Conversations around the cost of living in Oakland often focus on sky-high rents and home prices. But utility bills are taking increasingly large bites out of paychecks too.
For renters and landlords, the question of who pays for energy and water can mean a difference of hundreds of dollars a month for a household or property owner.
Across rental units in Oakland, you’ll encounter different set-ups. Maybe each apartment pays its own PG&E bill but the landlord covers water for the building. In some cases, the cost of all of those services is entirely the responsibility of the people living in a property or the people who own it.
At The Oaklandside, we’ve gotten questions from renters and property owners who are confused about the city’s utility regulations and their rights. We took a look at the city’s law and spoke with experts to break it down.
For some questions, there are clear answers. But we found that the laws around who’s responsible for paying for utilities are complex. The rules aren’t always straightforward, and interpretations vary, even among housing attorneys. Did we leave something out or get something wrong? Let us know, and we’ll continue to update this piece.
Key things to know about Oakland’s housing laws
To understand who is responsible for paying different utilities it’s important to know some basics about Oakland’s rental housing laws.
Most of Oakland’s rental housing is regulated by the city’s Rent Adjustment Program, or RAP. RAP collects fees from landlords and enforces the city’s rent control and eviction laws. Newer housing, built after 1983, is not subject to rent control. Neither are single-family homes.
For buildings that are rent-controlled, the landlord is allowed to set any rent price when a tenant first moves in. After that, they can only raise the rent by a set percentage each year.
Tenants in newer buildings and single-family homes aren’t covered by Oakland’s rent law. Landlords are allowed to pass utility costs onto their renters in these cases. But there are California laws requiring all landlords to be transparent about all utility costs and charge only what the services actually cost.
Who pays for water?
In some rent-controlled properties, there may be multiple meters measuring how much water each individual apartment uses. In these buildings, the lease can require tenants to get their own EBMUD accounts and pay the bills for their units.
If there’s only one meter for a multi-unit property, and the landlord pays one big water bill, “it is illegal to divide up the bill between units,” the city’s regulations say. The landlord can still try to recover some of the cost of the utility expense. When the tenant first moves in, they can set whatever rent price they see fit, effectively incorporating the cost of the landlord’s water expense.
Even if the original lease says that the tenant is responsible for a flat fee for utilities, say $100 a month, the city considers that $100 part of the overall rent price. The landlord can’t later raise that price, or start charging a renter for utilities midway through their tenancy. That would be considered an illegal rent increase, beyond the annual bump allowed by rent control rules. A tenant experiencing this could petition RAP to ask the city to prevent their landlord from asking for more money.
This doesn’t mean landlords are locked into a situation where rising utility costs could eliminate their ability to turn a profit. If the rental income they’re receiving isn’t enough to cover their costs, they can also petition the city to raise the rent higher than what’s normally allowed.
Who pays for gas and electricity?
The rules for energy costs are the same as water when it comes to rent-controlled properties. If there are meters for each apartment, the tenant can be responsible for getting a PG&E account. If there’s only one meter in a multi-unit building, it’s the property owner’s responsibility to pay the bill. The landlord can try to make up for their utility expenses through the original rent price they set.
These questions have taken on new weight this year. In January, PG&E raised home electricity rates by 20%, making California’s electricity costs the second-highest in the country. PG&E also charges customers more for electricity than the state’s other two utility companies, the San Francisco Chronicle reported.
For Oakland homeowner Jake Decker, rising PG&E costs have put him in an uncomfortable position as a landlord. He and his partner built an ADU on their property in 2017 and have a tenant there. They’ve also invested in a heat pump, solar panels, and a battery for the whole property, shelling out tens of thousands of dollars for the features.
“We did this both because we care about the environment, and as a way to hedge our bets against increased costs,” he said. But his PG&E bill has still spiked this year.
It’s demoralizing, he said. Decker has a great relationship with his tenant, who always pays his rent on time. He winces at the thought of raising his rent to make up for the higher electricity costs. And he worries about the state reaching its climate goals when the sustainability investments can be so costly for property owners.
Other landlords can be more opaque when charging tenants for utilities. In 2021, tenant advocacy group ACCE sued property owners Mosser and related companies, alleging that they used third-party services that illegally divided up utility costs among tenants even though the buildings in question only had single utility meters The companies also inexplicably charged some tenants more than others for energy, water, and trash.
In a settlement, two of these third-party companies, YES Energy Management and Yardi Services, agreed to stop providing utility-splitting services to rent-controlled properties in Oakland.
Renters in the lawsuits were also allegedly required to start paying for PG&E partway through their tenancy, after the landlords installed individual energy meters. This isn’t allowed in Oakland if the new cost to the tenant pushes their rent above the legal amount.
When a landlord comes to a tenant and says, ‘You need to pay for these utilities,’ many tenants might not conceptualize that as a rent increase,” said Ethan Silverstein, an attorney on the case who now works for Movement Legal. “These situations can escalate and veer into tenant harassment.”
Who pays for internet?
A web connection is treated similarly to other utilities. In rent-controlled buildings, landlords often do not provide internet. Tenants need to set up their own service. If a landlord does provide wifi for the building, they can pass on part of that cost as part of the initial overall rent. But they can’t later increase that amount above what’s allowed under rent control, or stop providing wifi without decreasing the rent cost too.
Who pays for trash, recycling, and compost?
City law requires that all “businesses, multifamily properties and single family homes subscribe to weekly recycle, compost, and trash collection that matches waste generation levels,” says Oakland Recycles, the city’s waste and recycling services coordinator.
This means that all landlords must make sure their properties have garbage bins and pay for collection services, regardless of whether they’re covered by RAP or not.
But can owners pass garbage collection costs onto tenants?
”In the majority of residential rentals in Oakland, it is unlawful to pass on the cost of garbage bills to tenants,” the city said. Apartment buildings virtually never have separate bins for each apartment, and the property owner can’t divide up the bill among units. Like with other utilities, when a tenant moves in, the landlord can set a rent price that reflects their costs. If a building is covered by rent control, any increase in those costs later on must not exceed what the landlord is allowed to charge for rent.
In 2017, Oakland sued its recycling contractor, California Waste Solutions, claiming that the company had been overcharging some landlords for waste pickup. The allegations refer to the “premium service option,” where recycling collectors go onto a property and roll the bins out to the curb themselves before emptying the contents into a truck. CWS agreed in a settlement to refund landlords more than $6 million total and reduce their service rate, from $188 per cart to $34.
Still confused?
The rules around who is responsible for paying for utilities are not “super intuitive” for renters, said Silverstein, the tenant attorney. Whether and how much renters must pay for utilities depends on several factors—if the building is rent-controlled, what their lease says, and whether their unit has its own energy and water meters. Landlords may have difficulty understanding how to follow the regulations as well.
Both tenants and landlords can call Oakland’s Rent Adjustment Program at 510-238-3721 to ask a housing counselor about their specific situations.
“Tenants concerned about the legality of their building’s policies/practices or of any individual rental agreement should consult an attorney,” the city told us.
This story was updated after publication to clarify Oakland’s rental regulations.
