RRAC ’em up

It will be two years ago next week that Council heard the story of an elderly couple who had moved out of the Benton Street apartment where they had lived for 17 years after their rent was raised by 67 per cent.

Those on the dais were appalled.  “Gives decent landlords a black eye,” said Vice Mayor Marilyn Ezzy Ashcraft.  “Saddening,” said Councilman Tony Daysog.  “Abhorrent,” said Mayor Marie Gilmore.

Indeed, the politicians were so upset that all but one of them – Councilman Stewart Chen, D.C. – suggested that the time had come to consider enacting some kind of rent control (or, to use the politically correct term, rent stabilization) ordinance in Alameda.

You had to be cold-hearted not to be moved by the Benton Street tenants’ plight.  But the Merry-Go-Round also was there with our customary stoicism.

And we wondered:  Was the rent increase experienced by the couple an aberration – or did it reflect a phenomenon occurring throughout the rental market in Alameda?   And if it was the latter, was the cause that landlords were trying to take advantage of the recovering Bay Area economy – or that they were attempting to deal with the escalating costs of a deteriorating housing stock?

We didn’t know the answers to those questions back in February 2013, and we don’t know them today.  Remarkably, neither does Council.  As a result, it is in no better position now than it was then to decide whether drastic measures – or any action of any sort – are necessary or desirable.

Even more remarkably, everyone (except maybe our new Mayor, Trish Spencer) appears to agree that if you don’t know the extent of the problem, you won’t be able to determine the scope of the solution.  And yet, rather than ferreting out the facts, our elected leaders, past and present, have spent two years wrangling over matters of form rather than achieving anything of substance.

It’s not a performance to be proud of.

The story of the Benton Street tenants was followed, a few months later, by another case presented to a Council about a tenant who had experienced a 50% rent increase.  When it came time in April 2014 to begin work on a new Housing Element, Renewed Hope and other housing advocates decided to press for action.  They asked the Planning Board to include a “program” that would result – by June 2015 – in adoption of a “rent stabilization” ordinance prohibiting eviction without “good cause.”  Such an ordinance was needed, the group said, to “mitigate the effects of displacement of current residents by rising rental prices.”

But Planning Board member John Knox White, for one, wasn’t willing to leap to the conclusion, absent a factual record, that an ordinance like the one suggested by Renewed Hope was truly necessary.  Other than the two stories told to Council, the only evidence available about rent increases in Alameda was the record of the handful of hearings conducted by the Rent Review Advisory Committee in response to tenant complaints.  To Mr. Knox White, this wasn’t a “big enough sample.”  The tenants who brought their cases to the RRAC “could be outliers, they could be indicative, or not indicative, of a major problem,” he said.  “If we’re going to have a conversation that brings all sides together, we need to start by defining the problem and how that problem is occurring in the city.”

Accordingly, Mr. Knox White proposed creating a “Council-appointed task force to provide information on the state of housing and rental pricing in Alameda, including trends, impacts on residents and families due to rising costs.”  The task force would “identify the root causes for recent price increases, existing efforts and policies in other Bay Area cities to combat these increases, including effectiveness and best practices and research into potential solutions.”  It would prepare a report that contained “multiple options and if consensus is reached a recommendation for Council action on a preferred option.”

By a 4-3 vote, the Planning Board included Mr. Knox White’s proposal in the draft Housing Element it sent to Council.  Had Council gone along, the work of collecting and analyzing data could have started immediately last July.

It didn’t happen.  None of the Council members disagreed with the importance of fact-finding.  Indeed, Mayor Gilmore endorsed it.  “We need to determine if there is a problem,” she said.  “I believe there is.  But my believing it doesn’t make it so.  So we really need some good data on this.”

Unfortunately, Council then got bogged down in procedural issues:  Should the Housing Element itself require establishment of the task force or should Council create it separately?  Ultimately, Council voted to take the latter route and directed staff to return with a proposal after the August recess.

City Manager John Russo did as he was asked and presented his idea last September.  As Mr. Russo explained at the time, he used as a model the “OPEB task force” he had set up shortly after his appointment to study and make recommendations to Council about the City’s unfunded liability for retiree health benefits.  Run by staff, the task force included representatives of all of the affected interest groups.  Its mission was, first, to determine the facts about the OPEB situation, and then, if possible, to reach a consensus about corrective action.  It was, Mr. Russo said, a “data-driven” enterprise.

The task force Mr. Russo proposed for the rental market was similar.  It, too, would be run by staff and would include interest-group representatives.  And it, too, would be “data-driven.”  As the staff report described it, the “Task Force will be charged with answering the following questions (italics added):

  1. What is the state of the residential rental market in Alameda?  This could include a quantitative analysis of rental rates, vacancy rates, absorption trends, and the length of residency and race/ethnicity of residents in different types of rental units.  The answers to this question will help identify the need/define the problem regarding housing costs.
  2. What have been the impacts on rental rates, supply of rental housing and the physical condition of rental housing in jurisdictions with rent control/stabilization ordinances?  This could include a background report summarizing longitudinal data regarding rents in stabilized units vs. market rate units, the impacts and effectiveness of existing programs in the Bay Area, and the legal limitations of rent stabilization (e.g., the Costa-Hawkins Act).
  3. What changes, if any, need to be made to the City’s Rent Review Advisory Committee (RRAC)?
  4. What changes, if any, need to be made to the Alameda Municipal Code (AMC) relative to residential rental housing?

Any proposed changes, the staff report stated, “would be informed by the research obtained from answering the first two questions.”

It sounded a lot like what Mr. Knox White had in mind.  And had Council adopted Mr. Russo’s recommendation, the work of collecting and analyzing data could have started immediately last September.

This didn’t happen, either.  Apparently, the housing advocacy groups didn’t like the proposed composition of the task force.  (Naturally, they wanted more tenant representatives).  Addressing this concern seemed simple enough – add another tenant group member – and Vice Mayor Ashcraft and Councilman Daysog, both of whom otherwise supported Mr. Russo’s plan, suggested doing exactly that.

Jeff Cambra

The Facilitator

But Councilman Chen had another idea. “For months,” Dr. Chen stated, he had been seeking advice about the rent increase issue from his close friend, Jeff Cambra, whom The Alamedan described as “an attorney and mediator who has served on a laundry list of local boards and who ran for City Council in 2012.”  During those conversations, Mr. Cambra had “volunteered” to lead a “community discussion process” that would replace the task force proposed by Mr. Russo.  This “process,” Dr. Chen assured his colleagues, would answer all of the questions posed in the staff report – and it would do so more quickly and reliably than a task force could.

Even Mayor Gilmore was skeptical about using a “community discussion process” as a fact-finding tool.  Eliciting stories about “egregious” rent increases, as Mr. Cambra intended to do, wouldn’t “help the Council understand if this is a widespread problem or we’re talking about a few landlords who are just bad apples,” Ms. Gilmore said.  Politely, Mr. Cambra suggested the Mayor had missed the point:

So this is an interest-based discussion, which means it is more of a qualitative discussion than it is a quantitative discussion, and so it’s not necessarily how many people have had their rent raised 25%; it’s the concept that it was raised 25%.   And that’s more important to say, Is this an issue?  And amongst the stakeholders to discuss that issue.

If Mr. Cambra was saying that his goal was producing a Rodney King moment for tenants and landlords, rather than the more mundane task of compiling data, Mr. Russo grasped the significance right away.  Once the “community discussion process” had run its course, he told Council,

you’re still going to need some numbers.  You’re still going to need people to say, how many evictions, how many people were forced out, what is the rental rate increase, for how many bedrooms, how many seniors on fixed incomes.  You need that kind of data.  Right now, we don’t have that data for you as policymakers to analyze.

But Mr. Cambra was eager for the assignment, and Dr. Chen, supported by Councilwoman Lena Tam, was adamant that he should get it.  (Indeed, in dismissing the concerns raised by Vice Mayor Ashcraft and Councilman Daysog, Dr. Chen displayed a previously unknown, and not particularly appealing, sarcastic streak).

It came down to the Mayor to break the tie.  “I am not a major proponent of community process because I’m unclear it’s going to give me data I need to make a decision,” Ms. Gilmore said.  Nevertheless, “we need to give the community group a shot.”  She joined Dr. Chen and Ms. Tam in voting for a resolution “to give the community forum an opportunity to respond to questions identified in the staff report regarding the residential and rental market in Alameda and return information to Council.”  (Is anyone surprised the vote was taken after 11 p.m.?)

The resolution called for Mr. Cambra to report to Council by December 2.  That deadline slipped, and the presentation didn’t take place until January 20.

By that time, of course, a new Council had taken its seats, and they listened as Mr. Cambra presented six “discussion points” – don’t call them “recommendations,” he insisted – for changing how the RRAC operated.  To a person, those on the dais thanked Mr. Cambra for his efforts.  But the new members had read the resolution giving Mr. Cambra his marching orders, and, inevitably, a few of them wanted to hear the answers to the other three questions posed in the September staff report, especially the one calling for a “quantitative analysis” of the rental market.

Councilman Jim Oddie took the lead.  Noting that several members of the audience were holding up signs with percentage rent increases, Mr. Oddie asked Mr. Cambra how many tenants had reported rent increases of more than 10 per cent.  Mr. Cambra responded that it was difficult to get tenants to speak up at the public meetings.  Mr. Oddie persisted:  So how many tenants reported increases of 10 per cent or more?  (“Yeah,” Ms. Ashcraft could be heard saying in the background).  Mr. Cambra responded that 12 to 14 tenants either spoke at meetings or emailed him.  Mr. Oddie didn’t give up:  So what was the average increase?

“I don’t have that statistical data,” Mr. Cambra replied.  “I think if you look at the RRAC records for last year, that will give you some insight into some of the types of rent increases tenants were facing.”

With this response we had come full circle and were back at square one.  More than a year before, Mr. Knox White (and, later, Mayor Gilmore) had pointed out the danger of generalizing from individual cases heard by the RRAC.  Since then, both Mr. Knox White and Mr. Russo had been trying to ensure that Council would get more than anecdotal evidence to serve as a basis for policy-making.  Councilman Chen had sold Mr. Cambra’s “process” as the fastest and most reliable way to obtain the necessary information.  Now, it turned out – as Ms. Gilmore, Ms. Ashcraft, and Mr. Russo had feared – that the “community discussion process” had produced no data Council didn’t already have.

(Our regular readers may have noticed that, in a single column, we now have said kind words about John Knox White, Marie Gilmore, Marilyn Ezzy Ashcraft, Jim Oddie, and John Russo.  If any of those worthies read this column, we apologize if our commendations cause them any trouble with their more ideologically inclined supporters.  We’re just angling for a guest membership in the Inner Ring).

And then things got worse.  Mayor Spencer terminated Mr. Oddie’s (gentle) cross-examination of Mr. Cambra to begin calling the public speakers.  (It was, once again, after 11 p.m.).  Then, when Vice Mayor Frank Matarrese moved to direct staff to prepare a plan for “implementing” the RRAC “discussion points” as well as  – finally – a report answering the questions posed in the September staff report, the Mayor convinced him to split the motion into two parts.

It was close to 1 a.m. when Council returned to the data collection motion.  By this time, all Mr. Matarrese wanted was a resolution directing staff to provide an estimate of the cost of gathering the information.  But when Ms. Ashcraft began reading the questions from the September staff report, beginning with the one about the “state of the residential rental market,” Ms. Spencer interrupted her.  “I can answer that,” the Mayor declared.  “There are next to no rentals available.”  Mr. Matarrese then further revised his motion to seek from staff only “an analysis of the considerations needed to answer” the previously stated questions and “the potential costs, if they can be identified, of gathering the data.”

Mr. Matarrese, Ms. Ashcraft, and Mr. Oddie voted in favor of the motion; Mr. Daysog – inexplicably – abstained; Ms. Spencer voted, No.  And then it was on to a presentation of perhaps the most important financial document prepared by the City – the Comprehensive Annual Financial Report.  Council devoted all of 10 minutes to discussing it.

“I’m a believer in data,” Mr. Russo told Council last September.  “I believe you need data.”

And so, we confess, do we.

Since Council heard about the Benson Street tenants two years ago, some people have tried to research the state of the rental market in Alameda.  Whatever data the public has seen on the issue is due to them.

Notably, Michele Ellson of The Alamedan has published pieces providing information about, among other things, the average market rates of Alameda’s rental housing and the ownership of rental property in the City.  If we had our druthers, Mr. Russo would give Ms. Ellson a consulting contract (which she undoubtedly wouldn’t accept in order to preserve her journalistic integrity).

In addition, before the January 20 meeting, Councilman Daysog reviewed the American Community Survey (and other) databases and prepared a slide presentation comparing, among other things, average household income and average rents on the Island.  We seldom have seen a Councilman undertake such a research project on his own initiative.

(We don’t mean to ignore the report presented to the Planning Board by Renewed Hope back in July 2014.  This “survey” essentially consisted of a compilation of quotations from self-selected participants).

The work done by Ms. Ellson and Mr. Daysog shows that relevant data about the rental market can be collected, if not with ease, at least with a little effort.  The more fundamental question, we suppose, is:  Should it be?

Mayor Spencer obviously doesn’t think so.  And we wonder why.  Perhaps she disagrees, philosophically, with the view held by Mr. Knox White and Mr. Russo – and by us – that data drives decisions.  We hope not – because the implication is that she would prefer to shoot from the hip.

Alternatively, perhaps Ms. Spencer believes that collecting data isn’t necessary because Council already has done all it can be expected to do to address the rent-increase problem.  When the issue came up during the campaign, she extolled the virtues of the RRAC and urged tenants to avail themselves of its procedures.  Mr. Cambra’s six “discussion points” were designed to improve the services provided by the RRAC.  Maybe Ms. Spencer thinks we’ve now gone as far as we can (or should) go.

That certainly is a defensible position.  But we won’t know if it’s the Mayor’s position until she says so.  Let’s hope we don’t have to wait another two years to find out.

Sources:

Renewed Hope April 17, 2014 letter: 2014-04-17 Renewed Hope letter

Planning Board June 9, 2014 meeting: 2014-06-09 staff report to PB re Housing Element2014-06-09 PB minutes

Council July 15, 2014 meeting: 2014-07-15 staff report re 2015-23 Housing Element2014-07-15 CC minutes

Council September 16, 2014 meeting: 2014-09-16 staff report re rent task force2014-09-16 CC minutes

“Community Discussion Group” memorandum: 2015-01-20 Report from the Rental Housing Community Discussion Group

Daysog presentation: 2015-01-20 Daysog presentation

About Robert Sullwold

Partner, Sullwold & Hughes Specializes in investment litigation
This entry was posted in City Council, Housing and tagged , , , , , , , , , , , , , , . Bookmark the permalink.

7 Responses to RRAC ’em up

  1. Erik says:

    Just like carpet bombing your rental housing stock. Economists agree. http://econjwatch.org/articles/rent-control-do-economists-agree
    The only people who like the idea or Rent Control are those that do not read. Working great for SF, Oakland, Berkeley. If you think price controls are suddenly, and miraculously, going to work, you are hopelessly disconnected from reality!

  2. John says:

    So we have apartment rent control which kills property tax income for Alameda schools? So do homeowners have to pick up the difference or do schools just decline? I saw that 54% of those in rent controlled apartments in San Francisco make over $100,000 a year. This seems like an intellectually sloppy random method of income redistribution.

  3. Robert, When is the staff supposed to come back with ““an analysis of the considerations needed to answer” the previously stated questions and “the potential costs, if they can be identified, of gathering the data.”?

    We’ve had enough traffic studies over the last decade or more, some of them redundant, so there should be a willingness to spend a reasonable amount of money to gather important data about an issue that is relevant to half of our residents (who are renters). How much we can effect the issue is another matter. I would also point out a key difference between the rent issue fact finding and the OPEB fact finding referenced above. The city is a party to the OPEB discussions. It’s not a party to any residential rental/leasing contracts.

    • Richard,

      At one point, Mr. Russo stated that staff would be able to present a “short report” within 90 days. But the motion then on the table asked only for a cost estimate. I DNK if adding the “analysis of considerations” changes the timing.

      • boathouse noodles says:

        The real question richard is why you think Rob. S would have any clue based on his past history of playing lose with facts and citations. Yet again he spills bottles of ink to say nothing more than “i’m really angry at Marie Gilmore for some reason” and ignores the actions of the sitting council. All while taking potshots at others and actively pretending he didn’t…If there’s one thing you should learn, its to watch the council meetings on your own, as Rob here has an agenda, and uses footnotes on the internet to try and hide the fact that he’ll say anything to push it forward.

  4. Paul S Foreman says:

    Robert,
    I think that the Mayor clearly stated her position. She wants to see how a revised RRAC will work with some new leverage built into their program before going into the intensive and expensive inquiry which would be required to consider rent control. Listening to the tenant speakers on Jan 20 did not give me any sense that they are insisting on rent control rather than a toughed-up mediation procedure.
    The imposition of rent control may be inevitable in this community where we have not had a competitive rental market for a long time; and expecting a mediation program to work may not be realistic when the tenant has no legal recourse if the landlord attends the mediation, but stands firm in his rent increase. However, rent control is a pretty draconian move with a lot of down side, so giving the RRAC more time and ammunition to work with is, as you say, a defensible position.

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