Tenants + ACCE + Oakland Community Land Trust = the Power to Persuade Owners to Sell

Affordable Housing Victory: How a Years-Long Strike Helped Residents Get a Property in Oakland reported by NBC Bay Area news. 

For more about Oakland Community Land Trust and their equity-based model, click here.

Also see article featured on the ACCE web site related to the story above.

Capital, Indeed. Another rent increase that may be passed on to You!

Tenants have a legal duty to keep the rental property clean and in good condition.

Tenants also have a legal duty to report repair issues to their landlord or property manager. If a pipe bursts or the heater fails to work, for example, the tenant should report this issue to their landlord. If the report is made verbally, tenants should also follow the request in writing (an email will do).

Renter’s insurance is a good idea, and may actually be requirement of a lease agreement. And some insurance companies will include an add-on policy to cover damages caused by water damage due to burst pipes or sewar backups which may be helpful in an old building.

But, what if the landlord decides to replace an outdated furnace with a new, energy efficient furnace? Or, to paint the building exterior or hire a structural engineer to upgrade the building balconies? In certain rent controlled jurisdictions like San Francisco, Berkeley, and Oakland, the landlord can pass the cost of these improvements on to the tenant in the form of a rent increase. If the landlord had to borrow money to pay for these improvements, the interest cost of the loan may be added to the total cost of improvements and amortized over a period of years.

The San Francisco rent board describes a capital improvement as, “. . .one that materially adds to the value of the property, appreciably prolongs its useful life, or adapts it to new uses, and which may be amortized over the useful life of the improvement of the building.”

Before passing certain capital improvement costs onto the tenant, the landlord must petition the local rent board, serve a copy of the petition on each of the tenants, and wait for a hearing in which tenants can attend and object. Supporting documentation to the petition may include labor and material costs, costs of engineering or architectural consulting, loan costs, and other relevant costs. After the hearing, the rent board hearing officer considers all documentation and testimony and issues an official decision to the landlord and the tenants. If the petition is approved, a specific cost – in the form or a “temporary” rent increase – can be passed along to each tenant for a period of months or years.

For example, in Oakland, 70% of the costs to paint the building exterior can be passed along to the tenants as a rent increase for 60 months or 5 years, after which the landlord or his agent should notify affected tenants that the rent increase related to this capital improvement is satisfied and the rent should decrease by the amount approved by the hearing officer.

In Oakland, capital improvements must “benefit the tenant,” however, what benefits the tenant is arguable. If the exterior paint of a building is in good condition, does applying a new color benefit the tenant or increase the property value for the landlord?

Each jurisdiction has their own requirements; there doesn’t seem to be a “standard” approach relating to capital improvements and the rent increase that the rent board may allow the landlord to pass along to their tenants or for how long.

It is important for the tenant to keep good records concerning the landlord’s petition, the hearing decision, and the Notice of Rent Increase related to these capital improvements and to create a calendar reminder about when this “temporary” increase should be suspended. The landlord or the landlord’s agent may not be as diligent at suspending this rent increase as they are at requiring it.

Reg. 1267 - Capital Improvements in Berkeley

Oakland's Capital Improvement Calculator

Alameda County Supervisors Meet This Morning to Discuss the County Eviction Moratorium

Today, Tuesday, July 19, the Alameda County supervisors will be discussing whether to weaken or end the County Eviction Moratorium, Agenda Item 30.1.

The meeting starts at 10:30 am, but the Supervisors probably will not begin to discuss the County Eviction Moratorium until after 10:45 a.m. 

To call into the meeting, use this zoom link :https://us06web.zoom.us/j/98271491041 and click 'raise your hand' when they call agenda item 30.1

You can also call in at 1-669-900-6833, Webinar ID 982 7149 1041, and dial *9 to raise your hand to speak when they call agenda item 30.1.

ACCE and the Oakland Tenants Union (OTU) asks tenants to please attend the meeting and make public comment.

NOTE: Agenda Item 30.1 which was to "Place the eviction moratorium ordinance on a future agenda for review and possible modification" was voted against -- the Alameda County Eviction Moratorium is still effective.

The Best Defense is a Good Offense

 A tenant was served a Notice to Pay Rent or to Quit for non-payment of rent “plus late fees.” While the Notice was defective because it included “late fees,” the Landlord could have separately served a “Notice to Cure or to Quit” for violation of a lease clause that related to late fees. If the issue of non-payment of rent + late fees escalated to an unlawful detainer proceeding (e.g., an eviction), the tenants attorney could challenge the Notice to Pay Rent or to Quit as being defective.

Moreover, how much “rent” and late fees were included in the Notice was not disclosed; only a total dollar figure owed was stated. A Notice to Pay Rent or to Quit can only be for the most recent 12-months of non-payment of rent -  the time period for which rent was owed was also not recorded. 

 But the question remained – “How much rent and late fees did the Notice include?”

 To answer that question, and to effectively challenge a Notice in court, the tenant should have a record of rent payments even when landlord-tenant relations are good. Sometimes the landlord-tenant relationship can go “south” and a tenant ledger can be helpful. The ledger can be a simple, handwritten record of payments made to the landlord, with the date and check number recorded. If rent payments are made by mail, then it is also a good idea to send rent payments with delivery tracking and to keep a copy of the postal receipt and the delivery tracking number.[1] If payments are made electronically, then bank statements will record when and how much each rent payment was deducted from the tenant’s bank account. In addition to the ledger, a copy of the voided check or the bank statement for electronic payments should be kept with the ledger. If things do go awry or if there are questions about a “short rent” payment, the tenant can produce the evidence to their attorney.

Landlords or their property managers usually also keep a ledger for each tenant of any payments made or incurred such as rent, late fees, utilities, rent registration city fees, etc. And this ledger may be submitted as evidence in a court proceeding along with the lease agreement and the Notice.

Tenants should also keep the original or a scanned copy of any and all Notices and letters received by the landlord or their property manager as well as all emails and texts. All written communications can be considered evidence for or against the tenant in a court proceeding whether the proceeding relates to issues with rent or security deposits or any other issue that may be hammered out in court.

 Sample Rent Ledger 

Date	Check No.	Rent Owed	Late Fees	Rent Paid	Balance
5/1/22	403	$1555.00	$0	$1555.00	$0.0
6/1/22	410	$1555.00	$0	$1555.00	$0.0
7/1/22	450	$1555.00	$55.00	$1000.00	$610.00

 [1] https://www.jdsupra.com/legalnews/when-the-check-is-in-the-mail-31240/

No Person is Ellised unto Themselves

In late 2018, tenants of a three-story, 13-unit building in Berkeley received a buyout offer to exchange their tenancy for cash. The building was covered by Berkeley's rent control and buyout ordinance. Some of the tenants accepted the buy-out offer and moved but there were a few “hold-outs” in 6-units.

 In April 2019, existing tenants received a Notice to Terminate Tenancy under the Ellis Act; the Owner alleged that they were going to remove the building from the rental market. Some of the tenants were “elders” or disabled and had lived in the building for many years; under Berkeley’s ordinance, they had a one-year notice period but the other tenants were given 120-days to relocate. Building renovations began. Balconies were dismantled, windows in vacant units were broken and left open to the elements, and some empty units were deconstructed.

Stimulated by the eviction notices, the tenants began to meet informally, involving the Eviction Defense Center and a private attorney. Due to a technicality, the Owner’s attorney rescinded the Ellis notices but served a new Ellis Notice to Terminate Tenancy in July 2019. The tenants stood strong. 

After one of the tenants paid for private tests for lead and asbestos which were positive, an anonymous caller involved OSHA and building inspection. Renovations were shut down, and with the shut-down, the tenants could enjoy some relief from the daily din of construction. In December 2019, a HazMat team began asbestos and lead abatement in the building.

An investigation revealed that due to state and local restrictions, while the building could not be converted to condominiums, it could be sold under a Tenancy-in-Common ownership which was the owner’s apparent intention. 

The tenants began to organize and, in September 2019, were notified that Bay Area Community Land Trust (BACLT) may be interested in acquiring the building; if successful, existing tenants could stay and BACLT would lease the other units to new tenants who met their income criteria. Was BACLT going to be their knight in shining armor?

In October 2019, the “elder” tenants were served with a new notice, a Notice of Temporary Relocation offering a rent differential to “temporarily relocate" to a new residence within 30-days and stating the the relocation period would be for about 4-months. One tenant stayed while the others packed their belongings and sought “temporary housing.”

The oldest tenant, who was in her mid-90’s, had resided in the building for over 25-years, and "temporarily" relocated to a nursing home. She died in May 2020 without ever being offered the opportunity to return to her "home."

In November 2019, the tenants met with ACCE leaders and organized a protest in front of the building and they were also supported by the Berkeley Tenants Union. The press covered the tenants' story..

Now down to a few existing tenants, the remaining tenants were hauled into court after their 120-day Ellis notice period expired in December 2019. Armed with their Eviction Defense Center attorney, the second Ellis Act notice was judged defective and their cases dismissed.

In March 2020, the Owner rescinded all Ellis Act eviction notices. And, then the world shut down due to the global COVID-19 pandemic. Renovations resumed – at a exceedingly slow pace. The building was re-roofed but vacant units revealed garbage bags of building debris mounting on bare balconies and windows in some of the units remained broken and open to trespassers.

But through it all, BACLT, the tenants, and the City of Berkeley persevered. BACLT secured the necessary financing to acquire the building both from the City's Small Sites program and private sources. BACLT closed escrow at the end of June 2022. 

Existing tenants’ tenancy is secured and the remaining nine units will eventually be leased to new tenants who meet BACLT’s income criteria and who will pay an affordable rent.

It takes courage for tenants to stand up and stand together, it takes perseverance and emotional fortitude. And, perhaps it takes a few good advocates and tenant’s rights leaders to stand by their side. 

An update to this story was published by Berkelyside on Sept. 30, 2002 and authored by Supriya Yelimeli: Residents return to North Berkeley apartments after local land trust buys back building

Berkeley's Eviction Moratorium Remains in Effect

Berkeley Tenant Union recently advised that the Berkeley eviction moratorium remains in effect.

The City website states the following:

"Berkeley’s eviction moratorium is still in effect! City Council has declared a local state of emergency with no expiration date set as of yet. So long as the state of emergency is declared, Berkeley's eviction moratorium remains in effect. In addition, on September 30, 2021, the Alameda County Superior Court amended its Emergency Rule 1.8a. This rule prohibits the filing of any eviction lawsuit unless the landlord alleges that the eviction is permitted under any local ordinance and/or is necessary to ensure the health and safety of residents or any other permitted exception."

The Alameda County Moratorium also remains in effect. 

A lawsuit was filed in March 2022 against the City of Oakland and against Alameda County in federal court, Northern District, alleging that both the City and the County eviction moratoriums are illegal. The case (Case 3:22-cv-01274-LB) is currently set for jury trial in April 2023.

For more about this federal lawsuit, including reviewing a copy of the complaint, see the article published by The Oaklandside: Landlords sue to end eviction moratoriums in Oakland and Alameda County

Oakland's Eviction Moratorium Still in Effect

The Oakland Rent Board advises the following:

"California Assembly Bill 2179, which extended the State's Eviction Moratorium, has . .  expired. However, this law did not preempt Oakland’s [Eviction] Moratorium, which continues to prohibit most evictions, rent increases beyond the CPI, and late fees on covered units until the City Council lifts the local emergency. For questions about how the end of the State's moratorium might affect you, contact a RAP Housing Counselor at 510-238-3721 or rap@oaklandca.gov."

Are you "banking" on a rent increase? Or are you taken by surprise?

Tenants in Oakland breathed a sigh of relief when the City Council recently voted to change the manner in which the CPI rent adjustment was calculated and the Council capped rent increases at no more than 3% versus 6.7% under the prior calculation. The Council also changed the date at which the new increase became effective from July 1 to August 1, 2022.

I reside in Oakland and on June 30, 2022, I received a rent increase notice from my landlord's agent notifying me that my rent would be increased by 3% on August 1. The last sentence of the notice read as follows:

“It is the express intention of the property owner that the balance of any allowed rent increase under the Ordinance are banked under provisions of the RAO (Rent Adjustment Program) and can be added to any future increases and transferred to any future property owners."

Fortunately, given the continuation of the Oakland Eviction Moratorium, only the the annual CPI increase can be imposed on any Oakland tenant covered by the Moratorium and late fees are also prohibited. In addition, a rent increase can only be imposed with proper written notice once every 12-months.

Landlords may argue that rent increases that are not imposed allow tenants to “bank” the increase in a savings account until the increase is actually imposed. But it is more likely a strategy for a landlord to accumulate banked increases and raise the rent by the highest allowable (and unaffordable) amount, an amount that is designed to stimulate the tenant to move. (The transference of banked rent increases may also make the building more attractive to new owners for the same reason.) Once the unit is vacated, the landlord can re-lease the unit at market rate. This is particularly true if the tenant is low income, retired and/or disabled and “enjoying” a fixed income and a low market rent due to rent control. 

In San Francisco, for example, there is no limit to applying any banked increases dating back to as far as April 1982. In an article published on 9/16/2019 and titled, “Cities Grapple with ‘Banked’ Rent Hikes,” Noah Arroyo wrote, “San Francisco can be seen as the Wild West of rent banking. . .Landlords may grow their banks to any size, and may tap into any portion of that bank in a single year, as long as they provide. . .notice. . .That means a landlord who never raised the rent in 37 years could impose a non-negotiable [rent] hike of 95% in 2020.”

Fortunately, in Oakland, there is a cap of 3x the current CPI but not more than 10% for banked increases, which is still a pricey increase. Landlords are limited to banking rent increases for no more than the most recent 10 years. But, there are certain exceptions that allow landlords to increase rent by more than 10% and this includes (but is not limited to) a petition and hearing related to a "Fair Market Return."  

The City of Alameda appears to have the most well thought out ordinance regarding banked rent increases restricting any banked increases to no more than 8% being imposed at one time and allowing only 3% of the banked increases plus the current AGA to be imposed on any tenant in any year. Moreover, Alameda has a Rent Registry, requiring landlords to inform the rent board about any and all banked increases. (AGA = Annual Gross Adjustment). 

Oakland is playing catchup to Alameda, Berkeley, Richmond, and San Francisco having just enacted a Rent Registry which would require landlord's to register the latest rent increase. But, to protect an elder or disabled population or low income families, the registry (like others) does not include age or income range, likely due to privacy issues.

So what's a tenant to do? Oakland has a Banked Rent Increase calculator available for download with instructions which tenants can use to determine how many, if any, rent increases have been banked. If possible, tenants can start a special savings account to accommodate for these future increases although tenants are currently squeezed by post-pandemic hikes in gas, utility, and food costs, and the cost of household supplies.

A table below explores some of the municipal banked rent increase requirements.Links to research studies by the Terner Center for Housing and Innovation, U.C. Berkeley, are also noted below.

https://ternercenter.berkeley.edu/blog/california-rent-cap-debate/

https://ternercenter.berkeley.edu/wp-content/uploads/pdfs/Rent_Control_Paper_053018.pdf

BANKING RENT	BANKED RENT INCREASES LIMITED BY “X’ YEARS?	IS BANKED RENT INCREASE CAPPED?
Oakland	10 Years; banked increases over 10 years expire. Banked rent increases can be transferred to a New Owner.	Yes. The total of CPI Adjustments imposed in any one Rent increase, including the current CPI Rent Adjustment, may not exceed three times the allowable CPI Rent Adjustment on the effective date of the Rent Increase notice (Reg. 10.45) and no more than 10% in any one year (O.M.C.8.22.070A(2)) with certain exceptions such as if the Owner seeks a Fair Market Return. (O.M.C. 8.22.070A(3)). "No series of rent increases in any five-year period can exceed 30% for any rent increases [with certain exceptions]" (O.M.C. 8.22.070A(3).)
Berkeley	No. “If a landlord chooses not to take an AGA rent increase in a given year, they do not lose it. Landlords can “bank” AGAs and then raise the rent to the rent ceiling at any time if they provide the tenant with proper notice.” See: https://rentboard.berkeleyca.gov/rights-responsibilities/rent-levels/annual-general-adjustment See B.M.C. Chapter 11 (1102)	Yes, it is capped by the rent ceiling which is established by the rent board annually and published for each rental address and rental unit. See: https://rentregistry.cityofberkeley.info/#/homepage
Richmond	No.	Yes, as guided by Rent Board Regulation 602," To the extent a Landlord has not increased Rent up to the Maximum Lawful Rent level, the Landlord shall have the ability to apply deferred AGA rent increases; however, if the proposed rent increase for the Tenant household exceeds the current year AGA plus five percent (5.0%) of the rental amount charged to the Tenant household at any time during the 12 months prior to the effective date of the proposed increase, either in and of itself or when combined with any other rent increases for the 12 months prior to the effective date of the increase, the proposed rent increase shall be void." NOTE: The rent board uses compounded addition for banked rent increases.
City of Alameda	No. Landlords may choose to bank unused portions of the AGA to impose in later years; however, there are numerous restrictions such as a banked increase may not be transferred to a new Owner, a landlord can’t bank more than 8% in rent increases, and a banked increase is capped at 3% plus current AGA. NOTE: Compounded addition is used.	For more information, see Form RP-203. https://www.alamedarentprogram.org/Forms/Landlord-Forms
San Francisco	No. A banked rent increase is an increase that has not been imposed on the Tenant for 24-months unless the banked rent increase is a partial increase which can be banked for 12-months. There is no limit to the number of years of banked increases that may be imposed but rent increases prior to April 1982 can’t be imposed. Banked increases can be transferred to the new Owner for current (not new) tenants. NOTE: Compounded addition is not used and the landlord cannot round up the rent increase amount. See https://sfrb.org/topic-no-053-banked-rent-increases See: https://sfrb.org/fact-sheet-7-annual-allowable-rent-increases-and-banked-rent-increases	No. See column 1.