Rents in Oakland have been going up on vacant units but not so much in occupied units. The current annual allowable increase in Oakland is tied to the Consumer Price Index and is only 2.1 percent for sitting tenants.
However, if an owner invests in capital improvements that benefit the tenant, she is currently allowed to pass that cost on to the tenant by amortizing it over five years. But this could soon change.
The recent, sensational article on a tenant getting a large increase ignored some very important details from the most recent Rent Board Report.
The article made it seem like there are many disputes among owners and tenants regarding rent increases. In reality, that is not the case. Most owners and tenants get along. In fact in the last fiscal year, there were only 411 petitions to the Rent Adjustment Program (RAP) out of approximately 66,000 covered rental units. That means that 0.62 percent of tenants are contesting rent increases.
The article also made it appear that owners were passing on large capital improvement increases to their tenants. However, according to the Rent Board Report, the average capital improvement increase from 2009 to 2012 was only $46.85, which is less than a 5 percent increase for a tenant paying $1,000 a month. That is hardly a rationale for rewriting the rent ordinance.
But that's exactly what's happening. The Rent Board and tenant activists want to rewrite the entire rent ordinance to drastically discourage owners from further investing capital into their properties.
Yes, the tenant in the article had been given a large increase but as of yet, the tenant has not even filed a petition at the RAP. That increase is likely to be reduced under the normal process, if he decides to file a petition.
Making these drastic changes to the rent ordinance will be extremely detrimental to Oakland. Our housing stock in Oakland is quite old. Even the "modern" buildings are 50 years old. When owners invest in their properties, they hire local workers for roofing, painting, windows, etc., which stimulates our local economy.
They pay for building permits, increased taxes, and our neighborhoods improve. Why would we want to discourage that?
One of the proposed changes is to go from a compliant-based system to one where owners would pre-petition the RAP for increases as they do in Berkeley. This would create a dreadful new bureaucracy and increase the annual expense of running the RAP.
It already takes 90 days to get a decision out of the RAP and increasing their caseload will mean they need to add staff and increase the annual fee.
In Berkeley, they charge owners $194 per unit just to administer the rent program yet they have less than one-third the rental units that Oakland has. Do we want to increase the cost of RAP from $2 million to $6 million per year?
Oakland sits on an earthquake fault and we have many rental units that need earthquake retrofitting. Retrofitting is an expensive undertaking but needs to be encouraged to protect the lives of our residents.
The proposed changes to the rent ordinance will actually deter retrofitting. The City Council needs to decide which is more important to them, protecting the tenant's rent subsidy or protecting the tenant's lives.
Luke A. Blacklidge is director of Oakland-based East Bay Rental Housing Association.