‘Loophole’ a Clear Policy Decision

 

This is in response to Monty Heyings’s commentary (”Vote Cements Loophole for Alameda Landlords,” July 14) concerning the fixed-term lease “loophole” in the city’s Rent Stabilization Ordinance. I am neither a residential landlord nor a tenant.

Heying presents this issue as an error that Council is too lazy to fix. On the contrary, it was a clear policy decision that took up an hour of discussion beyond the midnight hour at the Feb. 16 Council meeting. 

Councilman Jim Oddie was very clear that he wanted fixed-term leases prohibited because he feared that landlords would attempt to sign all new tenants to fixed-term leases in order to avoid relocation payments and the 5 percent re-rental limit. On the other hand, Mayor Trish Spenser was just as clear that she felt that landlords and tenants should be free to negotiate fixed-term leases that avoid these financial burdens. Council voted 4-1 to adopt the ordinance, with Oddie included in the majority, with the understanding that the ordinance could be amended if his fears proved to be justified.

Current tenants are protected because they do not have to accept the offer of a fixed-term lease and can continue with their current leases. If the landlords then terminate their leases by means of a no-cause eviction process they will suffer relocation costs and the re-rental limitation. 

I am concerned about the prospective tenant who is offered a fixed-term lease and signs it because he knows no better. I would suggest that a worthy amendment to the ordinance would require a landlord to place a bold-type notice in any fixed-term lease offered to any tenant expressly informing the tenant of rights he is losing by signing the same. 

However, I still share Oddie’s concern that if fixed-term leases become the norm in this tight market, tenants will not have the negotiating leverage to avoid such a lease. If that happens, fixed-term leases will need to be abolished.

The ordinance, warts and all, is a reasonable response to a difficult problem and needs to be given time to work and grow into a better document. The Alameda Renters Coalition proposed ordinance is not in the long-term interests of either tenants or landlords. 

San Francisco has had strong rent control for many years. It has lost 31,000 rental units to condo and tenancy in common conversions. It has sky-high rental rates partially due to this reduction of inventory and landlords offsetting poor returns from old rent-controlled tenants by charging super high rates to new tenants.

 

 

 

Paul Foreman lives in Alameda.