The Oakland City Council ratified regulations making it more difficult for landlords to convert rental properties into condominiums in a unanimous vote on Tuesday evening.
Proponents of the ordinance say the measure will dampen gentrification-related displacement by requiring that landlords construct replacement units for each rental-condo conversion in order to replace rental stock.
Such landlords will, however, be allowed to purchase a unit swap from developers already constructing buildings to be utilized for rentals. Previous regulations exempted landlords who converted buildings with 2-4 units. That loophole will now be eliminated.
The rules, introduced by District 1 Councilmember Dan Kalb, also include stipulations that all such conversions would require landlords to give tenants detailed, step-by-step explanations of the conversion process. Offers of lifetime leases will now be mandated for disabled and senior tenants, and tenants living in units to be converted must be allowed the right of first refusal at a purchase price 10 percent below market rate.
The ratification echoed an item on the consent agenda, which declared Oakland’s homelessness crisis a state of local emergency.
That declaration aptly followed council President Rebecca Kaplan’s decision to honor Misty Cross, Carroll Fife, Sameerah Karim, Tolani King, Merika Regan, Sharena Thomas and Dominique Walker as part of the city’s Black History Month observation. The individuals make up part of the Moms 4 Housing collective, an activist group that gained national prominence last November when they occupied a vacant home in West Oakland.
The group’s nonviolent, direct action heaped fresh attention onto the issue of housing insecurity and resident displacement in an area becoming increasingly gentrified and overrun by corporate real estate speculators.
According to a report submitted to the council, African-American residents are especially vulnerable to displacement since black Oaklanders are roughly twice as likely to rent than their white counterparts.
Additionally, the report said:
“(O)ver 26,000 Oakland households are severely rent burdened, which is defined as spending 50 percent or more of monthly household income on housing.”
The report added that nearly 1,000 units meeting the criteria of the new ordinance had been lost to conversions over the course of the last 15 years.
Despite ultimately universal support from the council, the regulations took an unusual route to approval. This was the second time the body had attempted a final vote on the matter. After complaints about fairness in the process were lodged by several small developers, Kalb amended his own legislation. The amendment grandfathers in developers who had already received approval from the city for conversion projects.
Despite the revision, some still balked at the proposal, claiming city surveyors played favorites in issuing vesting maps that were necessary to qualify for the exception. John Gutierrez, a real estate agent whose clients include such developers, said the proposal could also exacerbate Oakland’s well-known housing problem.
“The only way to create housing is with more housing, housing of all kinds.”
Jeff Levin, policy director for East Bay Housing Organizations, thought the objections lacked credibility.
In an interview after the rules passed, Levin said:
“These vesting maps are no secret.”
Levin said the ordinance was a long-overdue update to existing conversion restrictions originally passed in 1980. Under those provisions, developers converting buildings with four or fewer units were exempt, and the old ordinance only applied to a few select areas of the city. Buildings with five or more units had been covered by the restrictions throughout the entire city under earlier rules.
He said once such rentals were converted into condominiums, they were often sold to buyers making twice what previous tenants earned in income. In other instances, the units were simply re-rented at a higher rate.
“What we’re finding is somebody will convert their building to condo and sell it to somebody else who operates it as rental housing, because ‘condo’ is just a legal, parcel map thing, but once they have been mapped as condos, they are exempt from rent control under Costa-Hawkins.”
The Costa-Hawkins Act is a 1995 state law that limits the extent to which municipal governments can enact rent controls. It prohibits market restrictions on single-family homes, condos and any rental buildings constructed after the act’s passage.
Despite lack of dissent on the council, the new revisions nearly failed. District 3 Councilmember Lynette Gibson McElhaney had wavered at earlier points in the process, and neither councilmembers Loren Taylor nor Larry Reid were present for the vote. Further, as the vote approached, Councilmember Sheng Thao, who supported the measure, left the dais briefly.
If the vote had been taken with Thao out of the room and McElhaney voted against the ordinance, this would have left supporters with only a four-vote plurality instead of the five-vote majority needed to pass the ordinance.
Thao ultimately returned in time for the vote, and with McElhaney voting aye, the council spoke in one voice.
Levin said that seeing the regulations through to their ultimate conclusion had been a long row to hoe.
Addressing the council, he said:
“We’ve been working on this since 2006 when the Blue Ribbon Commission took this up.”
“It will be nice to see you all finally pass this tonight.”