The Advocate for dec Berkeley’s Rental Housing Providers 2018 Founded 1980 • Charter Member, California Rental Housing Association 2041 Bancroft Way, Suite 203, Berkeley, CA • www.bpoa.org President’s Message Kathryn Snowden, President, BPOA This is our moment to celebrate the defeat of Proposition 10 and to enjoy this reprieve. I hope that all of you will come to the Holiday Party on December 13. You can make your reservations on-line at the BPOA website. We have found new allies: supporters of ADU construction, homeowners (who are also in the sights of the Rent Board and their Friends on the City Council), owners of units which have lost exemptions and been placed under Rent Control, Berkeley residents who are shocked by the excessive costs of non-profit construction. BPOA must now join forces with like-minded groups to demand a viable and fair housing policy which can temper the abuses we see in Berkeley and start to deal with the problem — which is regional, not local. We all know that Rent Control was never a solution; it is a feel-good — not a do-good — response to a failed housing policy. Let’s use the temporary advantage we have won wisely, so that we are pre- pared when the demand for radical regulation arises again.
Inside this Issue
Editorial...... Page 2 Coalition Corner...... Page 3 What’s Next for Renters?...... Page 4 Suspect Charged in 1 of 9 Arson Fires...... Page 5 Portland Passes Buy-out Ordinance...... Page 6 What You Didn’t Know about Prop 10...... Page 8 Who Needs Profit?...... Page 8 Holiday Dinner Info!...... Page 9 Quote of the Month...... Page 10 January Meeting Preview...... Page 11 Services & Businesses...... Page 13 PROFIT IS CHEAPER THAN BUREAUCRACY—PART DEUX Albert Sukoff, Editor
BPOA Monthly is a regular publication of the This editorial last month dealt with the outrageous cost of a subsidized hous- Berkeley Property Owners Association, a trade ing project in Berkeley which came in over $700,000 a unit. The Berkeley City association dedicated to assisting rental hous- ing providers with upkeep and management Council has done it again. This time, they have approved a 34-unit project of of residential rental property and coping with Satellite Affordable Housing Associates (SAHA) at the corner of Cedar and Ox- Berkeley’s rent law. ford. These 34 units are for seniors, 13 will go to low income tenants, 21 to those 2018 classified as very low income. Board of Directors The site is being donated by the adjacent All Souls Episcopal Parish. There will Kathy Snowden, President be a manager’s unit and the Church will get two units. There are, therefore, Sid Lakireddy, Treasurer 37 units to be built. The per-unit cost then is $675,000. Unlike last month’s Jon Vicars, Vice President George Soengen project, this one is entirety comprised of STUDIO apartments. At a generous Richard Genirberg, Secretary 600 square feet per unit, that comes to about $1,125/square foot. For STUDIO Jim Smith APARTMENTS!! At least the last one had good sized units. The $25,000,000 cost Will Flynn for these units is at least double what it should be. Double! The City is contributing Paul Tuleja $6,000,000 toward this project and Alameda County another $2,600,000. Albert Sukoff Editor: There is another point worth making. This is not a new project on a vacant lot Albert Sukoff but rather involves the demolition of ten existing units. The 37 studios will Advisor: house 37 people. If the ten current units are average in size, they likely have a Michael St. John capacity of 20 or so residents. The $25,000,000 for this project, then, will add about 17 bed spaces to the housing stock. This is a cost of almost $1,500,000 Our Office Location: to add housing capacity for ONE more person. Wow! Okay, it’s a new building 2041 Bancroft Way, Suite 203 Berkeley, CA 94704 vs. an old building. Maybe this is an exaggeration. However, take a million, even two, to renovate the old building and the cost is still way over a million dollars Phone 510.525.3666 per person. The proper reaction is still: WOW!!! Email [email protected] Faced with these costs, a for-profit developer would tell you: Thank you but the Website http://www.bpoa.org project does not pencil out; I have to pass. How close to working are these num- Office Hours: bers? As you all know, owning rent property involves meeting your expenses Open Monday – Friday, with dedicated one- — taxes, insurance, etc. — and paying for the property itself, i.e. amortizing the on-one appointments for your convenience. investment. One can pay all cash to purchase or build, but there is usually a loan About the Newsletter involved, say 65-70%. Let’s keep it simple and pay for the property with a 100% loan. One generally cannot get a 100% loan, but it is an easy and useful way to Our articles are contributed on a volunteer basis by members and other interested parties, account for the capital investment. although we do accept paid advertising. We With a 100% loan at, say 5%, the payment on a 30-year mortgage for are always happy to include material submit- $25,000,000 would be over $134,000 a month or over $3,600 per STUDIO ted by members and welcome suggestions on unit. If the building were to be assessed at the development cost, the taxes how to improve our publication. would be over $300,000 a year and the per unit per month cost over $700. All articles in this publication represent the We’re up to over $4300 per unit per month for just amortization and taxes. author’s viewpoint and not necessarily the position of our organization. Let’s assume another $500 a month for utilities, maintenance, management, fees and licenses, insurance and the other expenses in running a building. This Direct comments and material to our leaves the non-profit with a $4,800 monthly cost of offering a studio apartment Bancroft Way office or to [email protected] which would likely go for about $2,000 or less at market rate. Thus, with a 100% market rate loan, there would have to be a cash subsidy of $2,800 a month for the non-profit. However, the tenants in these projects pay less than market rent so the subsidy would be even more. continued on page 12 december 2018 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.
2018 Election Results ton. This has always been a challenging district for us to Phew! Another election season down. With our biggest establish a good working relationship with, because it is fight behind us, it’s time to look ahead to what comes next primarily made up of students — a very transient part of for Berkeley. But first, let’s take a look at how the recent the voting population. Newcomer Rigel Robinson is just election shook out for rental housing providers in Berkeley. 22 years of age and undoubtedly has a lot to learn when it Candidate Elections comes to understanding the fine balance of housing priori- ties in Berkeley! Longtime Councilmember Linda Maio in District 1 announced she would be retiring and not running for re- It was another disappointing election at the Rent Stabili- election. City Council seats do not have terms in Berkeley zation Board. Every day the Rent Board is hard at work, and running against an incumbent is always difficult, with crafting themselves not as a Rent Board, but as a Tenant a small chance of winning. When Maio’s seat opened up, Protection Agency. This was solidified when four commis- there was a push by the progressives to fill the seat with sioners ran for re-election and all won. They managed to someone they knew would be pro-tenant and pro-homeless. add to the mix a UC Berkeley student who is taking a leave The progressives’ pick was Igor Tregub but, in the end, of absence from his fourth year of college to sit on the com- newcomer Rashi Kesarwani won with 54.5% of the votes mission. This will undoubtedly continue to make negotiat- (after Rank Choice Voting was triggered). Although Rashi ing balanced policy difficult. But do not despair! We will initially supported Prop 10, we are confident that her time never give up on being a thorn in the side of their progress. on the Housing Advisory Commission and her deep interest We were pleased to see Buffy Wicks sweep the Assembly in using data to make informed decisions will bode well for District 15 seat. Her decision not to back Prop 10 (she sup- us. We find her to be reasonable and open to learning about ported reform, not repeal) likely cost her a few votes, but the challenges of rental housing providers. ultimately, she blew her competitor out of the water and We worked hard to defeat incumbent Councilmember appears willing to work with rental housing providers to Kate Harrison in the District 4 race. She took the place understand how best to balance the needs of both tenants of former Councilmember Jesse Arreguin who in 2016 won and owners. the Mayor’s race. In coordination with the Berkeley Police Ballot Measures & Policy Changes Association and the Berkeley Rental Housing Coalition, we Both the increased Transfer Tax (up to 2.5% for sales over worked hard to educate homeowners that Harrison was $1.5m) and the General Obligation Bond that sold itself as damaging to — and worked against — their interests. At a way to raise money to deal with the homeless problem, the conclusion of election night, it appeared the race may won by a healthy margin. You can expect the bond to raise have moved to a run-off using rank choice voting. But in the your annual property taxes approximately $97 for every end, Harrison received almost 53% of the vote. We remain $425,000 of assessed value. But more importantly, you committed to trying to work with Councilmember Harrison can expect to see City Council fail to use the money in an in the hopes that she will strike a fair balance between ten- effective and productive manner. We’ve seen this time and ants, the homeless and homeowners. time again and expect no change in that dynamic this time We were pleased to see Councilmember Lori Droste around. sweep to victory on election night in her bid for re-election Measure Q, which proposed amendments to the Rent Sta- in District 8. We find her to be fair-minded and open to bilization Ordinance, also passed with flying colors (as we hearing our concerns and ideas. It is our hope she may con- expected). However, due to the failure of Prop 10, only one sider running for Mayor in 2020. amendment was left standing. It extends exemption from The youngest Councilmember will be seated in District 7, rent control and eviction protections to two-unit parcels in taking over for long-time Councilmember Kriss Worthing- continued on page 10 december 2018 3 BPOA MONTHLY Louis Hansen, Bay Area News Group, November 21, 2018 Rising rents, a growing renter population, and heartrending Property owners are now confident voters do not want gov- stories about evictions and displacement meant this should ernment price controls to guide the relationship between have been a good year to ask Californians to loosen restric- landlords and tenants. tions on rent control. But the measure allowing greater Debra Carlton, senior vice president for public affairs for protections for renters, Proposition 10, failed miserably at the California Apartment Association, said the vote was a the polls. What now? “resounding no” on expanded rent control. The association, Advocates haven’t given up. They see a political ally in newly which represents the largest commercial investors in resi- elected Governor Gavin Newsom and strength from an dential real estate, could find common ground with tenant expanding coalition of groups supporting tenant rights. groups on pro-development measures, she said. Pressure on tenants remains intense in the Bay Area, where Reform of local development policies could encourage more rents have soared 46 percent in San Jose and 50 percent in construction of apartments, homes and condos, offering San Francisco since 2010, according to Zillow. renters more choices. “You can’t let cities off the hook,” “Just because Prop 10 lost doesn’t mean the problems ten- Carlton said. ants face disappear,” said Assemblyman David Chiu, D-San Sid Lakireddy, a Berkeley landlord and incoming president Francisco. “We have to do something.” of the California Rental Housing Association, said the vote Tenant advocates say the movement still has momentum, should not stall efforts to compromise. He believes the mes- despite the clear rebuke from voters. Landlord and real sage from voters on Prop 10 was that rent control would estate investor groups say there’s room to negotiate — but not solve the housing shortage. further rent control measures may be off the table. “We’ve been under-producing housing since the 1980s,” The next step could be to reform — not repeal — the state Lakireddy said. “There’s no silver bullet. There’s no magic rent control law known as Costa-Hawkins, which was tar- solution.” geted by Prop 10. The law limits a city’s power to place rent Lonnie Vidaurri, director of investments at StarPoint Prop- control on new construction. A repeal would have given cit- erties in Los Angeles, said the state could encourage more ies the choice to impose strict regulations on rent increases multi-family developments through tax breaks and other on apartments, condos and rented single family homes. incentives for new construction in poor communities. State Housing advocates are optimistic Newsom will bring re- policy makers understand the need for more development, newed attention to the state’s shortage. Newsom opposed he said, because “the housing shortage in California is so Proposition 10, but supported more renter protections. intense and acute.” Newsom said in a post-election news conference that Supporters of the repeal effort expected a difficult cam- housing is a top priority — building more units for low and paign. Well-funded opposition from landlord and real estate middle-income residents, preserving affordable neighbor- investors outspent the Yes campaign by 3 to 1 in the run-up hoods and preventing displacement. “You’re going to hear a to the election, according to public filings. lot more from me on housing and transportation, because I “It’s a disappointing outcome, but I don’t think anyone see the two as the same,” he said. should read into it for the future of tenants rights,” said Both sides are hopeful Newsom will foster a new, more Jeffrey Buchanan of Working Partnerships USA, based in robust housing policy. He set a goal of creating 3.5 million San Jose. units of housing by 2025 — a pace six times faster than “Proposition 10 was a very uphill fight from the start,” said home construction during the last decade. Randy Shaw, tenant rights activist in San Francisco and Chiu, who co-sponsored an unsuccessful bill to repeal author of “Generation Priced Out.” Costa-Hawkins this year, is also optimistic about housing Shaw said the organizing efforts — bringing tenant groups reform in Sacramento. Options could include new protec- together from grassroots to a statewide campaign — will tions from evictions, and smaller modifications to state help on future local and statewide battles. He added that rent control laws. Lawmakers are already discussing bills, he it would also force lawmakers in some districts to “feel like said. they have to do something.” december 2018 4 BPOA MONTHLY Evan Sernoffsky & Megan Cassidy, San Francisco Chronicle, November 22, 2018 (abridged) Federal authorities have arrested a suspect in one of nine recent years. The first reports of an arsonist came after au- blazes at East Bay construction sites that have gripped thorities released video footage of a hooded bicyclist ignit- Oakland and surrounding areas and fueled suspicion that ing a blaze that destroyed a $35 million Emeryville complex one or more arsonists were targeting new housing develop- in May 2017 — the second time that site was targeted in a ments. year. Dustin Bellinger, 45, who also uses the name Faheem Bey, Authorities have not said if they believe the person in the was arrested Tuesday in Oakland, according to Alameda video was Bellinger. County jail records. The U.S. Attorney’s Office charged him But in an application to seal the affidavit accompanying with one felony count of maliciously Wednesday’s complaint, Assistant U.S. damaging or destroying a building The suspicious fires have Attorney Elise Lapunzina wrote that by means of fire or an explosive — a “this is an ongoing investigation into charge that carries a penalty of five put developers on edge for one of several arsons.” The suspicious to twenty years in prison. Bellinger, a fires have put developers on edge for self-employed handyman and part-time years with many investing years with many investing in pricey construction worker from Oakland, has in pricey security measures security measures like round-the- previous convictions for serious crimes, clock guards, dogs, cameras, lights and including kidnapping and second-degree like round-the-clock guards, fences. News of an arrest on Wednes- robbery. day brought some measure of relief. Agents with the federal Bureau of Alco- dogs, cameras, lights and “It’s clearly good news for everyone in- hol, Tobacco, Firearms and Explosives fences. News of an arrest volved — the developers, the Ice House linked Bellinger to an intentionally set project folks that were slated to move in fire that burned itself out inside the un- on Wednesday brought there,” said Simon Chen, chief financial der-construction Hollis Oak apartments officer of Madison Park Financial, the along Peralta Street near the Oakland- some measure of relief. developer of Hollis Oak. “I think this is Emeryville border in the early-morning good news for the entire community.” hours of Oct. 23, according to a federal complaint filed on Bellinger also uses the name Faheem Bey on Facebook and Wednesday. The same morning as the Hollis Oak fire, a Instagram. Several posts dating back to November 2017 massive inferno destroyed a 126-unit residential construc- showcase his construction skills, with projects including tion site known as the Ice House complex 10 blocks away roofing, carpet installation and demolition. Bellinger uses along West Grand Avenue — the second time the site had the surname Bey in association with the family that owned caught fire over a six-month period. Your Black Muslim Bakery, one of whom — Yusuf Bey Federal authorities have not charged Bellinger with the Ice IV — is among three men in prison for the 2007 killing of House fire or several other high-profile fires that destroyed journalist Chauncey Bailey and two others, according to the major construction projects in and around Oakland in ATF. Fear that construction projects were under attack from one ST. JOHN & ASSOCIATES, LLC or more arsonists escalated in May 2017 when surveillance Property Management Consultants cameras captured a suspect setting a fire at the construction Rent Control . Condominium Conversion . Real Estate Planning site on the 3800 block of San Pablo Avenue. It would be Michael St. John, Ph.D., Principal Consultant the second time the project burned down, raising ques- Andrew Thomas Fisher, B.A., Associate Consultant tions about whether the attacks were motivated by housing Marti Dion, Assistant Consultant costs and gentrification. In July 2017, the seven-story Alta Waverly development burned down west of Lake Merritt www.stjohnandassociates.net in Oakland. The cause of that fire has not been determined. 2115 West Street, Berkeley, CA 94702 On Oct. 31, 2016, a three-story apartment complex burned (510) 845-8928 . North Coast Office (707) 937-3711 down east of the lake. december 2018 5 BPOA MONTHLY Thacher Schmid, Los Angeles Times, November 24, 2018 The city of Portland, Oregon, known for progressive ideas, County Circuit Court Judge Henry Breithaupt disagreed has enacted a law that under certain circumstances requires and upheld the law last year, triggering the landlords’ ap- landlords to pay renters forced to leave their homes. (Don peal. Ryan / Associated Press) John DiLorenzo, the lead attorney representing landlords, The idea seemed simple enough. Last year, Portland passed called the law the wrong fix for the problem, comparing it a law to ease the pain of renters being forced out of their to “the doctors of old who thought that applying leeches homes or facing large rent hikes. would help a patient.” Officials and housing advocates in particular were worried Ron Garcia, president of the Rental Housing Alliance of about those facing “no-cause” evictions. Such renters aren’t Oregon, called it “draconian.” Garcia’s group represents compelled to relocate because they damage property or fail 2,000 members, 60% of whom are small “mom and pop” to pay rent; their landlords just want them out. landlords. The ordinance requires landlords to pay tenants from “I’m a guy who owns a duplex, and I’m getting stymied by $2,900 to $4,500 for a no-cause eviction, a rent increase of city government,” Garcia said. “I want my property back.” 10% or more, a “substantial change” to the lease or a lease Tenant advocates far from Portland see the law as a way to nonrenewal. help renters targeted for mass evictions in a deregulated Now, landlord groups that have sued to overturn the law rental marketplace. hope they will prevail when the Oregon Court of Appeals Minnesota’s Twin Cities have seen a surge in evictions in hears the case in January, even as tenant advocates na- apartment buildings with as many as 700 units, said Tim tionwide study the ordinance as a tool to prevent renter Thompson, president of the Housing Justice Center, an displacement. advocacy group. “As far as I know, no place else has taken this sort of ap- Minneapolis and four suburbs recently adopted tenant pro- proach,” said Emily Goldstein, a senior organizer for the tection ordinances, he said, after discussions that included Assn. for Neighborhood and Housing Development in the Portland law. Minneapolis is now considering a tenant Manhattan. “bill of rights” package, which could include mandatory The group hopes to educate the public and officials about relocation payments. the ordinance and possibly “replicate and improve” the law The number of renters in the U.S. is near its high-water in the New York region. mark for the last half-century, a Pew Research Center study Jamey Duhamel, a policy advisor for Portland City Commis- found. In cities up and down the West Coast, gentrifica- sioner Chloe Eudaly and co-author of the ordinance, said tion and eviction have led to increasingly volatile political cities across the nation have asked for information about battles. the law. “I think our relo ordinance is unique, and the only In Portland, 123,157 of the city’s 265,700 occupied housing one of its kind in the country,” she said. units — or 46% — are rentals, Martha Calhoon, spokes- In California, where Proposition 10 was defeated in the woman for the Portland Housing Bureau, said. The bureau’s Nov. 6 election, tenant advocates see Portland’s ordinance as a kind of Plan B to protect renters. Outside Oregon, tenant advocates see the law as a viable Beacon Properties tool to mitigate what Josh Butler, executive director of the Careful, Conscientious group Housing Long Beach, calls “a rental housing catastro- Property Management phe.” The Portland ordinance is a “really great first step for a city to take,” Butler said. “I see it more as displacement Carlon Tanner, Broker mitigation.” 466 40th Street, Oakland CA 94609 In their lawsuit challenging the ordinance, Oregon landlord 510-428-1864 groups argue that, by discouraging rent increases, it violates a state law “preempting” local rent control. Multnomah december 2018 6 BPOA MONTHLY continued from page 6 most recent “State of Housing” report found that almost being able to stand up for ourselves,” Jarvis said. every neighborhood in the city is now unaffordable for In 2016, actor Adam Lisser and his parents sold the North “extremely low income” individuals, and many black, Latino Portland duplex he lived in. He remained in his unit as a and single-parent households. renter, and a year later, the company they sold to handed Duhamel called Portland’s ordinance a “really big and him a 90-day no-cause notice. The landlord never tried to important protection for tenants in a moment of crisis.” get out of paying the relocation fee, he said. On the other However, “it doesn’t solve all of our problems,” she said. hand, “it was just radio silence,” he said. The law allows landlords to apply for an exemption if they Lisser pursued the issue “like a pit bull,” and he and two meet criteria in any of 12 categories, and it does not stop a roommates shared $4,500. landlord from raising rent 9.9% each and every year. “Having that extra cushion allowed me to look for a new But Portland’s law mandates payments that could make a place from a position of strength,” Lisser, 35, said. “If I difference to many ousted renters: $2,900 for a studio or didn’t have the relocation assistance, I feel like I would have single room occupancy, $3,300 for a one-bedroom unit, experienced a lot of paranoia and uncertainty.” $4,200 for a two-bedroom and $4,500 for three or more Is the relocation assistance law working? bedrooms. Nationwide, the average renter’s net worth Matthew Tschabold, assistant director for the Portland is a fraction of the average homeowner’s: $5,400 versus Housing Bureau, sighed when asked about its effectiveness. $195,400, the Federal Reserve found late last year. “That’s something we’re still working on,” he said. From The law, Ordinance 188219, went into effect in Febru- community-based partners, he said, the bureau has heard ary 2017. Three Portlanders who received payments since “it is having a stabilizing effect.” then said in interviews that it empowered them to face the One possible measure of the law’s effectiveness is the daunting challenge of finding a new home in a tight market. number of cases heard in local eviction court. Studies have “Who has three months of money in the bank that they can shown that only a small percentage of overall evictions land just pick up and move?” Amanda Potter, 37, asked, referring in eviction court, but it’s clear that the number of residen- to the usual payments required to execute a lease. “We rent tial eviction cases in the Portland area is declining. because we are not in a position to buy.” Potter and family Data provided by Multnomah County, one of three counties lived in a Portland neighborhood for 15 years, but received that include parts of Portland, shows that residential evic- a no-cause eviction notice in July 2017. They ended up 10 tion cases have declined for a decade, from a high of 6,713 ECSGroup, Inc. miles away, in Troutdale. in 2008 to 5,353 last year — a 20% drop. (So far this year, Sophia Jarvis, 29, was served an eviction notice in February the numbers are similar to 2017.) ECS2017. FindingGroup out about, theInc. ordinance, she said, “was the Housing experts say the decrease could reflect various fac- first whiff I had ever caught that there was anything on our tors, particularly an improved economy, but Ann Witte, an ECS side as tenants.” attorney who has helped tenants in local eviction courts “It was the difference between us feeling like we would end for four decades, sees it differently. “It is clear that this Group, Inc. up living on the street or sleeping on a friend’s couch — or approach that the City Council took is working for cutting down evictions,” she said. Since March, when the bureau began tracking data, 198 SHAWN M. RAU, CIEC, CAC Consulting Microbiologist landlords have applied for exemptions. Calhoon, the hous- ECS Senior Industrial Hygienist ing bureau spokeswoman, said “roughly half” of those who Group, Inc. 707.732.3370 apply for exemptions receive them. Landlords have made [email protected] 168 payments to renters, she said. However, they’re not re-
Indoor EnvIronmEntal and WatEr QualIty InvEstIgatIons quired to report payments, so the true number is unknown, Water Damage - Sewer Damage and likely higher. ECS Industrial Hygiene – Asbestos, Lead, Methamphetamine Are landlords trying to skirt the ordinance? Water Quality – Cooling Towers, Fountians, Central Systems Tschabold wouldn’t characterize landlords’ actions that way, Group, Inc. Microbiology - Bacteria, Mold but said the housing bureau continued on page 10
december 2018 7 BPOA MONTHLY Extraordinary wins such as the defeat of Proposition Roundtable (an organization representing California’s 10 can only come through the Herculean effort of largest employers). They raised almost $35 million for extraordinarily dedicated individuals. Kudos can never digital and advertising outreach to California voters. go to just one individual or one industry group because This critical alliance assured that our voice would be something as big as protecting vacancy decontrol and heard in the fight. single-family home rent control exemptions always This wouldn’t have happened without the strategic takes an army of protectors! mind of former BPOA President Sid Lakireddy. Almost But there is one industry group you may not be famil- two years ago he recognized that Costa Hawkins would iar with that deserves a big thanks for all its work. It is be at risk and he started pulling together like-minded the California Rental Housing Association (CalRHA). individuals to coordinate a plan of attack. He will The association was created over three years ago by a take the helm of CalRHA as President in 2019 with a group of dedicated property owner associations that primary focus of continuing to save the key aspects of wanted to make sure the voices of small and medium Costa Hawkins. property owners were heard. Comprised of ten proper- BPOA is a member of CalRHA and also an affiliate of ty owner associations up and down the state, they are the National Apartment Association (NAA). As a mem- the voice of those who are most impacted by extreme ber of BPOA, you automatically receive a membership regulations and least able to absorb major impacts to to NAA. If you have questions about how to access and their bottom line. utilize your NAA membership, please contact BPOA CalRHA was instrumental in the defeat of Prop 10 Executive Director Krista Gulbransen at bpoa@bpoa. when they joined forces with the California Business org.
BRIDGE is a large non-profit housing developer. These Thank you for your inquiry. BRIDGE Housing has $1.5 2016 salaries for the top executives at BRIDGE were billion in affordable housing construction activity up and posted on Berkeleyside as a comment on an article down the West Coast. We need highly qualified profession- about a low-cost housing project. (The subject of the als to lead this work, and unfortunately, we are competing article was a SAHA, not a BRIDGE project; see edito- against market-rate developers to hire and retain execu- rial.) The point of the post was to content that calling tives. The actual range that corresponds to the below is so-called affordable housing producers was something $287K to $667K, including performance bonuses. of a joke. Here are the posted salaries: Duly noted. Also noted was the defense of these high • Cynthia Parker: $743,118 salaries. I made no judgment in my inquiry nor did I • D. Valentine: $404,333 ask for an explanation. Her elaboration was voluntarily • Kimberly McKay: $414,457 contributed. • Rebecca Hlebasko: $404,803 My reaction to her claim that they need and must pay • Susan Johnson: $366,248 for top-notch executive talent is this: When liberal city • Ann Silverberg: $328,655 governments love what you are doing and bend over to make your job easier, how hard is it? When budget Not considering a posted comment on Berkeleyside a constraints are virtually non-existent, how hard is it? reliable source, I went to the company’s website and - When there is no chance of loss and no investors to out of the 45 listed executives - found and contacted answer to, how hard is it? When the rents are guaran- their press liaison to verify that these salaries are ac- teed by government contracts, how hard is it? -ed. curate. Her prompt response was as follows:
december 2018 8 BPOA MONTHLY BPOA 2018 Holiday Dinner Thursday, December 13th Social Hour 6:00pm • Dinner 6:30pm Awards & Program 7:15pm Join us for an evening of good food, good company and a reason to celebrate! BUFFET DINNER Salads, Sides Tri-tip or Dijon Mustard Chicken Plenty of holiday desserts Wine, beer & beverages included $45 per person at the Neyborly “Poet’s Corner” Event Space 2043 San Pablo Ave at University Ave How to Get Tickets: The best way: in the members area of the bpoa.org website or email us at [email protected], or call us at 510.525.3666 by December 10th!
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december 2018 9 BPOA MONTHLY continued from page 3 continued from page 7 which an owner of record is living in one unit and rent- occasionally fields “interesting” queries about how the mea- ing out the other. We support extending exemptions from sure can be applied. But such instances are rare — only “one regulation to small owners who regularly provide more landlord out of tens of thousands,” he said. “affordable” housing by nature of their close relationship Katrina Holland, executive director of the Oregon Commu- with tenants on property. This is why you did not see an nity Alliance of Tenants, which operates a tenant rights hot- opposing argument to the ballot measure in your Alameda line, believes otherwise. “We see a lot of different methods County voter guide. that folks try to use to get around relocation assistance,” What’s Next for Costa Hawkins Holland said. “We’ve seen efforts from some landlords Many of you are asking what comes next in the protection to try to trick tenants into thinking that they’re trying to of Costa Hawkins? It’s easy to think that the tenant activ- make a choice to leave.” ists will attempt to come back to the California voter in An organizer with renter advocate group Portland Tenants 2020 with another version of the repeal of Costa Hawkins. United agreed with Holland. “It’s true that some landlords But we are confident that newly-elected Governor New- are abusing [the ordinance],” Margot Black said, “but that som’s desire is to settle this at the negotiation table and doesn’t mean it was better before there was relo.” She called through a legislative fix — not a ballot measure. We are the ordinance a “paradigm shift.” working diligently to make sure we have a seat at the table. Tschabold said the housing bureau is prioritizing education It’s time to put down the weapons and work towards a and outreach, responding to what he called a rapidly chang- reformed Costa Hawkins Rental Act that balances both the ing rental landscape. needs of tenants and rental housing providers. Landlords, meanwhile, are placing their hopes in the appel- We welcome questions, feedback and discussion about late court. Garcia, the president of the Rental Housing Al- important political and legal matters. You may contact liance of Oregon, believes the public dialogue over rent has Executive Director, Krista Gulbransen at 510-304-3575 or been hijacked “by a small minority of radical tenant rights [email protected]. groups” who scream the loudest at City Hall. “The people ❖ that I speak for feel like the city has betrayed them,” he said. QUOTE OF THE MONTH What would you think of a person who earned $24,000 a year but spent $35,000? Suppose on top of that, he was already $170,000 in debt. You’d tell him to get his act together – stop spending so much or he’d destroy his family, impoverish his kids and wreck their future. Of course, no individual could live so irresponsibly for long. But tack on eight more zeroes to that budget and you have the checkbook for our out-of-control, big-spending federal government. – John Stossel december 2018 10 BPOA MONTHLY No Members’ Meeting in December... Let’s Have Dinner Instead! The Holiday Dinner Details are on Page 9
Coming Next Month: January Members Meeting Saturday, January 5th, 2019, 9:30am After a few very busy months, we’ll be back to the more routine Saturday morning monthly meetings, featuring refreshments at 9:30am, with the meeting starting at 10:00am. For January, we’ll be learning about Rent Control in today’s Berkeley market. You’ll hear from long time consultant and team members from St. John & Associates. Whether you’re new to being a landlord or you’ve been around for awhile, this workshop will give you a good framework for all things rent controlled and regulated in Berkeley!
december 2018 11 BPOA MONTHLY continued from page 2
How do you do that? First you get subsidized financing. At 3% rather than 5% on a $25,000,000 loan, the payment would be $28,750 a month less; a saving of $777 per unit. To my mind, passing on the interest advantage of government Paty’s House Cleaning bonds to a non-profit should be the extant of any subsidy for Patricia & Justin Diaz so-called affordable housing. However, while I do not have the numbers, I believe these non-profits also get tax breaks 510-701-2431 and other government subsidies. In my opinion — and I am too old to believe the world gives a damn about my opinion [email protected] — if non-profits can’t compete with private development with, say, a $1000 less in interest costs and other subsidies, Insured • Highly Recommended we ought to find another way to meet this need. How? I have an idea. The government should lend me the $25,000,000 at a non-subsidized, competitive rate of 5%. Holl Law & Mediation I will produce, not 37, but about 70 market-rate units and Benjamin J. Holl pay the full tax burden thereon, over $300,000 a year. The Attorney / Mediator loan payments would be about $1,800,000 a year. With that money, the government could subsidize 100 needy tenant- households at $18,000 a year, a significant subsidy of over *Real Estate * Landlord / Tenant * Litigation * Mediation $1,500 a month per unit. So, Plan A costs $25,000,000 and gets you 34 subsidized studio units. With Plan B, for the Tel (415) 324-8860 same money, you get 70 larger units of market rate housing, Email: [email protected] $300,000 in tax revenue and 100 subsidized households. All 2119 West St., Berkeley, CA 94702 for Plan B, raise your hand. 369 Pine St. Suite 420, San Francisco, CA 94104
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december 2018 14 BPOA MONTHLY ST. JOHN & ASSOCIATES, LLC Property Management Consultants Rent Control . Condominium Conversion . Real Estate Planning Michael St. John, Ph.D., Principal Consultant CalBRE # 01185967 Andrew Thomas Fisher, B.A., Associate Consultant Marti Dion, Assistant Consultant www.stjohnandassociates.net 2115 West Street, Berkeley, CA 94702 (510) 845-8928 . North Coast Office (707) 937-3711
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