#408 in a series of true experiences in real estate
October 2002, Hills Newspapers
There is an Oakland rent control measure on the ballot next month. I am interested because I sell real estate in Oakland and own property here, a duplex that I rent out and a house that I live in. So I read the proposed law.
This ordinance would regulate under what circumstances a tenant could be asked to leave the apartment or house he lives in. A “good cause” would be the requirement to evict a tenant, a specified-by-law reason such as non-payment of rent, illegal activity, or damage to the dwelling. This provision is, it is said, to prevent owners from evicting people simply to get a higher rent from someone else.
But under the present rules, such a thing can’t happen anyway. When a tenant is asked to leave (rather than leaving voluntarily), the rent must stay the same for the new tenant. So there doesn’t seem to be much advantage rent-raise-wise to evict someone.
Probably many people in Oakland, both renters and homeowners, are not aware that there is already rent control in this city, but there is. Rents cannot be raised willy-nilly. Rent raises are generally limited to a specific allowance based on the consumer price index. Right now the rate is very low, .6%, which allows only an annual $6 raise on a current monthly rent of $1000.
The November ballot measure, called Measure EE, does not change the rent increases allowed. But it does have far more extensive ramifications concerning occupancy of rentals — apartments and also single family houses.
My husband and I bought my duplex some 30 years ago next door to the house we were living in then. When we divorced a few years ago, I borrowed money and bought my husband out. I have no plans to sell the building, in part because I depend on the income, and also because it is possible that I, or my children, may want to live there one day. But could we?
One part of Measure EE delineates under what circumstances an owner can ask a tenant to leave so that the owner (or certain relatives of the owner) can move in. It states that the owner has to have previously lived in the rental unit. He must also have written into the rental agreement with his tenant a provision for such a possibility.
I have never lived in my duplex. Therefore, I would not be allowed to displace one of my tenants should I or my children wish to live in my building.
If, for example, one of my children was going to Cal and needed an apartment, he could only move into my building if one of my tenants decided on his own to vacate. If, because I got sick and couldn’t work, or for any other reason decided that it would make sense for me to move out of my house and into one of my apartments, I could not ask a tenant to leave so that I could do so.
And, another rule, even if I qualified to evict a tenant so that I or my child could live there, we’d be required to stay for 3 years. In other words, if my child moved in and finished his doctorate in 2 years, then wanted to move elsewhere, according to the rules, he couldn’t.
Suppose instead that I’d rented out my own residence while I took a job out of state. In that case, I would already have lived in the house, and would, I expect, have provided for the possibility of wanting to reoccupy in my agreement with my tenant. But there could still be big problems if I wanted to move back in again.
Because, under this ordinance, if I rent to the same tenant for 5 years and that tenant happens to be 60 years or older, I cannot ask the tenant to move out. Just the tenant’s age and the fact that he’d rented from me for 5 years would prevent me getting back into my house. This would also be the case if the tenant was seriously ill or has a disability (as defined by the California Fair Employment & Housing Act).
What if I want to sell my house? Suppose that I made that move out of state, liked it in my new location and decided to sell my house in Oakland? Let’s say that I am able to find a family who wants to buy it. But wait, there’s a huge problem. The family can’t move into the house. Why not? Because the tenant has been there for 5 years and is at least age 60, seriously ill or disabled. He can’t legally be asked to leave ever, even by a new owner.
The family wanted a home, not a rental property, so they don’t buy from me. The value of my house has gone down because it has become a rental with a protected tenant in it.
There may be an exception. As I read the proposed ordinance, it could be possible for an owner (myself or a new owner) to evict a protected tenant. This could only happen if the owner himself is age 60 or older and, in addition, is disabled or seriously ill.
What if I wanted to sell my duplex? How might this new rent control law affect me? It is possible, I suppose, that I might want to move closer to where my children are someday living, and not wanting to manage my rental property from afar, I could put it on the market.
Perhaps the buyers are a couple and a single friend who have decided to purchase together. They would like to occupy both units of the duplex but, they can’t (even if there are no protected tenants living in either apartment).
Under the new law, that would be the rule. Because only the tenant in one of the units could be displaced. The couple or the single could evict one tenant from one apartment, but not both.
Is your head spinning yet? Mine is. There is much more about this measure that I find amazing, almost unbelievable, too much to tell you here. I believe in a fair shake for tenants and for owners. I do not believe Measure EE provides for both.
