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Only in Berkeley • November 15, 2005

Another Attack on the Ellis Act

Editor's Note: The following is the letter sent by BPOA to the Mayor and Council regarding the Rent Board Proposal to further expand the "mitigation payments" required when a property owner wants to reside in a unit which is occupied by an existing tenant.

 

 

 

The Berkeley Property Owners Association

2005 Hopkins St. · Berkeley, CA 94707· (510) 525-3666

www.bpoa.org · bpoa@bpoa.org

 

 

 

Re: November 15, 2005 Agenda Item #11

 

Dear Mayor and City Council:

 

Agenda Item #11 is the latest of several measures showing the Rent Board’s continuing hostility to any measure designed to relieve the current shortage of affordable owner-occupied housing in this City. 

 

Current law requires property owners to pay $7000 in “mitigation” to  tenants who are low-income, or disabled, or over sixty years of age whenever the owner wants to occupy his or her own property. Item #11 would add a requirement to pay $4500 to tenants who are neither disabled nor senior citizens, and whose income is adequate. Such a payment, where there is no demonstrated damage to the tenant, is a simple windfall, and most likely violates state law.

 

A close reading of the Rent Board memorandum (“Board Memo”) accompanying Agenda Item #11 shows that:

 

      -As admitted by the Board Memo (page 5), Ellis Act evictions in Berkeley are a rare thing:  fewer than fifteen units per year since 1985 have been impacted by the state law which guarantees owners the right to live in their own property.  The Board seems to fear a rash of  TIC conversions, but there is no proof that this has occurred.

 

      -Existing law already guarantees that “mitigation” of $7000 be paid to tenants who are over 60, or who are disabled, or who are “low income”.  The Board Memo concedes (page 2) that 60% of Berkeley’s tenants are “low income.[1]  If we estimate that an added 15% are seniors or disabled, we may conclude that Agenda Item 11 offers a windfall to the remaining 25% of tenants who are young, able-bodied, and earning more than $50,000 per year.  As the Memo frankly points out (page 3), at least one court has found that such a freebie violates the Ellis Act.

 

      -The key is that under the law there must be a showing of real damages.  The Memo alleges only one kind of legitimate damage, i.e. moving expenses.  But these range (by the Board’s admission at page 5) between $500 and $2000, an amount which falls far short of the amount that would be required to be paid here.

 

      -As was the case with the recent condo conversion ordinance, the City is being asked to make its housing policy without any actual survey of the current housing market.  BPOA has continually asked for a impartial survey which we believe would show that vacancies exceed 5% of rental housing stock and that rents in real terms are lower than they were in 1999.  This being the case, there is no basis for finding that a tenant impacted by an Ellis Act move-in would have to pay higher rents in a comparable unit.

 

-The Board implies that tenants who are enjoying under-market, pre-1999 rents because of rent control are “damaged” when required to move on and pay the same rents as everyone else.  But on what ground should property owners be forced indefinitely to subsidize a class which is of working age and is not needy, and not disabled? If anything, Item #11 would add to the windfall advantage already enjoyed by tenants with artificially low rents. 

 

There is no reason for yet another rush to judgment before the evidence is in.  The Board admits there is no current problem with Ellis Act evictions.  It admits that tenants who might be hurt are currently protected.  The Council should defer this matter until (1) there is real evidence of excess owner move-ins, and/or harm to legitimate tenant interests, and (2) we have the results of a neutral survey of the City’s current housing situation.

 

 

Sincerely,

 

 

Michael J. Wilson

 

President

     



[1]  BPOA disagrees with the Board’s inclusion of the student population (who are about half of Berkeley’s tenants) in the “low income” category, since most students have unreported sources of income.  Nonetheless as  interpreted by the City the current law provides for a one time payment to these as well as other “low income” tenants.

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