Conflicted City Council Passes Rigorous Rent Control Ordinance


By:

 blogimage.jpg

The Richmond City Council approved the strictest rent control and tenant protection measures in the Bay Area late Tuesday night during the most contentious City Council meeting since Mayor Butt took office.

Tuesday’s hard-fought decision protects nearly 10,000 rental units in the city from rent increases and enacts a just cause eviction ordinance, which makes evicting tenants more difficult.

Discussion over the proposed rent control legislation stretched over six hours, during which time over 100 speakers pleaded their cases to the increasingly wary Councilmembers. 

Dozens of landlords spoke before the Council donning red t-shirts with the message “No Rent Control” to show their solidity. Their stories became familiar as the meeting proceeded. 

“I have been a resident of Richmond for 66 years, and I have kept rental increases at my duplex reasonable,” pleaded speaker Helen Brun. “Over time rent control will contribute to deterioration of rental properties in the city…Rent control will not solve the problem of too little housing in Richmond. Instead of spending exorbitant amount of money on rent control, that money should be spent on affordable housing." 

The approved rent control ordinance is estimated to cost the city between $1.5 and $2 million per year. Richmond, which just passed its first balanced budget in years, will pass along these costs to the landlords —who will not be allowed to pass on the costs to their tenants. But to many tenants struggling to pay their rents, thinking about rent control in terms of simple economics was missing the point. 

One woman told the Council of how she and her seven-year-old son experienced a 200 percent increase in rent from one month to the next, leaving them both homeless in the city. 

Speakers on both sides of the issue grew tearful at times, all concerned about protecting their livelihoods. However, Councilmembers grew visibly exhausted from the heart-wrenching testimony as time wore on.  

With the clock fast approaching 11:30 pm, Councilmember Gayle McLaughlin called for an abrupt end to debate in order to get the vote in before the Council would have to vote to extend the meeting.

The back and forth over whether to end debate before allowing the rest of the Council to voice their thoughts pushed Mayor Tom Butt over the edge, and he and councilmember Vinay Pimplé abruptly left the chamber.  Councilmembers McLaughlin, Martinez, Beckles and Myrick voted to stop discussion before allowing Mayor Butt and Councilmembers Bates and Pimplé to speak or ask questions.

“I’m voting no, and I’m also leaving. I can’t deal with this,” the Mayor said before escorting himself and Pimplé out of the chamber. 

Until last night it was unclear whether the rent control ordinance had enough support to pass. Councilmember Jael Myrick, the Council’s swing vote, was reported last week to not be in support of such stringent measures, but changes to the ordinance put him in support of it in the end.  

“On April 19 [during the City Council meeting] I said publicly that I wanted to make sure we did something strong, and that we did it the right way to make it not harm the General Fund,” explained Myrick. “Changes to make Option D [rent control] more palatable have been met. Right now, it provides a guarantee that about 9,900 people will not be priced out of their homes, and I can’t look at that opportunity and just let it go by.”

The ordinance passed 4-3, with Councilmember Nat Bates joining Pimpléand Butt in opposition. 

The contention continued morning after the ordinance was approved with Councilmember Jovanka Beckles posting on Facebook that because of this ordinance, “…light will shine on those greedy, selfish, arrogant landlords. Should they evict people to get back at the City, they will be seen for who they really are: evil.”

Rent control and just cause eviction go into effect December 1, though the base period for rents started upon approval of the ordinance to prevent landlords from hiking up rents before its official implementation.  

Richmond’s rent control ordinance affects the 9,912 rental units in the city that predate 1995, per California’s Costa-Hawkins Rental Housing Act. In addition, the city will establish a rent control board to regulate rent increases —which can reach up to 100 percent of the Consumer Price Index —and hear cases around just cause evictions. 

The measures approved Tuesday night make Richmond the first city in Contra Costa County to enact such ordinances, and it places the city among the ranks of San Francisco, Oakland, and Berkeley, which each have their own rent control policies. The combined impacts of rent control and just cause evictions make Richmond’s rent control policies the strictest in the nation.


Photo courtesy Culver City Crossroads.

Showing 3 reactions

Please check your e-mail for a link to activate your account.
  • commented 2015-07-26 20:02:59 -0700
    Your story is a pretty typical one for an individual investor/landlord. Rent control makes this business model significantly less viable and will have the ultimate result in deterioration of the condition of existing housing stock and disinvestment in the sector, resulting in lower property values. That of course, is exactly what the RPA really wants — a forced redistribution of wealth (which is unfortunately accompanied by the destruction of wealth). Just because you supply housing, rather than food or clothing, or for that matter computers or refrigerators — you are in the crosshairs of the “progressives”. You are inherently evil because you rent out property. You will be forced to essentially pay a confiscatory tax to support the scheme and comply with it, or you will be forced to sell your property at a significant loss to market value pre rent control.
  • commented 2015-07-26 10:22:23 -0700
    Written to the council members before the vote:

    I am a Richmond resident and I own a duplex in the Richmond Annex. I also manage a 5 unit building in Oakland for my father who is no longer able to manage the building but depends on it for some of his retirement income.
    In general, I am a supporter of rent control – many renters are abused by landlords who do not manage their buildings in a way that supports both sides. I think rent control is coming to Richmond at some point but I also believe the pendulum tends to swing too far in either direction and I want to offer my two examples as a note of caution as Richmond moves into this realm.

    My husband and I bought our duplex in order to diversify our retirement investments about 2 years ago. We charge market rates and provide what we think is good service to our tenants. So far our tenants are content and we’ve had no vacancies. As new property owners, we are just getting to the point where the property sort of pays for itself – we borrowed from the bank for a mortgage, we borrowed from our retirement accounts for the down payment and we used our saving plus a loan from a friend to make the place safe and habitable. We have paid off our friend and have a few more years to pay off or retirement accounts, our saving are still flat and we take no income from the property at all. We try to collect rents that pay the monthly bills plus $500 for maintenance and repairs. At present, we are saving for a new roof which we patched, but did not replace, when we bought. When several bond measures passed in 2014, our property taxes went up by a lot and we were forced to pass the expense on to our tenants or be unable to maintain the property. If rent control had been a factor, we would not have been able to maintain this investment.

    My father has owned his place in whole and with partners since 1975 and is able to weather the storms of high taxes, somewhat. Even so, raising rent in Oakland is a constant struggle for very little gain. Every year the Oakland Rent Board calculates an annual CPI, the percentage at most that rents can be raised. For the last 3 years, it has hovered around 2%. This year, it’s 1 .7%. When I have given 30 days notice to each tenant, I will be able to collect $100 more per month in rent for all 5 units combined. The rent board keeps rents so low that I’m having trouble finding money to make needed improvements like replacing the windows and old carpeting. There are exceptions for improvement under Oakland’s system but it is very difficult to utilize these until after the projects are finished and paid for, so landlords have to come up with the money first.
    How did my father do it all those years? when a major project was needed (painting, for example, $24,000 two years ago), he would refinance and pull money out of the principal. This finally backfired when credit got very tight a few years ago and he could not secure a loan while the paint deteriorated. In the midst of this, dad suffered a severe stroke and I took over management. The next winter, the building leaked in 3 different places – right into the living spaces of the tenants. I learned the hard way that very old buildings need intact protective layers of paint and caulk to be water-proof – it’s not just cosmetic! Fortunately I was able to refinance and lower his monthly payment and in the end, I was able to get the place painted. I continue to manage it now on a shoe-string. It’s hard.

    As you debate the pros and cons of rent control in Richmond, please think about how bonds and parcel taxes will affect the cost of owning property. Also think about what this will do to property values which are just now returning to normal after the recession. People will not want to pay more, and banks will not lend so much, for buildings that cannot, by law, generate an income adequate to support the costs. Recent additional property taxes and bond payments in Richmond would have put us out of business if we could not have passed the costs on to our tenants. I sincerely hope our council members think that through if they want to pass rent control in Richmond

    In conclusion, if rent control is going to happen in Richmond at all, please proceed slowly and with caution, monitor for unintended consequences, keep a sharp eye on anything that may raise property taxes and incorporate sunset clauses into laws so that they can be revamped or dropped if they don’t work as intended.
  • commented 2015-07-23 17:05:57 -0700
    Thanks once again RPA councilmembers for putting the City of Richmond in the national spotlight as the dumbest city in the nation (along with worse housing authority, space crazies, environmental violators, etc.),

    Voters when you don’t vet or don’t vote you get unqualified, irresponsible, ignorant, arrogant, incompetent, idiots to represent you. Check-out the RPA councilmembers qualifications, their records, the lawsuits the City has under their leadership, how they spend our taxpayers dollars, how they handle core elements of the our city. Check people out!!!

    I did not vote for the RPA, because of their qualifications and records, so they do not represent me and others. These people are not progressive, they are impostors. If this is the best that RPA has to offer, they should shut down shop and start over. RPA, these people give the entire organization and the City of Richmond a bad name.

    We need to get them out of government.
Fight your California speeding ticket and win here. Fight your red light camera ticket here. Fight your cell phone ticket here.