An editorial from Richmond Mayor Tom Butt.
The Richmond Progressive Alliance kicked off the petition drive for their new Rent Control initiative this week with the goal of placing it on the November ballot.
I suspect that few people who sign these petitions make any effort to really understand them, but in case someone does, I am providing some useful information. Whether or not you like the concept of rent control, you should know that the initiative, known as the Richmond Fair Rent, Just Cause for Eviction and Homeowner Protection Ordinance.
The initiative, like its predecessor passed and then rejected by the City Council in 2015, is poorly drafted, replete with internal inconsistencies and may be illegal.
- 11.100.060 defines the powers of the Rent Control Board. It consists of 5 members, to be appointed by the City Council. They must be residents of Richmond, but do not have to be citizens or voters. The Rent Board is entirely separate and independent of any other government body. Section 11.100.060(m). It has the full and exclusive authority to set its own budget, and “The City Council and the City Manager shall have no authority to oversee, supervise, or approve the budget”. Section 11.100.060(n). The Board also has full authority to a) hire anyone they want, including more staff or consultants; b) enter into any contract they want to procure goods or services; c) hire and pay attorneys, whether to advise or litigate – and all with no oversight or control by the Council. Moreover, the Board can require – without limitation or oversight – that the costs for funding their budget be taken directly from the General Fund: “The Board is empowered…to receive funding…from any available source”. Section 11.100.060(l).
- Three appointed Board members (a majority), none of whom have to be citizens of Richmond, will have full authority of the City’s purse strings, with absolutely no oversight or control from the Council, the City Manager, or any other City department. They may spend from the General Fund as they see fit, hire any employees they want, including staff attorneys, counselors, and hearing examiners, and enter into any contracts they want.
- The Board may also pay themselves compensation as they see fit, and are not limited to the nominal amounts that most commissions are statutorily limited to. They may establish a physical office of whatever size and cost they desire
- Any violation of the Ordinance by a Landlord is a misdemeanor, punishable by “imprisonment in the county jail not exceeding six months”. Section 11.100(d), referring to RMC 1.04.100 and California Penal Code Section 19.
- Rent is capped at the amount charged on July 21, 2015 – which, if this passes, will be approximately two years prior to its enactment.
- Landlords may not prevent a subtenant from moving into their property, and may not terminate a lease based on an unapproved subtenant moving in. Section 11.100.050(2)(i). Once a subtenant moves in, they become a Tenant, with all the rights and privileges granted under this ordinance. Section 11.100.030(r). A Landlord may end up with a tenant they don’t even know, but who is protected under this ordinance.
- Any repair or improvements work done to a rental unit must be pre-approved by the Board, and “unless due to a documented emergency affecting a Tenant’s health and/or safety”, a landlord may not demand entry with 24 hour notice (as required by state law) to repair their property without prior approval from the Board. Section 11.100.050(a)(4). There could be many repairs that may be an emergency for the landlord (like water damage and wood rot) that could not be fixed without pre-approval from the Board.
- If Landlord owns a 1 bedroom house and a 5 bedroom house that is then vacant, and wants to repair the 1 bedroom unit in a manner that temporarily displaces the tenant, they must offer the 5 bedroom unit to the tenant (at the tenant’s option) at the same cost as the 1 bedroom unit. Section 11.100.050(5)(C). This very likely violates Costa-Hawkins.
- For an owner-move in eviction, the owner must move in within 90 days. If they fail to do so, they must a) give the unit back to the tenant; and b) pay the tenant substantial damages. Section 11.100.050(a)(6). This will mean an owner will not be able to make any major repairs, even if necessary, before moving in.
- The Rent Board may both raise and lower the amount a landlord may charge for rent, and at their discretion. Section 11.100.060(e). They will be the sole determiner of what a landlord may charge in rent, and whether the current rent is too high or not. If they belief the current rent being paid is too high (even if it is legally consistent with the Base Rent definition), they may order the Landlord to lower it to whatever amount they feel it is worth. If the Landlord refuses to comply, it is a misdemeanor, punishable by up to six months in jail. Section 11.100.100(d).
Contradictions and Conflicts:
- If an owner needs to substantially repair or demolish a house, they must first obtain a permit, then, after doing so, they must provide up to one year notice to the tenant. Section 11.100.050(a)(7). Under current City code, a permit expires after six months, and will have expired well before the tenant vacates.
- Before proceeding to evict a tenant for 1) breach of the lease; 2) nuisance; or 3) failure to allow the landlord access, the Landlord must serve a written notice stating that “a failure to cure may result in the initiation of eviction proceedings”. Section 11.100.050(d). However, it a misdemeanor (11.100.100(d)) for a landlord to “threaten to terminate a tenancy, verbally or in writing” unless the failure to cure has already occurred. Section 11.100.050(a). Thus, a landlord may not evict on this basis without first committing a misdemeanor (punishable by six months in jail).
- A Landlord may not evict a tenant for non-payment of rent, if prior to non-payment, the tenant communicates their right to withhold rent for repairs -- even if the withholding is not justified. Section 11.100.050(e). All a tenant has to do if they can’t pay rent is say they are withholding it. Even if the reason is unjustified or baseless, it would be a misdemeanor for the Landlord to issue a notice to pay or quit, or evict on that basis.
- A hearing examiner (employee of the Rent Board) will decide individual cases, and the decision will be immediate, and not stayed on appeal. Section 11.100.070(d)(11); however, no decision will be final until 30 days after the decision. Section 11.100.090.
Regardless of the technical flaws in the proposed ordinance, there is no evidence that it will actually work to prohibit rent increases. In the article below, Joe Mathews make an an interesting comparison between rent control and Proposition 13, both with originally good intentions but in the end massively exacerbating inequities.