An exemption that frees landlords from rent control is on the way out after the City Council told staff to draft an ordinance ending the practice.
Previously, landlords could opt out of rent control if they could show they had made substantial repairs to the property. But affordable housing activists have called it a loophole that landlords have abused to oust long-time tenants from their homes and raise rents.
“This is one of those situations where Oakland is a lone wolf. Of all the cities in the state that have some form of rent control, no other jurisdiction has this measure in their ordinances,” local tenants’ rights activist James Vann said at the meeting. “San Francisco’s ordinances are completely different and they haven’t used the exemption since 2007, so it’s time to get rid of this outdated anachronism in the (rent control) ordinance.”
The City Council, on a unanimous vote, also extended a moratorium on the renovation exemptions at its meeting Tuesday. The moratorium will extend through March, giving staff time to come up with an ordinance to end the exemption.
Since 2011, Oakland’s rent board has granted 267 exemptions to rent control rules, according to a city report. Of those, 35 were for substantial rehabilitation, affecting 197 units of housing, the report said.
Oakland and San Francisco are the only cities to have substantial rehabilitation exemptions to rent control laws; Oakland’s are less strict than San Francisco’s, the report said. To qualify for the exemption, the building must be at least 50 years old, the building must contain “essentially uninhabitable” residential units, and the cost of improvements must be at least 75 percent of the cost of newly constructed residential buildings with the same number of units.
The exemption was adopted in 1980 to encourage landlords to improve rental units by allowing owners to recover revenue lost from vacancies during renovations, a past city report said. But the exemption has been abused, council member Rebecca Kaplan said, by landlords trying to make more money.
Though activists have showed up to several City Council and rent board meetings over the past year to denounce the exemption, few landlords have shown up in support of it.
In November 2017, landlord Karen Francisco brought up the concern that other property owners like her may be at risk of not being able to afford necessary improvements to their buildings.