Rental Board Under Fire in Berkeley

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SAN FRANCISCO BAY AREA | August 1, 2012, 4:06 p.m. ET

By BOBBY WHITE

BERKELEY—A powerful city agency that regulates some rental rates and intervenes in disputes is facing calls for an overhaul after a highly critical grand jury report in June labeled it “a self-sustaining bureaucracy.”

Berkeley’s Rent Stabilization Board, a nine-member group of elected officials established in 1980, came under scrutiny last year by the Alameda County Superior Court after two agency employees petitioned the court to investigate alleged unfair hiring practices.

The resulting grand jury report found the agency to be a “bureaucracy that operates without effective oversight and accountability.” The report said the board heavily favored tenants by hiring a lobbyist for pro-tenant issues and contracting with local nonprofits to help tenants fight eviction. The board has raised rental-unit registration fees paid by landlords from $22 at the beginning of rent control in 1980 to $194 today.

 

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(Lianne Milton for The Wall Street Journal ) Jon Vicars, left, vice president of the Berkeley Property Association, in front of his apartment building with Dave Saunders, building manager and tenant. 'We've been complaining for years about how the board has operated and it has fallen on deaf ears,' Mr. Vicars says.

                                                                            

Rent Stabilization Board members are elected to serve for four years and are limited to two terms. Members run in contested elections and can solicit contributions from residents, tenants and property owners.

The average rent for a one-bedroom apartment in Berkeley is $1,885, a 21% increase from just five years ago, according to RealFacts LLC, a local firm that tracks rental rates in the Bay Area. In comparison, average rent for a one-bedroom in San Francisco is $2,632, up 32% from five years ago, according to RealFacts.

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Santa Monica Council to Consider Rent Control Law Change

 

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By Lookout Staff

July 17, 2012 — As part of an unusually light agenda, the City Council on Tuesday will consider changing Santa Monica’s Rent Control law for only the third time in more than 30 years.

The proposed charter amendment would replace the General Adjustment (GA) formula the Rent Control Board uses to calculate how much landlords can raise rents on rent-controlled units annually.

The new formula would allow landlords to raise rents based on 75 percent of the regional Consumer Price Index (CPI), instead of basing it on a complex formula that can change from year to year depending on landlord expenses.

Landlords argue that 75 percent is not a fair return, but prefer the simpler formula.

If the council accepts the change recommended by the Rent Board, the charter amendment would be placed on the November ballot, making it the third such change since voters approved Rent Control in 1979.

West Hollywood, another major rent control area, also uses 75 percent of CPI for their GA, according to Rent Board officials.

Using the current formula, Santa Monica landlords were allowed to raise rents by 77 percent of CPI, an increase Rent Board officials said reflected the “improved cash-flow owners are experiencing as a result of vacancy decontrol.”

Last year, nine out of ten landlords had rented at least some of their formerly rent-controlled units at market rate, officials said.

Under the 1994 Costa-Hawkins Rental Act, which went into full effect in 1999, owners of rent-controlled units are allowed to raise the rent to market rate when a unit is voluntarily vacated or the tenant is evicted for non-payment of rent.

The general adjustment, however, caps the percentage a rent can be increased.

 

Source: The LookOut News

Voters Could Change Rent Control Law

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Santa Monica Rent Control Board asks City Council for a charter amendment on the Nov. 2 ballot that would simplify formula used to calculate yearly rent increases.

By Jenna Chandler | June 29, 2012

Santa Monica voters could be asked to simplify the method used to calculate yearly increases to rent paid by tenants of rent-controlled units in the city.http://blog.rsanyc.net/property-rights/wp-content/uploads/2012/07/santamonica1.jpg

In a 4-0 vote Thursday night, the Rent Control Board recommended to the City Council that it place a charter amendment on the Nov. 2 ballot.

Each year the board approves rent increases designed to cover the costs a landlord pays to maintain their properties, such as property taxes, utilities and business license fees.

If ultimately approved by voters, the formula used to determine how much rent should increase would be equal to 75 percent of the percentage increase in the Consumer Price Index, the federal government’s tool for measuring inflation rates.

“Going to a 75 percent of CPI is somewhat tried and true, it’s really just following the lead of several of our sister cities,” said Rent Control Board member William Winslow.

For the past 30 years, the board has calculated the increases using a formula that involves surveying landlords to find out how much and in what areas their expenses have increases and weighting those components based on local median rents.

“Santa Monica is the only city with rent control in the state using this methodology for determining what the general adjustment should be,” Winslow said. Continue reading