The Advocate for jan Berkeley’s Rental Housing Providers 2020 Founded 1980 • Charter Member, California Rental Housing Association 2041 Bancroft Way, Suite 203, Berkeley, CA • www.bpoa.org A New Year Equals New Challenges Kathryn Snowden, President, BPOA
Most new year’s messages contain bits of wisdom and glimmers of hope for what’s to come. But let’s face it, we operate rentals in Berkeley and sometimes the only positive glimmer we get is the glint from a quarter dropped on the sidewalk. With the continued pressure on rental housing providers, we expect we will have to continue to try to secure any glimmer of hope we can get! With the new year comes the threat of all the elections scheduled for 2020. In March you will see multiple ballot measures that will increase property tax assessments for purposes of raising housing funds for Berke- ley teachers. By November you’ll have a heavy ballot packet, rife with both state and local measures. One of the biggest threats in 2020 will be another attempt at Prop 10. The proponent of the 2018 ballot mea- sure has collected enough signatures to qualify for the November ballot. This is a modified version of the last ballot measure, as he hopes to kill vacancy decontrol. Vacancy decontrol is the only thing that protects rental housing providers who are under the burden of rent control. By increasing your rent to market when a tenant vacates, you can play catch up with all the increased costs you were unable to pass on to the tenant. We will continue to defend this right at all costs. The industry is already planning the defeat, and we will be reaching out to ALL our members asking them to provide some financial support to this effort. We also expect that there will be a flurry of attempts to pass new rent regulations in Berkeley by the Mayor and City Council. Why such a flurry? Because it’s election season and passing “tough legislation” is seen as a win by the constituents who vote to keep the Mayor in office. (If you haven’t already heard, he is running for re-election.) These new proposals include the prohibition of conducting criminal background checks on prospective tenants as well as giving your tenants first right of refusal when you go to sell your property. All this guarantees the year ahead of us will be a tough one. We remain committed to advancing fair and even-handed approaches to the city’s rent regulations. And for this, we are hopeful. See you in 2020!
Members Meeting Inside this Issue Saturday, January 4th Editorial...... Page 2 Annual Members Meeting & Elections Coalition Corner...... Page 3 with Landlord 101 Workshop Berkeley & BART Housing Agreement...... Page 4 Riding California’s Rent Control Wave...... Page 5 Come participate in our annual elections, Oakland Housing Fee Leads Nowhere...... Page 6 followed by a workshop on everything you need Oakland Condo Conversion Changes?...... Page 8 to know as a Berkeley landlord Monthly Meeting Info...... Page 9 Sid Lakireddy on the Coming Year...... Page 10 ST JOHN’S PRESBYTERIAN CHURCH Santa Monica Weighs Renter Right to Counsel...Page 11 2727 COLLEGE AVENUE IN BERKELEY 94705 2019 Legislative Wins...... Page 12 SEE PAGE 9 FOR DETAILS Services & Businesses...... Page 13 GOOD VS EVIL IN BERKELEY Albert Sukoff, Editor BPOA Monthly is a regular publication of the The San Francisco Chronicle printed following opinion piece on August 2, 1985. It is Berkeley Property Owners Association, a trade now a third of a century since I wrote it. Other than that I have now lived in Berkeley association dedicated to assisting rental hous- for 50 years, has anything changed? ed. ing providers with upkeep and management of residential rental property and coping with HAVING LIVED in Berkeley for over 20 years, I find it both infuriating and Berkeley’s rent law. amusing that this town has an unchallenged reputation for tolerance. Having 2020 been at least tangentially involved in the civic and political life of this community Board of Directors for virtually my entire adulthood, my experience is that nothing could be further Kathy Snowden, President from the truth. Sid Lakireddy, Treasurer A tolerant community would be one in which even those who do not share the Jon Vicars, Vice President prevailing local view of the world are nevertheless treated with respect and cour- George Soengen Richard Genirberg, Secretary tesy. It is a community where people can agree to disagree and get on with it. This Jim Smith does not describe Berkeley. Will Flynn Berkeley is not more tolerant than other communities; it is at best differentially Paul Tuleja tolerant. I would even contend that it is, in fact, less tolerant. It is certainly true Albert Sukoff Mark Tarses that beliefs, attitudes and lifestyles are indulged here which would draw hostility Editor: elsewhere, but if these already conform to local values, that is not evidence of any Albert Sukoff particularly high level of tolerance. Berkeley can be quite intolerant, often with a Advisor: vengeance, of the very things that are routinely tolerated elsewhere. Michael St. John DICK CAVETT once joked that the world is divided into two kinds of people: Our Office Location: those who divide the world into two kinds of people and those who don’t. I am 2041 Bancroft Way, Suite 203 clearly in the former group. I think the world is divided into those who believe Berkeley, CA 94704 in live-and-let-live and those who insist on running everyone’s life by their own Phone 510.525.3666 particular value system. Email [email protected] Whether the value system is based on political philosophy, religious dogma or psychobabble is irrelevant. These true believers, be they Marxists, Shiites or Website http://www.bpoa.org Primal Screamers, are so sure that they are right (or, paradoxically, so insecure in Office Hours: their values) that they cannot abide the dissent inherent in a pluralistic society. Open Monday – Friday, with dedicated one- In their most innocuous form, these true believers are compulsive proselytizers; on-one appointments for your convenience. at the other extreme, they will kill you if you do not subscribe to their beliefs. About the Newsletter Those Berkeleyans who give the town its reputation (a group far smaller than the Our articles are contributed on a volunteer entire population) are such true believers. They tenaciously hold their values with basis by members and other interested parties, a smug self-righteousness and they do not look kindly upon those who hold vary- although we do accept paid advertising. We ing opinions. are always happy to include material submit- That their values are largely at odds with the mainline society leads to something ted by members and welcome suggestions on how to improve our publication. of a siege mentality — a them-against-us attitude which fosters defensiveness which is hardly conducive to tolerance. All articles in this publication represent the author’s viewpoint and not necessarily the To hold values other than theirs on critical social issue is tantamount to evil. That position of our organization. is why the true believer cannot be tolerant. A saint can tolerate the sinner, but Direct comments and material to our not the sin. These people, though sincere and even passionate in their beliefs, are Bancroft Way office or to [email protected] not saints and they are not tolerant. There is no such thing as a simple disagree- ment in Berkeley. Everything manifests itself in terms of good and evil and, if the true believers are good, their opposition must be evil.
continued on page 8 january 2020 2 BPOA MONTHLY By Krista Gulbransen, Executive Director The Berkeley Rental Housing Coalition (BRHC) is the political and legal voice of Berkeley’s rental housing providers. Goodbye 2019, Hello 2020! If you’ve been in the rental housing provider business We recognize that that our successes are likely to be in small long enough, you know it’s not for the faint of heart. And increments, but we have no intention of going anywhere. if you’ve been a rental housing provider in Berkeley long We’ve continued to effectively impact as many policies as enough you know your ticker is likely to take a beating. we can including: With the inception of a new state law that regulates rent • Killing a requirement of buildings with four or more increase and provides eviction protections to tenants, we units to install automatic door openers at the request of know other rental housing providers across the state will a tenant (at the owner’s expense!) now also be feeling these heart palpitations. While one nev- • Advancing the extension of rent control and eviction er wants to wish rent control and eviction protections on protection exemptions to two-unit properties with an their worst enemy, there is some comfort in knowing that Accessory Dwelling Unit there are others who share in the pain of these regulations. • Stalling the Tenant Opportunity to Purchase Act in Much of our pain comes from the constant stream of which tenants would have the first right of refusal for increased regulations placed on our industry. It seems purchase when you place your rental on the market (we every time a politician hears a difficult tenant story (no expect this to rear its head in 2020) matter who’s in the right) a new policy must be created to • Keeping the Rent Board (per unit) registration fee respond to that experience! Never mind the rental housing steady, with no increase in 2019 provider’s experience. In fact, many of our elected officials • Negotiating on the Fair Chance Ordinance (the inability purposefully ignore facts that do not serve their purpose. to do criminal background checks on prospective ten- Instead, they just focusing on creating policies that will con- ants) so that it allows for small owner exemptions strain owners to the greatest extent possible. Their disdain for property ownership is apparent and the squeeze is on. • Allow for an owner to increase rents when major capital improvements are made even if they have already had This is how the Berkeley Rental Housing Coalition was born vacancy moments in which rents were brought to market in 2015. A group of owners got together and decided to • Creating a Eviction Legal Support Fund for owners pool resources and lobby for the interests of income proper- going through evictions with their tenants (a benefit ty owners in Berkeley. Like many, they sought a Rent Board provided to BRHC members!) and City Council that would strive for a more balanced way of achieving agreed-upon goals. Their hope was to illustrate The Berkeley Rental Housing Coalition remains dedicated to to city officials the important role property owners play in protecting the rights of all rental housing providers. What the Berkeley landscape. hurts one owner, hurts all owners. We are stewards of what This group of dedicated individuals decided it was impor- is a fundamental need in our community and remain stead- tant to have a full-time, on-the-ground representative that fast in our dedication to providing stable and safe housing. would represent owners through political action (the Politi- We appeal to you at a critical time in our growth. To contin- cal Action Committee) and legal defense (the Legal Defense ue to good work of the BHRC, we must grow our member- Fund). The goal was to advance a fair and even-handed ship. When you become a member of BRHC, you automati- approach to the city’s Rental Stabilization and Just Cause cally continue your membership with BPOA. Please keep an Ordinance. eye out for your renewal letter, in which you will be offered Fast forward more than four years, and we are deep in it! the opportunity to convert your membership to one that We’ve fought several policy battles, waged lawsuits, and supports the good work of the BRHC and BPOA. held back asinine policies. But we expect 2020 will be differ- We welcome questions, feedback and discussion about important ent. What we were able to hold back in 2019 is likely to come political and legal matters. You may contact Executive Director, to the forefront again in 2020. Some people just don’t give up. Krista Gulbransen at 510-304-3575 or [email protected]. january 2020 3 BPOA MONTHLY Natalie Orenstein, from Berkeleyside, December 11, 2019 Berkeley will pursue zoning changes and set aside money hood/city center” sites. That means they must be zoned for housing developments on the Ashby and North to allow a minimum height of seven stories and a mini- Berkeley station lots. mum density of 75 units per acre. The Berkeley City Council on Tuesday unanimously ap- The rules only pertain to zoning — not specific projects. proved a memorandum of understanding (MOU) with If Berkeley zones a site to permit seven stories, BART BART, spelling out the steps the city and transit agency could still theoretically pick a building design that was will take in the coming months in pursuit of develop- only four or five stories. But Berkeley can’t require that ment. BART’s board is set to vote on the MOU next. BART build less than seven stories. Berkeley could also Decisions about BART housing always draw a passionate choose to exceed the minimum requirement, zoning a crowd, and Tuesday’s meeting was no exception. The line site to permit, say, up to 10 stories — again, allowing of people waiting to speak about the issue snaked around BART to choose to build anything between one and 10 the council meeting room. The majority waved blue signs stories. reading “MOU Now!” Speakers shared pleas and concerns While decisions about design will come much later in around affordability, access to the stations, and the pres- the process, most of the ideas floated so far for North ervation of the Berkeley Flea Market, currently located Berkeley include taller buildings at the center of the lot, on the Ashby lot. and shorter heights around the outskirts, to blend into “This is the beginning of a process,” Mayor Jesse Ar- the surrounding neighborhood. Ashby is a bit more com- reguín tried to reassure the crowd. “This ensures Berkeley plicated. While BART owns the land there, Berkeley can has a seat at the table.” retain “air rights” over the main lot and could have more say over what’s built on it. The draft Adeline plan calls for MOU lays out timeline for pre-development process hundreds of units there. Berkeley leaders began talking about building housing The MOU also says at least 35% of the units at each sta- at North Berkeley in 2017, while the Ashby lot has been tion will be reserved for low, very low or extremely low- under discussion, as part of the Adeline Corridor plan- income residents. The document commits the council to ning process, for longer. Then, in 2018, Assembly Bill decide to “set aside” “sufficient” funds by the end of 2020 2923 gave BART the authority to develop housing on its to help BART meet that mark. BART itself has a goal of property. Cities must comply with predetermined zoning at least 20% affordability at each station it develops, and standards for those stations by the summer of 2022. 35% system-wide. The MOU references recent Berkeley In May, the City Council voted to enter into an MOU tax measures as potential revenue sources for what could with BART for North Berkeley. The document is not a be tens of millions of dollars in city contributions. required one, but officials hoped it would ensure that the agency prioritizes Berkeley in its 10-year development plan. And both groups wanted to determine the next steps in a process brand new to both parties. The resulting agreement, approved Tuesday, tackles both North Berkeley and Ashby. It says Berkeley will make its zoning changes by summer 2021, a year ahead of the state deadline. That process will be lengthy and costly and Berkeley will need to work within the strict limits set by AB 2923. The law locked in BART guidelines, which — controversially — designated both Berkeley stations as “urban neighbor- january 2020 4 BPOA MONTHLY Brian Milovich, Forbes, October 4, 2019 Recently, California’s State Assembly passed a statewide nificantly below-market rents as if it were at market rates. rent control bill for all apartment units built more than 15 Now, however, that strategy becomes a liability and the years ago. The Tenant Protection Act of 2019 (AB 1482) will value of that type of property will decline since investors place a cap on annual rental increases of 5% plus the change can’t bring every unit to market in a short amount of time. in the cost of living, or 10%, whichever is lower. It also Aside from the near-term shock to the California apartment provides just cause eviction protections to tenants, mean- investment market, owners are worried about the slippery ing that landlords cannot decide to terminate a tenancy at slope that legislation like this could create. For example, the end of one’s lease without reason (i.e., just cause). Those San Jose, California had a rental ordinance where landlords reasons could be non-payment of rent, criminal activity on could increase rent 8% in a 12-month period (and up to the property or the owner desiring to substantially remodel 21% in a 24-month period) and pass-through a portion the unit or property. of capital improvements to tenants in addition to a rent Previously, rental ordinances that established rent caps and increase. That was reduced to 5% in May 2016, and many restrictions on a landlord’s ability to remove a tenant were of the pass-throughs were eliminated. Owners in San Jose limited to cities such as San Francisco, Berkeley, Oakland, are rightly worried about further reductions in the allow- Santa Monica and Los Angeles, to name a few. Those com- able rent increase as affordability continues to be a concern munities all have stricter rental restrictions than the new in the Bay Area. The same anxiety is now seen in the entire bill, but only for properties generally built in 1978 or earlier. state as owners are likely fearful that the 5% statewide The real impact of AB 1482 will be seen in how the invest- allowable increase will get reduced even further, set to infla- ment community perceives the risk in owning properties tion (i.e., consumer price index), or even be as draconian as built between 1979 and 2004 and in communities where San Francisco where increases are limited to 60% of CPI. rent control was never on the radar. Institutional owners While the implementation of the new law is months away, have largely avoided rent-controlled properties in Califor- the impact on the investment market will be seen today. nia with some notable exceptions. In 2008 when Lehman Just as trade fears with China have caused the stock market folded and the economy fell into recession, the debt on to whipsaw during 2019, the uncertainty around how the large pools of rent-controlled properties in San Francisco new Tenant Protection Act will affect the California apart- was in default and many institutional private equity funds ment market will cause valuations to be more volatile and swooped in to take control of assets they would’ve other- investors to take a step back. A structural change for apart- wise avoided. Institutional investors don’t want to be in ment owners is just beginning. the news for any missteps adhering to the letter of a rental In the short term, the allowable increase is still large ordinance, unless the financial incentive is so great. Now, enough for most owners to not worry about the economics these same groups find themselves in a new predicament as of their property, especially given that we’re late into a long they will become owners of rent-controlled properties and economic cycle. As long as a new owner can achieve market their property management companies will need to learn rents in a reasonable amount of time, there shouldn’t be how to navigate this process. much change in valuations. continued on page 10 While the threats of new apartment investment and devel- opment grinding to a halt are unfounded, the uncertainty REAL ESTATE SERVICES surrounding the new law may create short-term volatility. P R E M I U M PROPERTY MANAGEMENT Fewer investors may be interested in California apartment LEASING PROPERTIES INVESTMENTS properties as a result of the law, causing a potential dip in CONSULTING SALES & BROKERAGE pricing. 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California’s explosive growth haven’t felt the need to keep every unit at market rents. The investment market was CA BRE LICENSE #01120349 so liquid that investors would value a property with sig- january 2020 5 BPOA MONTHLY Sarah Ravani, San Francisco Chronicle, December 10, 2019 Oakland passed an impact fee on new residential develop- tracking the fees properly because the programs weren’t ments three years ago to jump-start the city’s construction “talking to each other.” of affordable housing. But little has happened since then. City staff have since said they corrected the problem and The city has collected just under $9 million in fees and dis- have the correct amounts. Still, they have hired an outside tributed $4.8 million to help fund about 160 new affordable auditor to check their work. units — none of which are yet under construction. Oakland “We are looking right now at the processes and making sure has not approved any new projects that have applied for we have good reconciliation,” said Bill Gilchrist, director of funds from the fees since 2017. the city’s planning and building department. “We have not When the measure was enacted in 2016, the city forecast it uncovered anything that has given me concern.” would collect close to $65 million in fees over 10 years. The issue underscores a larger question about Oakland’s Critics, including current City Council members, say col- commitment to creating affordable housing. One coun- lections are running far behind what they anticipated, and cil member has suggested the city increase its affordable they have grown frustrated. Some advocates and developers housing stock by requiring that a certain amount of new say that the city should have collected close to $20 million construction be affordable for people with low to moderate into its impact fee fund. incomes. Councilwoman Nikki Fortunato Bas said she also “We have been asking these questions for a year and not plans to review the impact fee ordinance and look for ways getting answers — so we don’t know if it is a failure to to boost the fees. collect, being expended improperly or if the fund(s) are sit- “When you look at the level of affordable housing that has ting somewhere, but not being tracked,” said Oakland City been permitted and you overlay that with what we might be Council President Rebecca Kaplan. able to build for the next couple of years with impact fees, Unable to fully account for the program’s performance, the we are just not getting to the numbers that we need,” Bas city recently hired an outside auditor to investigate how it is said. working and how the city tracks the fees. At issue isn’t a po- To date, the city has deployed about $4.8 million of the tential misappropriation of funds, rather the slow process funds from the program approved in 2016 to three afford- to get answers and the lack of transparency, city officials able housing projects: $1.2 million for a 55-unit project said. on 95th and International, $2 million for 50 units at the Affordable housing nonprofit organizations say they are Friendship Senior Rental Housing Development at 1904 waiting for money to be released and are missing out on Adeline St. and $1.6 million for the 57-unit Nova Apart- state funds that are available only if they have a financial ments at 445 30th St. commitment from their local governments. Nova Apartments is under a final review by the Planning “We have been in a holding pattern,” said Susan Friedland, Department. The other two projects have been approved by chief executive officer of Satellite Affordable Housing As- the Planning Department and are in the pre-development sociates. “It’s just frustrating. The whole process has been continued on next page stuck by the lack of resources, and we feel that the impact fees are one of the biggest pieces of that program.” Jeff Levin, a policy director at East Bay Housing Organiza- HOLL LAW & MEDIATION tions, which represents nonprofit developers, initially raised questions about the impact fee collections. BENJAMIN J. HOLL “They should have had plenty of time to think through how Attorney/Mediator they were going to administer this and how they were going to collect data, but apparently they did not,” Levin said. Tel 415-324-8860 369 Pine St., Suite 420 Fax 510-665-6005 San Francisco, CA 94104 Staff from the planning and building departments say they have collected the correct amount in affordable housing Email [email protected] www.holl-lm.com impact fees, but the city’s two software programs weren’t january 2020 6 BPOA MONTHLY stage. None has broken ground, The Chronicle confirmed by The city is working with a consultant to automate invoices visiting the sites. for impact fees and is expected to be done by Dec. 20. Iden- The amount developers pay into the fund depends on what tifying a consultant and producing reports has been a slow part of the city their project is in, with payments ranging process. And the audit won’t be done until next spring. from $13,000 to $24,000 per unit. Councilman Loren Taylor said at a recent committee meet- Impact fee for affordable housing ing that it was astounding it took the city so long to identify a consultant. In April 2016, the Oakland City Council passed an ordi- nance that would impose impact fees on developers build- Councilman Larry Reid pressed the city administration on ing market-rate housing projects in Oakland. coming up with answers before the spring and said “sooner is better than later.” Fees were meant to make up for the lack of affordable hous- ing units being built. The city makes grants to affordable Meanwhile, developers are unhappy with the lack of move- housing developers through an application process. Those ment in deploying the funds. developers then use those funds to qualify for state fund- “They are angry because they are saying this raises the fun- ing. damental question of competency,” said Greg McConnell, Market-rate housing developers must pay the first half of head of the Jobs and Housing Coalition, which represents their impact fee upon receiving their building permit, and developers. “The city hasn’t spent that money on affordable they pay the second half after receiving their certificate of housing. It just looks bad all the way around.” occupancy. Developers can opt out of paying the fee if they build the equivalent in affordable housing units. Impact Fee For Affordable Housing The city was divided into geographic zones, and the fees were implemented in phases: In April 2016, the Oakland City Council passed an Developers in downtown, Uptown and Lake Merritt pay ordinance that would impose impact fees on developers $24,000 per unit. building market-rate housing projects in Oakland. In West Oakland and parts of North Oakland, impact fees Fees were meant to make up for the lack of afford- are $19,250 per unit. able housing units being built. The city makes grants to affordable housing developers through an applica- Combined with impact fees for jobs and transportation, tion process. Those developers then use those funds to Oakland has fees that add up to about $65,000 per unit. qualify for state funding. San Francisco has fees that add up to more than $165,000 per unit. Market-rate housing developers must pay the first half of their impact fee upon receiving their building permit, More broadly, Oakland has been pushing aggressively to and they pay the second half after receiving their certifi- add new housing, though, like many California cities, its affordable housing efforts have moved slowly. cate of occupancy. Developers can opt out of paying the fee if they build the equivalent in affordable housing In 2016, Mayor Libby Schaaf set a goal of protecting 17,000 units. households from displacement and building 17,000 new homes — both affordable and market rate — by 2024. The city was divided into geographic zones, and the fees About 28% of those new homes would be affordable. By the were implemented in phases: end of 2018, Oakland had built 9,341 market-rate homes Developers in downtown, Uptown and Lake Merritt pay and 751 affordable units. $24,000 per unit. Under the 2016 program, developers of market-rate hous- In West Oakland and parts of North Oakland, impact ing can opt out of paying an impact fee if they build the fees are $19,250 per unit. equivalent in affordable housing units. In the area stretching from east of 23rd Avenue and Council members and advocates question whether that is including Coliseum City, fees will top out at $13,000 contributing to the the low dollar amount collected so far, per market-rate unit by 2020. but the city has been unable to provide an answer. january 2020 7 BPOA MONTHLY Ali Tadayon, Bay Area News Group, December 17, 2019 Tenant advocates say current rules threaten city’s affordable housing stock Oakland may make it harder for landlords to convert apart- Tenants who are forced to leave would be entitled to ments to condos — a move tenants’ rights advocates say is thousands in relocation benefits under the city’s Uniform long overdue. Relocation ordinance. “Condo conversions are a very big loophole to rent control,” Some in the real estate industry pushed back against the said attorney Jackie Zaneri of the tenants-rights law group ordinance at the Dec. 3 committee meeting. Mimi Rohr, Centro Legal De La Raza. of the Jobs and Housing Coalition, said the group was Tenants’ rights activists say the city’s current condo con- concerned that the extra regulations would result in fewer version rules are outdated. The rules were created in 1981, condos on the market. after two waves of condo conversions in the 1970s, accord- “By restricting condo conversions in this environment, we ing to a 2016 report from UC Berkeley’s Urban Displace- are also limiting opportunities for affordable homeowner- ment Project. ship,” Rohr said. “The ordinance isn’t just about protecting tenants from Kalb, in an interview, said the time has long since passed displacement, but preserving our rental housing stock for when condos in Oakland were affordable to the working people who can’t afford homeownership,” said Jeffrey Levin class. According to the real estate website Redfin, 62 condos of East Bay Housing Organizations at a December 3rd were listed for sale in Oakland at a median listing price of City Council committee meeting where the ordinance was $617,000. A 20 percent down payment for a condo at that discussed. Council members decided to discuss the proposal price would be more than $120,000. more in January before the full council considers it. Under the proposed new regulations, tenants would have The ordinance, proposed by Oakland Councilman Dan Kalb, first shot at purchasing their units if they are converted to would put stricter rules on landlords notifying tenants of condos, and will be entitled to a 10 percent discount on the condo conversions, requiring that renters be apprised of the condo. Seniors and disabled tenants whose apartments are steps the owners are taking throughout the process. It also converted to condos must be offered lifetime leases under requires tenants be told what rights and relocations pay- the ordinance. ments they are entitled to.
continued from page 2 Like any community, Berkeley comfortably indulges that in THE MEASURE OF a community is not how different that which it believes. Compared to other communities, howev- pattern is in comparison to other communities, but how er, Berkeley is probably less indulgent of those who digress well the community treats those outside of its own prevail- from the prevailing municipal mind-set. This supposed ing pattern. How well do such people fare in Berkeley? Let citadel of tolerance is nothing of the sort. Berkeley exhibits me put it this way: if Berkeley were a country unto itself, no extraordinary degree of tolerance in the general sense, dissent from the dominant party line would probably be a but simply a pattern of acceptance and rejection of beliefs, capital offense. attitudes and behaviors which is different from that found elsewhere. QUOTE OF THE MONTH It is said that power corrupts, but actually it is more true that power attracts the corruptible. – David Brin january 2020 8 BPOA MONTHLY Saturday, January 4th, 2020 This month’s topic is Landlord 101: Skirting the Landmines of Berkeley Rent Regulations With staff from St. John & Associates Prepare for 2020 with a comprehensive overview of what it means to be a rental housing provider in Berkeley including: Lease terms and clauses Replacement tenants and subletting New policies & ordinances coming down the pike As ever, it’s fun, it’s free and you always learn something. Join us at 9:30 am for coffee, pastries and networking! See you there! 9:30am Refreshments • 10:00am Meeting & Workshop St. John’s Presbyterian Church, 2727 College Avenue, Berkeley, 94705 Parking available in the church lot Coming Next Month: Saturday, February 1st, 10:00am Before You Rent Your Apartment: Avoiding the Common Pitfalls With Mark Tarses, Rental Housing Provider Extraordinaire
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january 2020 9 BPOA MONTHLY Sid Lakireddy, President, CalRHA 2019/2020 It’s the end of year and we are furiously getting ready to priorities. First off, we need to make some changes to AB take on 2020’s legislative and ballot measure battles. The 1482. Assemblymember Chiu is preparing to clean it up, challenges we are about to face will not be easy, but we are and when he does, you can rest assured we will be front and ready and we are confident we can overcome them. This center advocating for the changes we need, such as provid- past year was a year of many attacks on the rental hous- ing rental housing providers with the ability to bank rent ing provider industry. We took them on and for some, we costs increases. fought back with strong success. AB 36, the bill proposing Other legislative priorities for 2020 include: implementing to expand rent control, and AB 1481, the bill enhancing policy that allows rental home providers to address issues just-cause evictions, never made it to the Assembly floor before facing lawsuits from renters, limiting the practice for a vote. We had a hand in pushing on and educating our of warranty of habitability to instances when rental home lawmakers about the impact of harmful legislation on small providers are properly notified, and reviving AB 2300 which property owners. As small owners, we are very dependent would grant rental housing providers the ability to imple- on our rental business to sustain our families and liveli- ment no-smoking of cannabis in their leases and rental hood. agreements. We expect this coming year will be no different. Just a few But this is only the beginning! We have a lot of work to do weeks ago Michael Weinstein (the original proponent of and thankfully we also have a lot of proven support from the 2018 Prop 10 ballot measure) submitted signatures to you all. What you did in 2019 helped our name be forefront position what we are calling, Proposition 10 — 2.0 on the in rental housing legislation. For that, we will continue to 2020 ballot. Although voters overwhelmingly voted down move forward in 2020. a similar initiative in 2018, Weinstein is back trying to kill Thank you to all our members that believe we need to Costa Hawkins in a second round. Even with the passing of present a stronger front in Sacramento, and to those of AB 1482, supporters of Weinstein are not satisfied with the you who continually demonstrate your commitment to our complex and confusing rent control and just-cause eviction campaign on social media, at social gatherings, and work. I rules that will sweep across the state in January. They claim would especially like to thank CalRHA’s outgoing board of it does not do enough. But we know the truth — many directors. Thank you for the time and effort you dedicated small property owners that have built their businesses from to making 2019 a year to be proud of. To the incoming the ground up will be forced to sell their properties because board of directors, we are grateful for your commitment to of the new state law. the work ahead. We know that 2020 will be a challenging But like I said, we are ready! CalRHA’s policy and lobbying year, but we have defeated poor ideas in the past and we team are equipped to continue protecting and protecting will do it again. property owners, and we look forward to 2020’s legislative
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However, long-term owners who have artificially kept rents already own and operate in this environment, we were able low because they’ve experienced a significant increase in to cut through the ambiguity associated with the political value over time will now want to pass-through the maxi- changes. Owners who find themselves in a new rent control mum allowable increase and begin a renovation program quandary would be well-served to remain patient, maximize on any vacant unit. Because not all owners operate with the the rent of their units when allowed and start assembling same goals in mind, valuations will run the gamut. a team of service providers with experience in this arena. In my experience, our firm saw values of apartment prop- Although it may take some time for the market to deter- erties fall in Mountain View, California after it enacted its mine values and how best to operate, plenty of owners have own rent control in 2016. That presented a buying opportu- found ways to remain successful within the confines of rent nity, and we were finally able to enter that market. Since we control. january 2020 10 BPOA MONTHLY Madeleine Pauker, Santa Monica Press Democrat, December 5, 2019 Santa Monica renters could gain the right to legal repre- free legal services to 400,000 residents with $166 million in sentation against attempted evictions under a new pro- annual funding. posal from two City Council members. Councilmembers The New York City ordinance is already helping prevent Sue Himmelrich and Kevin McKeown have asked the City displacement, according to a report from the city’s Office of Council to vote Tuesday to develop an ordinance that would Civil Justice. Since Mayor Bill de Blasio signed the ordi- guarantee tenants the right to legal counsel if they face evic- nance into law, legal organizations funded by the Office of tion. McKeown said a right to counsel law will help protect Civil Justice have served 74% more households threatened renters from losing their homes as property owners try to with eviction. capitalize on Santa Monica’s overheated real estate market San Francisco passed a right to counsel law in 2018, which cit- by evicting tenants in order to raise rents. ed a 2014 report that revealed that tenants were taken to court A recent report on strategies to combat displacement in without representation in 80% to 90% of eviction lawsuits. Santa Monica’s rapidly gentrifying Pico neighborhood pro- In Santa Monica, owners of rent-controlled properties may posed passing a right to counsel ordinance, McKeown added. only evict tenants if they have “just cause,” if they or their “Eviction attempts against our neighbors continue to in- immediate family members wish to occupy the property or crease, and we know that a renter in court without a lawyer if they wish to leave the rental business. Most multifamily has little chance of prevailing,” he said. “Besides protecting buildings in the city constructed before 1979 are subject to our neighbors, we know this will slow the post-eviction rent rent control. increases to market rate on existing affordable housing, sav- A new state law that goes into effect Jan. 1 will extend ing our community from further loss of affordability and of those eviction protections to all renters in buildings resident diversity.” constructed before 2005, impacting 8 million California McKeown said the ordinance would follow right to counsel tenants. The law also limits annual rent increases in those laws in San Francisco and New York City. Los Angeles is buildings to 5% plus inflation. also in the process of enacting an ordinance. If the Santa Monica City Council votes to develop a right to In 2017, New York City became the first municipality in the counsel ordinance, city staff will draft the law for a council country to make legal services available to all tenants facing vote and present recommendations on how to implement eviction proceedings. The program is expected to provide and fund the ordinance.
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january 2020 11 BPOA MONTHLY This year we stuck together and pushed back against a Assembly Bill 724 (Wicks): wave of harmful legislation that would have weakened Held under suspension (meaning stopped at the Com- California’s already-fragile rental housing industry. mittee level), AB 724 would have created an online Thank you to all our members and coalition of support- registry portal that could have risked the privacy of ers for always standing alongside small rental housing renters and cost the state valuable tax dollars for its providers. launch and maintenance. Assembly Bill 1481 (Bonta): Assembly Bill 1697 (Grayson): Stopped before being facing a vote on the Assembly Stopped from moving forward by the bill’s author, AB floor, the bill sought to enhance just-cause evictions 1697 was meant to require rental housing providers to rules, placing additional requirements and prohibi- provide notice with just cause to renters living on the tions on rental housing owners pursuing the eviction property for over 12 months. This was later wrapped of a tenant. into AB 1482. Assembly Bill 36 (Bloom): Senate Bill 529 (Durazo): Stopped in Committee of Rules, AB 36 would have Stopped in the Senate Appropriations committee, SB modified Costa Hawkins Rental Act, and allowed local 529 sought to protect renters who formed an associa- governments to enact their own rent control on hous- tion to strike against the same rental property pro- ing stock older than 10 years old. vider.
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