I understand that landlords have been hard hit, too, with delays in rental assistance from the state’s Housing is Key program and increased costs (i.e., EBMUD, etc.). But, when I learned about Oakland’s proposed 6.7% rent increase adjustment, I was shocked and wondered how Oakland’s AGA could be so different from Berkeley and San Francisco.
Berkeley’s AGA for 2022 is 2.1%. See: https://rentboard.berkeleyca.gov/rights-responsibilities/rent-levels/annual-general-adjustment
San Francisco’s AGA for 2022 is 2.3% (Jan. 2021 to Dec. 2021) See: https://sfrb.org/topic-no-051-years-annual-allowable-increase#:~:text=The%20annual%20allowable%20increase%20amount%20effective%20March%201%2C%202021%20through,San%20Francisco%20Rent%20Board's%20jurisdiction.
The difference has to do both with the time period used from the Consumer Price Index (CPI) and the calculation. As reported in a recent City Council meeting, Oakland’s CPI calculation was negotiated by the City in 2002 and weighed the interests of landlords and tenants. But, the pandemic, and its aftermath, has shaken up all of our lives and, given public outcry, has stimulated the City to re-examine the 6.7% rent increase adjustment and how it is derived. I am happy to report that the calculation has been changed and rent increases capped at 3.0% to apply on August 1 versus July 1, 2022. Applicable increases are also guided by the Oakland Eviction Moratorium which is still in effect, is tied to the Local Health Emergency, and is being challenged in the court.
OLD NEWS:
On 2/29/2020, I reported the following on this blog,
“As guided by O.M.C. 8.22.070B(3):
Beginning in 2002, the CPI Rent Adjustment is the average of the percentage increase in the ‘CPI—All items’ and the ‘CPI—Less shelter’ for the twelve (12) month period starting on March 1 of each calendar year and ending on the last day of February of the following calendar year calculated to the nearest one tenth of one percent."
The All Item Index CPI for the Bay area is 3.53% while the All Items Less Shelter Index is 3.54%.
The data for these calculations takes some time to locate on the U.S. Bureau of Labor statistics website but if one visits the CPI database page and selects one-screen data search and uses non-seasonally adjusted data, one can secure the relevant statistics.
CPI All Items All Items Less Shelter
Feb. 2018 281,308 240,742
Feb. 2019 291,227 249,269
Change 9,919 8,827
% Change 3.53% 3.54%
Avg. 3.53%
Applying rounding principles, one would round down to 3.5% which is the percent allowable rent increase published by the Oakland Rent Adjustment Program for July 2019.
See: https://www.bls.gov/cpi/data.htm
NEW NEWS:
On 5/31/22, Oakland proposed, and the City Council enacted, a major change in the CPI as follows:
1) the CPI time period used will now date from April 2021 to April 2022,
2) only the "All Items CPI" for the San Francisco – Hayward-Oakland western region will apply, and
3) Oakland will use 60% of the CPI or a 3% cap, whichever is lower.
The current CPI is 5% and 60% of that is 3%. (NOTE: The reason for the continued difference between Oakland, San Francisco and Berkeley is the time period chosen to calculate the CPI increase.)
This new rent adjustment calculation has been adopted by the City and, notably, is now lower than the allowable CPI rent adjustment increases in 2019 and 2020.
For more information, see: https://www.oaklandca.gov/news/2021/annual-allowable-rent-increase-announced
City Councilperson Carol Fife sponsored the amendment. She is the founder of ACCE, a state-wide tenants’ rights organization. All but one City Councilperson voted in favor of the amendment. Oakland Tenants Union also backed the CPI revision as well as other tenants’ rights organizations.
The City advised Landlords about other avenues available to increase rent in non-pandemic circumstances which includes 1) capital improvements, and 2) fair market return. A small property owner’s workshop will be offered by the City on July 13, 2022.
Tenants may register for a Tenants’ Workshop which is occurring on June 22, 2022.
Beginning in 2002, the CPI Rent Adjustment is the average of the percentage increase in the ‘CPI—All items’ and the ‘CPI—Less shelter’ for the twelve (12) month period starting on March 1 of each calendar year and ending on the last day of February of the following calendar year calculated to the nearest one tenth of one percent."
The All Item Index CPI for the Bay area is 3.53% while the All Items Less Shelter Index is 3.54%.
The data for these calculations takes some time to locate on the U.S. Bureau of Labor statistics website but if one visits the CPI database page and selects one-screen data search and uses non-seasonally adjusted data, one can secure the relevant statistics.
CPI All Items All Items Less Shelter
Feb. 2018 281,308 240,742
Feb. 2019 291,227 249,269
Change 9,919 8,827
% Change 3.53% 3.54%
Avg. 3.53%
Applying rounding principles, one would round down to 3.5% which is the percent allowable rent increase published by the Oakland Rent Adjustment Program for July 2019.
See: https://www.bls.gov/cpi/data.htm
NEW NEWS:
On 5/31/22, Oakland proposed, and the City Council enacted, a major change in the CPI as follows:
1) the CPI time period used will now date from April 2021 to April 2022,
2) only the "All Items CPI" for the San Francisco – Hayward-Oakland western region will apply, and
3) Oakland will use 60% of the CPI or a 3% cap, whichever is lower.
The current CPI is 5% and 60% of that is 3%. (NOTE: The reason for the continued difference between Oakland, San Francisco and Berkeley is the time period chosen to calculate the CPI increase.)
This new rent adjustment calculation has been adopted by the City and, notably, is now lower than the allowable CPI rent adjustment increases in 2019 and 2020.
For more information, see: https://www.oaklandca.gov/news/2021/annual-allowable-rent-increase-announced
City Councilperson Carol Fife sponsored the amendment. She is the founder of ACCE, a state-wide tenants’ rights organization. All but one City Councilperson voted in favor of the amendment. Oakland Tenants Union also backed the CPI revision as well as other tenants’ rights organizations.
The City advised Landlords about other avenues available to increase rent in non-pandemic circumstances which includes 1) capital improvements, and 2) fair market return. A small property owner’s workshop will be offered by the City on July 13, 2022.
Tenants may register for a Tenants’ Workshop which is occurring on June 22, 2022.
For more information about these workshops, see: https://www.oaklandca.gov/resources/rent-adjustment-program-workshops
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