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Oakland city leaders vote to prevent highest rent increase in decades

Tenants in Oakland's rent-controlled apartments will see their rents increase by 3% in July, as the Oakland City Council chose to tighten the cap for rental increases amid a housing crisis

OAKLAND, Calif. (CN) — Oakland city leaders have voted in favor of tenants, preventing a major rent hike for people living in protected units as the end of an eviction moratorium looms.

Renters and tenant representatives spoke for hours to the City Council on Tuesday, protesting the biggest citywide rent hike for controlled units ever — and the largest seen amid the Bay Area’s housing crisis. The Council responded with a 6–1 vote to lower a cap on price increases for rent-controlled units, that can take place July 1.

The Council will conduct a second reading of the proposal and a final vote on it in its next meeting.

Cities like Oakland with rent control set caps on how much rent can be raised — also known as annual allowable increases. Since 2002, Oakland has based these allowed increases on the regional consumer price index, or inflation. The highest increase permitted was 3.6% in 2003, and currently, until July 1, the highest allowable rate is 1.9%. 

Councilmember Carroll Fife proposed an ordinance to amend city code to set the allowable rent hike for controlled units at 3%, rather than allowing it to increase to 6.7%. She also asked to align the rent adjustment period with state law. 

“This rate of increase is the highest in decades and it comes at a time when Oakland tenants are facing a myriad of issues, including income and housing insecurity,” Fife’s report said.

Addressing the council Tuesday, Fife said, “I care about the entire housing environment in Oakland,” but added that tenants in covered units, particularly Black and Latino residents, are facing “an unprecedented and major rent increase hike.”

“Landlords currently have the opportunity to petition the city of Oakland ... if they feel like a 3% increase is not sufficient for them to achieve a fair rate of return.” 

Council president Nikki Fortunato Bas supported Fife's proposal because "prevention of homelessness is a big part of our housing strategy."

"I am just appalled at how homelessness has grown, going back to 2016 to now during a global pandemic, when we should have been sheltering people in place and housing people," she said.

According to the East Bay Rental Housing Association, property owners with rent-controlled units can petition for higher increases up to three times the CPI rate — by passing renovation costs onto tenants or banking several years of allowable increases to implement all at once. But the current Covid-19 eviction moratorium in Oakland prohibits any increases above the CPI rate, according to local news source The Oaklandside.

A number of landlords spoke against Fife’s proposal, saying they have not raised rents in three years and need to keep up with costs raised by inflation and for maintenance.

Property owner Phyllis Horneman said housing improvement costs are increasing along with the price of everything from wood to water. 

“Let us keep up with the expenses so we can do the maintenance and do the improvements our tenants deserve,” Horneman said. 

Property owner Danny Gonzalez said, “It seems to me like the city’s closing off the pathways for Black and brown people to close the gap for property ownership."

Gonzalez said if the council does amend city code to lower the rent increase, “Let us bank that remaining 3.7% so we can take it in remaining years when inflation is not so high."

Many renters and union representatives implored the council not to allow such a large rent increase. 

Grace Martinez of Oakland Alliance of Californians for Community Empowerment said many tenants are still waiting on rental assistance. 

“With the ongoing housing crisis even prior to the pandemic, people can't afford to live in the city they’re from,” Martinez said. “We really need to make sure we have a budget that addresses the needs of working class people and issues many of our families are facing.”

According to Zumper data, the current average cost of a one-bedroom apartment in Oakland is $2,050, a 3% percent increase from last year. The average for a two-bedroom apartment is $2,795.  

Kenneth Tang, an organizer for local Chinese immigrant renters, said the majority of that community are low-income workers or on fixed income.

“With the 6.7% increase, none of them would continue to afford housing,” he said. “You would displace the majority of our community who have been rooted in Oakland for many years.”

Janet Kobren said senior citizens “have little opportunity or capability to increase our incomes” with less money for food and rent, and that “A cap on rent increases would prevent any seniors and other vulnerable residents from having to leave Oakland or become homeless.”

After hearing from residents, Councilmember Loren Taylor asked to amend Fife’s proposal to allow landlords to bank any proposed increase that would have come to an increase of over 3%, to be able to implement that increase in the future. His proposal failed 6–2 and he abstained from voting on Fife's proposal.

Chanee Minor, manager of the city’s Rent Adjustment Program, said landlords can reach out for help with costs for their units, and have opportunities to petition for rent increases under certain conditions or pass costs on to tenants. 

“We’re at the epicenter of the housing crisis but we have a significantly higher increase during this time,” Minor said. “San Jose is the second highest, and they capped theirs at 5%.”

“We've heard from many landlords they have not received the funding, we've heard from many renters that they have not been processed through the system yet,” Vice Mayor Rebecca Kaplan said. 

Kaplan said that state personnel have informed her they will soon provide “a large enough amount” of Bridge Subsidy financing “to cover all qualified applicants.” The city has applied for a $20 million loan under the state program, and is pending approval, Minor added. 

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