Capping it off

Oakland dumps rent cap for CPI

By Pauli Wai

In its latest blow to tenants, the Oakland City Council is expected to enact a dramatic new law changing the way annual rent increases are calculated.

At its Jan. 22 meeting the board passed the ordinance on first reading, voting 6-2 to scrap its tradition of resetting the rent cap once a year after holding roundtable discussions and public hearings. Instead, increases will be calculated using a formula based on the Bay Area's consumer price index. Under the new formula the cap is expected to drop from 3 percent to 1.9 percent this year but could go up to as much as 10 percent when the economy improves.

Critics say that using the CPI injects more volatility and uncertainty into the housing market. Oakland's tenants, who make up 58.6 percent of the city's population, would have a harder time saving money for rent, since they could not predict changes from year to year.

"We've always had the right to argue in a humane fashion what the tenants can pay under their income guidelines," Lynda Carson, an Oakland housing activist, told the Bay Guardian. "But the CPI is based on the global market and Wall Street traders. We've never had this before." John Murcko, an attorney at the Eviction Defense Center, also believes that Oaklanders would bear the brunt of a "CPI pulled upward by wealthier communities in the Bay Area."

Although the formula is part of a broader law, which includes some regulations that favor tenants, a majority of the tenants and landlords who spoke at the hearing opposed the ordinance. So why did the city council ignore their pleas?

"I don't want the rent adjustment to become a political issue every year like this," Councilmember Jane Brunner told us.

But tenant activists say the issue is political and that the new rent formula puts an official stamp of approval on a system that already pits old tenants against the moneyed folks replacing them.

Unlike those in San Francisco and Berkeley, landlords in Oakland don't need a "just cause" (such as nonpayment of rent or a lease violation) to evict their tenants. Technically, landlords are forbidden to raise the rent for one year after a no-cause eviction, but enforcement has been lax. Swamped with a backlog of cases, the Oakland Rent Board is notorious for dragging out the tenant complaint process for a year or more.

To improve the situation, Oakland tenants are jump-starting a November ballot initiative to install just-cause protections. They gathered signatures for a similar campaign last year but hit a legal glitch. This year they've hired an attorney to oversee the process.