Oakland and the limits of rent control: A battle at the ballot

Lisa Simonson is an artist, but she makes ends meet by assisting an East Bay home stager who aims to ensure that multimillion-dollar listings live up to their asking prices.

It’s an ironic day job for the Oakland resident of 18 years, who moved to Vallejo at the end of September after a spike in her own housing costs.

“I expected a rent increase, but I didn’t think it would be $1,200,” Simonson, 56, said of her shared two-bedroom apartment on the North side of Lake Merritt. “I was stunned. My mind went blank.”

Like thousands of other apartments, condos, duplexes and houses built after 1983, the converted photo studio Simonson has called home since being priced out of San Francisco in 1998 isn’t covered by Oakland’s rent control ordinance. Her experience shows both the limitations of such policies under current state law and how thousands of other renters stand to gain from new protections promised by the Measure JJ initiative headed for the November 8 ballot.

Most notably, the city council-backed measure would expand eviction protections to rental units built through 1995, up from the current 1980 cutoff, and alter the way the city enforces price controls.

Renter advocates contend that Measure JJ, which they have deemed the “Renters Upgrade Act,” is necessary to stem a tide of displacement that disproportionately affects low-income and minority residents. Landlords argue that adding more restrictions will compound price increases by encouraging renters to cling to already scarce units.

“Time is of the essence right now in terms of keeping Oakland residents in their homes,” said Jahmese Meyers, campaign director for the pro-Measure JJ ‎East Bay Alliance for a Sustainable Economy. “The displacement crisis is probably as severe as we’ve seen it in decades.”

What sort of effect Measure JJ might have on evictions comes down to a provision that would extend “just cause” protections to units built from 1980 to 1995.

If the measure passes, tenants who have paid rent or otherwise not violated their leases would have to be compensated by landlords in the event of an eviction. These protections are already in place for most units built before 1980, with the exception of some owner-occupied units or smaller structures like single-family homes.

The ballot measure would reaffirm and build upon a recent council “companion ordinance,” which will require landlords to begin pre-applying for rent increases above inflation levels in early 2017. It also calls for more visibility into the city’s enforcement efforts, including better tracking of rent increases and a new public database of rent board cases.

Longtime renter Clifton Harrison, who has spent the last three years trying to hang onto his own Adams Point home of 28 years, will be voting for Measure JJ to support the proposed switch away from Oakland’s complaint-based system requiring tenants to appeal large rent increases.

Harrison’s case stems from a 112 percent rent increase due to bills for kitchen and bathroom renovations that he argues should have counted as routine maintenance.

Representatives for the building’s owner, named in the ongoing rent board case as Solares Properties, Vernon Street Apts. LLC, did not respond to requests for comment.

Even as a professional paralegal, Harrison said the rent appeal process has been taxing.

“They have to show they’re not doing this just to force the tenant out,” Harrison said. “The burden is more on the landlord than the tenant.”

Landlords, for their part, see Measure JJ as another example of unnecessarily burdensome and self-defeating bureaucracy that threatens their return on investment.

James Forsyth, a 50-year Oakland resident and former high school teacher who owns several rental properties near Lake Merritt, said he has issued less than a dozen rent increases to standing tenants during his time as a landlord. Instead, he relies on state laws that allow property owners to reset prices on all units after tenants move out.

Forsyth once owned more than a dozen rental units in the city after buying and flipping his first six-unit property in Piedmont in 1968 with $8,000 in family financing. He has sold all but a few single-family units, which are exempt from price controls, and cites lagging supply as an overlooked culprit in price increases.

“The city has to take some responsibility for the housing crisis,” Forsyth said. “They blame foreclosures and greedy landlords.”

In fact, nearly all sides agree that a failure to keep pace with demand for new housing has compounded competition for existing rental units.

From 2007 to 2014, Oakland permitted one-quarter of the 14,629 new housing units needed to keep pace with state population projections. Middle class housing production was particularly bleak; just 22 new units affordable to residents making around the area’s median income hit the market over the seven-year period—a small fraction of the 3,142 units targeted at that price point.

“Rent control can never address supply issues,” said Miriam Zuk, project director and senior researcher at the UC Berkeley’s Urban Displacement Project. “It’s not designed to do that.”

Rather, she said, such policies are designed to curb displacement and keep vulnerable populations in their homes.

In Oakland and beyond, however, rent control campaigners are running into familiar policy barriers. All six Bay Area cities with rent control-related measures on the ballot this fall—Oakland, Richmond, Alameda, San Mateo, Burlingame and Google’s hometown of Mountain View—have encountered existing state laws that exempt newer units from price controls.

The Costa Hawkins Rental Housing Act still bars price controls—but not eviction controls like those sought in several cities—for units built after 1983.

“More and more cities and politicians and tenants are talking about that Costa-Hawkins is a problem,” said Aimee Inglis, acting director of San Francisco renter advocacy group Tenants Together. “The thing that I’m hopeful about is this groundswell of tenants that we’re supporting.”

California Governor Jerry Brown has so far been reticent to overturn entrenched housing policies like Costa-Hawkins or the Ellis Act, also loathed by tenants. The latter policy allows evictions for landlords who wish to take a property off the rental market. In fact, in late 2013, Brown vetoed a bill that would have weakened Costa-Hawkins, which the San Francisco Realtor’s Association declared “a big win.”

Despite more vocal opposition and nascent organizing efforts at the local level, policymakers in Sacramento still doubt that Costa-Hawkins or the Ellis Act will be dismantled anytime soon.

“Look, anything is possible,” said Ben Metcalf, director of the California Department of Housing and Community Development. “I’m skeptical.”

In the absence of state reform, Oakland voters are being asked with Measure JJ to decide how to cope with the fallout from an obvious imbalance in housing supply and demand. The campaign to sway them is already underway.

With less than two weeks to go until Election Day, Oakland-based housing activist group Causa Justa :: Just Cause has spent more than $140,000 in support of the measure, city campaign finance records show. Though advocates for the measure expect counter-spending from rental real estate interests, the politically powerful California Apartment Association and affiliated groups have yet to report any spending in Oakland, instead funneling more than $1.5 million into other Bay Area rent control races.

In the meantime, precisely how many Oakland tenants stand to be immediately affected by Measure JJ’s expanded eviction protections—should it pass—remains unclear.

Oakland Tenants Union Co-Founder James Vann cites an estimate based on building permits that upwards of 8,000 units would be covered by the new eviction rules. Landlord groups including the East Bay Rental Housing Association peg the number at more like 1,200 to 1,600 units, based on the number of apartment buildings constructed in the 1980s and 90s.

City of Oakland representatives did not respond to multiple requests for updated internal calculations on how many residents would be affected by Measure JJ, or what it would cost to enforce. A May report by the city clerk evaluated a much broader version of the proposal, which failed to gain adequate signatures for the ballot, and projected that more than 10,000 units would be affected and that enforcement could cost as much as $24 million annually.

“Unfortunately, the city does a lousy job of keeping statistics,” Vann said.

When it comes to political calculus, he and members of his tenants’ union also worry that voter turnout in areas of the city defined by vastly different income levels could be a blow to their cause.

“We’re going to fight like hell to get the turnout in the flatlands up to 50 percent, but the turnout in the hills is 80 to 90 percent,” Vann said.

This series of two articles will look at the city’s initiatives in Part 1 and the Measure JJ ballot campaign, as well as similar state limitations, in Part 2. Part 1, “Confronting a crisis,” appeared October 27.

Correction: This article previously misstated the title of James Vann. He is a co-founder of the Oakland Tenants Union.