How much is hype?


root - Posted on 23 July 2001

Oakland’s New Rent Proposal Being Questioned

by Lynda Carson

July 2, 2001

Oakland, CA–Oakland’s rent program has become more complicated because city officials refuse to either sign off on a Just Cause evictions measure or create a rent registration program that would enhance rent control laws. Making matters worse, Oakland’s tenant activists have proven to be poor negotiators when it comes down to hard-boiled negotiations with the landlord lobby and City officials.

Some say that renters took a huge loss recently after recent negotiations that took place at the behest of Councilman (Tricky) Dick Spees, of the Montclair District. Others wonder why tenant activists joined with
the notorious Councilman Spees, who is Mr. Anti-Tenants’ Rights in the City of Oakland, and signed off on proposals that will now dearly cost the majority of Oakland renters for years to come.

Recent news articles in the Oakland Tribune, and the SF Chronicle speak glowingly of the new proposals that are meant to strengthen Oakland’s rent laws. The articles speak of a new rent program that will have a $1.5 million dollar budget for new staff, along with a new mediation program meant to speed up the process. This actually means the introduction of a 2-tiered system into the existing rent program; its second tier will have its own budget of $100 thousand per year to assist those in need.

Many feel that Oakland’s tenant activists were duped by Councilman (Tricky) Dick Spees, into signing off on these proposals that may cost Oakland renters a bundle of money in the long run, speed up rent
increases, and do little to protect tenants from landlords who evict for profit. Before the recent agreement, renters had access to the rent program for a mere $15 filing fee that would allow them to challenge rent increases. Renters still have to pay the $15 filing fee to file a petition, but now they also have to contribute to the $1.5 million cost increase by an annual fee of $24. The cost of the annual fee is to be split among landlords and tenants, but experience has revealed that in Oakland, landlords tend to pass along extra costs to their renters in one way or another.

The new $1.5 million budget is to be paid for by the new annual fees, and is meant to cover expenses for four new employees, and a new full-time attorney. Those must be some very high-priced folks to suck up all of that money (it's estimated that more than half of Oaklanders earn less than $35 thousand per year). The current program has eight staff on board, and three of those positions were funded for a year. All the new proposals are to go into effect January 1, 2002. According to sources, funding for the existing rent program came from several city agencies that chipped in to cover expenses.

So what’s going on in the realm of Oakland’s rent control that the papers have been overlooking? How much is hype? How much is real? For those who like numbers, here’s the deal. Oakland, founded in 1850, has a population of around 372,242. There are approximately 154,737 families. About 65 percent of Oaklanders are renters. That’s well over 200,000 renters. Out of over 200,000 renters in Oakland, only 325 renters filed petitions with the rent program during the first half of this year, a very small percentage of the renters who should be using this much needed program. Another 325 petitions are expected to be filed during the rest of this year, bringing the total petitions filed to around 650 for the year 2001. With a new $1.5 million dollar budget, and assuming the number of petitions filed this year remained the same for 2002, it would
average around $2,300 per person to go through the process with the new
rent program. This does not include the additional $100,000 to be included for the new mediation program being established. Past budgets for the rent
program have not yet been obtained, but for certain it only cost renters
$15 to file a petition in past years.

Allegations are that the tenant activists did not know what they were doing
when invited to join the taskforce created by Councilman Spees, who is
known as a shill for the landlord lobby. Questions arise as to what was
actually being negotiated. Further allegations are that there was no number crunching being done before the activists signed off on the proposals; for example, the $24 fee was based upon how many rental units and renters will fund the $1.5 million budget for the new proposed rent program. Since rent registration is not in place, no one really knows how many units are affected by Oakland’s rent control laws, and therefore the question arises as to who pays or does not pay. Why sign off on something affecting hundreds of thousands of renters if you do not know what the numbers are? What we do know is that Oakland has around 85,000 units, and if you multiply that times $24 the figure comes to $2,040,000.

Without rent registration, tenant activists lacked some solid numbers to base their decision upon when signing off on the proposals. This means that these negotiations were flawed from the get go and not negotiated in good faith by the City of Oakland or the landlords controlling this town. A lot of guess work was going on. In addition, many units have more than one renter, and at times, numerous contracts. Some already wonder if certain units will be charged double or triple what others are charged due to multiple contracts. The devil may be in the details.

Many questions are being asked, about this and the new proposed CPI formula of setting allowable annual rent increases, which are currently set by the City Council each year. Currently the annual rate of rent increases are set at three percent, but may jump to six percent or more once the new formula is set up and locked into place. During the past two years tenant activists did well to keep the annual rent increases at 3 percent. With the new formula to be put in place renters will not be allowed to challenge future annual rent increases.

Due to the lack of number crunching by tenant activists, renters do not know how the new CPI formula will affect rents down the road and whether increases or decreases in rent lie in store for them. This was all rushed through very quickly, though tenant activist James Vann claims that these hasty changes are a step in the right direction, according to a June 27, 2001 article in the SF Chronicle.

Regardless of whether what has occurred is good or bad for Oakland renters, the new CPI formula was something the landlord lobby wanted very badly. For low-income renters already reeling from the extreme rent hikes of the last few years and exorbitant utility rate hikes during the past six months, these new proposals add another burden on top of existing ones. When so many are to pay for a program that is used by so few, it certainly makes one wonder what the tenant activists actually expect from this new $1.5 million dollar rent program. One can only wonder why tenant activists of Oakland signed off on so many give-aways to the landlords. As renters face the future rent increases, City officials and landlords will be able to blame the activists for signing off on the proposals and deflect the heat from themselves during upcoming elections.

What do renters get out of this? They’re being told that under the new
program, landlords who evict must file the new rent level with the City
within 30 days of renting the unit. If a landlord is found to have violated
the law, he or she must pay $1,000 plus two months of the market-rate rent
for the unit to the displaced (evicted) tenant as relocation assistance.
This may sound good on paper, but some sound figures paint a very different picture, particularly as there is no plan as to how to find the evicted renters.

Unless the new renter who replaced the evicted renter files a petition with the rent board claiming their rents were unlawfully high, no one will ever know if the landlord raised the rents beyond the lawful limits. Considering that last year out of over 200,000 renters in Oakland, only 458 filed petitions at the rent program, landlords have little to fear when breaking Oakland’s rent control laws. The odds of finding any or all of the
evicted renters scattered to the 4 corners of the Earth, make this all a
very daunting quest indeed. Oakland’s 2-year moratorium on rent increases, after certain types of evictions, has yet to snag even one landlord for prosecution during it’s nearly one year of existence, one example of how this system works. It doesn’t!

Renters are now being asked to give up a huge amount of money for a system that is avoiding the rent registration needed to make these new proposals effective. The rent program is still effective in fighting rent increases, but as for tracking down evicted renters tossed out into the streets, it appears that tenant activists were taken by Councilman (Tricky) Dick Spees all of the way to the cleaners on this one.

The Oakland rent board hears petitions from tenants who believe a rent
increase is above the allowable amount, and from landlords who want to petition for amounts higher than what's allowed by law. About 95 percent of petitions are from tenants complaining they are being charged increases over the allowable rate. Renters that file a petition "STOP" rent increases from occurring until a decision is made as to whether it’s legal or not. It may take six months or more to get through the process. Oakland has a 3 percent cap on annual rent increases. Most money hungry landlords claim that the three percent cap on rent increases isn’t realistic and allows them to barely generate a profit.

Despite these claims, during the last few years rents in Oakland have shot up to the moon. No landlords have been prosecuted for ignoring the two year moratorium on rent increases after certain types of
evictions. The new proposal adds to the burden of high rents already set in place. The way the system works is that landlords raise the rents as high as they want and often intimidate or threaten retaliation to keep renters from filing a petition to challenge the unlawful rent increases. Even the unlawful rent increases go into effect if the renter does not file a petition to challenge it, and the increase gets locked into place after 30 days.

Among the few good things in the new proposals agreed upon, is that tenants would have 75 days to file a complaint after they receive notice of a rent increase. Until all this is sorted out and comes into effect on January 1, 2002 it would not hurt to stick with the old plan, as the details have not been worked out on most of the recent proposals.

A recent history of rent program petitions follows: Petitions filed to be
heard by the rent board amounted to 199 petitions in 1998, 220 petitions in
1999, 458 petitions in 2000, and during the first half of 2001, there were
325 petitions filed. Because of the new agreement pushed for by (Tricky)
Dick Spees and signed by tenant activists, renters who choose to file a petition may be pressured to avoid the normal process when they try to file the petition, and be diverted instead to the mediation program. Tenants need beware, and choose very carefully. Rent increases may occur faster in the mediation program, and obviously rent increases may occur more slowly if you go the traditional route. Let this be your choice.

Many question why there needs to be a mediation program that will cost Oaklanders an extra $100,000. Mediation Forums that are open to the public and available to renters and landlords in Oakland already exist.
Placing the mediation program directly in the rent program seems to be an
effort to divert renters away from the rent board that already determines
what is legal or not. This new program may not be in the best interest
of renters. It’s supposed to cost an extra $100,000 and may produce decisions of mediation that may or may not be legal at all. Go figure....

Because the new mediation program being created by (Tricky) Dick Spees may be quite controversial for those lured into it while filing their petitions when fighting rent increases, it would do renters no harm to avoid this new two-tiered system. The old way works just fine where the rent board members are a resource, unlike the new hearing officers awaiting all of those that may be diverted away from the rent board.

Until rent registration is put into effect, most of the above mentioned
proposals are highly suspect in terms of being effective ways to stop unlawful rent increases, or in providing restitution to people who may have moved far away. Until a Just Cause Ordinance is born in Oakland, landlords shall continue to evict for profit. Last year Just Cause came very close to becoming a reality in Oakland, but due to clerical errors it failed to pass. A hard lesson to learn for all who worked so hard to get the Just Cause Initiative on the ballot. Perhaps the future holds a path that Oakland renters can follow to free themselves from the bondage of a brutal system that is known as the EVICTION FOR PROFIT SYSTEM.

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