Let Jeff do it

We still don’t have any hard data about either the extent or the impact of residential rent increases in Alameda, but it’s not just the tenant advocacy groups anymore who are bemoaning the rental housing “crisis” in the City.  Now the politicians have taken up the cry.

It remains to be seen whether they’re willing to adopt reforms that match their rhetoric.

Nine months ago, the former Council turned the task of redressing the problem of “exorbitant” rent increases over to a “community process” overseen by self-described “special events producer/attorney” Jeff Cambra.  The current Council has let Mr. Cambra continue to emcee the show.

But two weeks ago Council suggested that its patience is wearing thin.

Jeff Cambra

Jeff Cambra

Back in January, Mr. Cambra presented six “discussion points,” all involving the Rental Review Advisory Committee, and Council directed staff to draft amendments to the Municipal Code and/or revisions to the RRAC procedures reflecting those points.  This effort, City Manager John Russo told Council, would take 90 days.

(At the same time, staff also was told to advise Council what “additional analytical work” could be done to “better understand” the issue of rent increases.  Not provide actual data, mind you.  Just tell Council what the additional data might consist of).

Originally, staff intended to publish its handiwork on April 26 and deliver it to Council on May 5.   But then two weeks ago Mr. Cambra requested that staff present its recommendations to his group for review before staff put them on the Council agenda.  “Our stakeholders want to be involved in all of the decision-making process,” Mr. Cambra told Council.

Councilman Jim Oddie wasn’t buying it.  He was troubled by the delay – estimated by staff to be 30-to-60 days – that Mr. Cambra’s request would cause.  “I’m still confused what we’re going to get in 30 days that we don’t have today,” he said.  “I don’t know why we keep dragging this out.”

More fundamentally, Mr. Oddie objected to the intrusion into legislative affairs.  Of course, he put it more politely:  The “original charge” of Mr. Cambra’s group was to “put together recommendations to bring to the Council on high-level principles,” he said.  It then became Council’s responsibility to take the next steps, if it so chose, to write those principles into law.  “I thought only Council gave direction to staff,” he told Mr. Cambra.  “It does seem a little usurping, to be honest with you.”

(Earlier in the meeting, Mr. Oddie had made a similar point by reminding Mr. Cambra of Council’s role:  “If you can’t decide, we’re kind of the deciders.  We were elected to be the deciders.  We’ll be the deciders.”  Who knew that Mr. Oddie was so conversant with the aphorisms of George W. Bush?)

Councilwoman Marilyn Ezzy Ashcraft expressly endorsed Mr. Oddie’s view, and Vice Mayor Frank Matarrese and Councilman Tony Daysog likewise opposed departing from the original schedule.  Only Mayor Trish Spencer voted to grant Mr. Cambra’s request.

Like everyone else, we’ll have to wait until April 26 to see what staff comes up with.  But it’s highly unlikely that the recommendation will include a rent control ordinance.  City Attorney Janet Kern pretty much put the kibosh on that idea when, at the invitation of Mayor Spencer, she volunteered her opinion that rent control was “limited in its application” and “limited and difficult in how it’s enforced.”

As usual, Ms. Kern took an exceedingly narrow view of the law.  It is true, as she told Council, that the Costa Hawkins Rental Housing Act exempts from local rent control laws any residential structure built after 1995 as well as single-family homes and condos.  But that exemption doesn’t really restrict the reach of a possible rent control ordinance in Alameda.

In fact, according to the data compiled by the American Community Survey, only about 10 per cent of the total housing units in Alameda were built in the last 25 years.  Moreover, the public record shows that the local complaints about rent increases are coming from apartment dwellers, not single-family home or condo renters.

Nevertheless, the politicians invariably defer to Ms. Kern’s views, even when the case law doesn’t support them.  In any event, no one on the current Council has expressed any enthusiasm for rent control, and from statements made during the campaign, we’d count Mayor Spencer, Vice Mayor Matarrese, and maybe Councilman Oddie as likely opponents.

(Interestingly, Councilman Tony Daysog tweeted a link this week to a piece by Robert Gammon in the East Bay Express urging repeal of Costa Hawkins.  But that may just be Tony being Tony; after all, he sometimes tweets a link to the Merry-Go-Round, too).

With rent control off the table, Council instead will focus on Mr. Cambra’s recommendations for “strengthening” the program whereby tenants may file complaints about rent increases with the RRAC, a five-member committee appointed by the Mayor, which then conducts a hearing.  But none of what Mr. Cambra called his “discussion points” involves any dramatic change:

  • One of the points simply restates existing state law against retaliatory eviction.
  • Another requires landlords – Mr. Cambra usually calls them “housing providers,” but we’ll start using that term when grocery stores begin styling themselves as “foodstuff purveyors” — to provide written notice of the rent review procedures when they raise rents.
  • Another suggests having the City “look into” expediting hearings before the RRAC.  (Now, the committee considers complaints at a monthly meeting).
  • Two others require the landlord and the tenant to attend, or send a representative, to the RRAC hearing.

(There was also a sixth “discussion point”:  the threshold rent increase level that would allow a tenant to file a complaint with the RRAC.  Sounding a little like John Kerry announcing a nuclear arms deal with Iran, Mr. Cambra declared two weeks ago that this point had been “the deal breaker back in January, which no one ever thought we would ever come to agreement on.”  But, now, he proclaimed, he had managed to secure consensus, although he didn’t say what it was).

It’s not difficult to see how Mr. Cambra was able to achieve accord on his five (and maybe six) “discussion points.”  A tenant might view them as – finally – showing the respect she is due.  In response, a landlord might well conclude:  Okay; it’s no skin off my nose.  Hand out a notice?  Show up for a meeting?  No problem – as long as I can still raise the rent as much as I’d like.

And there’s the rub.  Under the current state of affairs, the RRAC has no power to force a landlord to rescind or modify a rent increase, however unreasonable the committee may determine it to be.  It can only “recommend” that the landlord take such an action.  If the landlord refuses to accept the recommendation, the tenant can bring the matter before Council.  But Council, too, has no power to compel the landlord to change her mind.  All it can do is to authorize the Mayor to send a letter “encouraging” the landlord to “rethink” its position.

Which the landlord then is free to ignore.  As staff has described it, “The Council’s recommendation is advisory only and is not binding on the landlord.”

There are some who argue that the RRAC program works perfectly well without the committee or Council having any enforcement authority.  “I think what we’re doing has been incredibly successful,” RRAC chair Karen Miller told The Alamedan last October.  “I’m interested just in helping negotiate and mediate between tenants and landlords because I think that there’s a common ground that can be found, and most of the time we find it.”

At the January Council meeting, long-time Alameda realtor Don Lindsey concurred.  According to Mr. Lindsey, “someone comes in [to the RRAC] and it gets resolved, pretty typically.”  (The Alamedan’s analysis showed a 71 per cent success rate on complaints heard between 2000 and 2014).  And even if it doesn’t, he added, “peer pressure” from other landlords can force a recalcitrant property owner to back down.  He supported his point with an anecdote about personally contacting an out-of-town landlord who had rejected the RRAC’s recommendation and convincing him to change his mind after the hearing.

Maybe those who tout the effectiveness of moral suasion are right, and the only necessary reform is to provide additional tools for that purpose.  (How ‘bout a billboard at the exit of the Webster Street tube with pictures of the “Greediest Landlords in Alameda”?)  Forgive us, but we don’t share the same faith in the willingness of people to be swayed by the better angels of their nature (or even by Don Lindsey).  We might go so far as to argue that, unless Council actually gives the RRAC authority to order a landlord to revoke or reduce a rent increase, or assumes that authority itself, all it will have done is dress an impotent emperor up in fancier clothing.  His decrees will remain as feckless as ever.

We’re not surprised that the “community process” did not include a recommendation for giving the RRAC or Council enforcement powers.  After all, the goal of the exercise is to attain universal agreement among the “stakeholders.”  Inevitably, the result is a list of items so innocuous as to be unobjectionable to everyone.  But no landlord with her eye on the bottom line is likely to agree to let a volunteer committee – much less a body of politicians – decide how much rent she can charge.

Likewise, we will be surprised if Council decides to do anything more than adopt staff’s version of Mr. Cambra’s “discussion points.”  A true progressive Democrat may believe that the government should override the free-enterprise system if necessary to protect people who can’t afford to pay the market price.  But, as far as we’ve seen, the Alameda Renters’ Coalition – the grass-roots renters’ advocacy group formed last September – has not agitated for such a remedy.  Indeed, the group’s founder, Angela Hockabout, appears to be marching in lock step with Mr. Cambra.

Absent any political pressure, we don’t see any current member of Council taking on the mantle of Elizabeth Warren.

Sources:

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

March 17, 2015  staff report: 2015-03-17 staff report

About Robert Sullwold

Partner, Sullwold & Hughes Specializes in investment litigation
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4 Responses to Let Jeff do it

  1. BMac says:

    The mayor was adamant in that last meeting on the subject that we not study actual data (a preference for anecdotal impulsiveness she translates to many areas including transit priorities) and not try and pass an actual ordinance. She was apparently afraid that if we passed an ordinance governing increases on the units we are legally allowed to, we would lose the ability to employ the RRAC to mediate issues on all rentals.

    The mayor rents a house, as do I. Maybe that informs her desire to protect this amazing RRAC over all other options. The apparent success of the RRAC is not convincing. Case by case mediation is not an adequate attempt at a solution. Commendable, maybe, but not adequate. Many people don’t even bother bringing their rent increases to the RRAC for many reasons. Subtle retaliation from current landlords, stigma amongst property managers and landlords in town who could basically blacklist you from future rentals as a troublemaker, etc. As you pointed out, the RRAC is toothless.

    My question to the mayor would be, if we instituted some sort of ordinance on the units not exempted by Costa-Hawkins, why can’t the RRAC continue to exist in its mediation role for the rest of us? The only argument is that the peer pressure from folks like Lindsay exists only because they fear an ordinance. If there was an ordinance, I’m guessing he wouldn’t be calling my landlord about my $300 increase that goes into effect next month, call me cynical.

    Housing is a special market and gets special protections. Changing your housing isn’t the same as switching between chicken or beef. Free market comments by many who reflexively oppose any actions in this area don’t fly. Especially the government imposed restrictions on competition for “housing providers” in the form of land use policies, to use Cambra’s phrase.The only question of intervention is of degree. The disruptions, increases, stresses and other issues we are going through as a community are extreme in nature. A little rent calming ordinance is not out of the question. Alameda might never support Berkeley style rent control, neither would I actually, for many reasons. But, some common sense rules to smooth out the increases in a skyrocketing market like the one we have had these past couple years (and decades, really) are reasonable. My proposal would be something like CPI+5%, w/ some capital improvement passthroughs, etc. It doesn’t have to be punitive to landlords, but it should be predictable for tenants also, since housing decisions are made w/ long time horizons.

  2. CPI +5% is rent control.
    How about encouraging longer term leases?

    • BMac says:

      One of the reasons the American economy is (was) so dynamic is the mobility of the American worker. A major reason the last recession dragged on so long was that millions of people were trapped in homes that were underwater (financially speaking.) long leases might be attractive to some, but flexibility is one of the main arguments for renting.

      My CPI +5% is a form of rent control, sure. But so is not allowing new development or zoning for low density only, it’s rent control for property owners, preventing competition. My proposal is just one tool to create a little smoothing of the market for renters without jeopardizing landlords’ long term ability to invest in upkeep and turn a reasonable profit.

  3. Kyle Hansen says:

    I am one of those people being displaced. We recently received a 60-day notice. We have rented the house that we live in for 11 years, and we have a 4 year old daughter. Both my wife and I work very hard. It appears that the homeowner who lives out of state, but uses a local property manager, wants to move into our unit. We only got that answer after asking multiple times. Well, we live in the upper unit of a victorian with an in-law. The in-law was where the owners lived before they moved out of state. It was vacant until just 2 months ago. If they wanted to move back then why not move into the same place they remodeled to their tastes? The in-law was completely renovated a few years ago, and the new renters signed a 1 year lease, so the owners don’t appear to be selling the house. The in-law is beautiful, completely remodeled. I find it oddly convenient that just after the in-law was rented the owners want to “move in” to our unit, since they haven’t even lived in California for years. This is especially peculiar due to the fact that they have another rental property in Alameda and a home a couple of states away.

    We really don’t know what their actual plan is, we were just given a blank 60-day notice. There was no communication. No reason on the notice, nothing. We have never been late on our rent in 11 years. It was inhuman and cold. Now we are scrambling.

    Suffice it to say, something needs to be done. I understand that they own the home and it is an income property. I get it, but given the fact that we have lived here for 11 years without a single complaint or late rent payment….shouldn’t we at least deserve a little communication? They were our downstairs neighbors for years for pete’s sake.

    That being said, I don’t think that a blanket Rent Control solution is right for Alameda’s diverse housing and population, but something has to change. Something has to give, or it will no longer be the Alameda that you know. It will be just like the current situation in San Francisco. That is a dire forecast for our island.

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