Monday, December 25, 2017

Some Landlords are Taking Advantage of a Loophole in Oakland's Municipal Code - Closing the Loop

Some Oakland tenants are receiving notices that their landlord is applying for an exemption from rent control based on "substantial rehabilitation" from the Oakland Rent Adjustment Program.  In fact, during the past six years, 33-35 buildings in Oakland have been exempted from rent control based on this exemption basis which, in turn, allows landlords to raise rent to market rate. And, market rate is edging up considerably with the influx of high technology employees from Silicon Valley employers such as Google and as Oakland becomes the hot new rental market in the Bay area.

Under Oakland Municipal Code (O.M.C.) 8.22.030.B(2), buildings that are substantially rehabilitated can be exempted from rent control even if they were previously covered as follows:

a.  "In order to obtain an exemption based on substantial rehabilitation, an owner must have spent a minimum of fifty (50) percent of the average basic cost for new construction for a rehabilitation project and performed substantial work on each of the units in the building.

b.  The average basic cost for new construction shall be determined using tables issued by the chief building inspector applicable for the time period when the substantial rehabilitation was completed.

c.  An owner seeking to exempt a property on the basis of substantial rehabilitation must first obtain a certificate of exemption after completion of all work and obtaining a certificate of occupancy. If no certificate of occupancy was required to be issued for the property, in lieu of the certificate of occupancy an owner may provide the last finalized permit.,,"


There is a growing movement among tenants and tenant's rights activists to close this loophole as evidenced in the following articles feature in the East Bay Express.  The loophole was temporarily closed for 6-months on November 8, 2017 to afford the City Council and City Attorney's office time to redraft the municipal code after carefully weighing both the tenant and the property owner's side of the issue.



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