As many of you know, or should know, six Bay Area cities considered ballot initiatives related to rent and eviction controls last November. The measures passed in four of them: Oakland, Alameda, Richmond and Mountain View. Here, in our ongoing series, we’re going to take a closer look at the impact of those new laws city-by-city and what it means to you.
First up is Alameda.
Alameda voters were presented with two competing rent and eviction control ballot measures in November. The first measure, Measure M1, would have capped rent increases at 65% of inflation, along the lines of stringent rent control laws in Oakland and Berkeley. Voters rejected that measure and passed a competing one, Measure L1, by a margin of 56% to 44%. Voters had time to digest the pros and cons: this measure was a confirmation of an existing ordinance on rent and evictions that the City Council adopted back in March. It is now the law.
This new law – unlike the measure that was defeated – does not cap annual rent increases, which is good news for landlords obviously.
But it isn‘t a free ride. The law DOES limit rent hikes to one per year. Another important provision: the law does stipulate that rent increases above 5% are subject to review by the Rent Review Advisory Committee. If either the landlord or resident disagrees with that panel’s decision (and the rental is a multi-family rental unit built before Feb 1995), either party can file a petition to take it to a hearing officer for arbitration.
(IMPORTANT TO KNOW: For some of you, and we’ll repeat this point throughout the series, there’s no need to panic. State laws exempt all single-family homes and condos, and all multifamily apartments built after Feb 1, 1995, from limits on annual rent increases. State laws also allow landlords to charge new residents whatever they want when a unit is voluntarily vacated – after which the new resident can be rent controlled by local laws.)
Meanwhile, the new Alameda law also permits so called no-fault evictions (with conditions), but those evictions are limited to 10% of a property’s total units in any month, or 25% in any 12-month period. In the case of a no-cause eviction, relocation fees are required and the rent offered to the new resident cannot be more than 5% greater than the prior resident’s rent. The idea behind that: to discourage landlords from evicting residents in order to increase rents. Plan accordingly.
But wait, there’s more….
In cases of “no fault” and “no cause” evictions, landlords must pay relocation benefits to residents being displaced. These benefits amount to $1,553 plus the equivalent of one month’s rent for each year that a resident has rented the unit capped at four months’ rent.
Alameda, in rejecting firm rent control caps in favor of mediation, seems to have settled on a middle ground. “I think because it is new to Alameda, it is a hot-button subject here,” resident Robert Anderson told the Alameda Sun. “ Landlords in other communities seem to be able to be successful with some controls in place. There is no reason Alameda should be any different.”
The Real Bottom Line?
Just be ready to justify any rent increases above 5% – and certainly beware of relocation benefits that go with certain evictions. Like with anything else involving local rules, and property ownership for that matter, learn the law inside out. And make sure you have advisors who know the law inside out.