Free-Market Rent Is Alameda Tradition

Free-Market Rent Is Alameda Tradition

Since the establishment of Alameda 154 years ago and through numerous real estate booms and busts, landlords and tenants have co-existed without city mandates regarding pricing. Yet the City Council is quickly making policies that will forever change this relationship. Many people believe this council is ill-prepared to pass an ordinance of this nature with many facts not quantified. 

The information they are using to create a rent ordinance in Alameda is not fact-based nor conclusive. I have yet to hear factual numbers on what percentage of renters have been evicted, charged “egregious” rent increases, or have left Alameda due to the aforementioned. Council has biased testimonials from a small number of upset tenants, pressure from some very vocal protestors, old survey results, and is making rushed recommendations that will affect the whole city, without knowing all the facts, costs and implications. 

Of the total Alameda population, what percent of residents were actually evicted without cause, and how many landlords raised rents exorbitantly in the past 8-12 months? How many cases were voluntarily resolved through the existing Rent Review Advisory Committee (RRAC) and non-binding arbitration? 

I understand only a few cases have been brought to the current City Council’s review as they weren’t able to be resolved through the current RRAC. The scope of this situation does not warrant the city to mandate all relationships. We have not seen the statistics as they haven’t been tracked.

Setting a threshold at 5 percent for all tenant-landlord relationships is extreme and the start of a downward spiral for historical Alameda. I would strongly suggest the 8 percent currently in place is a more reasonable threshold that RRAC can actually manage.

At present, “excessive rent increases” can’t be defined, is very subjective, and this 5 percent threshold is based on historical average percentages of rent increases and was agreed to at 4 a.m. one morning. The ordinance as written is not taking into consideration whether or not the landlord has historically passed along “average” rent increases. Many have not. 

Many tenants agree that they have enjoyed stable rents for years, and now are deeply concerned that rents are on the rise. Landlords have been absorbing the inflating costs of ownership including insurance, taxes, utilities, fire and earthquake upgrades, paint, labor, roofing and improvements over many years. In the RRAC guidelines, there needs to be exceptions made to those owners who haven’t passed on rent increases over the past several years, as there will be no way to make up these past and current costs under the proposed ordinance.

There also needs to be provisions for older buildings and smaller property owners to pass along their higher costs of maintenance, and renovations to current code as required but the city, dollar for dollar in the year they are incurred. 

Fifteen years to re-coup money spent is not fair when the owners are paying it all up front while the tenants are enjoying the safety and comfort of the upgrades. Unit renovation and upgrades should allow for bringing the rent to market. Five percent or 8 percent on a $2,000 rent does not cover these costs for many, many years. 

We should be concerned about the $1.9 million estimated cost and practical considerations of implementing the proposed ordinance. This is an estimate, and we can expect this expense to inflate, adding to rents. 

Costs for implementing any ordinance or new mandates should be fairly split by both tenant and landlords. However, the City Council is recommending $300,000 be taken from the General Fund immediately upon passing this ordinance, with no requirement for repayment. So know that this will cost all Alameda residents in the end. Why should landlords be responsible for paying the entire amount of program fees and then have to collect the tenant’s fair share?

This ordinance, or rent control, will add to rent prices. The more cases before RRAC, the more costly it will be to administer. These costs will be passed through to the tenants.
It seems like the current City Council wants to manage the issue based on the demands of those that make the most disturbance. 

Yet we have nothing to show that the majority of renters have been harmed or that the majority of landlords have “misbehaved.” They are managing to the exception, to the mob.

Has the City Council covered all its legal bases in passing an ordinance that restricts owners and puts the burden on landlords to provide affordable housing when the city’s outdated law (Measure A) is a major reason for the current supply shortage? Oakland and Berkeley recently passed an ordinance to loosen restrictions on building in-law units, etc. 

I own property on a bus line and have room on my lot to add two more units, but current Planning Board restrictions limit me providing housing for two more families or four students who may not have cars. The city needs to consider relaxing restrictions for expansions, as rent control or rent ordinance does not in any way deal with the reason for this panic: limited supply.

The city needs time to flush out all the details and how RRAC will ultimately be successful without destroying Alameda. How can RRAC absorb all the potential new cases mandated by the new ordinance, and the numerous cases sure to arise on a voluntary basis? We’ve heard that tenants plan to petition any increase over the Consumer Price Index to RRAC.

Will there be staffing ample to handle these cases and ensure the cases are resolved in a timely manner of 30-60 days? How can tenants understand the true costs of ownership in Alameda and that all landlords are not greedy?

How can the city provide more affordable housing supply and stop penalizing the providers of this much needed resource? It scares me that the landlords will pay the immediate price, whether it be this ordinance or the public voting on rent control, but the entire city will ultimately suffer the most. 

As I stated, the tenant-landlord relationship has co-existed for more than 150 years without city intervention as regards to rent pricing. Please consider that not all government intervention is healthy or warranted.

I am more in favor of concept of a trust fund that would raise funds to provide for need-based assistance for the elderly and disadvantaged. I can see many more constructive ways to spend $1.9 million dollars than the proposed administration of a mandate that neither party is happy with.