2013 I Q4 2012 ' Q4 2011 I Q4 2010 I Q4 2009 I i Q4 2008 Q4 2007 I Q4 2006 I Q4 2005 I Q4 2004 I Q4 2003 Q4 2002 Q4 2001 Q4 2000

041999 -

$1,000.00 $1,100.00 $1,200.00 $1,300.00 $1,400.00 $1,500.00 $1,600.00 $1,700.00

(Note: the table and chart on this page are only produced for the 4th Quarter report)

United Nations AIHRC/34/51

(A\ General Assembly Distr.: General 18 January 2017

~~ Original: English

Human Rights Council Thirty-fourth session 27 February-24 March 2017 Agenda item 3 Promotion and protection of all human rights, civil, political, economic, social and cultural rights, including the right to development

Report of the Special Rapporteur on adequate housing as a component of the right to an adequate standard of living, and on the right to non-discrimination in this context

Note by the Secretariat

The Secretariat has the honour to transmit to the Human Rights Council the thematic report of the Special Rapporteur on adequate housing as a component of the right to an adequate standard of living, and on the right to non-discrimination in this context, Leilani Farha, pursuant to Human Rights Council resolution 31/09. The report focuses on the "financialization of housing" and its impact on human rights. It examines structural changes that have occurred in recent years whereby massive amounts of global capital have been invested in housing as a commodity, as security for financial instruments that are traded on global markets, and as a means of accumulating wealth. The report assesses the effect of those historic changes on the enjoyment of the right to adequate housing and outlines an appropriate human rights framework for States to address them. The report reviews the role of domestic and international law in that sphere, and considers the application of principles of business and human rights. The report concludes with a review of States' policy responses to the financialization of housing and some recommendations for more coherent and effective strategies to ensure that the actions of global financial institutions and actors are consistent with ensuring access to housing for all by 2030. The Special Rapporteur suggests that, as a way forward, States must redefine their relationship with private investors and international financial institutions, and reform the governance of financial markets so that, rather than treating housing as a commodity valued primarily as an asset for the accumulation of wealth they reclaim housing as a social good, and thus ensure the human right to a place to live in security and dignity.

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Report of the Special Rapporteur on adequate housing as a component of the right to an adequate standard of living, and on the right to non-discrimination in this context

Contents

Page I. Introduction: the financialization of housing ...... 3 II. Human rights framework ...... S III. Human rights implications of the financialization of housing...... 6 A. Historical origins of the financialization of housing...... 6 B. Effects of excess global capital...... 8 C. Dehumanized housing: from social use to commodity value ...... 9 D. Creating inequality and exclusion...... II E. Relinquished governance and accountability...... 12 IV. Financialization of housing in developing and emerging economies...... 13 V. Lack of access to justice, effective remedies and accountability ...... IS A. Investment treaties ...... IS B. Domestic courts ...... 16 C. Business and human rights ...... 18 VI. Policy responses to the financialization of housing...... 19 VII. Conclusions and recommendations: the way forward...... 21

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I. Introduction: the financialization of housing

I. The expanding role and unprecedented dominance of financial markets and corporations in the housing sector is now generally referred to as the "financialization of housing". 1 The term has a number of meanings. In the present report, the "financialization of housing" refers to structural changes in housing and financial markets and global investment whereby housing is treated as a commodity, a means of accumulating wealth and often as security for financial instruments that are traded and sold on global markets. It refers to the way capital investment in housing increasingly disconnects housing from its social function of providing a place to live in security and dignity and hence undermines the realization of housing as a human right. It refers to the way housing and financial markets are oblivious to people and communities, and the role housing plays in their well-being. 2. Housing and real estate markets have been transformed by corporate finance, including banks, insurance and pension funds, hedge funds, private equity firms and other kinds of financial intermediaries with massive amounts of capital and excess liquidity. The global financial system has grown exponentially and now far outstrips the so-called real "productive" economy in terms of sheer volumes of wealth, with housing accounting for much of that growth. 3. Housing and commercial real estate have become the ·'commodity of choice" for corporate finance and the pace at which financial corporations and funds are taking over housing and real estate in many cities is staggering. The value of global real estate is about US$ 217 trillion, nearly 60 per cent of the value of all global assets, with residential real estate comprising 75 per cent of the total. 2 In the course of one year, from mid-20 13 to mid- 20 14, corporate buying of larger properties in the top I 00 recipient global cities rose from US$ 600 billion to US$ I trillion. 3 Housing is at the centre of an historic structural transformation in global investment and the economies of the industrialized world with profound consequences for those in need of adequate housing. 4. In "hedge cities", prime destinations for global capital seeking safe havens for investments, housing prices have increased to levels that most residents cannot afford, creating huge increases in wealth for property owners in prime locations while excluding moderate- and low-income households from access to homeownership or rentals due to unaffordability. Those households are pushed to peri-urban areas with scant employment and services. 5. Elsewhere, financialization is linked to expanded credit and debt taken on by individual households made vulnerable to predatory lending practices and the volatility of markets, the result of which is unprecedented housing precarity. Financialized housing markets have caused displacement and evictions at an unparalleled scale: in the United States of America over the course of 5 years, over 13 million foreclosures resulted in more

1 See Manuel Aalbers, The Financialization of Housing: A political economy approach (London and New York, Routledge, 2016), and Radhika Balakrishnan, James Heintz and Diane Elson, Rethinking Economic Policy for Social Justice: The radical potential of human rights (London and New York, Routledge, 2016), p. 85. 2 Savills World Research, "Around the world in dollars and cents: what price the world? Trends in international real estate trading", 2016, pp. 4-5. Available from www.savills.co.uk/research articles/188297 /198669-0. 3 Saskia Sassen, 'The global city: enabling economic intermediation and bearing its costs", City & Community, vol. 15 , No. 2 (June 2016), p. 105 .

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than 9 million households being evicted. 4 In Spain, more than half a million foreclosures between 2008 and 2013 resulted in over 300,000 evictions. 5 There were almost I million foreclosures between 2009 and 2012 in Hungary. 6 6. In many countries in the global South, where the majority of households are unlikely to have access to formal credit, the impact offinancialization is experienced differently, but with a common theme- the subversion of housing and land as social goods in favour of their value as commodities for the accumulation of wealth, resulting in widespread evictions and displacement. Informal settlements are frequently replaced by luxury residential and high-end commercial real estate. 7 7. While much has been written about the financialization of housing, it has not often been considered from the standpoint of human rights. Decision-making and assessment of policies relating to housing and finance are devoid of reference to housing as a human right. Issues related to business and human rights have received some attention in recent years. However, the housing and real estate sector -the largest business sector with many of the most serious impacts on human rights- appears to have been mostly ignored. 8. A report on the topic is timely as States embark on the implementation of the Sustainable Development Goals. If the commitment in target 11.1 to ensure access for all to adequate, safe and affordable housing and basic services is to be achieved by 2030, it is essential to consider the role of international finance and financial actors in housing systems. That will help to identify and address more effectively patterns of systemic exclusion, to ensure more meaningful human rights accountability for issues of displacement, evictions, demolitions and homelessness, and the engagement of all relevant actors in the realization of the right to adequate housing. 9. Constructing human rights accountability within a complex financial system to which Governments are themselves accountable, involving trillions of dollars in assets, may seem a daunting task. However, the global community cannot afford to be cowered by the complexity of financialization. 8 The present report aims to cut through some of the complexity and opaqueness of finance in housing to expose the central relevance and necessity of the human rights paradigm at multiple levels, from the international to the local. 10. The report builds on important work undertaken by the previous Special Rapporteur on the right to housing. In her 2012 report on the impact of finance policies on the right to housing of those living in poverty (A/67/286), she warned of emerging trends towards the financialization of housing encouraged by States ' abandonment of social housing programmes and increased reliance on private market solutions. She documented attempts by States to rely on the private market and homeownership, which increases inequality and fails to address the housing needs of low-income and marginalized groups. More fundamentally, she called for a paradigm shift through which housing would once again be

4 Saskia Sassen, "Finance as capability: good, bad, dangerous", 2014, pp. 5-6. Available from http://arcade.stanford.edu/occasionlfinance-capability-good-bad-dangerous. Observatory of Economic, Social and Cultural Rights and Platform of Mortgage Victims, "Housing emergency in Spain: the crisis of foreclosures and evictions from a human rights perspective" (December 20 13), p. 12. Available from http://observatoridesc.org/sites/default/files/20 13-housing emergen cy -spain -observatory -des c. pdf 6 Saskia Sassen, Expulsions: Brutality and Complexity in the Global Economy (Cambridge, Massachusetts and London, Harvard University Press, 2014), p. 48. 7 Stanley D. Brunn, Maureen Hays-Mitchell and Donald J. Zeigler, eds., Cities of the world: world regional urban development, 5th ed. (Plymouth, Rowman & Littlefield Education, 20 12), p. 446. 8 See Saskia Sassen, Expulsions: Brutality and Complexity in the Global Economy (Cambridge, Massachusetts and London, Harvard University Press, 2014 ).

4 A/HRC/34/51

recognized as a fundamental human right rather than as a commodity. The present report takes up that challenge.

II. Human rights framework

II. The right to adequate housing is, at its core, the right to a place to live in dignity and security. It is interdependent with other human rights, particularly the right to equality and non-discrimination and the right to life (see A/71/310). It is against those core human rights values that the actions of States in relation to financial actors and housing systems are to be assessed. 12. International and domestic financial institutions and markets are created and sustained by Governments and must be made accountable to States ' human rights obligations. Millions of foreclosures, evictions and displacements and more than a billion people living in grossly inadequate housing conditions and homelessness worldwide signal, among other things, the failure of States and of the international community to manage the interaction between financial actors and housing systems in accordance with the right to adequate housing. The absence of any effective human rights monitoring or accountability in that sphere also · signals the underestimation on the part of Governments, international and national human rights bodies, domestic courts, lawyers and advocates of the role that domestic, regional and international human rights law could play as a framework for both regulating financial actors and engaging financial systems in the realization of the right to housing. 13. States' human rights obligations are commonly categorized on the basis of a tripartite division of obligations to respect, protect and fulfil human rights. A State must respect the right to housing by refraining from taking any action that would violate that right, protect individuals and communities from violations of the right to housing by third parties and fulfil the right to adequate housing to the maximum of its available resources, with a view to achieving progressively its full realization by all appropriate means, including particularly the adoption of legislative measures. 9 The obligation to fulfil the right to housing includes adopting and implementing, in collaboration with stakeholders, strategies for the realization of the right to housing that clarify the responsibilities and roles of all levels of government, institutions and private actors, with goals, timelines, accountability mechanisms, appropriate budgetary allocations and measures to ensure access to justice. 10 14. The tripartite obligations of States in relation to the management of financial markets and the regulation of private actors are often interpreted too narrowly. Under international human rights law, States' obligations in relation to private investment in housing and the governance of financial markets extend well beyond a traditional understanding of the duty to simply prevent private actors from actively violating rights. The assumption, bolstered by neo-liberalism, that States should simply allow markets to work according to their own rules, subject only to the requirement that private actors "do no harm" and do not violate the rights of others, is simply not in accordance with the important obligation to fulfil the right to adequate housing by all appropriate means, including legislative measures. 15. The State must regulate, direct and engage with private market and financial actors, not simply to ensure that they do not explicitly violate rights, but also to ensure that the

9 See International Covenant on Economic, Social and Cultural Rights, art. 2 (I). 10 See Committee on Economic, Social and Cultural Rights, general comment No.4 (1991) on the right to adequate housing, paras. 11-15.

5 A/HRC/34/51

rules under which they operate and their actions are consistent with the realization of the right to adequate housing. States are obliged under international human rights to ensure that private investors respond to the needs of residents for secure, affordable housing and do not cater only to the wealthy or purchase homes simply to leave them empty. 16. State compliance with the right to adequate housing must ultimately be assessed in relation to the circumstances of rights-holders. A human rights framework for addressing the financialization of housing must challenge the way in which accountability to the needs of communities and the human rights obligations of Governments has been replaced with accountability to markets and investors. Mechanisms must be established for rights-holders to be fully heard and engaged in decisions that affect them. States must ensure that financial institutions and investors are responsive to the needs of marginalized communities, behave in a manner that is consistent with the full realization of the right to adequate housing and provide complaints procedures and access to effective remedies. 11 17. The Committee on Economic, Social and Cultural Rights has suggested that the obligation to fulfil incorporates both an obligation to facilitate and an obligation to provide. 12 In the context of the critical relationship between housing and financial markets, the articulation of a State's fulfilment obligation to not only provide housing when needed but also to facilitate the implementation of the right to housing is helpful in capturing the wide range of States' obligations to ensure that financial markets and the actions of private investors work towards the realization of the right to adequate housing. 18. In addition to the more obvious requirements, within the framework of human rights, to ensure that housing developers exercise due diligence, comply with safety standards and adopt policies of non-discrimination, for example, States may also be required to ensure that investment in housing complies with a rights-based housing strategy and with the target of ensuring adequate housing for all by 2030. Private actors may be required to take particular steps to ensure access to credit for disadvantaged households and to address the needs of residents of informal settlements, women, migrants and people with disabilities. The obligation of States to facilitate the realization of the right to housing by establishing a coherent strategy at both the national and international levels with clearly allocated roles and responsibilities is central to the commitments made. by States in the 2030 Agenda for Sustainable Development and the New Urban Agenda.

III. Human rights implications of the financialization of housing

A. Historical origins of the financialization of housing

19. The financialization of housing has its origins in n¥o-liberalism, the deregulation of housing markets, and structural adjustment programmes imposed by financial institutions and agreed to by States. It is also tied to the internationalization of trade and investment agreements which, as discussed below, make States' housing policies accountable to investors rather than to human rights. The financialization of housing is also the result of significant changes in the way credit was provided for housing and more specifically, of the advent of"mortgage-backed securities".

11 See Committee on Economic, Social and Cultural Rights, communication No. 2/2014, J.D. G. v. Spain, Views adopted on 17 June 2015, and general comment No. 9 ( 1998) on the domestic application of the Covenant. See also Balakrishnan, Heintz and Elson, Rethinking Economic Policy for Social Justice, pp. 96-97. 12 See Committee on Economic, Social and Cultural Rights, general comments No . 12 ( 1999) on the right to adequate food, para. 15, and No. 13 (1999) on the right to education, para. 46.

6 A/HRC/34/51

20. Prior to the advent of mortgage-backed securities in the 1980s, the provision of credit for a housing purchase was generally an individualized contractual relationship between a single lender, usually a bank or a savings and loan institution, and a single creditor or homeowner. Mortgage-backed securities were promoted as a means of attracting additional lenders into the mortgage market by reducing the reliance on local financial institutions. They allowed for portfolios of mortgages to be bundled together, in order to distribute the risk more evenly among all of the mortgages, and sold to investors in the form of bonds or investment instruments on secondary bond markets. That created new conditions for global capital to be invested in housing finance. 13 21. The 2008 global financial crisis revealed the fragility, volatility and predatory nature of financialized housing markets and the potential for catastrophic outcomes both for individual households and for the global economy. In the United States of America, there were an average of 10,000 foreclosures per day in 2008, and as many as 35 million individuals were affected by evictions over a five-year period. 14 Not only had people lost their homes but they faced personal financial ruin. 22. Many expected that the global financial crisis and its impact on the human rights of millions of households would act as an alarm bell, forcing States and international financial institutions to reassess the value of unbridled financialization and introduce reforms to ensure that the financial system addressed rather than exploited the housing needs of low income households. Unfortunately, it seemed to have the opposite effect. Individuals and families who were affected by the crisis were often blamed for taking on too much debt and new rules and regulations were put in place to restrict their access to mortgages. Austerity measures cut programmes on which they had relied for access to housing options, and the march towards the financialization of housing continued. The States that were the most severely affected by the crisis assumed responsibility for billions of dollars ' worth of distressed debt (high-risk mortgages) and arranged for them to be sold off to private equity funds, thereby increasing rather than decreasing the role and power of corporate finance in national housing systems. 15 23. States have continued to focus on attracting capital and wealthy investors with reduced taxes and other benefits. Countries like Cyprus, Greece, Portugal and Spain, where harsh austerity measures have been implemented, have enacted policies to entice foreign investors into their domestic markets. 16 One such measure, colloquially known as the "golden visa", allows foreign investors to receive permanent residence or even citizenship in exchange for a minimum amount of investment in property: €500,000 in Spain and Portugal, €300,000 in Cyprus and €250,000 in Greece. 17 Australia has a similar programme for individual foreign investors who purchase $A 5 million in real estate through a real estate investment trust to ·qualifY for an Australian significant investor visa. 18 Programmes

13 See Aalbers, The Financialization of Housing. 14 Sassen, Expulsions, p. 128. 15 Debt and Development Coalition Ireland, "From Puerto Rico to the Dublin docklands: vulture funds and debt in Ireland and the global South", 2014, pp. 4-9. Available from www.debtireland.org/download/pdf7ddci_ vulture_ funds _report. pdf. 16 Xiangming Chen and Julia Mardeusz, "China and Europe: reconnecting across a new silk road", European Financial Review, vol. 2 (February 2015), p. 8. 17 See, for example, Spain, Act No. 25/2015 , art. 63 ; Greece, Act No . 4146/2013, art. 6 (2); and Portugal, Act No. 23/2007, amended by Act No. 29/2012. See also "Living, buying property and doing business in Cyprus", available at www.cyprusinformation.com/. 18 See Australia, "Explanatory statement: select legislative instrument No. I 02 , 20 15", attachment D (Subclass 188 (Business Innovation and Investment) visa). See also Dallas Rogers, Chyi Lin Lee and Ding Yan , "The politics of foreign investment in Australian housing: Chinese investors, translocal sales agents and local resistance", Housing Studies, vol. 30, No. 5 (20 15).

7 A/HRC/34/51

of that nature can contribute to housing affordability problems for local residents without providing any evidence of substantial benefits for the broader population.

B. Effects of excess global capital

24. The amount of money involved in the purchase of housing and real estate is almost impossible to digest. Cushman and Wakefield, an American global real estate services firm engaging in $90 billion worth of real estate sales per year, publishes an annual report entitled "The Great Wall of Money" which includes a calculation of the amount of capital raised each year for trans-border real estate investments. The total in 2015 was a record $443 billion, with residential properties representing the largest single share. The report notes that "cross border flows will continue to transform real estate investment across the globe". 19 25 . Housing and urban real estate have become the commodity of choice for corporate finance, a "safety deposit box" for the wealthy, a repository of capital and excess liquidity from emerging markets and a convenient place for shell companies to stash their money with very little transparency. 20 In addition, corporate tax havens that generate massive amounts of profit immune from taxation, estimated at 30 per cent of global gross domestic product, are particularly attracted to housing and real estate. 21 In most countries, residential investment provides many tax advantages, so that the housing system itself provides a tax haven for the rich (see A/67/286, pp. 11-12). 26. Housing prices in so-called "hedge cities" like Hong Kong, London, Munich, Stockholm, Sydney and Vancouver have all increased by over 50 per cent since 2011 , creating vast amounts of increased assets for the wealthy while making housing unaffordable for most households not already invested in the marketY Land prices in the 35 largest cities in China have increased almost five-fold in the past decade and prices for urban land in the top I 00 cities in China have increased on average by 50 per cent in the past year. 23 27. Corporate finance does not only profit from inflated prices in hedge cities, it also profits from housing crises. 24 The global financial crisis created unprecedented opportunities for buying distressed housing and real estate debt, which was sold off at fire sale prices in countries such as Ireland, Spain, the United Kingdom of Great Britain and Northern Ireland and the United States of America. The Blackstone Group, the world's largest real estate private equity firm, managing $102 billion worth of property, spent $10 billion to purchase repossessed properties in the United States of America at courthouses and in online auctions following the 2008 financial crisis, emerging as the largest rental

19 Cushman and Wakefield, "The Great Wall ofMoney", 2016, p. 5. Available from www. cushmanwakefield.com/en/research -and-insight/20 16/great -wall-of-money-20 16/. 20 See Rodrigo Fernandez, Annelore Hofman and Manuel Aalbers, "London and New York as a safe deposit box for the transnational wealth elite" Environment and Planning A, vol. 48, No. 12 (December 2016). 21 Aalbers, The Financialization of Housing, p. 85 . 22 See Sassen, "The global city". 23 Edward G1easan and others, "A real estate boom with Chinese characteristics", National Bureau of Economic Research, Working Paper 22789 (2016), p. 2. Available from www.nber.org/papers/w22789.pdf See also Jacky Wong, "Why China's developers can't stop overpaying for property", Wall Street Journal, 24 June 2016. 24 Elvin Wyly and others, "Cartographies of race and class: mapping the class-monopoly rents of American subprime mortgage capital", International Journal of Urban and Regional Research. vol. 33 , No.2 (June 2009), p. 333.

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landlord in the country. 25 Other major institutional players invested $20 billion to purchase approximately 200,000 single-family homes in the United States between 2012 and mid- 2013. 26 With the recovery of the United States housing market, Blackstone and other private equity firms have sought to take advantage of other buying opportunities in Europe and Asia. Cushman and Wakefield estimated that there was over €541 billion of distressed real estate debt in Europe in 2015, much of it held by public asset management companies such as the National Asset Management Agency in Ireland and the Sociedad de Gesti6n de Activos Procedentes de Ia Reestructuraci6n Bancaria (company for the management of assets proceeding from the restructuring of the banking system) in Spain. The vast majority of that debt is being purchased by giant private equity firms. 27 28. Massive investment of capital into housing markets and rising prices should not be confused with the production of housing and the benefits that accrue from it. The bulk of real estate transactions of that sort do not create needed housing or long-term secure employment. When rented homes or mortgages are owned by remote investors, money mo stly flows out of communities and simply creates greater global concentration of wealth. The new corporate interest in developing rental properties from homes sold in foreclosures has also raised concerns that there is a greater incentive to pursue foreclosures rather than modifY a loan agreement to avoid an unnecessary eviction. 28 The proliferation of foreign and domestic investment in short-term rental properties, such as for Airbnb, in countries like Portugal, has contributed to escalating prices of housing and changes to the make-up of neighbourhoods, without creating affordable housing or other benefits for the local population. 29. What is so stark about the pouring of those vast amounts of money into housing is that hardly any of it is directed towards ameliorating the insufferable housing conditions in which millions live. If even a portion of those amounts was directed towards affordable housing and access to credit for people in need of it, target 11.1 of the Sustainable Development Goals, to ensure adequate housing for all by 2030, would be well within reach. 29 Financialization under current regimes, however, creates the opposite effect: unaccountable markets that do not respond to housing need, and urban centres that become the sole preserve of those with wealth.

C. Dehumanized housing: from social use to commodity value

30. A significant portion of investor-owned homes are simply left empty. In Melbourne, Australia, for example, 82,000 or one fifth of investor-owned units lie empty. 30 In the

25 Joe Beswick and others, "Speculating on London's housing future: the rise of global corporate landlords in 'post-crisis' urban landscapes", City, vol. 20, No.2 (March 2016), pp. 323-325. 26 Right to the City Alliance, "Renting from Wall Street: Blackstone's invitation homes in Los Angeles and Riverside", July 2014, p. 9. Available from http://homesforall.org/wp- content/uploads/20 l4/07/LA-Riverside-Blackstone-Report-071514.pdf 27 Debt and Development Coalition Ireland, "From Puerto Rico to the Dublin docklands", p. 9. 28 See Sarah Edelman, Julia Gordon and David Sanchez, "When Wall Street buys Main Street: the implications of single-family rental bonds for tenants and housing markets" (Washington, D. C, Centre for American Progress, 2014 ). Available from www.americanprogress.org/wp content/uploads/20 14/02/WallStMainSt _ Report. pdf 29 Jonathan Woetzel and others, 'Tackling the world's affordable housing challenge" (McKinsey Global Institute Report, October 2014), p. 8. Available from www.mckinsey.com/global themes/urbanizationltackling-the-worlds-affordable-housing-challenge. 3° Catherine Cashmore, "Speculative vacancies 8: the empty properties ignored by statistics" (Prosper Australia, 2015), p. 5. Available from www.prosper.org.au/wp- content/uploads/20 15 /1 2/11 Final_ Speculative-Vacancies-20 15-l .pdf

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affluent boroughs of Chelsea and Kensington in the city of London, prime locations for wealthy foreign investors, the number of vacant units increased by 40 per cent between 2013 and 2014.3 1 In such markets, the value of housing is no longer based on its social use. The housing is as valuable whether it is vacant or occupied, lived in or devoid of life. Homes sit empty while homeless populations burgeon. 31. Financialized housing markets respond to preferences of global investors rather than to the needs of communities. The average income of households in the community or the kinds of housing they would like to inhabit is of little concern to financial investors, who cater to the needs or desires of speculative markets and are likely to replace affordable housing that is needed with luxury housing that sits vacant because that is how best to tum a profit quickly. Financialized housing thus precipitates what has been referred to as "residential alienation", the loss of the critical relationship to housing as a dwelling and the diverse set of social relationships that give it meaning. 32 In financialized housing markets, those making decisions about housing- its use, its cost, where it will be built or whether it will be demolished - do so from remote board rooms with no engagement with or accountability to the communities in which their "assets" are located.33 32. Many corporate owners of housing are nameless. In the first fiscal quarter of 2015, 58 per cent of all property purchases over $3 million in the United States were made by limited liability companies rather than named people, and the majority of those purchases were in cash, creating a greater level of anonymity. 34 More than 36,000 properties in London are held by shell companies registered in offshore havens such as Bermuda, the British Virgin Islands, the Isle of Man and Jersey. 35 33. Many residential rental properties are now owned by bondholders or holders of public stock with no direct connection to properties. It is difficult to know who is accountable for human rights when the owner of housing is a multibillion dollar fund, bondholders, public stockholders or a nameless corporate shell. Tenants living in housing owned by absentee corporate landlords have complained of sharp increases in rent, inadequate maintenance and conditions as a result of substandard renovations that have been undertaken quickly to flip the home into rentals, and an inability to hold anyone accountable for those conditions.

3 1 See Department for Communities and Local Government, " Vacant dwellings". Available from https://data.london.gov. uk/dataset/vacant -dwellings/resource/c428a 18b-9961-4b98-9cfe- b7fl20 114141. See also Ed Cumming, "' It's like a ghost town': lights go out as foreign owners desert London homes", Guardian, 25 January 2015, and "Empty Homes in England- data". Available from https://docs.google.com/spreadsheets/d/llgLJr3btF_ 63 Hv I w 17 AkhwqwsPehC6N8q8eriVLuWs8/edit #gid=O. 32 See David Madden and Peter Marcuse, In Defense ofHousing: The Politics of Crisis (London and New York, Verso, 2016), chap. 2. 33 Ibid., p. 19. 34 See Ana Swanson, "How secretive shell companies shape the U.S. real estate market", Washington Post, 12 April2016, and Louise Story and Stephanie Saul, "Stream of foreign wealth flows to elite New York real estate", New York Times, 7 February 2015. 35 See Transparency International UK, Corruption on your doorstep: how corrupt capital is used to buy property in the UK (20 15). Available from www.transparency.org.uk/publications/corruption-on your-doorstep/.

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D. Creating inequality and exclusion

34. Increased prices of housing and real estate assets have become key drivers in the creation of greater wealth inequality. Those who own property in prime urban locations have become richer, while lower-income households confronting the escalating costs of housing become poorer. Surveys of ultra-high-net-worth individuals show that more than half have increased the proportion of their investments allocated to residential properties, with the most common reasons being in order to sell at a later date and to provide a safe haven for wealth. 36 The "economics of inequality" / 7 in fact, may be explained in large part by the inequalities of wealth generated by housing and real estate investments. 38 Buying a home with a mortgage becomes a speculative investment depending on volatile financial markets, which may generate considerable wealth on leveraged equity or, alternatively, deprive households of a lifetime of savings. 35. The dominant impact of wealth and private investment has also created and perpetuated spatial segregation and inequality in cities. In South Africa, for example, the impact of private investment in the urban core of cities has sustained the discriminatory patterns of the apartheid area, with wealthier, predominantly white households occupying areas close to the centre and poorer black South Africans living on the peripheries of cities. That "spatial mismatch", relegating poor black households to homeownership in peri-urban areas where employment opportunities are scarce, rather than rentals in the urban core, for example, has entrenched their poverty and cemented inequality. 39 Similar patterns of racial displacement from urban centres and segregation in evidence in large cities in the United States have led to more severe impacts of financialization and the mortgage crisis being experienced by African-American households. 4° Financialization also creates gender segregation. In Australia, analysis has shown that average-income single female workers can afford to live in only one suburb of Melbourne and cannot afford to live anywhere in Sydney. 41 36. In contemporary Chile, the appropriation of land by large scale investors and speculators, accumulating land and luxury properties, has meant that inner-city redevelopment has displaced many traditional residents, exemplifYing "the intertwined roles of the state and assorted holders of economic capital in the production, distribution and representation of urban exclusion and segregation".42

36 Knight Frank Research, "The Wealth Report 2016: the global perspective on prime property and investment", p. 13. Available from http:l/content.knightfrank.com/research/83/documents/enlwealth report-20 16-3579.pdf. 37 See Thomas Piketty, The Economics ofInequality (Cambridge, Massachusetts and London, Harvard University Press, 2015). 38 See Matthew Rognlie, " Deciphering the fall and rise in the net capital share: accumulation or scarcity?" Brookings Papers on Economic Activity (Spring 20 15), and Aalbers, The Financializalion of Housing, p. 83. 39 See Socio-Economic Rights Institute of South Africa, "Edged out: spatial mismatch and spatial justice in South Africa' s main urban areas", November 2016. Available from www.seri sa.org/images/images/SERI_ Edged_ out_report_Final_ high _res. pdf 40 See Jacob Rugh and Douglas Massey, "Racial segregation and the American foreclosure crisis", American Sociological Review, vol. 75 , No. 5 (October 2010). 41 See Council to Homeless Persons, "Single working women being locked out of renting in Melbourne", 2 October 2016. Available from http:l/chp.org.au/wp- content/uploads/2016/1 0/161002_single-women-locked-out-of-rental.pdf. See also Calla Wahlquist, "Apartment rent in Sydney and Melbourne beyond reach of many women", Guardian, 3 October 2016. 42 Emesto L6pez-Morales, "Gentrification in the global South", City, vol. 19, No.4 (2015), p. 569.

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37. Financialized housing markets create and thrive on gentrification and the appropriation of public value for private wealth. Improved services, schools or parks in an impoverished neighbourhood attract investment, which then drives residents out. The transformation of an old railway line in West Chelsea in Manhattan into a public walkway and park has attracted wealthy investors to a mixed income neighbourhood, radically transforming it with luxury housing units costing in the multimillions, and displacing longer term residents. 43 In Vancouver, the opening of new public transport facilities in Burnaby, one of the few remaining areas of affordable rental housing, has quickly led to the development of expensive condominium towers, displacing residents who have not only lived there for decades, but also invested in developing their community. 38. Patterns of inequality are often starkest in developing countries. In Africa, if current trends continue, the number of households living in informal settlements will continue to increase while the number of ultra-high-net-worth individuals is predicted to rise by almost 50 per cent in the next decade. 44

E. Relinquished governance and accountability

39. The financialization of housing has dramatically altered the relationship of States to the housing sector and to those to whom they have human rights obligations. Rather than being held accountable to residents and their need for housing, States' housing policies have often become accountable to financial institutions and seem to pander to the confidence of global credit markets and the preferences of wealthy private investors. Given the predominance of housing-related credit in many economies, domestic housing policy becomes intertwined with the priorities and strategies of central banks and international financial institutions, which are themselves rarely held accountable to States' human rights obligations to ensure access to adequate housing and do not meaningfully engage with rights-holders. 45 40. Accountability to global finance rather than to human rights has been rigorously imposed by the International Monetary Fund and other creditors when Governments have faced foreign debt crises. Decisions made by central banks and finance ministers in consultation with international financial institutions are rarely informed by input from stakeholders or those involved with housing policy and programmes. Processes put in place to address the debt crisis in Central, Eastern and South-Eastern Europe through the "Vienna Initiative" for example, brought together "key stakeholders", identified as national central banks and Western European parent banks along with multiple regional and international financial institutions. Absent were civil society groups and anyone representing the interests of borrowing households, the people most affected by any decisions taken. 46 41. In circumstances where Governments should be relying on positive measures and resource allocation to provide housing to households affected by economic downturns and widespread unemployment, many have been held accountable to austerity measures imposed by creditors. They have agreed to dramatically reduce or eliminate housing programmes, privatize social housing and sell off massive amounts of housing and real estate assets to private equity funds.

43 Kevin Loughran, "Parks for profit: the High Line, growth machines, and the uneven development of urban public spaces", City & Community, vol. 13, No. I (March 2014), pp. 49-68. 44 Knight Frank Research, "The Wealth Report 2016", p. 13. 45 Ray Forrest, "Globalization and the housing asset rich", Global Social Policy, vol. 8, No. 2 (2008), p. 168. 46 See Daniela Gabor, Central Banking and Financialization: A Romanian Account ofhow Eastern Europe became Subprime (New York, Palgrave Macmillan, 2011).

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42. As noted by the Institute for Human Rights and Business, global financial institutions with representations from central bank governors and ministers of finance, "seem generally remote from stakeholder engagement. These institutions are independent self-governing bodies with their own rules of procedure and are not directly accountable to the public."47 Governments relying on the financial system and financialized housing assets to service their own debt are not encouraged by global financial institutions to manage housing systems for compliance with human rights. They are more likely to be urged to cut housing programmes and social protection programmes to comply with the demands and economic theories of financial corporations and credit agencies.

IV. Financialization of housing in developing and emerging economies

43. Research into the financialization of housing has focused on Australia, Europe and North America, where access to credit extends to a large portion of the population and where the majority of the "global cities" attracting capital in unprecedented quantity are located. Caution is needed, therefore, when examining the diverse experiences of financialization, in order to avoid generalizations about global patterns based on the particular circumstances in those cities. 44. The housing sector in the global South has not been subject to extensive financing of homeownership. Only about 17 per cent of the population in Botswana, Kenya, Namibia and Zambia, for example, would be eligible for mortgage finance based on existing criteria. 48 Low-income, informal and indigenous communities have nevertheless experienced, first-hand, the power of financial corporations to appropriate land and real estate and to generate vast disparities in wealth by treating housing and land as commodities. The displacement ofGarifuna communities by model cities containing luxury developments for tourists and wealthy residents in Honduras is an example of the kinds of displacements of communities and forced evictions that are occurring in many countries (see A/HRC/33/42/Add.2, para 56). Many local and national governments looking for capital investment have opted to sell land to major developers at the expense of indigenous and impoverished communities and those living in precarious housing. 45. Informal settlements in Southern cities are regularly demolished for luxury housing and commercial development such as shopping malls and other high-end services intended for those with expendable incomes. In Lagos, Nigeria, for example, 30,000 residents of the Otodo Gbame community were forcibly removed after their waterfront homes were set alight, allegedly related to luxury developments. Many were left homeless. 49 Elsewhere, when informal settlements are upgraded with infrastructure development and the granting of formal title and credit, they become subject to speculation and rising costs that force existing residents, particularly informal renters, out of the community. The real estate market in Mumbai, India, is now actively engaged in promoting speculative investment in

47 See Institute for Human Rights and Business, "Human rights and sustainable finance: exploring the relationship", I I February 2016. Available from www.ihrb.org/focus-areas/finance/report-human rights-and-sustainable-frnance-exploring-the-relationship. 48 See Centre for Affordable Housing Finance in Africa, "Housing Microfinance". Available from www.housingfinanceafrica.org/projectslhousing-microfrnance. 49 Information on the relevant communication is to be made public in the joint communications report for the thirty-fourth session of the Human Rights Council.

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informal settlements, where upgraded housing is attracting real estate speculation and price increases. 50 46. Experiences of financialization in emerging economies demonstrate many commonalities with experiences in global cities. 5 1 In Malaysia, for example, the national mortgage corporation, Cagarnas, originally established to promote access to affordable housing as a social policy, has been transformed into the single largest issuer of asset backed securities in Malaysia, with more than 50 per cent of the market share, and with the goal to establish itself as a "leading securitization house in the region". It has been at the centre of a significant expansion of homeownership modelled on the United States 2 institutions, Fannie Mae and Freddie Mac. 5 47. The Republic of Korea experienced a fairly rapid transitiOn to a financialized economy after the Asian financial crisis, when the International Monetary Fund bailout of Korean banks was made conditional on a restructuring programme of deregulation and privatization. While expanded access to mortgages has increased the rate of homeownership, the Republic of Korea now experiences greater inequality between rich 3 and poor and has the highest level of household debt for any emerging country. 5 48. In Egypt, after Prime Ministerial Decree No. 350/2007 removed restrictions on foreign purchases of property, land prices more than doubled in many areas, rising at a rate of 148 per cent per year between 2007 and 2011.54 Extension of credit for housing has been largely restricted to higher income households in Cairo and Giza, and approximately 3 million homes have been left empty or unfinished by their owners in urban areas. Poverty 5 continues to increase and more than 12 million people live in informal housing. 5 49. In Mexico, mortgage securitization and other aspects of financialization have been adopted, beginning in 2003, with the active involvement of the World Bank. The housing market experienced a boom with increased mortgage lending and a tripling of the amount of residential mortgage-backed securities to over US$ 6 billion in 2006. However, the benefits of the housing boom and securitized mortgages have not extended to the households that are most in need. Measures taken by the Government to stabilize the financial sector proved attractive to financial corporations, pension funds and private equity 6 firms, which have become more significant actors in the Mexican housing market. 5 50. In many developing and emerging economies, the World Bank and other international and regional financial institutions continue to actively promote the financialization of housing as the dominant strategy for addressing the critical need for housing, despite evidence that such strategies fail to provide housing options to the

50 See Vandana Desai and Alex Loftus, "Speculating on slums: infrastructure fixes in informal housing in the global South", Antipode, vol. 45 , No. 4 (2012). 5 1 Bruno Bonizzi, "Financialization in developing and emerging countries: a survey", International Journal of Political Economy, vol. 42, No. 4 (20 14 ), p. 91. 52 Ibid., p. 93. 53 See Kyung-Hwan Kim and Miseon Park, "Housing policy in the Republic of Korea", Asian Development Bank Institute Working Paper, No. 570 (April2016). Available from www.adb.org/sites/default/files/publication/183 281 /adbi -wp5 70 .pdf. 54 See Yahia Shawkat, "Egypt's deregulated property market: a crisis ofaffordability", Middle East Institute, 5 May 2015. Available from www.mei.edu/content/at/egypts-deregulated-property-market crisis-affordability. 55 See World Bank, "Opening up housing to Egypt's poorest", 5 May 2015. Available from www. wort dbank. org/en/news/feature/2 0 1510 5/041 opening-up-housing-to-egypt -s-poorest. 56 Susanne Soederberg, "Subprime housing goes south: constructing securitized mortgages for the poor in Mexico", Anitpode, vol. 47, No.2 (March 2015), pp. 495-96.

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7 households that are most in need, and lead to greater socioeconomic inequality. 5 World Bank development programmes concentrate on what they consider to be the building blocks of housing finance such as title registration, foreclosure procedures, lending regulations, long-term funding instruments, and improving the liquidity of mortgage assets in order to reduce the costs of credit-risk underwriting for investors. 58 Those policies, combined in many cases with austerity measures that reduce social protection and housing programmes, have meant that development programmes frequently support the emergence of a financialized housing system that may be at odds with States ' obligations to prioritize the needs ofthose in the most desperate circumstances. 59

V. Lack of access to justice, effective remedies and accountability

51. Financialization is made possible through the legal enforcement of agreements between lenders and borrowers. It relies on legal systems governing property rights, zoning laws and contracts and also on an increasingly complex system of international and regional treaties governing the terms and conditions of investments and government actions that may have an impact on profitability. 52. The excessive financialization of housing is directly related to systemic patterns of inequality in investment treaties and in domestic law that fail to recognize the paramountcy of human rights over investor interests and deny access to justice for those whose right to housing is at stake. Ensuring meaningful accountability of financial institutions and private actors to the right to housing will require a significant transformation of current systems of law and accountability and new avenues of access to justice at the local, national and international levels.

A. Investment treaties

53 . There are currently almost 2,500 bilateral investment treaties in force and almost 300 treaties with investment provisions. 60 Provisions in investment treaties generally provide protection for investors from actions by States without imposing obligations on them to uphold human rights. Investors are guaranteed fair and equitable treatment, protection from direct or indirect expropriation and other protections and have access to an investor-State dispute settlement procedure to seek damages for breaches of those provisions. The effect of those protections is that investment in housing and real estate for the purposes of speculation and the accumulation of wealth becomes a protected "right", while government measures to regulate investment to protect the right to housing may be the basis for claims against States by private investors for massive damage awards. 54. Claims have recently been brought against the Dominican Republic and Panama, for example, on the basis that government decisions to cancel planned luxury developments in

51 International Bank for Reconstruction and Development and World Bank Group, "World Bank Group support for housing fmance" (Washington, D.C, 2016), pp. 22-29. Available from https://ieg. worldbankgroup.org/Data!reports/housingfmance.pdf 58 Loic Chiquier and Michael Lea, eds. , Housing Finance Policy in Emerging Markets (Washington, D.C., The International Bank for Reconstruction and Development/The World Bank, 2009), p. xliv. 59 See Padraic Kenna, ed., Contemporary Housing Issues in a Globalized World (Farnham, Ashgate Publishing, 2014). 60 See the International Investments Agreements Navigator. Available from http:/ /investmentpolicyhub. unctad.org/1 lA.

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order to protect indigenous territories or environmental resources violated investors ' rights under bilateral investment treaties. 6 1 The Government of Mauritius is currently being taken to arbitration by a group of property development companies from the United Kingdom that invested in luxury real estate developments in Mauritius and are now seeking damages for a decision on the part of the Government to change its planning policy to restrict such developments.6 2 55. The mere threat of those kinds of claims can have a directive effect on State housing policy. Investment treaty arbitration frequently involves millions of dollars in damages, and thus acts as a disincentive for States to enact and enforce any regulatory measures restricting the profitability of housing or real estate assets purchased by foreign investors. Those whose right to adequate housing may have been infringed by States' failures to regulate the activities and speculative profits of foreign investors, on the other hand, have few if any avenues of redress, and certainly no ability to seek damages in the amounts claimed by private investors. The imbalance in access to remedies creates an imbalance in State accountability and priorities.

B. Domestic courts

56. Domestic adjudication in the area of housing and finance has also tended to protect investors and has been oriented towards enforcing the contractual relationship between lenders and creditors, both with individual households and with States, without considering imbalances in power or the implications for human rights of the means used for enforcing repayment. 63 The right to adequate housing has rarely been referenced in the adjudication of foreclosures and subsequent evictions, although it is clearly at issue. 57. In some instances, courts have played an important role in holding financial institutions liable for predatory and discriminatory lending practices, albeit without reference to international human rights obligations. In a recent case, the Eleventh Circuit Court of Appeals in the United States ruled in favour of a lawsuit brought by the city of Miami against Bank of America and Wells Fargo for discriminatory predatory lending practices linked to the mortgage crisis. 64 The Constitutional Court of South Africa recently considered a case involving a fraudulent scheme by investors and a finance company leading to hundreds of homeowners suffering losses of homes and savings. The Court rejected a claim by banks that would place responsibility on the homeowner for repayment of an unpaid debt due to the bank, holding that there is an obligation on the part of well resourced powerful banking groups to check on the legality of what their clients are buying before lending money and earning interest on it. 65 58. There is considerable variation and inconsistency, however, in the way mortgage or rental default is addressed in domestic law and enforced by courts. In many jurisdictions,

6 1 See Michael Ballantine and Lisa Ballantine v. Dominican Republic, Notice of arbitration and statement of claim, II September 2014, and Alvarez and Marin Corporaci6n S. A. and others v. Panama (2015), International Centre for tbe Settlement of Investment Disputes (ICSID) case No. ARB/15114. 62 See Thomas Gosling and others v. Republic of Mauritius (20 16), ICSID case No. ARB/16/32. 63 See Lauren E. Willis, "Introduction: why didn' t tbe courts stop the mortgage crisis?", Loyola of Los Angeles Law Review, vol. 43 , No. 4 (January 20 I 0), and Ada Colau and Adria Alemany, Mortgaged Lives: From the housing bubble to the right to housing (Journal of Aesthetics & Protest Press, Los Angeles, Leipzig and Lon, 2014), pp. 165-167. 64 See City ofMiami v. Bank ofA merica Corp, in The United States Court of Appeals for tbe Eleventh Circuit, case No . 14-14543. 65 See Absa Bank Limited v. Moore and Another (CCT 03/ 16), Constitutional Court ofSoutb Africa.

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foreclosure is a common practice for arrears in mortgage payments, regardless of the cause of the arrears and the consequences of foreclosure. Principles of international human rights law requiring, for example, that no eviction take place if it will lead to homelessness, have not generally been properly applied by domestic courts to evictions linked to defaults on mortgages or rent. The Special Rapporteur is concerned that in the area of housing, the ·'remedy" of eviction from homes is routinely applied in the case of unpaid debts, even though there are many other options available for courts to enforce repayment or restructuring of debts, short of invoking the State power to seize or evict individuals from their home, such as imposing repayment plans or garnishing wages. Foreclosures and evictions have severe effects on health and well-being and may result in the loss of custody of children. 66 Those are unacceptable consequences of default on mortgage or rent payments when other options eire available. They are, moreover, generally contrary to international human rights law. 59. In some jurisdictions, foreclosures for mortgage default are not permitted and alternative procedures are limited by statute. Foreclosure was abolished in Ireland following the 2008 financial crisis, with an equivalent procedure to foreclosure provided, however, to the public asset management company, the National Asset Management Agency.67 In Brazil, foreclosures are prohibited by law where residential properties are used by their owners for dwelling purposes, although creditors have developed ways of circumventing those restrictions.68 In China, there are provisions for many other options for collecting outstanding debts, with foreclosure only being permitted when all other options have been exhausted.69 In Spain, however, mortgage arrears are not considered to have been discharged by a foreclosure, which means indebted homeowners are required to continue to make payments on outstanding arrears even after having lost their home. 70 60. In the first case to be considered by the Committee on Economic, Social and Cultural Rights under the Optional Protocol to the International Covenant on Economic, Social and Cultural Rights, J.D. G. v. Spain, the Committee considered States' obligations to ensure access to justice in the context of mortgage foreclosure. As a result of a domestic court's lack of diligence, the author of the communication had not received notification of mortgage enforcement proceedings and received no other communication prior to an auction order. In those circumstances, the Committee found that the author's right to access to justice to protect the right to housing had been violated. The Committee found that "such notice in respect of a foreclosure application needs to be adequate, in accordance with the standards of the Covenant applicable to the right to housing".71 The Committee clarified that Spain should ensure that no eviction takes place without due process guarantees, affirming that "the right to housing should be ensured to all persons irrespective of income or access to economic resources".72 61. ln that case, the author was able to remain in her home and the Committee did not address the question of whether foreclosure and eviction from housing, potentially into

66 Colau and Alemany, Mortgaged Lives, pp. 165-167. 67 See Ireland, Land and Conveyancing Law Reform Act 2009 and National Asset Management Agency Act 2009. 68 Bruno Martins, Eduardo Lundberg and Tony Takeda, "Housing finance in Brazil: institutional improvements and recent developments", Inter-American Development Bank Working Paper, No . 269 (20 II), pp. 8-9. Available from www.iadb.org/document.cfrn?pubDetail= I &id=36411946. 69 Tien Foo Sing, Yonglin Wang and Daxuan Zhao, "Impact of foreclosure laws on mortgage loan supply and performance", I 0 September 2016. Available from https://papers.ssm.com/sol3/papers.cfrn?abstract_id=2837333 . 7° Colau and Alemany, Mortgaged Lives, pp. 165-167. 71 See Committee on Economic, Social and Cultural Rights, !.D. G. v. Spain, para. II. I. 72 See the Committee's general comment No.4 (1992) on the right to adequate housing, para. 7.

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homelessness, was a reasonable remedy in the case of mortgage or rent default or whether it was consistent with State obligations to respect the right to adequate housing. lt is hoped that the issue will be subject to consideration and clarification by the Committee and other human rights bodies in future cases. In the Special Rapporteur's view, the all too common practice of depriving people of their homes as a remedy for outstanding mortgage or rental arrears should be subject to more rigorous human rights review than it has received to date from domestic courts and international human rights bodies.

C. Business and human rights

62. Emerging norms for business and human rights and increased attention to corporate social responsibility offer additional avenues through which to pursue enhanced accountability and effective remedies for violations of human rights linked to the financialization of housing. 63. A leading framework for the human rights responsibilities of business enterprises is the Guiding Principles on Business and Human Rights: Implementing the United Nations "Protect, Respect and Remedy" Framework. It is grounded in three pillars: (a) the obligation of States to protect against human rights abuses committed by companies; (b) the responsibility of business enterprises to respect human rights, and thus avoid causing or contributing to adverse human rights impacts; and (c) the obligation of States to provide victims with access to effective remedies when rights are breached. A similar framework is applied in the ten principles of the United Nations Global Compact, the first two of which commit businesses to support and respect the protection of internationally proclaimed human rights and to refrain from complicity in human rights abuses. 73 The Principles for Responsible Investment, launched in 2006 by the United Nations Environment Programme Finance Initiative and the Global Compact, provide a voluntary framework for the incorporation of environmental, social and governance issues into decision-making and ownership practices. Over l ,200 investment institutions have become signatories, with approximately US$ 45 trillion assets under management. 74 64. Despite the growing attention to the importance of business and human rights and despite the fact that housing represents the largest global business sector, very little attention has been paid to the obligations of business enterprises and financial corporations operating in the real estate and housing sector with respect to the right to adequate housing. The "Practical guide to ESG integration for equity investing", for example, makes no reference to human rights in relation to investments in housing and other real estate. The International Organization of Securities Commissions, whose members regulate more than 95 per cent of the world 's capital markets, has not addressed the. central role that human rights in general and the right to housing in particular should play in the regulation of capital markets. 75 65. Decisions made by global financial corporations, institutions and private equity firms regarding access to credit, foreclosures and development priorities have a direct impact on homelessness, displacement and access to affordable housing. The adoption of progressive policies with respect to corporate social responsibility by investors in housing

73 See www.unglobalcompact.org/what-is-gc/mission/principles/principle-l. 74 See www.unglobalcompact.org/take-actionlaction!responsible-investment. 75 See Tajinder Singh, Deputy Secretary General of the International Organization of Securities Commission, "IOSCO initiatives and the challenges going forward", remarks to the Annual General Meeting and Conference of the International Council of Securities Associations, Stockholm, 23 May 2016. Available from www.iosco.org/library/speeches/pdf720 160523-Tajinder-Singh.pdf.

18 AfflRC/34/51

and real estate could play an important role in redirecting investment towards the social use of housing and advancing the implementation of the Sustainable Development Goals. 66. Business and human rights guidelines in the housing sector must recognize the responsibility of private investors and the obligations of regulators of capital markets to ensure that the needs of vulnerable and marginalized groups are adequately addressed through inclusive investment strategies and to contribute to the realization of the right to housing and the implementation of the 2030 Agenda and the New Urban Agenda

VI. Policy responses to the financialization of housing

67. Policy responses to the financialization of housing have tended to prioritize support for financial institutions over responding to the needs of those whose right to adequate housing is at stake. Spending on bailouts of banks and financial institutions after the 2008 financial crisis far outstripped spending to provide assistance to the victims of the crisis. In fact, many national Governments made substantial cuts to their housing programmes. As noted above, the World Bank continues to promote "financial liberalization" rather than active State intervention in housing provision in emerging economies, despite the evidence that financialization generally increases inequality and fails to address the needs of the millions of households living in situations of homeless ness or grossly inadequate informal housing. 76 68. Nonetheless, a number of subnational and national governments have started to address the effects of excess capital flows and financialization on affordability and access to housing for low-income households. Initiatives have been advanced at both national and subnational levels providing a number of tools that can at least curb the excesses of financialization and mitigate its effects. 69. In response to the mortgage crisis in Spain, the autonomous regions of Andalusia and Catalonia introduced progressive laws explicitly affirming the social function of housing and facilitating temporary expropriation of vacant housing. 77 Catalonian legislation also prohibited foreclosures and evictions that would result in homelessness. 78 Both of those regional initiatives were struck down by the Constitutional Court as encroaching on the jurisdiction of the national Government and opposing the general economic interests of the country. 79 In response, at least in the case of Catalonia, the legislation was reintroduced with amendments and was passed by the Catalonian parliament. 80 70. A number of States, including Austria, China, the Philippines, Thailand and Viet Nam, have instituted restrictions on foreign purchasers of residential real estate. The province of British Columbia in Canada has introduced a 15 per cent foreign homeowner

76 See International Bank for Reconstruction and Development and World Bank Group, "World Bank Group support for housing finance". See also Aalbers, The Financialization ofHousing , p. 73 . 77 See Aalbers, The Financialization of Housing, p. 73. 78 See Autonomous Region of Catalonia, Spain, Ley 24/201 5, de 29 de julio, de medidas urgentes para afrontar Ia emergencia en el ambito de Ia vivienda y Ia pobreza energetica, arts. 2, 3 and 4, and Regional Government of Andalusia, Decreto-Ley 6/20 I 3, de 9 de abril, de medidas para asegurar el cumplimiento de Ia Funci6n Social de Ia Vivienda. 79 See www.boe.es/diario_boe/txt.php?id=BOE-A-2015-6831 (BOE-A-2015-6831 , 19 June 2015}, and www.boe.es/diario_boe/txt.php?id=BOE-A-2016-5337, (BOE-A-2016-5337, 3 Jtme 20 16). 80 See Clara Blanchar, "Cataluiia recupera Ia ley contra los desabucios que anul6 el Constitucional", El Pais, 22 December 20 16.

19 A/HRC/34/51

tax. 81 The City of Vancouver recently approved a I per cent tax, which would apply to both foreign and domestic investors, on vacant homes in order to address the issue of approximately 20,000 vacant homes in its overheated speculative housing market. Net revenue from those taxes is to be invested in affordable housing initiatives. 82 71. Elsewhere, taxes on luxury properties have been instituted. Singapore imposes an 18 per cent property sales tax 83 and an additional buyer stamp duty on wealthy property owners and investors, with revenues used to subsidize homeownership of low-income individuals. 84 A number of jurisdictions, including China, Germany and Malaysia, have introduced a property speculation tax. 85 Tax in China, announced in early 2013 after renewed speculative activity in the housing market, involves a straight 20 per cent on capital gains, 86 and in Taiwan Province of China, residential property owners are taxed 15 per cent on the sale price of their property if they sell it within one year of purchase and 10 per cent if sold within two years. 72. Some Governments have chosen to encourage a more inclusive approach to private investment in housing in the form of financial incentives to encourage the development of affordable units. The Government of Algeria, for example, finances the development of rental housing for households earning less than 1.5 times the minimum wage, on free government land. It also provides a lease-to-own programme for households with little down-payment capacity. 87 Other Governments require that developers. include a proportion of affordable units. The Mayor of London recently announced that builders will be required to ensure that 35 per cent of new homes that are built are genuinely affordable. 88 73 . Those types of programmes or agreements must be properly designed and monitored in order to be effective. For example, definitions of "affordability" do not always reflect actual income levels of those in housing need and accountability mechanisms to ensure that developers deliver are rarely in place. Additionally, agreements to include affordable housing within developments have sometimes resulted in the stigmatization of tenants occupying the affordable units. Referred to as the "poor door" phenomenon, low-income tenants are segregated from the more affluent residents, compelled to use separate, less attractive entrances and segregated services, such as laundry facilities and waste bins. 89

81 British Columbia, Ministry of Finance, "Additional property transfer tax on residential property transfers to foreign entities in the Greater Vancouver Regional District: Property Transfer Tax Act" (27 July 20 16). Available from www2.gov.bc.ca!assets/gov/taxes/property-taxes/property-transfer tax/forms-pub Iications/is-006-additional-property- transfer-tax- foreign-entities-vancouver. pdf 82 See City of Vancouver, "Empty homes tax". Available from http://vancouver.calhome-property developmentlempty-homes-tax.aspx. 83 Ibid. 84 See Sock-Yong Phang and Matthias Helbie, "Housing policies in Singapore", Asian Development Bank Institute Working Papers, No. 559 (Tokyo, Asian Development Bank Institute, 2016). Available from www.adb.org/sites/default/files/publication/ 181599/adbi-wpS 59 .pdf. 85 Andrew Heywood and Paul Hackett, "The case for property tax speculation", Smith Institute discussion paper (Smith Institute, 2013), p. 12. Available from https :1/smithinstitutethinktank. files. word press.com/20 14/ II /the-case-for-a-property-speculation tax.pdf 86 Ibid. 87 See Centre for Affordable Housing Finance in Africa, "2014 Yearbook: housing finance in Africa: a review of some of Africa' s housing finance markets" (South Afiica, November 2014 ). Available from www.housingfinanceafrica.org/wp-content/uploads/20 14/ 11/CAHF- I 4.11.20 14-small. pdf 88 See Dave Hill, "Sadiq Khan sets out key plans for more ' genuinely affordable' London homes", Guardian, 29 November 2016. 89 See Hilary Osborne, "Poor doors: the segregation of London's inner-city flat dwellers", Guardian, 25 July2014.

20 A/HRC/34/51

74. A range of initiatives has al so been introduced in a number of States and cities to provide access to credit for low-income households based on alternative, community controlled models of microfinancing. Growing either from non-governmental organizations or microenterprise lenders, microfinance allows low-income households to finance construction over time, often in unplanned areas.

VII. Conclusions and recommendations: the way forward

75. Despite the positive elements of some States' policy responses, overall responses have tended to be sporadic and reactive, addressing overheated markets or providing limited initiatives to expand access to credit. The broader systemic issues of financialization and commodification of housing remain largely unaddressed. What is lacking is for States to reclaim the governance of housing systems from global credit markets and, in collaboration with affected communities and with cooperation and engagement by central banks and financial institutions, redesign housing finance and global investment in housing around the goal of ensuring access to adequate housing for all by 2030. 76. Many States have been too deferential to the dynamics of unregulated markets and have failed to take appropriate action to bring private investment into line with the right to adequate housing. By providing tax subsidies for homeownership, tax breaks for investors, and bailouts for banks and financial institutions, States have subsidized the excessive financialization of housing at the expense of programmes for those in desperate need of housing. There seems to be a gross imbalance between the attention, mechanisms and resources that States have developed to support the financialization of housing and the complete deficit of housing for the implementation of the right to adequate housing. 77. The Special Rapporteur suggests that the way forward requires a shift to take hold so that States ensure that all investment in housing recognizes its social function and States' human rights obligations in that regard. That requires a transformation of the relationship between the State and the financial sector, whereby human rights implementation becomes the overriding goal, not a subsidiary or neglected obligation. The Special Rapporteur believes that can be achieved with more constructive engagement and dialogue between States, human rights actors, international and domestic financial regulatory bodies, private equity firms and major investors. In order to create those new conversations and achieve that shift, the Special Rapporteur recommends the following: (a). New initiatives should be developed in order to bridge the worlds of corporate and government finance, housing, planning and human rights. The Special Rapporteur recommends that an international high-level meeting of States, international financial institutions, human rights bodies, civil society organizations and relevant experts be organized to design a strategy for engaging financial regulatory bodies and actors in the realization of the goal of adequate housing for all by 2030; (b) Strategies developed by States and local governments to achieve target 11.1 of the Sustainable Development Goals and the New Urban Agenda should include a full range of taxation, regulatory and planning measures in order to re-establish housing as a social good, promote an inclusive housing system and prevent speculation and excessive accumulation of wealth; (c) Trade and investment treaties should recognize the paramountcy of human rights, including the right to housing, and ensure that States are fully

21 A/HRC/34/51

empowered to regulate private investment so as to ensure the realization of the right to housing; (d) Business and human rights guidelines should, on a priority basis, be developed specifically for financial actors operating in the housing system; (e) States should review all laws and policies related to foreclosure, indebtedness and housing, to ensure consistency with the right to adequate housing, including the obligation to prevent any eviction resulting in homelessness; (t) States must ensure that courts, tribunals and human rights institutions recognize and apply the paramountcy of human rights and interpret and apply domestic laws and policies related to housing and housing finance consistently with the right to adequate housing; (g) international, regional and national human rights bodies should devote more attention to the issue of financialization and clarify for States, through constructive dialogue during periodic reviews and in consideration of individual cases, their obligations in relation to the financialization of housing.

22 Item 7.a.(4)

Rent Stabilization Board

To: Rent Stabilization Board Commissioners

From: Commissioner Alejandro So to-Vigil

Date: March 20, 2015

Subject: Commissioner Email Policy

RECOMMENDATION:

That the Rent Board modify its e-mail policy to discontinue our mandate that staff automatically review emails sent to Commissioners' City issued emails.

BACKGROUND:

History of Staff Access to Commissioners Email Should be Discontinued

On March 17, 2013, the Rent Board voted (7-2-0-0) NO: Blake, Townley on the part of the Rent Board e-mail policy,

"The communications to the full Board would go to staff to review and forward. When communications are of a policy nature, they will be included in the full Board packet. The communications for individual Board members would simultaneously go to the Board member's mailbox and to a staff mailbox. Staff will review the mail and act as a 'fail safe' and notify the Board member that a communication was received and is being forwarded. If there is an additional advisory message (Brown Act alert, an appeal is pending or anticipated and it is recommended that the communication not be read, or relevant background on the issue about which the e-mailer is communicating), that will be included at the time the e-mail is forwarded to the Board member."

On April20, 2015, due to numerous concerns raised by Commissioners Soto-Vigil and Chang, a recommendation was brought forward that sought to modify the Board's Commissioner Email Policy. The motion to change the policy failed by a 4-3-2-0.

Why Staff Access to Commissioners Email Should be Discontinued

Over the last several years, the Rent Board Commissioners that use City emails have received numerous communications from members of the public. There is a wide array of the types of emails that we see,

2125 Mil via Street, Berkeley, California 94704 TEL: (510) 981-7368 (981-RENT) • TDD: (510) 981-6903 • FAX: (510) 981-4940 E-MAIL: [email protected] • INTERNET: www.cityotberkeley.info/rent some more relevant than others. As policy makers, it is important that we continue examining what policies work and what policies need changing. Again it time that the Board discuss changing the Rent Board email policy.

Confidentiality Rent Board Commissioners have the responsibility to direct and supervise the Executive Director. Over the last few years, I have received emails from members of the public that expected the communication to be viewed by only me. The particular emails that are relevant for this discussion were critical of Rent Board staff or the Executive Director. It was clear that the senders of the email did not expect that the Executive Director or Staff to have the automatic ability to review the communications. It is improper for residents and members of the public not to know that their communication to elected members of the Board would be automatically reviewed by staff.

It is imperative that when residents or members of the public communicate to Rent Board Commissioners, that they can feel free to express their opinion about staff without staff having the automatic right to view the complaint, whether or not the complaint is warranted.

Legislative Autonomy

There is no other legislative body in the entire county where the executive, that oversees the bureaucracy, has the automatic right to see all incoming emails sent by the public to the legislator. Each commissioner should have the right to respond or not respond to emails sent to the city issued email account. On March 9, 2017, I was sent a communication to my RSBSoto-Vigil email account from Local Progress, a policy focused group which I am a member. Staff, although with no ill intentions, sent an email on my behalf stating "Please REMOVE us from this mailing list." The problem is that our email policy allows our staff to review and at times erroneously speak on our behalf.

I know that staff did not intend to speak for me, but the email was received by the Local Progress staff and caused confusion. Here is local Progress' response "Alejandro, I'm not sure how this email bounces within the Rent Board, but do you have a different email you could provide us so that we can reach you and share information without annoying your colleagues and staff? Thanks!"

Staff Time

At a time when tenant harassment and displacement is at its height, staff should not focus on monitoring Commissioners emails. With thousands of people seeking the services of the Rent Board, our staff has plenty of work to do other than review and respond to emails sent to commissioners. Moreover, given our budget and staff limitations, the added mandate that staff review our emails causes an unnecessary burden to staff's workload.

Therefore it is recommended that the Rent Board Commissioners modify the Rent Board email policy to the following:

2 will review the mail and act as a 'fail safe' and notify the Board member that a communication was received and is being forwarded. If there is an additional advisory message (Brown Act alert, an appeal is pending or anticipated and it is recommended that the communication not be read, or relevant background on the issue about which the e-mailer is communicating), that will be included at the time the e-mail is forwarded to the Board member."

Attachment: 1. Exhibit A

3 EXHIBIT A

------Forwarded message ------From: Mueller, Aimee B. Date: Thu, Mar 9, 2017 at 6:57PM Subject: RE: Local Progress Member Call Follow Up To: Tarsi Dunlop

Please REMOVE us from this mailing list.

Thank you,

Aimee Mueller Rent Stabilization Board Administration 2125 Milvia Street I Berkeley, CA 94704 Tel.: 510.981.49321 Fax: 510.981.4940 [email protected]

From: Tarsi Dunlop [mailto:[email protected]] Sent: Thursday, March 09, 2017 12:58 PM To: Tarsi Dunlop Subject: Local Progress Member Call Follow Up

Hello Local Progress Members, Thank you for registering for the March 2017 Member Call. For those of you that were able to join in, we hope you found it inspiring and useful. Please make sure to share your victories and resistance efforts with us, we want to lift up your stories in future calls (as well as on social media).

Action Items: 1) Join us in NYC to Advance Immigrant Protections and Defend Sanctuary Cities (Learn more and register here)- deadline to be considered for financial aid is March lOth (tomorrow)! 2) Join one of our three campaigns, and share your victories with us here. 3) Register to join us in Austin this summer, July 28th & 29th. 4) Follow us on Twitter As always, please let us know how we can support your work and thank you for all that you do. In solidarity,

Tarsi Dunlop

Local Progress Program and Membership Associate Center for Popular Democracy + CPD Action 1730 M Street, NW Suite 1115 I Washington, DC 20036 0: 202-516-8428 M: 413.822.1051 populardemocracy.org I cpdaction.org

4 Item 7.a.(5)

New Dem Housing Task Force Representatives Denny Heck, Juan Vargas, Stephanie Murphy

The Primacy of Housing: Housing is the largest expense in middle-class budgets (housing makes up 42% of the consumer price index). Home ownership is the largest source of wealth building and retirement savings for middle-class families. Home construction is the critical industry in restoring the economy to growth after normal recessions. But something is wrong. Soaring housing prices are pervasive in cities around America, even some of those in the Midwest that were previously immune. Markets that used to quickly balance supply with demand now have sustained imbalances, and, as a result, prices keep rising. And now, on top of that, our long 30-year decline in mortgage rates is ending and reversing. We face a time of rising interest rates, not just from the Federal Reserve but from a steepening yield curve and from the likelihood of GSE reform that brings in more private capital to bear risk and with it a higher risk premium in mortgage rates. Housing Failures Hurt Everyone: Every price increase and rate inc;rease pushes families down a rung: from prospective first-time homebuyers to long-term renters; from tenants in market-rate housing to applicants for rent vouchers; from extremely rent-burdened to homeless. We face a variety of problems in the housing market, and we tend to address them in isolation: separating home ownership from rentals, market-rate housing from affordable housing, and homelessness from The Rent being Too Damn High. But housing is an ecosystem, and all of these aspects are tightly linked, especially through housing prices. A New Democrat Task Force: The Housing Task Force in the New Democrat Coalition is charged with studying housing markets, understanding dynamics and identifying solutions to the problems plaguing housing access and supply. The Task Force will build on previous New Dem efforts on GSE reform but would broaden to cover the full scope of federal housing policy (including housing subsidies through HUD and through the tax code) and could propose reforms at the state, local and regional levels as well. Housing Task Force ofthe New Democrat Coalition

We all know housing is important, but we often fail to realize how important • Housing is, by far, the largest expense in middle-class budgets (housing makes up 42°/o of the consumer price index). • Home ownership is the largest source of wealth building and retirement savings for middle-class families. • Home construction is the c:ritical industry in restoring the economy to growth after recessions. FRED ~ - (S&P/Case-Shiller U.S. National Home Price Index©), j an 1990=10 0 - (All-Tran sactions House Price Index for the United States), Q11990=100 - (Consumer Price Index for All Urban Consum ers: All Items), j an 1 990=10 0 This especially matters because housing markets are broken • Prices used to track inflation (green), but now are rising far in excess. • Nationally, prices have

eclipsed the peak of the fred.stloulsfed.org myf.red/g/d240 "bubble" in 2006. FRED ~ - Housing Starts: Total: New Privately Owned Housing Units Started • Despite record prices, 2,800 home construction is at 2,400 .~ c: ::> 2,000 past recession levels. 0 ~ 1,600 :Jl • Rents show a similar il 1,200 .c: 1- pattern 800

400 I ... - .... _. T -·-· ... - .. · r~ · ...... -r...... !' ... -- .. .. • The cost of shelter is rising 1960 1970 1980 1990 2000 2010

Source: U.S. Bureau of the Census for everyone with no relief fred.stloulsfed.org myf.red/g/d24J in sight.

Housing policy is poorly structured to address this problem • Power is fragmented across federal, state and local governments • Housing programs are very siloed and often work at cross purposes • Nobody is looking at the whole housing ecosystem to see the big picture and adjust accordingly Item 7.a.(6)

-----Original Message----- From: Julie Ashworth [mailto:[email protected]) Sent: Thursday, March 09, 2017 4:42PM To: TheRentBoard Subject: For All Berkeley Rent Board Members regarding 2425-2439 Virginia Street dear Berkeley Rent Board,

My husband and I are long-term residents of Berkeley. I work for UC Berkeley and my husband works for LBNL.

This year, my rent increased from $2105/month to $3500/month.

My landlord is Jack Phillips. He owns 2425-2439 Virginia Street. He is converting the Virginia Street apartments to rental units for tourists and temporary visitors. Jack uses different websites to rent units. For example, the following profiles are for 2427 and 2429 Virginia Street: https://www.airbnb.com/rooms/3303357 https://www .airbnb.com/rooms/6260270 https://www .sabbaticalhomes.com/OfferedDetails.aspx?id=97752

Jack has employed full-time maintenance staff to clean and repair his temporary rentals, which currently includes 2427, 2429, 2435-2439 Virginia.

I am disappointed with the lack of oversight from the city. Professionals can't afford to compete with temporary visitors. My husband and I will be moving, probably outside Berkeley and commuting our jobs at the University. I love this city, and I am sad to leave.

Thank you for your time, and understanding.

Julie Ashworth 2431 Virginia Street Berkeley CA 94709 510-224-4664

In 2015, my 1 bedoom rent increased from $2105/month to $2900/month. I have received notice that it will be increased to $3500/month in June, 2017. RECEIVED MAR 2 4 2017 March 22"ct, 2017 lnitial_ \1_t--l'W- Re nt Stabilizati n Pro gram To : Berkeley City Attorney Item 7 .a.(7)

Re: Illegally high relocation fees in your Ellis Act ordinance?

It was with great interest (and quite a bit of joy, to be honest) that I just read the unanimous ruling (A145044 and A146569) handed down in the California Appellate Court with respect to the San Francisco ordinance that attempted to graft apartment owners who wished to Ellis their buildings.

Over and over the three judges talked about how the cities are simply not allowed to impose "a prohibitive price on the exercise of the right under the Ellis Act."

The judges cite many cases that have already determined that a public entity "may not impose a prohibitive price on a landlord's exercise of the right under the Ellis Act to go out of business."

I took the most joy in the judge's decision, when on page 16, they called out the faulty analysis on the pati of the San Francisco city attorney who tried to argue that an 'adverse impact' was the higher rents the tenant would face. The judges said, "This analysis ignores the impact ofthe City's policy decision to impose residential rent control, creating a rent differential." In other words, it is the city's fault (ergo, the city's responsibility), not the owner, for any adverse impact the tenant may claim to suffer.

It is with the above facts and analysis that I politely request that you immediately roll back the recent hikes you made to the Ellis Act relocation ordinance as those hikes seem to be in pretty clear violation of state law as well as the letter and intent of this decision.

Regards,

- Jonathan Weldon 2226 Jefferson Avenue, Apt. A Berkeley, CA 94703 tent Affordability Declining for Blacks and Hispanics I Fortune.com Page 1 of2

Item 7.a.(8) HOUSING Black and Hispanic Communities Are Spending Almost Half Their Incomes on Rent

Annalyn Kurtz Mar 29, 2017 D

Rents have been rising faster over the last several years, and as a result, a new study says the affordability of rental units has declined, with black and Hispanic communities hit particularly hard.

In 2016, it took about 44% of income to make rent in predominantly black communities, up from 40% five years earlier, according to a report by Zillow released Thursday. In Hispanic communities, about 48% of income goes to the monthly rent check, up from 41% in 2011.

Skylar Olsen, a senior economist for Zillow, calls it an "affordability crisis."

The story is primarily driven by sluggish wage growth, she told Fortune. While rents tend to be lower in minority communities, those same communities have benefitted least from recent improvements in the job market. The average .income for households in black neighborhoods has increased about 2. 9% over the last five years, compared with a 5.4% rise in white communities.

You've probably heard of the 30% rule of thumb, which says that whether you rent or buy, it's best not to spend more than 30% of your gross income on housing each month. But that rule is currently holding true only for residents of primarily white communities, who pay less than a third-or about 31% of their income-to cover rent, the Zillow report said.

This affordability gap limits the upward mobility of people who live in minority neighborhoods. As a larger portion of their paychecks goes to cover housing, http:/lfortune.com/2017/03/30/rent-black-hispanic-neighborhoods/ 4/2112017 Rent Atfordability Declining tor Blacks and H1spamcs !l

"African-American and Hispanic renters find themselves in a catch-22 situation-while owning a home is a great way to build wealth, you need to save up some cash to be able to buy. If you're spending close to half of your income on rent, saving up that down payment is going to be incredibly difficult," Zillow's chief economist Dr. Svenja Gudell said in a press release.

The Zillow report is based on data measuring market-rates for rental units in census tracts. When market rates aren't affordable, it can mean more low-income renters will remain permanently stuck in public housing or subsidized housing, Olsen said.

The rental affordability gap is especiallywide in places like Boston, where it takes about 71% of income to afford rent in black neighborhoods, but 35% of income in white neighborhoods. And in San Francisco, it takes an average of 7 5% of income to cover rent in a black community, but 49% in white neighborhoods.

Of the 26 cities for which Zillow provided data on both white and black neighborhoods, Atlanta had the narrowest affordability gap. There, rent consumes about 32% of income in black neighborhoods and 27% of income in white neighborhoods.

When compiling the report, Zillow's economists looked at individual census tracts and categorized them by the largest racial group present in each area. Next, they used Census Bureau data on the median household income in each of those neighborhoods, alongside Zillow's own measures of rent and mortgages to calculate affordability.

http://fortune.com/ 20 17/03/3 0/rent-black-hispanic-neighborhoods/ 4/2112017 California Landlords Threaten Immigrant Tenants With Deportations - City Lab Page 1 of6

From The Atlantic Item 7.a.(9) CIT,~!../~ I~

In California, Landlords Threaten Immigrant Tenants with Deportations Housing Lawyers are reporting a troubling trend: Landlords exploiting the growing fear of immigration authorities to evict tenants, raise rents, and clear residents from gentrifying neighborhoods.

KRISTON CAPPS I 'f# @kristoncapps I Apr 5, 2017 I • Comments

Norsk Te leg rambyra AS / Reuters

Love Citylab? Make sure you're signed up I Email Sig n up for our free e-mail newsletter. L______,

Shirley Gibson's client was in jeopardy. A mother of three Living in San Mateo County in California, the woman had obtained a restraining order against her children's father for domestic abuse. Her Landlord took the opportunity to https://www.citylab.com/housing/2017 /04/landlords-are-threatening-immigrant-tenants-... 4110/2017 California Landlords Threaten Immigrant Tenants With Deportations - City Lab Page 2 of 6 demand that she sign a new, higher lease. She pleaded with him to let her take the document to an attorney.

"Legally, a victim of domestic violence isn't required to agree to new lease terms or agree to pay more rent, just because they're a victim," says Gibson, directing attorney for the Legal Aid Society of San Mateo County.

The landlord wasn't having it. Gibson says that he made a clear threat: Ifyou don't sign this right now, I'm going to call immigration, andyou will be taken to Mexico, away from your children.

In that moment, the woman was a single mother, with no father in the picture, looking at choosing between losing her home or losing her children and her country.

"She believed this manager, because when he was making the threat he was wearing the red hat-the 'Make America Great Again' hat-and to her mind that meant, This is a person who really hates me,"' Gibson says.

Emboldened by President Donald Trump's anti-immigration policies, landlords across California are threatening to report undocumented tenants to immigration authorities. Landlords looking to evict their tenants, raise their rents, or stifle their complaints about their living conditions are exploiting undocumented tenants' fears about being deported, according to housing advocates and attorneys.

While undocumented renters and members of mixed-immigration-status households have always been vulnerable to abuse and intimidation, California legal-aid experts say that reports of explicit deportation threats are pouring in from every part of the state.

"The scale at which it's happening has increased dramatically since the November election," says Jith Meganathan, policy advocate at the Western Center on Law & Poverty. "We have somewhere between two-and-a-half million and three million undocumented individuals living in California, most of whom are renters. Unscrupulous landlords are taking advantage of their knowledge of that fact to deprive tenants of their legal rights."

Most often, landlords who threaten to report a tenant to Immigration and Customs Enforcement do so in response to complaints about the rental unit: https://www.citylab.com/housing/20 17 /04/landlords-are-threatening-immigrant-tenants-... 4/10/2017 California Landlords Threaten Immigrant Tenants With Deportations - City Lab Page 3 of 6 plumbing Leaks, mold, exposed electrical wiring, and so on. In the past, Legal- aid advocates might occasionally field calls from a building when a slumlord threatened to dial up an ICE raid in order to get out of fixing a problem.

In rent-controlled jurisdictions where housing prices are skyrocketing, however, some landlords are now threatening to report undocumented tenants or mixed-status households to ICE in order to raise their rents. Or to evict tenants seen as undesirable, in the hopes of drawing a more affluent renter class in gentrifying neighborhoods.

Legal-aid agencies throughout California are reporting eviction threats by landlords who cite President Trump by name.

"We have stories of this happening in every part of California," Mega nathan says. "The Bay Area, Los Angeles, San Diego, Orange County, rural areas like the Central Valley and the Central Coast."

Under California state law, Landlords can't ask a tenant or family about their immigration status. A bill before the state legislature, Assembly Bill291-the Immigrant Tenant Protection Act of 2017 -would strengthen renter protections by prohibiting landlords from disclosing a tenant's immigration status to authorities. It would also make it illegal for landlords to threaten to report a tenant to ICE or otherwise compromise an undocumented tenant's legal rights.

Legal-aid advocates could not attach a specific figure to the rise in immigration-related eviction threats, but all registered a growing sense of alarm. Bad landlords exacerbate an already bleak housing situation for Latino families in California: Just 43 percent of Latino households owned their homes in 2014, compared with 63 percent of white households. Almost 12 percent of Hispanic households in California live in crowded housing conditions, more than twice the average for Hispanic households nationwide. And 57 percent of https://www.citylab.com/housing/20 17 /04/landlords-are-threatening-immigrant-tenants-... 4110/2017 California Landlords Threaten Immigrant Tenants With Deportations - CityLab Page 4 of6 the state's Hispanic households are rent burdened, meaning they pay more than one third of their income toward rent.

Navneet Grewal, senior attorney at the Western Center on Law & Poverty, says that threats about immigration status are not just increasing in number-they're also growing more intimidating. A landlord's attorney asking for a tenant's immigration status during a deposition hearing in a rent dispute, for example, in which immigration status should have no bearing. Nonprofit legal-aid agencies throughout the state are reporting eviction threats from landlords who cite President Trump by name, she says.

"What we used to see is, when there was a building of folks who had habitability concerns, you'd see things like a landlord threatening to report the building to ICE," Grewal says. "What I hear from people now, there is an attitude of, 'Why go through the eviction process when I can just call ICE to do the sheriff's job?"'

Rental fears in California extends beyond the lease. Households who receive federal housing assistance worry that receiving or even applying for federal housing aid, such as vouchers, could make them vulnerable to deportation. Mixed-status families may receive pro-rated assistance based on the different immigration statuses of members of the household.

"That's perfectly legal under the law," says Karla Ng, supervising attorney for the National Housing Law Project. "But the fear is that if you have anyone in the family who's not a citizen, does that put you at risk? Does that put you on ICE's radar?"

Ng adds, "Then there are folks who have not yet received federal housing benefits, but they're afraid if they get any benefits, not just housing benefits, they are at risk of getting in trouble or getting their information forwarded to immigration enforcement."

lm~igrant families appear to be eschewing all kinds of interactions with the government, not just aid. Reports of domestic abuse among Latinos in Los Angeles in 2017 have dropped by 25 percent. (On the other coast, police in Philadelphia also reported a significant drop in violent crimes reported by Latinos.) Gibson says that many clients who come to her with a strong case are too fearful to pursue their legal rights in court. Efforts at intimidation that https://www.citylab.com/housing/2017 /04/landlords-are-threatening-immigrant-tenants-... 4110/2017 California Landlords Threaten Immigrant Tenants With Deportations - City Lab Page 5 of6 would have been unimaginable to someone living in the Bay Area before now feel more pressing.

"Previously, when we were counseling people, we would say, 'Look, the likelihood that, even if your landlord did call immigration authorities, that they would pick up the phone and listen to some random landlord, and that would inspire them to go pick someone up, [is] slim to none,"' Gibson says. "Now, who knows? I can't say to people that won't happen."

She describes another client whose landlord was pUshing her to vacate her apartment. He had not taken any formal steps to evict the woman; he was just warning her that paperwork would have consequences. If she forced him to serve her with court papers, she would be found at the courthouse and deported.

California Supreme Court Chief Justice Tani Gorre Cantil-Sakauye shares that concern. "Courthouses should not be used as bait in the necessary enforcement of our country's immigration laws," she told Attorney General Jeff Sessions and Homeland Security Secretary John Kelly last month.

Even renters who know their rights worry about their lawful interactions with the government, given the White House tilt on immigration. Gibson says that state law needs to be enhanced in order to address fears specific to the Trump era.

"That same client called us back at one point and said, 'My kids are home and are telling me that there are two men at the door,"' she says. "Her teenager was texting her and saying, 'Mom, there's some men at the door, and I think they might be here to take you."'

The woman ended up sending her neighbor out to check. The two men in suits, to her relief, were Jehovah's Witnesses.

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https://www.citylab.com/housing/20 17 /04/landlords-are-threatening-immigrant-tenants-... 4110/2017 Item 8.a.(1)

COMMUNICATION ACCESS INFORMATION: This meeting is being held in a wheelchair-accessible location. To request disability-related accomrnodation(s) to participate in the meeting, including auxiliary aids or services, please contact Aimee Mueller at 981-4932 or 981-6903 (TDD) at least three business days before the meeting date.

Please refrain from wearing scented products to this meeting.

Rent Stabilization Board

RENT STABILIZATION BOARD BUDGET & PERSONNEL COMMITTEE MEETING Tuesday, April4, 2017-5:00 p.m. 2001 Center Street, Law Library, 2nd Floor AGENDA

1. Roll Call

2. Approval of Agenda

3. Public Comment

4. Fiscal Year (FY) 2016/17 Budget Update

5. FY 2017/18 Budget Review Status Quo

6. FY 2017/2018 Budget Review of Known Questions and Discussion of Other Proposed Changes

a. Rent Tracking System b. Known Additional Work c. Proposals from Board Members and Committees

7. FY 2017/2018 Budget Presentation

8. Future Agenda Items and Meeting Times

9. Adjournment

STAFF CONTACT: Jay Kelekian, Executive Director (510) 981-7368

COMMITTEE: James Chang, John Selawsky, Alejandro Soto-Vigil, Igor Tregub (Chair) Item 8.a.(2)

Please refrain from wearing scented products to this meeting.

Rent Stabilization Board

RENT STABILIZATION BOARD BUDGET & PERSONNEL COMMITTEE MEETING Monday, April17, 2017-5:30 p.m. 2001 Center Street, Law Library, 2nd Floor AGENDA

1. Roll Call

2. Approval of Agenda

3. Public Comment

4. FY 2016/2017 Budget Status Update

5. Continuation ofFY 2017/2018 Budget Review Discussion

6. FY 2017/2018 Budget Presentation Update

7. Future Agenda Items and Meeting Times

8. Adjournment

STAFF CONTACT: Jay Kelekian, Executive Director (510) 981-7368

COMMITTEE: James Chang, John Selawsky, Alejandro Soto-Vigil, Igor Tregub (Chair) Item 8.a.(3)

COMMUNICATION ACCESS INFORMATION: This meeting is being held in a wheelchair-accessible location. ~ To request disability-related accommodation(s) to participate in the meeting, including auxiliary aids or services, please contact Aimee Mueller at 981-4932 or 981-6903 (TDD) at least three business days before the meeting date.

Please refrain from wearing scented products to this meeting.

Rent Stabilization Board

RENT STABILIZATION BOARD BUDGET & PERSONNEL COMMITTEE MEETING Tuesday, April25, 2017- 5:30p.m. 2001 Center Street, Law Library, 2nd Floor AGENDA

1. Roll Call

2. Approval of Agenda

3. Public Comment

4. April 24, 2017 Board Meeting Budget Discussion Review

5. FY 2016/2017 Budget Status Review

6. FY 2017/2018 Budget Discussion Continuation

7. May 1, 2017 Board Budget Workshop Update

8. Future Agenda Items and Meeting Times

9. Adjournment

STAFF CONTACT: Jay Kelekian, Executive Director (510) 981-7368

COMMITTEE: James Chang, John Selawsky, Alejandro Soto-Vigil, Igor Tregub (Chair) Item 8.b.(1)

COMMUNICATION ACCESS INFORMATION: This meeting is being held in a wheelchair-accessible location. rl To request disability-related accommodation(s) to participate in the meeting, including auxiliary aids or services, please contact Aimee Mueller at 981-4932 or 981-6903 (TDD) at least three business days before the meeting date.

Please refrain from wearing scented products to this meeting. Rent Stabilization Board

. RENT STABILIZATION BOARD EVICTION I SECTION 8/ FORECLOSURE COMMITTEE MEETING Thursday, April13, 2017 5:00p.m. 2001 Center Street, Law Library, 2nd Floor

AGENDA

1. Roll call

2. Approval of the Agenda

3. Approval of Minutes of the March 22, 2017 meeting (attached to agenda)

4. Public Comment

5. Discussion and possible action regarding recommending East Bay Community Law Center's proposal for funding (attached to agenda)

6. Discussion and possible action regarding Owner Move-in eviction report (attached to agenda)

7. Discussion and possible action regarding proposed schedule for committee reports throughout the year (attached to agenda)

8. Discussion and possible action regarding developing a Workplan and schedule

9. Confirm next meeting date (Commissioners, please bring calendars to meeting)

10. Future Agenda Items

-+ Section 8 Discrimination Ordinance -+ Eviction data report

11. Adjournment STAFF CONTACT: Matt Brown, Staff Attorney (510) 981-4930 Matthew Siegel (510) 981-4930

COMMITTEE: James Chang, Christina Murphy, John Selawsky, Leah Simon-Weisberg (chair) Item 8.b.(2)

Please refrain from wearing scented products to this meeting. Rent Stabilization Board

RENT STABILIZATION BOARD EVICTION I SECTION 8 I FORECLOSURE COMMITTEE MEETING Wednesday, April26, 2017-5:30 p.m. 2001 Center Street, Law Library, 2"d Floor

AGENDA

1. Roll call

2. Approval of the Agenda

3. Approval of Minutes of the March 22, 2017 meeting and Aprill3, 2017 meeting (attached to agenda)

4. Public Comment

5. Discussion and possible action regarding recommending East Bay Community Law Center's proposal for funding

6. Discussion and possible action regarding Owner Move-in eviction report (attached to agenda)

7. Discussion and possible action regarding proposed schedule for committee reports throughout the year (attached to agenda)

8. Discussion and possible action regarding developing a Workplan and schedule

9. Confirm next meeting date (Commissioners, please bring calendars to meeting)

10. Future Agenda Items

-+ Section 8 Discrimination Ordinance -+ Eviction data report

11. Adjournment STAFF CONTACT: Matt Brown, Staff Attorney (510) 981-4930 Matthew Siegel (510) 981-4930

COMMITTEE: James Chang, Christina Murphy, John Selawsky, Leah Simon-Weisberg (chair) ' tc.rn '6. , e. . L \ )

Please refrain from wearing scented products to this meeting.

Rent Stabilization Board

RENT STABILIZATION PROGRAM OUTREACH COMMITTEE MEETING Friday, February 24, 2017 5:00p.m. 2001 Center Street, Law Library, 2nd Floor Approved Minutes 1. Roll call: Murphy, La verde, Chang (30 minutes late). Meeting start time was 5:1Opm 2. Election of Outreach Committee Chairperson: At 5:40pm Commissioner Chang was elected chair. Laverde (m), Murphy (s), 2-0. 3. Approval of agenda: Laverde (m), Murphy (s), 2-0. 4. Approval of minutes from November 18, 2016 meeting: Laverde (m), Murphy (s). 2-0. 5. Public Comment: None 6. Staff report on outreach a. Overview of all outreach activities and work plan: Traylor distributed the Outreach Work Plan from 2016 for the commissioners to review. The commissioners agreed that they would review it on their own time and bring questions back to Nick Traylor at the next meeting. Commissioners later on in the meeting discussed some ideas for additional outreach including; more literature translated into Chinese and Spanish; doing $50 Facebook ads. b. Off-site counseling report (Nick Traylor): Traylor reported on Cal Campus Counseling on Wednesdays and that the Library counseling has been temporarily cancelled due to lack of attendance. Staff person Law informed the commissioners that the Rent Board was working the University to secure a more permanent space on campus. Traylor recommended that the committee revisit the Library counseling program and ways we might be able to increase participation if and when it is restarted. c. Upcoming special events: Traylor informed commissioners that a staff person from the Rent Board would be attending a Financial Literacy Faire at Cal for UC Berkeley employees. The staff person would be tabling, passing out information about landlord/tenant rights and advising employees about how to manage the current rental market. d. Review of schedule for the 2017 Workshops and Seminars: Traylor distributed the schedule of workshops and seminars to the commissioners. e. New video page corning to Rent Board website: Traylor described the upcoming video page on the Rent Board's website and showed the commissioners the first two videos that would be posted on that page. Commissioners suggested that the videos be displayed in the lobby of the Rent Stabilization Program office; the Black Rep Theater; the Social Security office; and a "Better Way (non-profit). 7. Discussion and possible action on: a. Previous committee's outreach ideas: (1) "Tip of the Month" email, (2) "Dollar Bill graphic showing example of where a tenant's monthly rent goes (for possible use in Annual Report). La verde and Chang suggested we use Facebook ads or posts for our "Tip of the Month" and to inake the Annual Report in the form of an Info-Graphic Video. 8. Items for future discussion and setting next meeting date: Commissioners scheduled the next 1 meeting for March 10, followed by April 7 and May 5 h, all at 5pm. 9. Adjournment

STAFF CONTACT: Nick Traylor (510) 981-4901 Moni T. Law (510) 981-4906 COMMITTEE: Christina Murphy; James Chang; Paola Laverde; COMMUNICATION ACCESS INFORMATION: This meeting is being held in a wheelchair-accessible location. To request disability-related accomrnodation(s) to participate in the meeting, including auxiliary aids or services, please contact Aimee Mueller at 981-4932 or 981-6903 (TOO) at least three business days before the meeting date.

Please refrain from wearing scented products to this meeting.

Rent Stabilization Board

RENT STABILIZATION PROGRAM OUTREACH COMMITTEE MEETING Friday, April7, 2017 5:30p.m. 2001 Center Street, Law Library, 2nd Floor **REVISED AGENDA** 1. Roll call 2. Approval of agenda 3. Approval of minutes from March 10, 2017 meeting. 4. Public Comment 5. Staff report on outreach a. Review of Outreach Work Plan b. Report on the rest of our off-site counseling for 2017 c. Report on recent workshops/seminars d. Report on "Rent Registration" video and incorporation of dollar graphic or something similar into the video (for the purpose of explaining how registration fees are spent).

6. Discussion and possible action on: a. "Tip of the Month" idea b. Dollar Bill graphic showing example of what services the registration fee pays for possible incorporation into the "Rent Registration" video. c. Review and discussion about possible outreach for the new "elevator law." d. Discussion about possibility of Rent Board doing a demographic survey to assist in targeted outreach. e. Review of documents handed out to the public to discuss possible translation of documents into Spanish and Chinese. f. Facebook ads and other forms of advertising of Rent Board services for 2017 7. Items for future discussion and setting next meeting date 8. Adjournment

STAFF CONTACT: Nick Traylor (510) 981-4901 Moni T. Law (510) 981-4906 COMMITTEE: Christina Murphy; James Chang; Paola Laverde;