If a tenant secretly moves out of their rent-controlled apartment and sublets it to someone else, should a landlord have the right to raise the rent to market-rate? And should primary tenants—renters named on a lease agreement with their landlord—be allowed to overcharge their roommates who aren’t named on the lease?
Some Oakland landlords say they’ve had issues before with tenants who abuse the rules, profiting from rent control at the expense of landlords and subtenants. The Oakland City Council will soon consider new rules that would allow landlords and subtenants to contest these situations.
Tenant advocates say the problem isn’t common, and that Oakland should wait until after the pandemic to allow landlords to seek these kinds of rent increases, especially since some tenants have been forced into unusual, temporarily living conditions, like moving in with a relative to help with childcare, or moving out to quarantine themselves from their household.
At Tuesday’s meeting of the City Council’s Community and Economic Development Committee, officials voted to send a new ordinance that would give landlords and subtenants new rights to the full council for a vote in May. But the councilmembers voted to postpone enforcement of the rent-increase rule until the COVID-19 crisis is over.
The new regulations were written in response to last summer’s updates to Oakland’s Just Cause ordinance. Those updates said tenants can’t be evicted if they bring in a new roommate whom their landlord “unreasonably refuses” to rent to. At the time, property owners expressed fears that tenants would abuse the law by illegally subletting, so city staff said they’d come up with regulations giving landlords the right to challenge tenants who try to game the system.
“The policy is good policy, to avoid people committing fraud and scamming the rent-control system,” Chanée Franklin Minor, Rent Adjustment Program director, told the committee Tuesday. She said the proposal went through thorough review by the Rent Board, landlords, and tenants.
Under Oakland’s rent-control law, landlords can only raise rents by a small percentage each year, until tenants move out, at which point they can set any new price. The new ordinance would make it so landlords can petition the Rent Adjustment Program to raise the rent beyond the annual allowed increase if they find out tenancy has changed—if their tenant has moved to a new “principal residence” and is keeping the unit empty or collecting money from a subletter or Airbnb guest.
Sometimes a landlord “doesn’t know who’s actually occupying a unit,” said Greg McConnell of the Jobs and Housing Coalition, a business advocacy group, at the meeting. “This makes sure the tenant is using the place as his or her principal residence. It’s important especially in a housing crisis that all units are used as they’re intended.”
Tenant attorneys called in to warn that the ordinance could encourage landlords to spy on tenants to determine who’s living in the apartment.
“It’s concerning to create essentially an incentive for landlords to be monitoring tenants and creating a situation where tenants may feel harassed,” said Leah Simon-Weisberg, ACCE’s legal director. Harassment of tenants has increased during the pandemic, she said, since landlords are prohibited from evicting renters who don’t pay.
Simon-Weisberg added that many tenants have new family and work obligations that might require them to live away from home for periods of time.
“I don’t think that the middle of a pandemic is when we add reasons that people can raise the rent,” Simon-Weisberg said.
Councilmember Carroll Fife, who’s also ACCE’s Oakland director, said she agreed that the committee should delay a vote on the ordinance until after the COVID-19 crisis, or scrap it altogether.
Councilmember Dan Kalb proposed an amendment to the ordinance preventing landlords from petitioning to raise rents until three months after Oakland declares an end to the local state of emergency. That version was unanimously approved by the committee, which sent the ordinance off to be scheduled for a City Council discussion and vote.
Minor called Kalb’s tweak a “very good compromise.” She said the Rent Adjustment Program is currently hearing rent-increase cases, to avoid a “massive backlog” after the pandemic, but said the principal-residence cases could be unusually complicated and difficult for renters to participate in if they’ve temporarily relocated because of COVID-19.
“They would have to defend themselves in what could be a complex adjudicative matter,” she said. Minor used to work for Berkeley’s Rent Board, which had a regulation similar to the Oakland proposal, and she said the principal-residence issue was one of the most common reasons that landlords petitioned for a rent raise.
The proposed ordinance includes another, less controversial, provision that would allow subtenants in rent-controlled apartments to contest overcharges by a primary tenant. A primary tenant, also known as a master tenant, is the sole tenant on the lease for a shared apartment, and they collect rent from their roommates, who are considered subtenants. The new regulations say that subtenants who believe they’re being charged a disproportionately high rate for their room by the primary tenant can petition the Rent Adjustment Program for a fairer rate.
The ordinance is likely to come to the City Council on May 4.