TOM BUTT E-FORUM: Rent Control Comes to Richmond


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Last night, on a 4-1 vote (with Nat Bates voting no and Pimple and me absent), the Richmond City Council became the first California City in 30 years to adopt rent control. Click on Rent Control and Just Cause for Evictions Ordinance for a copy of the final version of the ordinance. I continue to maintain that this is a colossal mistake for Richmond  and that the unintended consequences will be significant. A recent example of unintended consequences is when the same four City Council members (McLaughlin, Beckles, Martinez and Myrick) passed the “Space Weapons” resolution that resulted in the Richmond Police Department being inundated with calls from people around the world under attack from space-based weaponry seeking relief.

The rent control and just cause ordinance is ridden with errors and omissions that even its proponents concede will have to be corrected by multiple amendments in the future in order to function.

The legal requirements related to implementation also remain murky. If you have questions, contact the City Attorney’s Office at 510-620-6509.

Even though I did not support the ordinance, it is my job as mayor to appoint the Rent Board members, subject to City Council approval. Applications for Rent Board are now being accepted. You can download a form at http://ca-richmond2.civicplus.com/DocumentCenter/Home/View/190, complete it and file it with the city clerk.

There are no prerequisites, qualifications or other requirements or restrictions for serving on the Rent Board. You don’t have to reside in Richmond or even be a U.S. citizen. You can be any age, live anywhere, be a landlord, renter, or neither.

Meanwhile, the city manager will start assembling a multi-million dollar bureaucracy and hiring employees to run the rent control and just cause operation, all this in the face of yet another downgrade in Richmond’s credit rating by Moody’s because of “inadequate steps to address its long-term structural imbalance in FYs 2015 and 2016, extremely narrow liquidity, significant General Fund support of poorly performing cost recovery and enterprise funds, and the risks associated with its high level of exposure to variable rate debt and derivatives. Depletion of its cash position over the last seven years has left the City with very little flexibility to sustain its operations when faced with economic or fiscal challenges.”

The cost of operating the rent control and just cause apparatus is intended to be a “cost recovery” operation funded by fees on landlords. “Poorly performing cost recovery funds” is one of the reasons cited by Moody’s for the credit rating reduction, which will cost Richmond dearly as the cost of borrowing goes up. Cost recovery is never 100% because full recovery is not possible. The City will end up funding substantial costs related to rent control from the general fund, including the high cost of multiple elections that probably will not be recoverable. City staff has already spent and will continue to spend an inordinate amount of time implanting rent control to the detriment of other City projects and programs.

 

Reposted from Mayor Tom Butt's "E-Forum"

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  • commented 2015-08-06 15:39:11 -0700
    I am appalled with the actions of the RPA +1. These people have total disrespect and disregard for the City, its residents and positive progress. They are incompetent and unfit to hold office. After several credit downgrades and warnings that their actions would bankrupt the City, they persisted and continued with their flawed agenda. The fact that circumvent laws is also a crime.

    Although these actions are extremely bad for the City, I do see a silver lining. Since three are not up for election until 2019 and we are struck with them, bankruptcy may be the only way to diminish their power and get Richmond back on the right track. So let them continue on their road to demise, and hopefully we can get rid of Myrick in 2016 and change the makeup of this majority for the betterment of Richmond.

    If is unfortunate that those who voted these people could not see, their only concern was for themselves. In a few months they will see that their actions do not help and will make it more difficult for them to find affordable housing or remain in Richmond.

    Due to the RPA +1 actions and lack of governing skills, all potential investors, property owners, and businesses will be extremely cautious and reluctant about doing business with the City of Richmond and that is unfortunate. But I am a true believes that everything happens for a reason, so let the chips fall where may.
  • commented 2015-08-06 14:56:03 -0700
    If Chevron hadn’t embedded itself in the last municipal election, the campaign would not have taken on the polarization that it did, and the city would likely have seen elected the best qualified people, rather than just the ones who opposed Chevron the loudest. This state of affairs seems inevitable in any city heavily dominated by one large corporation. Even though I live at Marina Bay and only see a shadow of this worst kind of dynamic, do know that I look forward to the day that I will have moved somewhere better and can finally say, “Not my circus; not my clowns.”
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