Concord’s Contentious Rent Issues

By Edi Birsan

For over three and half years the Concord City Council has refused to take any action on rent issues. Not only have they refused to vote on any actual proposals addressing rental issues; they have refused to even put a discussion of rental issues on their agendas… until now.

During these past several years, stories from the neighborhoods and testimony provided during the Council’s public comment periods have related horror stories from tenants regarding rapidly increasing rents, deteriorating living conditions, and retaliation by landlords to tenants’ complaints.

Then during the 2018 election, rent issues became front and center in District 3 as both candidates for Council took essentially identical positions supporting a range of approaches to these rental issues. It was this tipping point that provided the impetus to bring these rental issues forward.

There are various semantics used in this argument, such as Rent Control vs. Rent Stabilization. There are also various viewpoints to the argument, such as Tenant Rights vs. Landlord Rights. Here is a short synopsis of the various questions, ideas, and issues that are currently being discussed and fought over:

What Types of Housing Should Be Subject to New Legislation?

1. Should new legislation apply to apply to single family homes? Should it apply to duplexes? Should it only apply to multi-unit rental apartments? Should it apply to condos?

2. Should it apply to structures built prior to 1986, or to all structures both new and older? (The Costa-Hawkins law prevents cities from establishingrent control—or capping rent—on units constructed after February 1995 and exempts single-family homes and condos from rent control restrictions.)

3. What size of structure should be addressed?

Non-Financial Rent Regulation That Have Been Suggested:

1. Limit rent increases to one rent increase in a 12- month period.

2. Require that landlords always offer a minimum 1-year lease at the beginning of tenancy and upon each lease renewal. (A one-year lease vs. month to month should be at the option of the tenant). The 30-day month to month lease has always given a one-sided advantage to landlords and provided the bulwark of the landlords’ power over tenants.

3. Require that landlords provide extra 30-days’ notice prior to a rent increase or notice of termination (extra time should be provided for seniors and/or the disabled).

For years landlords have opposed these types of measures as they are considered part of the “evil” known as “rent control” in their view, though many landlords would agree that these types of measures could be considered best practices. However, the landlords’ vociferous opposition has always thrown a shadow over even these very mild policies, defining them as being unreasonable.

In arguing against “rent control”, landlords often cite “studies” that show that rent control “does not work”. However, this claim is rather bogus in that, as far as I know, there have been NO studies that looked at the impacts of these three ideas when taken together. All studies that I know of focus on rent caps as the main culprit in the study.

Arbitration Vs Mediation in Rate Conflict

Another idea that appears to have majority support, that has been brought forward has been a proposal that arbitration, rather than mediation, should be applied in cases of conflicts over rate increases. It has also been proposed by some that arbitration requirements be applied only to apartment buildings, not condos, although no specific proposals have been made as to the minimum number of apartment units that would be affected in that case.

The basis for this proposal has been the fact that, for the last 18 or so months, we have had a “mediation” board. Tenants have 15 days to appeal to this Board if they receive a rent increase over 10%. The problem is that most tenants have no faith in this Board. In fact, in one recent case, a landlord insisted on a 48% increase and turned down a 23% compromise suggested by the mediation board because the mediation was non-binding.

Moreover, their fear of retaliation has kept the numbers of affected tenants requesting mediation very low; not more than one or two a month compared to the hundreds of possible cases over the same period.

As such, there is now increasing support for binding arbitration rather than mediation for resolving high rent increases. One of the variations in the proposals that I personally have made is to put the requirement and responsibility for initiating arbitration onto the landlord rather than onto the tenant. In addition, I am proposing that this would require the landlord to obtain authorization for all rent increases over a cap within a given time period (perhaps a calendar year). For example, if the landlord expects to increase the rents on twenty of his 200 apartments this year, he would be required to obtain authorization for any or all rent increases at the same time without having to specify which apartments it would apply to since the crisis situation that has his financially in a bind would apply to all possible apartments. This would avoid the necessity for each of the affected tenants to request arbitration on their own, thereby allowing the landlord to avoid the risk that someone might accuse him of singling out any one individual tenant for retribution.

Rent Cap

The most contentious issue in rental policy is the placement of a cap on rent increases (although currently under State law, this issue can only be applied by cities to apartments built before 1996). When I met with landlords to discuss this issue, I was met with a chorus of responses insisting that “rent control does not work in the long run”. Of course, we are looking at a Housing Crisis that the Council Declared exists now in the short run.

Again, assuming that some type of rent cap becomes acceptable for adoption in the future, the question arises as to specifically which apartments would be subject to the rent cap. Currently there is a proposal on the table that rent caps be applied to ownerships of three or more units, though some maintain that rent caps be limited to ownerships of either twelve or twenty eight units, in order to protect the small landlord. Note that this cap would not apply in the event of a vacancy; that is, once an apartment becomes vacant, the rent could be increased to whatever rate the landlord chooses.

Right now, there are two potential votes on the Council for a 5% cap; one potential vote for a 10% cap, one for a 7% cap plus the amount of the current CPI (e.g., 10% = 7% plus CPI of 3%), and one wavering for something under 10%.

What is interesting here is that tenant groups have been calling for a cap of 3% or the CPI, whichever is less. Also interesting is that almost all “small” landlords have said that they cannot remember ever going over 7% and maintain that only the “bad” landlords have done so.

Here again we see how landlords fear any changes to the status quo that might lead to further limits on what they are allowed to charge, even though, in the event the landlord wants to go over the cap, he still has recourse through the arbitration system.

In addition, while tenants now see themselves being forced out of the neighborhoods they have lived in, in some cases for decades, this would similarly provide them with recourse through the arbitration system.

The impact over a few years and how it affects the community is something we need to look at and review. Clearly, past economic studies on rent caps indicate there is in fact a problem when cost increases for maintenance and operations exceed income levels. So, any of these proposals, when implemented, need to be carefully monitored. The current view is that they need to be monitored for at least three years. Again, this is subject to finalization.

Relocation Expenses

Mandatory relocation expenses have been proposed as a possible replacement or substitute for some type of “just cause” eviction protection. As proposed, if a tenant who has lived in a place for three years or more is given a termination notice (as opposed to an eviction notice for violating a lease), the landlord would be required to give relocation assistance of either two months’ rent or $5,000 (whichever is greater). This would allow “no cause” terminations of tenancy including, for example, a case where a building is purchased for it to be renovated, remodeled, or rebuilt and therefore qualify, financially and legally, for higher rents.

One of the problems here is that it provides a major incentive for the landlord to terminate all rental agreements after two years but before the trigger level. Therefore, I have suggested that there be a pro-rata increase over a few more years in order to avoid the sudden death overtime approach to rentals. The quick turn over could be reduced if there was Just Cause controls, but as you will see below that is not happening.

Still to be determined whether any new desired regulation can be made applicable to multifamily apartments over a certain size and year of manufacture (most likely built before 1996) as required under State law.

Just Cause Termination

This would provide tenants who have always paid their rent and otherwise met all the terms of their lease agreements the ability to remain securely in their units. It would force a landlord to state why he wants the tenant lease terminated and show evidence that his proposal meets the criteria of what constitutes a “just cause” eviction, as specified in City regulations. Acceptable criteria for termination may include violation of the terms of the lease, failure to pay rent, unacceptable nuisances (to be specified), denying access to the landlord for reasonable repairs and inspections, etc.

Landlords fear that this would result in their not being able to get rid of problem tenants, but in fact nothing in the language of the proposed regulations would prevent a landlord from evicting a tenant who is legitimately in violation of a lease.

On the other hand, tenants fear that without this protection they can be easily retaliated against, discriminated against, and evicted simply because of greed on the part of “bad” landlords or by corporate interests speculating in real estate. This battle has been fought over and the landlord position has thus far prevailed, so at this time the allowable reasons, under law, for termination of a tenancy remain as they were before: namely no cause is needed to terminate at the end of a lease and those majority of tenants on a month to month lease are in constant peril.

Finally, what I find interesting in talking to the small landlords about their “horror” tenants (and they all have a few), is that in all cases in which they would in fact have had just cause to evict a tenant, because of reasons such as destruction of property, violation of any terms of a lease agreement, or even police issues, the landlords ended up enmeshed in the legal system over proving violation of the lease, which to say the least, they didn’t relish.

So, there you go. The battles are still to be fought. There may soon be a petition fight over these issues, with petitions which you may be asked to sign indicating your position one way or the other. Moreover, you may find yourself having to vote on these issues in a general election. I therefore recommend you take a good hard look at these issues, since if nothing else, they may affect your pocketbook.

As always, this is the view of Edi Birsan and not the views of the City Council or any part thereof. Further I always reserve the right to alter positions implies or perceived based on new facts and corrected myths. You want to talk about contact me: EdiBirsan@gmail.com

|updated from printed version, June 30, 2019|