How Do YOU Spell Relief?

Following is a Press Release issued by Kamala Harris, U.S. Senator for California:

"Amid Rising Costs of Housing, Harris Introduces Bill to Provide Rent Relief

WASHINGTON, D.C. - With the cost of housing continuing to rise in California and across the country, U.S. Senator Kamala D. Harris today introduced legislation to provide rent relief for working families struggling to pay their bills. The Rent Relief Act would create a new, refundable tax credit to put more money in the pockets of families at a time when renters’ wages have remained stagnant and housing costs have increased rapidly. Harris was joined in the introduction by Senators Dianne Feinstein (D-CA), Richard Blumenthal (D-CT), and Maggie Hassan (D-NH).

“America’s affordable housing crisis has left too many families behind who struggle each month to keep a roof over their head,” said Senator Harris. “This bill will ensure no family is priced out of the basic security of a place to live. Bolstering the economic security of working families would strengthen our country and increase opportunity.”

“This bill would help more than 140,000 low-income Connecticut families struggling to pay rent each month, providing them much needed relief and flexibility to spend on other vital needs like health care and putting the American Dream within closer reach,” said Senator Blumenthal. “For far too many in Connecticut and across the country, rising rents and flat paychecks prevent them from enjoying the basic, fundamental human right to affordable housing.”

“As far too many families scramble to afford the cost of living, we must keep working to find solutions to our affordable housing crisis,” said Senator Hassan. “I’ve heard from businesses across our state that one of their most pressing challenges is a shortage of affordable housing for their prospective employees. This common-sense bill would create a refundable tax credit to help bring relief to families who struggle to afford their rent and expand economic opportunity for hard-working Granite Staters and Americans.”

“The lack of affordable housing is a national emergency,” said Matthew Desmond, Author of “Evicted: Poverty and Profit in the American City. “Senator Harris is bringing heightened awareness to a crisis that’s been ignored for far too long. The Rent Relief Act reflects a strong commitment to ensuring that all Americans have access to a safe and affordable home.”

A report by the National Low Income Housing Coalition illustrates that there is a shortage of 7.4 million affordable rental units for America’s 11.4 million extremely low-income families. According to California’s Department of Housing and Community Development, nearly 1/3 of California renters (3 million California households) are rent burdened, and California has the third highest rents in the country. More than 1.5 million households are severely rent burdened and more Americans than ever are renters. The share of US households that were renters climbed to 35 percent in 2012, up from 31 percent in 2004.

Under Harris’ Rent Relief Act, the refundable tax credit will be available to individuals who live in rental housing and pay more than 30% of their gross income for the taxable year on their rent including utilities. Eligible individuals would qualify for the tax benefit by determining the total amount spent yearly on rent, taking into account the family’s annual income, and a rate of the federal government’s established fair market rent controls.

Individuals who live in government-subsidized rental housing could claim the value of one month’s rent as a refundable tax credit. Subsidized rent is normally capped at 30% of a person’s income, making them eligible for the tax benefit for rent-burdened residents. The Rent Relief Act would give much-needed relief to lower income residents.

The Rent Relief Act is supported by: the National Low Income Housing Coalition, National Alliance to End Homelessness, Fair Housing of California, and the National Housing Law Project

"I applaud Senator Harris for her leadership in introducing this innovative, bold proposal, which would help struggling families who today face impossible choices between paying rent and meeting their other basic needs, including putting groceries on the table and taking care of their health,” said Diane Yentel, President and CEO of the National Low Income Housing Coalition. “A new tax credit for renters - like the one proposed by Senator Harris - could transform lives, providing millions of the lowest income people with the breadth of opportunities that start with an affordable home - opportunities to climb the economic ladder, improve their health, and allow children to do better in school."

“Home is not just where we keep a roof over our heads — it’s where we raise families, become part of a community, and create a lifetime of memories,” said Los Angeles Mayor Eric Garcetti. “It’s also where we want to stay, and Senator Harris’ legislation would help protect millions of families from losing their homes, by expanding benefits and opportunities for people who pay rent every month.”

“Nearly every Oakland resident who pays rent will save money under this law,” said Oakland Mayor Libby Schaaf. “At a time when our city is fighting the displacement of long-time residents, The Rent Relief Act of 2018 will help working class families, artists, senior-aged tenants, and anyone else who struggles to make the rent each month. I’m proud to partner with Sen. Harris to fight California’s cost of living crisis and deliver more affordable housing to all Oaklanders.”

“Thank you to Senator Harris for acting with urgency, thoughtfulness and creativity to help address the housing crisis that is impacting cities throughout California,” said Sacramento Mayor Darrell Steinberg. “This bill would be an important tool to provide real relief for millions of people struggling through no fault of their own.”

“Mayors across the country should applaud Senator Harris’ proactive leadership in addressing the housing crisis impacting millions of renters,” said San Jose Mayor Sam Liccardo. “With the billions in tax subsidies allotted to billionaires through last year’s tax changes, this legislation provides a refreshing contrast for working families who struggle daily.”

“In Stockton, one in two residents will pay over 30% of their income to housing,” said Stockton Mayor Michael Tubbs. “We have seen some of the highest rent increases in the nation, making even finding a place to live a major challenge. It will take solutions from both State and Federal officials, as well as creative improvements locally, to help solve this housing crisis. I am incredibly thankful that Senator Harris is helping to lead the way with the Rent Relief Act.”

For a full list of supportive statements, click here.

Text of the legislation can be found here.

A fact sheet on the bill can be found here.

Bubble, Bubble, I Smell Trouble!

A young professional leased a house with two other professionals. After living together for well over a year, their relationship soured. One of the roommates drank to excess and an argument ensued resulting in a firearm being brandished against the young man. These three young men were all privileged; they came from wealthy homes, attended the best schools and were employed in professional jobs.

The next day, the young man packed up his belongings, rented a truck, and moved home. But, then his troubles with the property management company began.

The lease had two onerous clauses:

1)  A joint and several liability clause; and  

2)  A clause stating that the Lessee consisted of all three tenants.

Here’s how the lease read:

"Lessee acknowledges that this Agreement is between Lessor and each Lessee executing this Agreement jointly and severally, whether or not in actual possession of the Premises. In the event of default by any one, each and every remaining Lessee shall be responsible for full payment of rent and all other provisions of this Agreement."

"The parties to this Agreement are Property Owner, (hereinafter called "Lessor"), and Tenant 1, Tenant 2, and Tenant 3 (hereinafter called "Lessee")."

The lease was for one year and then reverted to a month-to-month term. The young man submitted a 30-day written notice to the Property Manager. But, they would only accept his lease termination after a “Roommate Change Addendum” was signed by all three roommates and, in that addendum, they required the young man to “relinquish” all rights to his security deposit. They further argued that unless and until the Addendum was signed, that they would hold all three men responsible for the rent and any charges and they did not conduct a property inspection after the young man moved out.

The existing roommates refused to sign the Addendum and argued that the young man was responsible for 1/3rd of all charges (rent, utilities, etc.) until they found a new roommate.

The young man’s problems were further compounded by confusion over what he actually paid as a security deposit and what rights his existing roommates had to his deposit. He was able to secure agreement to the actual deposit amount and he argued that his roommates rights to the deposit were controlled by state law (Cal. Civ. Code § 1950.5).

He also argued that a roommate not in possession of the property cannot be held liable in perpetuity for rent. See Schmitt v. Felix, 157 Cal.App.2d 642, 648. 

“Once a cotenant in a month to month tenancy gives notice to the landlord of his termination of the tenancy, he cannot be held liable for his cotenant's remaining in possession. Upon receipt of such notice the landlord is put to the choice of either accepting the cotenant as his tenant alone, or of terminating the tenancy. “[Emphasis added.]

The resolution cost the young man his security deposit less a small refund owed to him and attorneys’ fees.

Relationships between people are not predictable.  And, roommate disputes are common.

• It is always advisable to retain a lawyer to review the lease agreement and, if possible, to negotiate the clauses before signing;

• It is highly advisable to have a written roommate agreement outlining the rent share and share of housing expenses, overnight guests, cleaning responsibilities, and more before moving in together; and

• To always conduct financial transactions with a written paper trail. While Venmo is convenient, be sure that the transactions are clear and never, ever combine a security deposit transaction with a rent payment.

See Sidebar to this Blog concerning Security Deposits and Roommate Agreements.

Ninth Circuit Upholds San Francisco Landlord Buyout Ordinance as Constitutional

See the full article here: https://www.courthousenews.com/ninth-circuit-finds-san-francisco-landlord-buyout-law-constitutional/

San Francisco, Berkeley, and now Oakland each maintain a public database of buyout offers by zip code. While San Francisco's database of buyout offers can be found via the link below, visit the rent board offices to obtain listings of buyout offers in Berkeley and Oakland. Since the City of Oakland just enacted their BuyOut ordinance, the data will probably be fairly "thin" until later this year.

Buyout Offers in San Francisco: https://data.sfgov.org/Housing-and-Buildings/Buyout-agreements/wmam-7g8d/data

Oakland City Council Passes Tenant Move-Out Ordinance!

The following is from a press release issued by the City Attorney's office in Oakland:

"On April 17, the Oakland City Council adopted an ordinance sponsored by City Attorney Barbara J. Parker, City Council President Pro Tempore Abel Guillén and Councilmember Dan Kalb to protect tenants when landlords initiate move out negotiations."

"The Council adopted the Tenant Move Out Ordinance (TMOO). . .The ordinance, which will take effect May 1, 2018, improves the fairness and transparency of move out negotiations and agreements. The ordinance requires that property owners advise tenants in writing of their rights when the owner seeks to negotiate a move out. The ordinance grants tenants the right to reconsider and rescind move out agreements in specified circumstances and clarifies that the City's minimum relocation payment amounts apply to move out agreements."

"As Oakland's housing crisis continues and grows, the City is receiving reports that low-income tenants have signed exploitative move out agreements. Some of these agreements fail to cover even the relocation costs; other agreements require that tenants give up their legal rights or options to return to the unit. Tenants who inadvertently waive these rights face the nearly impossible task of finding affordable housing at a comparable rent, because state law allows property owners to rent vacant units at market rates, which in many cases are astronomical."

"As Oakland struggles with a historic housing crisis, some unscrupulous landlords are using deceptive or coercive tactics to get rid of tenants. This new law will require that landlords advise tenants of their rights so they are in a position to advocate for their rights; and the law will help the City identify bad actors who are attempting to force tenants out of their homes under false pretenses."

"The ordinance requires that landlords give tenants information including the following in writing:

•  A statement that the tenant has the right to refuse to enter into a move out agreement, and the property owner cannot retaliate against them for this decision

•  A statement that the tenant may choose to consult with an attorney before entering into a move out agreement or move out negotiations

•  A statement that the tenant may rescind the move out agreement for up to 25 days (if the tenant has not already moved out)

•  A description of the tenant's eligibility for relocation payments

• Information about when tenants have rights to return to their homes under state and local law, as well as a statement that waiver of rights to return may increase the value of move out agreements, and

• A statement that property owners who fail to comply with the ordinance may be subject to more significant penalties if the tenant is elderly, disabled or catastrophically ill, and a space for tenants to indicate whether they fall within any of these categories as defined in the ordinance."

"Under the new law, property owners also are responsible for submitting notifications of their intent to enter into move out negotiations - as well as copies of any fully-executed move out agreements - to the City's Rent Adjustment Program."

"Additionally, owners must give tenants a copy of the agreement in the language in which it was negotiated or in English, Spanish or Chinese, depending upon the language(s) in which the tenant is proficient. According to data from the 2000 census, more than 26% of Oakland residents speak either Spanish or Chinese at home."

"The ordinance also requires that property owners state under penalty of perjury whether or not they have recently communicated to the tenants that they intend to recover the unit under Oakland's Just Cause Ordinance and on what grounds. Responses to this question will aid the City in identifying property owners who may be coercing tenants to accept move out agreements through misrepresentation or intimidation."

"The ordinance does not apply to move out agreements that are negotiated or agreed to during the course of an unlawful detainer (eviction) proceeding."

".In Oakland’s high rental market, some tenants have been pressured into bad move-out deals by landlords who want to jack the rent up sky high,” Councilmember Kalb said. 'The Tenant Move Out Ordinance increases transparency and fairness around move-out negotiations between tenants and landlords and will aid the City’s regulatory efforts accordingly.'"

Raising the Rent - Capital Improvements in Oakland's Rent Controlled Units

I am a tenant, just like you. In 2016, my landlord served each tenant in my building with a notice of inspection related to an appraisal. Usually, an appraisal signals either a property sale or an appraisal to secure a loan for a property improvement. Subsequent to the actual appraisal, we received a notice that the exterior of the building would be repainted. Since the exterior paint was a very unattractive pink, the new Malibu beige and contrasting brown trim was welcome from an aesthetic perspective. But, then, I wondered would there also a petition from the landlord to the rent board to pass along the capital improvement costs to the tenants. Indeed, was painting the building exterior a "benefit" to the tenants or to the landlord (e.g. increases the marketability of the building)? 

We waited and heard nothing. But today, each tenant listed on each lease for every unit in our building received a notice from the rent board by mail concerning our landlord's petition to pass the capital improvement costs along to the tenants. There is a two-year time period dating from the date of the capital improvement in which a landlord can petition the board to pass along the improvement costs as a rent increase to the tenants.

See: http://www2.oaklandnet.com/oakca1/groups/ceda/documents/agenda/oak063313.pdf

A tenant or a landlord can download (click here) an Excel file that the landlord is required to use in calculating the rent increase based on capital improvements.

In Oakland, only 70% of the capital improvement costs for the ENTIRE building can be passed on to the tenants. So, for instance, if the capital improvement cost was $10,000, only $7,000 can be passed along to the tenants. To this $7,000, there is an "amortization interest" that is added which is currently about 3.8%. The amortization period is different for different capital improvements. In our case, exterior building paint is amortized over 5 years. Thus, when I entered the numbers, the monthly rent increase per unit spread out over 5 years (or 60 months) was $15.40 per unit. Of course, this amount is on top of annual rent increases (if any) and/or banked rent increases.

Our landlord's petition was filed in mid-January 2018 and received on April 21, 2018, a testament to how backlogged the Oakland Rent Adjustment Board really is. The hearing on the petition is scheduled for July 2018. My landlord has been fair to me, thus far. And, I hope that this will continue but I wondered why, when I saw him in February 2018, he asked me how I liked the new colors to the building exterior. Whether the building is pink or a more fashionable Malibu beige, there are no direct benefits to me (at least how I see it.)  I am more concerned about the safe functioning of the gas furnace, the plumbing leaks, and the recent burglary of my neighbor's apartment when she was (thankfully) away.

Oakland's New BuyOut Agreement Ordinance Still in the Works

Since reporting the initial recommendation to implement an addition to the Rent Adjustment Ordinance on February 20, 2018 concerning regulating buyout agreements in Oakland, the City has proposed a second revision to the proposed buyout ordinance which is still under review by the City Council.

You can download the Supplemental version (e.g. second revision) from the City Council website via the following link:

https://oakland.legistar.com/LegislationDetail.aspx?ID=3300957&GUID=55AF2B27-C5B8-4AA7-82AD-7677366A7657&Options=&Search=

Oakland Joins Berkeley and San Francisco in Regulating Tenant Buy-Out Agreements

An excerpt of an "East Bay Times" report published on 2/15/18 and written by Al Tayadon, describes a new "Move-Out Ordinance" that is supposed to go into effect on May 1, 2018 and was approved by the Oakland City Council on 2/6/18.  The Ordinance was co-sponsored by city councilman Dan Kalb and Abel Guillen and the City Attorney's office.

"A new ordinance requires Oakland landlords to tell tenants their rights before paying or giving them other compensation to move out.

The ordinance, approved by the City Council on Feb. 6, aims to regulate so-called 'move out' agreements that are often done to circumvent state and local legal requirements and restrictions. It requires landlords to submit the agreements to the city’s rent adjustment program.

'Oakland’s rising rents have exacerbated tensions between property owners and tenants residing in units that are rent-controlled or covered by Oakland’s just cause for eviction ordinance,” a report by the city attorney’s office says. 'By emptying their units, property owners can attempt to increase their return on their investment by selling the property or re-renting the units at a higher rate. Property owners who seek to expedite this process may enter into move-out agreements with tenants who are not aware of the full extent of their legal rights under state and local law.'

The ordinance is supposed to go into effect May 1, though city administrators may extend the date if the city’s forms will not be available by then. The ordinance does not apply to existing move-out agreements.

Councilman Dan Kalb, who co-sponsored the legislation with Councilman Abel Guillen and the city attorney’s office, said giving tenants a list of their rights and allowing them to back out of the agreements within 30 days 'evens the playing field.'"

To read the entire news article, click here.

To read a copy of the ordinance and the supplement to the ordinance, see the report and supplemental report from the City Attorney's office via the following link.