More of Mayor Tom Butt’s Thoughts on the RPA’s Rent Control Initiative and Councilmember McLaughlin’s reply


By:

blogfoto_tb.jpg

In the ongoing discussion of the proposed rent control initiative that’s being circulated seeking signatures to qualify it for the November ballot, Mayor Tom Butt and Councilmember Gayle McLaughlin have been offering their opinions on the merits of the initiative.  Radio Free Richmond is posting their unedited comments so the voters can pick and choose which points are valid and which are not.

Here is the latest response from Mayor Butt:

This is a response to Councilmember McLaughlin’s “Email from Gayle McLaughlin April 9, 2016,” (http://www.radiofreerichmond.com/gayle_mclaughlin_clarifying_richmond_s_rent_control_measure) that disputed my critique in RPA Hits the Streets with Rent Control Petitions, April 3, 2016.

One thing we all agree on is that demand for housing in the Bay Area is outpacing supply, and that has resulted in increased rents. Rent levels throughout the Bay Area are particularly challenging to renters at lower income levels who are spending an increasing proportion of their income on rent, in many cases more than the 30% deemed a reasonable maximum. In 2015, 54.9% of Richmond renters were paying in excess of 30% of household income for rent (http://www.ci.richmond.ca.us/DocumentCenter/View/31210). 

What we don’t agree on is the municipal policy framework that can best address this issue. The Richmond Progressive Alliance and its allied organizations have chosen rent control as their flagship and essentially exclusive response and are conducting an initiative petition campaign to place Rent Control and Just Cause on the November 2016 ballot as an ordinance.

We believe that Rent Control is a failed experiment that has resulted in some of the highest rents in the United States in Bay Area cities that embraced it decades ago, including Oakland, Berkeley and San Francisco.

Unfortunately, some members of the RPA Steering Committee have characterized those of us who oppose rent control as deficient in empathy and compassion. I think we all appreciate the impact that rising rents have on those least able to cope, but I simply don’t buy the  solution of rent control that has such a widespread history of failure. This is not a contest to see who has the most empathy and compassion; it should be an effort to seek the most effective solution.

Instead, I have embraced a number of solutions that address the supply side rather than trying to regulate it. This is what the Mayor’s Office is doing:

  • Convening regular meetings of affordable housing developers to seek policies that will attract them to Richmond and reduce impediments.
  • Accelerating marketing of former Redevelopment Authority parcels for affordable housing development.
  • Accelerating marketing of surplus City-owned properties for affordable housing development.
  • Searching for properties that can be acquired for development of affordable housing.
  • Supporting acquisition of vacant properties using Social Impact Bonds to rehabilitate and sell them to low-income buyers.
  • Setting up a Community Land Trust to seek funding and acquire properties for both rental and sale to low-income buyers.
  • Promoting the construction of market rate for-sale housing that will provide either affordable units or in-lieu fees to be used to construct affordable housing.
  • Collaborating with Habitat for Humanity to build affordable housing in Richmond.
  • Passing a Junior Accessory Dwelling Unit ordinance and supporting AB2406 (Thurmond).

The proposed Richmond Rent Control ordinance is based on the two most aggressive rent control bureaucracies in California – Berkeley and Santa Monica, but Richmond’s is even more aggressive. Both Berkeley and Santa Monica, compared to Richmond, are wealthy cities with significantly higher rents that can better afford the exorbitant cost of the regulatory rent control bureaucracy, but Richmond can’t.  The Berkeley Rent Board has a budget of $4.5 million, a staff of 22 employees and Registration fee of $194 per unit. This would make the Richmond Rent Board the fourth largest department on the city based on budgets, exceeded only by police, fire and public works. 

In a recent Grand Jury investigation of the Berkeley Rent Control Stabilization Board (BRSB), the Grand Jury found that the BRSB is a “…self-sustaining bureaucracy that operates without effective oversight and accountability. The BRSB's independence from the city of Berkeley contributes to excesses in its registration fees, in compensation for the director and members of the board and to perceptions of impropriety in personnel procedures.”

Based on staff estimates from 2015, there are about 24,529 rented units in Richmond. About 10,632 are exempt from rent control because they are single family units and another 1,877 because they are condos. Another 1,389 are exempt because they were constructed after 1995, and 1,910 are exempt because they are subsidized. The net number of units subject to rent control is about 8,721. Some of these units are occupied by tenants who can well-afford market rent. Many are owned by landlords who exercise constraint in rents. Perhaps a relatively few are owned by landlords who push the envelope and abuse renters. 

But do we need a nearly $5 million new department to regulate perhaps as few as 10 per cent of Richmond’s rental market that would exercise excessive rent increases? Whatever portion of the rental market that might benefit initially would rapidly diminish over time. It is the lowest income and youngest renters who are most transient. As they move out chasing jobs, education and other opportunities, rents mat be reset to market values. Rent Control has a lot in common with Proposition 13; those who can afford to stay put become major beneficiaries while the rest see few benefits. The spread between the cost of rent controlled units and non-rent-controlled units grows, and the inventory of rent controlled units continues to diminish until it is no longer significant. This is what happened in Berkeley, Oakland and San Francisco.

Just yesterday, I was discussing Santa Monica’s rent control and just cause ordinance with a Santa Monica City Council member and a Santa Monica landlord. I heard a lot of horror stories, like original tenants in rent-controlled units charging roommates so much that the original tenant is actually making money off the unit. Or tenants in rent-controlled units  renting them out on Airbnb at significant profit.

Following are specific responses to my original analysis by Councilmember McLaughlin and my response to her:

 1.       Composition of the Rent Board

  • What I wrote:   “ [The Rent Board] 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.”
  • What Gayle wrote: “Mayor Butt seems to be worried about the make-up of the Rent Board.  Well, this 5 member Board will be appointed by the current mayor and future mayors - with the concurrence of a majority of the City Council.   It will be up to Mayor Butt to put forward appointees for this Board.   Any member of the Board can also be removed by the mayor - with the concurrence of a majority of the City Council.” 
  • What the Proposed Rent Control Ordinance says: “ 11.100.060 Richmond Rent Board. (a) The Board shall be made up of Richmond Residents.” The Board shall consist of five Board Members appointed by the City Council” and “(b) Duly qualified residents of the City of Richmond are eligible to serve as Members of the Board. There shall be no more than two members that own or manage any rental property or are realtors. Anyone nominated to this board must be in compliance with this Chapter and all other local, state and federal laws regarding the provision of housing.”
  • Discussion: The proposed ordinance is technically in error about appointments. The City Council is not empowered by the Charter to make appointments. According to the Charter,” The Mayor shall have the authority at any regularly scheduled meeting of the City Council to make appointments to or removals from all City boards, commissions and committees with the concurrence of at least four (4) other members of the City Council.” Gayle acknowledged this error by pointing out that, in her opinion, “…this 5 member Board will be appointed by the current mayor and future mayors - with the concurrence of a majority of the City Council” What she did not respond to is the fact that there are no restrictions on who can serve on the Board. There are no minimum age restrictions or requirements that Board members be U.S. Citizens. Because of the extraordinary powers of the Board to control their own budget (which could be well into the multi-millions of dollars), including their own compensation, this is troubling. You would think that Board members would have to at least meet the same qualifications as City Council members.

Other critical boards and commissions, like the Planning Commission have to be made up of registered voters (RMC 3.20.020: “All members of the Commission shall be registered voters residing within the City who shall not be officers or employees of the City and who shall be appointed by the Mayor with the approval of the City Council.”) 

The use of the term “realtor” is strange, because “Realtor” is a copyrighted term describing a members of the National Association of Realtors. Not being familiar with the real estate industry, the drafters of the proposed ordinance probably thought it was a generic term describing real estate brokers or sales persons. Presumably, a Realtor ® would be barred from three of the Board positions, while an unaffiliated licensed real estate broker or sales person would not.

2.       Fiscal Control

  • What I wrote:  “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. 

  • What Gayle wrote: “Mayor Butt is also misinformed that the Board can be funded ‘from the General Fund as they see fit.’  In fact the very opposite is true. The Ordinance clearly states that the budget of the rent board shall be funded by the Rental Housing Fee, which will be paid by the landlords.  The City Council will set the amount for this fee, after a recommendation of the Rent Board.   There is a statement that also says:  ‘The Board is also empowered to request and receive funding when and if necessary from any available source for its reasonable and necessary expenses.’    The purpose for including this is so that the Board, if desired, can request  money from federal or state grants and programs.  Potentially, they could request funds for rehabbing of rental units that would be available to landlords.” 

“Again, this ordinance DOES NOT state that the Rent Board has independent access to the General Fund.  It is the City Council that determines what comes into and goes out of the General Fund.   The reason for keeping the Board independent of the City of Richmond budget and to give the Board control over their own budget (with landlord fees approved by the City Council) was to put a firewall between the Rent Board's budget and the City Council's budget.  If the Board was part of the City of Richmond budget, then there would be legitimate concerns about General Fund money potentially going to fund the Board.   We wrote this ordinance specifically so that the Rent Board would be separately funded by landlord fees.” 

  • What the Proposed Rent Control ordinance actually says: “11.100.060(a) Budget. The Board shall, prior to July 1 of each year, hold a public hearing on a proposed budget and adopt an annual budget for the coming fiscal year. At least thirty-five days prior to the beginning of each fiscal year, the Board’s Executive Director shall submit to the Board the proposed budget as prepared by the Executive Director. After reviewing the same and making such revisions as it may deem advisable, the Board shall determine the time for the holding of a public hearing thereon and shall cause to be published a notice thereof not less than ten days prior to said hearing, by at least one insertion in the official newspaper. Copies of the proposed budget shall be available for inspection by the public in the office of the Board at least ten days prior to said hearing. The City Council and City Manager shall have no authority to oversee, supervise, or approve this budget. Upon final adoption, the budget shall be in effect for the ensuing fiscal year and the amounts stated therein shall be and become appropriated by the Board for the respective objects and purposes therein specified. At any meeting after the adoption of the budget the Board my amend or supplements he budget by the affirmative votes of at least three members. Copies of the adopted budget amendments or supplements shall be filed with the City Clerk,, and City Manager, Necessary adjustments to city administrative procedures shall be made.”

11.100.060(l) Financing. The Board shall finance its reasonable and necessary expenses by charging Landlords registration fees in amounts deemed reasonable by the Board. The Board is also empowered to request and receive funding when and if necessary from any available source for its reasonable and necessary expenses.

(1)     Residential Rental Housing Fee. All Landlords shall pay a business license fee if required by Richmond Municipal Code plus a Residential Housing Fee. The City shall charge the Residential Housing Fee at the same time as the business license fee. The amount shall be determined by the City Council after a recommendation by the Board is provided to the City Council. The City Council will vote on the recommendation at the next regularly scheduled meeting. The budget shall be funded by the Rental Housing Fee.

  • Discussion: Gayle is wrong on the facts. 11.100.060(a) gives the City Council no authority to modify the Board’s adopted budget (“The City Council and City Manager shall have no authority to oversee, supervise, or approve this budget.”). The implication of the proposed ordinance is that is that the City Council has no discretion over the Board’s budget and is required to adopt it. What happens if he City Council believes the proposed budget is not ‘reasonable and necessary’ and does try to use discretion to reduce the Board’s budget? 11.100.060(l) answers that by providing that the Board “is also empowered to request and receive funding when and if necessary from any available source for its reasonable and necessary expenses.” Presumably, this would include the General Fund. It is certainly not excluded. Gayle’s speculation that 11.100.060(l) could mean something else has no basis. Gayle has failed to explain what would happen if the Rent Control Board and the City Council don’t agree on the amount of the budget.

Berkeley’s ordinance includes similar language about funding but, unlike the proposed Richmond ordinance, specifically eliminated the general fund as a source:

BMC 13.76.060(N): “The board is also empowered to request and receive funding, when and if necessary, from the City of Berkeley and/or any other available source for it reasonable and necessary expenses.” 

BMC 13.76.060(F)(18): “Except as provided in Section 13.76.060N of this chapter, the board shall finance its reasonable and necessary expenses for its operation without the use of general fund monies of the City of Berkeley.

The bottom line is that this is just plain scary, giving three unelected people complete control over a multi-million dollar budget, including their own compensation, all of which is intended to be extracted from landlords who may or may not violating any provision of the ordinance.

3.       Remedies 

  • What I wrote:  “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.”
  • What Gayle wrote: “Mayor Butt address the fact that violation of this ordinance is a misdemeanor which could result in up to 6 months imprisonment in county jail. California Penal Code Section 19 addresses how misdemeanors are handled and all ordinances of the City are held to California Penal Code.  It is up to the courts to determine  the penalty for specific misdemeanors.  Most result in fines.  However, a state court always has the discretion - perhaps if there were repeated violations - to require up to 6 months in jail.  Again, this is state law.” 
  • What the Proposed Rent Control ordinance actually says: 11.100.100(d). Any landlord violating this Chapter shall be guilty of a misdemeanor and shall be punished in accordance with Section 1/04.100 of the Richmond Municipal Code.”
  • Discussion: Gayle does not dispute what I wrote. I’m not sure why she even responded.  Even though she noted that guilt is determined by a court, the proposed ordinance presupposed that anyone charged is guilty (“Any landlord violating this Chapter shall be guilty of a misdemeanor”).   

By way of contrast, violating Berkeley's rent control ordinance is a civil violation subject to monetary fines and injunctions.

4.       Base Rent

  • What I wrote: “Rent is capped at the amount charged on July 21, 2015 – which, if this passes, will be approximately two years prior to its enactment.”
  • What Gayle wrote: “Another point I want to clear up is about the base rent that will roll back to the amount charged on July 21, 2015, which was the date included in the original ordinance passed by the City Council.  However, as the ordinance states, there is the allowance of one annual Consumer Price Index (CPI) increase, since one full year will have ensued by the time this will go into effect.   Also, landlords can petition the Board if they feel they are not getting a reasonable return to get a further adjustment of the rent.  The Board will enact rules and regulations regarding hearings and appeals”
  • What the Proposed Rent Control ordinance actually says: “11.100.070 Rent Control; Right of Reasonable Return for Landlords. (2) Establishment of Base Rent. Beginning the effective date of this Chapter, no Landlord shall charge Rent for any Controlled Rental Units in an amount greater than the Rent in effect on July 21, 2015, except for increases expressly allowed under this Chapter.” The proposed ordinance goes on to state that (11.100.071(b)(1) that “The Annual General Adjustment shall be equal to one hundred (100%) percent of the percentage increase in the Consumer Price Index (All Urban Consumers, San Francisco-Oakland-San Jose region or any successor designation of that index that may be later adopted by the U.S Bureau of Labor Statistics, for the 12-montbperied ending March of the current year”, (2) Subparagraph 1 of this Section notwithstanding, in no event shall the Annual General Adjustment be less than zero percent (0%0, and (3) For the period between the effective date of this Charter [sic] and the first Annual General Adjustment announced September 1 [2017?] the landlord may increase the Maximum Allowable Rent to include one Annual General Adjustment for September 2016.”
  • Discussion:  If passed, this ordinance will go into effect in 2017, and the first Annual General Adjustment will be announced in September 2017. Although murky, it appears that the allowable Annual Adjustment must be somewhere between  0% and 100% of the CPI increase, but the actual amount is at the discretion of the Rent Board (11.100.060(e):

(e) Powers and Duties. The Board shall have the following powers and duties:

(1) Establish a Base Rent under Section 11.100.070(a).

(2) Make adjustments in the Tent Increase and Decreases in accordance with Section 11.100.070.

(3) Set Rents at fair and equitable levels in order to achieve the intent of this Chapter.

Both Gayle and I were wrong on this. Rent is not “capped” at July 21, 105 levels, but that date does establish the base rent, and apparently allows a one-time annual increase to July 21, 2016, based on the CPI. After that, rent increases are solely at the discretion of the Rent Board as long as they are between 0% and 100% of the CPI. 

5.       Sub-tenants

  • What I wrote:  “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.”
  • What Gayle wrote: “Mayor Butt expresses concerns about sub-tenancy.   This subject is addressed in the Just Cause for Eviction section of the ordinance.”

“As most of us know, there are many rental units in which roommates live and share the rent.  A three-bedroom unit, for example, may have 3 roommates sharing the rent.   Should one of the roommates move out, the remaining tenants often cannot carry the rent without subleasing to a new roommate.   As the ordinance states, the landlord must be notified in writing about a proposed new occupant.  The landlord has a right to a reasonable refusal of the Tenant's written request.   But the main point of this section is that the landlord cannot evict a tenant if the original tenant(s) finds a subtenant or subtenants to replace one or more departed roommates on a "one-for-one basis" and as long as the landlord has been notified and has not reasonably withheld the right to sublease.”  

“There is also protection for families in this section.  Perhaps a tenant marries or child is born to a family or a grandparent moves in.  There is protection for such additional tenants, although the maximum number of occupants per California Uniform Housing Code, even in these family situations, cannot be exceeded.”

“There is no reason for concern by landlords in situations of ‘just cause’ evictions for any tenants - including subtenants - since landlords can evict for reasons of failure to pay rent, breach of lease, nuisance (such as noise and/or non-maintenance of the property), failure to give access, temporary vacate orders, owner move-in, withdrawal from rental market, and temporary tenancy.”     

  • What the Proposed Rent Control ordinance actually says

Notwithstanding any contrary provision of this Section, a Landlord shall not take any action to terminate a tenancy based on a Tenant’s sublease of the unit if the following requirements are met:

a. The Tenant continues to reside in the Rental Unit as his, her or their primary residence.

b. The sublease replaces one or more departed Tenants under the Rental Housing Agreement on a one-for one basis.

c. The Landlord has unreasonably withheld the right to sublease following written request by the Tenant. If the Landlord fails respond to the Tenant in writing within fourteen (14) days of the receipt of the Tenant’s written request, the Tenant’s request shall be deemed approved by the Landlord. A Landlord’s reasonable refusal of the Tenant’s written request may not be based on the proposed additional occupant’s lack of creditworthiness if that person will not be obligated to pay some of all of the Rest to the Landlord. A Landlord’s reasonable refusal of the Tenant’s written request may be based on, but is not limited to, the ground that the total number of occupants in a Rental Unit exceed the maximum number of occupant as determined under Section 503(b) of the Uniform Housing Code as incorporated by the California Health and safety Code Section 17922.

  • Discussion: What I wrote was correct as was what Gayle wrote. My point is that a landlord essentially loses any control of who his or her tenants are. I think that’s a problem; Gayle believes it’s a good thing.

6.       Landlord Repairs

  • What I wrote:  “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.”
  • What Gayle wrote: Another concern that Mayor Butt addresses is in regard to landlord repairs.  It is NOT true that any repair or improvement done to a rental unit must be pre-approved by the Board.  The ordinance states that "The Board shall promulgate regulations for the repair and improvement of Rental Units to ensure the least amount of disruption for the Tenant."  The rules and regulations have not been worked out yet.  That will be one of the first tasks the Rent Board will undertake.   Emergencies and non-emergencies will be addressed in the regulations.   It is noteworthy that pro-tenant cities such as Berkeley and Santa Monica have never had a situation where a landlord has been denied the right to make needed repairs (emergency or otherwise). 

Mayor Butt also takes issue with the landlord's obligation to offer another unit to the tenant during repair work that temporarily displaces the tenant. The ordinance states that if the landlord has another unit (that is vacant) he/she must offer temporarily that unit to the tenant at no more than the lawful rent of the unit that is being repaired.  This is only for a period of up to 90 days or less (if the repair takes less time).   This time-frame is a protection for the landlord so that the landlord can indeed evict the tenant after the 90 days (or less) from the vacant unit, requiring them to move back into the original and now repaired unit.

  • What the Proposed Rent Control ordinance actually says: “The Board shall promulgate regulations for the repair and improvement of Rental Units to ensure the least amount of disruption for the Tenant. Unless due to a documented emergency affecting a Tenant’s health and or safety, all repair or improvement work will be scheduled in compliance with applicable Board regulations.”
  • Discussion: The fact is that repairs by the Landlord are subject to Board regulation, and those regulations are put off to some future time, so no one knows what they will be. Gayle agrees, “The rules and regulations have not been worked out yet.”

7.       Owner Move-In

  • What I wrote:  “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.

  • What Gayle wrote: “Mayor Butt also expressed concerns about the timeframe for an owner move-in, so let me clarify. For an eviction that is allowed due to the owner, or his/her spouse, children, parents or grandparents, moving into the unit, the ordinance states that:  ‘The Landlord or enumerated relative must intend in good faith to move into the Rental Unit within ninety (90)  days after the Tenant vacates and to occupy the Rental Unit as a primary residence for at least Thirty-Six (36) consecutive months. The Board may adopt regulations governing the determinations of good faith.’  This is a protection against the circumvention of rent control. Landlords should not be able to say they are moving in, just to evict a tenant and circumvent the reasonable  limits put on a rent-controlled unit.  This is a protection for families who get unreasonably evicted, so the landlord can raise the rent.  Mayor Butt states that an owner will not be able to do major repairs before moving in, but again this section mentions a "good faith" intention and the Board may adopt regulations governing the determination of good faith.” 
  • What the Proposed Rent Control ordinance actually says

Where the Landlord owns any other residential units in the City of Richmond, and any such unit is vacant and available at the time of service of the written notice terminating the tenancy, or at any time thereafter until the earlier of the Tenant’s vacating the premises or the entry of a judgment by a court of competent jurisdiction awarding possession of the premises to the landlord, the Landlord shall, as a condition of obtaining possession pursuant to this subsection 11.100.050 (a) (5) notify tenant in writing of the existence and address of each such vacant unit and offer Tenant the right, at the tenant’s option:

To enter into a rental agreement (to be designated as a “temporary rental agreement” on any available rental unit which the Tenant may choose, at a rent not to exceed the lesser of the lawful rent which may be charged for such available rental unit or the lawful rent in effect, at the time of the notice of termination of tenancy, on the unit being vacated, said rental agreement to be for a term of the lesser of ninety days or until completion of repairs on the rental unit being vacated by the tenant; or

  • Discussion: What I wrote is correct. Gayle did not address this issue.

8.       Withdrawal from Rental Market

  • What I wrote:  “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.”
  • What Gayle wrote: Mayor Butt refers to the section regarding a landlord wanting to withdraw from the rental market.  He states there is a contradiction or conflict in the ordinance regarding the timeframe given tenants to vacate a unit based on a withdrawal from the Rental Market.  The ordinance states as follows:  "Tenants shall be entitled to a 120-day notice or one (1) year in the case tenants are defined as senior or Disabled under Govt. Code Section 7060.4 (6).    Mayor Butt sees a contraction in that our City code has permits for substantial repairs or demolition expiring in 6 months.  The fact is that for the most part, tenants will have to leave the unit within 4 months (120 days) once they have been notified of a landlord's intention to withdraw from the rental market .  However, a senior or a disabled tenant is provided by state law 1 year to vacate.  State law is what the City must follow, and it is very reasonable to give senior and/or disabled tenants more time to vacate.
  • What the Proposed Rent Control ordinance actually says: “If the Landlord or relative specified on the notice terminating tenancy fails to occupy the unit within (90) days after the Tenant vacates, the Landlord shall (i) Offer the unit to the Tenant who vacated it, and (ii) Pay to said Tenant all reasonable expenses incurred in moving to and from the unit” 
  • Discussion: What I wrote is correct.

Showing 4 reactions

Please check your e-mail for a link to activate your account.
  • commented 2016-09-05 16:03:03 -0700
    If anyone is still unclear about how rent control causes rents to go UP in cities like Oakland, read this letter which I have sent to other council members including and especially McLaughlin:
    As a Richmond resident and small landlord as well as a manager of 5 units in Oakland for my father, I would like to share with you some of the effects of rent control in that city. and my concerns that Richmond may follow in Oakland’s footsteps, inviting some serious problems that have been caused or exacerbated by rent control laws.

    Rent control distorts the market forces without being truly progressive – it keeps rents low for some, driving rents for new residents and uncontrolled housing through the roof. Oakland’s rents for newly vacant units have gone up 240% while San Leandro rents (where there is a rent advisory board) has gone up only 40% over the same period of time.
    While the stated intention of rent control is to protect low-income renters, the disabled and the elderly, it actually protects all established renters in older dwellings regardless of income or circumstance, not the poor or middle income renters, These demographics overlap but are not the same. A renter need only live in an “old” building and to not move out to be protected – there is no income qualification for a rent controlled unit. For these laws to really apply to people who need them, renters would have to qualify for it and they should have to re-qualify every 5 years as college is completed or circumstances change.
    Established renters stay in rent controlled units whether they need cheap housing or not, housing stock falls and it becomes almost impossible for new renters to get in. When they do, they, as new renters – together with Oakland’s landlords, subsidize existing renters, creating a two-tiered system. For example, my dad’s latest renter pays over $500 more than her predecessor. However, that money does not go to my elderly and disabled father. It goes to maintenance deferred due to the low rents that other residents pay.
    Rent control advocates say the law provides for funding capital improvement projects. However in order to do a project, I would first have to save the estimated cost of a project. The structure of a capital improvements increase means it takes at least 5 years to re-coup a portion (70%) of the cost of the project. There is nothing for the costs of financing if I need to borrow. So projects must wait until I save the money and with artificially low rent saving is very hard to do. Meanwhile the costs of labor and construction continue to rise.
    Under normal circumstances property owners should be striving to provide high quality housing and trying to keep established renters to avoid vacancies. Instead rent control limits funding for improvements and maintenance and making it less advantageous to keep established renters by causing vacated units’ prices to spike – decreasing the quality of housing for established renters while disproportionately increasing the costs for new renters.

    It is true that the East Bay housing market is crowded. The solution to this is really more housing, not to scapegoat property owners and drive out small businesses.
    What Richmond needs for existing housing is a forum for property owners and renters to come together, get advise and figure out what’s fair and reasonable. We need some way to deal with bad actors on both sides. We need ways target those individuals, not a ham-handed law that is going to cause more problems for everyone.
    In the end, most people want to be good to each other, We want to provide high quality housing for reasonable costs and to have positive relationships with each other. Rent control is a blunt instrument that obstructs rather and facilitates these goals.
  • commented 2016-04-21 17:03:16 -0700
    So does this mean it will not pay to let tenants pay late , and work with people going through a difficult time . It will make more sense to hit somebody with a 3 day notice on the 2nd of the month . We are now in the process of moving our investments out of Richmond .
  • commented 2016-04-21 16:33:55 -0700
    Well said Mayor Butt. It is obvious that Gayle McLaughlin lacks education In simple economics and property ownership. Most of us know that supply and demand dictates market rates. But these type of measures and bad policies only exacerbate and elevate rental prices, due to their cost . These measures are the driving force behind extremely high rents. These measures makes it difficult for people to survive on the either side of the debate. There is reason that these type of measures have been banned in 35 States!!!

    Furthermore, no one is discussing the negative and dangerous effects this measure has on homeowners; eg. higher insurance , devalued property, blight, bad tenants as neighbors, etc, (especially those neighborhoods with high density rentals). Everyone should keep in mind this measure is not only about tenants and landlords, it affects us all.

    Also a tenant can sublet without any checks or balances, really! This is scary. No tenant should have a right to sublet. Property owners should always know who is living on their property, if for no other reason than liability issues. We all know that it only takes one bad apple to create chaos/problems in a neighborhood.

    And last but not least for now, the stupid Board that only requires you be a resident of Richmond. Hell, that could be Mickey Mouse, Donald Duck or Goofy if they live in Richmond. Give me a break!! And this Board has the power to strip owners of
    their rights to manage and maintain their property as they see fit. You have got to be joking.

    I could go on, because this measure is so bad. Instead, I recommend that you read and study it yourself and form you own opinion. I have come to the conclusion that whoever wrote it is ignorant or it is an elaborate scheme to force people out of Richmond (because they know that great things are on the horizon for this city). I chose the believe the latter.

    Wake-up Richmond residents!!!
  • commented 2016-04-21 14:39:37 -0700
    We are lucky to have a Mayor who takes the job seriously, as evidenced by this thorough and detailed analysis of the proposed rent control ordinance being foisted on the City by the RPA. The Mayor points out its many technical and non-technical flaws, and runs circles around the vague and fuzzy responses from the RPA. “Just trust us” is not a policy, and the many ambiguities and inconsistencies in this ordinance will just become fodder for the lawyers (speaking as a lawyer) who will generate fees for themselves and for whichever counsel the Rent Board wants to hire as these issues are hashed out. This is a textbook example of why initiatives on complex subjects like rent control, which are crafted in private without any opportunity for given and take, or scrutiny, end up being so bad most of the time. The Council considered a rent control ordinance and several alternative proposals with full opportunity for public input and scrutiny, and by a narrow 4-3 majority adopted the most extreme proposal. some 7000 citizens rose up within 30 days and successfully petitioned to either put it on the ballot or have the council rescind it. Now we get a poorly drafted “no compromise” initiative that goes to even further extremes, as so cogently pointed out by our Mayor, and there is no opportunity to remedy its flaws.

    Just like the failed eminent domain misadventure of a couple of years ago, this initiative will do nothing to solve — and will actually exacerbate — the real underlying problem, which is a shortage in available housing. It will, however, serve as a “punishment” to those who have the audacity to be owners of rental property (which I believe is the real motive of the RPA as evidenced by their disparaging statements about rental property owners) and will cause a lot of legal expenses to be incurred while it all gets sorted out.

    Don’t sign the petition, and if it is on the ballot, Vote No!
Fight your California speeding ticket and win here. Fight your red light camera ticket here. Fight your cell phone ticket here.