The Takeaway: READ the law closely when, and if, you’re seeking to increase rents or evict problem tenants. Recently, voters in five Bay Area cities considered new laws that could have a big impact on property owners and landlords. All of these ballot initiatives were designed to impose or strengthen limits on rent increases and evictions. Not a plus for landlords, to be sure, but the price of admission for being in the housing market.
Most of the measures proposed new caps on annual rent increases, tying them to the Consumer Price Index (CPI), as measured by the Labor Department. With inflation quite tame in recent years, that index is about 1 percent a year. And several of the laws would ban so-called “no cause” evictions – and force landlords to pay relocation expenses when terminating certain tenant situations.
According to one tenants advocacy group Tenants Together, the laws together could impact some 52,000 apartments in five area cities, including Alameda, Richmond, San Mateo, Mountain View, and Burlingame, as well as a countywide measure in Alameda. Oakland already has rent controls on the books, but a new law would , hold onto your hat, strengthen them.
So how did these new measures fare at the ballot box?
The Envelope Please
Oakland Measure JJ This would extend eviction controls to newer rental units (those built after 1983) and require landlords to get approval from the city before increasing rents more than 100 percent above CPI. PASSED
Richmond Measure L would cap annual increases at 100 percent of CPI and ban no-cause evictions. PASSED
Mountain View Measure V would limit rent increases to between 2 and 5 percent annually, based on 100 percent of CPI and prohibit evictions without just cause. PASSED
Alameda Measure L1 would require mediation for rent increases above 5 percent and require landlord to pay some relocation fees. PASSED
Alameda Countywide Measure A1 would raise up to $580 million through a bond issuance to acquire and approve up to 8,500 properties to provide affordable housing for low-income households, seniors, and veterans. DEFEATED
Alameda Measure M1 would have, passed limit annual rent increases to 65 percent of CPI, ban no-cause evictions and require landlords to pay some relocation fees when terminating tenancies. DEFEATED
Burlingame Measure R would have capped annual rent increases at 100 percent of CPI, ban no-cause evictions, and set relocation fees at three months’ rent. DEFEATED
San Mateo Measure Q would cap annual increases at 100 percent of CPI and ban no-cause evictions. DEFEATED
Mountain View Measure W would adopt a tenant-landlord dispute resolution program and binding arbitration for rent increase disputes exceeding 5 percent of base rent per 12-month period; it would also prohibit eviction of tenants without just cause or relocation assistance. DEFEATED
Proceed with Caution
Property owners should be aware, if you’re not already, that California state laws—which trump these local ordinances—prevent rent control in buildings erected after 1995. And, in single family homes or condos.
Only apartments would be affected by new laws. Also, the issue is not settled yet. Other localities—Sebastopol is one—are mulling future ballot measures on rent controls and evictions.
So What now?
If you own with rental units in the cities with new laws you will need to know exactly how to comply with the spiffy new rent caps and eviction restrictions. “Having specific compliance guidelines for each city will be critical” for property owners, says Debra Carlton, Senior Vice President of Public Affairs at the California Apartment Association.
In addition, property owners, landlords and management companies need to be aware of just what kinds of evictions are allowed going forward. For example, tenants who don’t abide by the terms of their lease or those who are a nuisance or engage in illegal activity can still be evicted. (That’s good news for some landlords.) And eviction is possible if a landlord wants to move into the property – or if the building is taken off the rental market. (More good news.)
Yet – and this is a big “yet” – certain steps and timelines must be exactly followed if an eviction is going to be determined as legal and fair to the tenant.
In other words: Make sure you consult your lawyer.
Extra Help : The California Apartment Association plans to distribute details on the new laws.
Watch these pages or Caanet.org for the latest