Opinion: A plea to Berkeley homeowners: Vote for the ‘Homeowners for Rent Board’ slate

The rent board needs balance. It’s time to elect some property owners.

How do the foxes at the Berkeley Rent Stabilization Board engorge themselves on unlimited hens with impunity? If this opening offends you, maybe you should read something else. If not, this a plea for your support for at least minimal rent board representation by something other than the uber-progs which have held every seat on the board for well over a decade.

If you have an ear to the winds of Berkeley politics, you know that it is overwhelmingly opined that the rent board is a profligate waste of time, toil, and treasure. Even rent control advocates know this. And yet these single-minded activists routinely win all the seats on the rent board. It wasn’t always so.

It matters, but it is not definitive, that there are more tenants than landlords among Berkeley voters. The key, however, is the vote of homeowners. Put more accurately, the failure of homeowners to vote. They don’t pay for the rent board – the fees on landlords fund the board – and so they have no dog in the fight. (Actually, they do, but that’s a more complicated argument for another time.) That they are disinclined to pay much attention to rent control policies is understandable. It’s not that they don’t care so much as it’s that they don’t care enough to learn which five candidates represent a continuation of the status quo and which would bring some balance and common sense to Berkeley.

A LITTLE HISTORY ON THE RENT BOARD. The enabling initiative which established the Berkeley Rent Stabilization Board was passed in 1980. In the ordinance was an enumeration of powers and duties. For the rent control program to run, three things were essential. The rent board had to establish and maintain a database of all rent-controlled units; it had to set up a procedure to determine the mandated annual rent adjustment (the AGA); and it had to establish an administrative process to award unit-by-unit or building-specific rent adjustments (IRA) upon application.

All three of these then-essential functions are now superfluous. 

A subsequent voter-passed initiative made automatic the formerly complicated process of determining the annual rent adjustment. Today, instead of being left to board discretion, it’s fixed as a percent of the Consumer Price Index. All the board does now is look up CPI and make announcement to the public.

The Costa/Hawkins Rental Act (C/H), passed by the state legislature, enabled property owners to establish a market rent for the initial tenant in any newly vacated unit. It preempted Berkeley’s more restrictive law which had previously allowed no increase from tenant to tenant. The controlled rent that that had been charged to the departing tenant does not limit a new rent on that same unit, so there is no need for the board to know current rents. Every sitting tenant has an established legal rent ceiling on record and every new tenant has a newly established rent ceiling. Constantly updating the board’s database is included in the ordinance, but since Costa/Hawkins passed, is unnecessary. Millions of dollars are wasted here.

An off-shoot of Costa-Hawkins was the rent board’s choice to virtually eliminate Initial Rent Adjustments (i.e. rent increases for capital improvements). The AGA was meant to provide rent increases to cover increased costs of routine operations, where the IRA was for larger non-routine expenditures such a new roof, parking lot paving, and most importantly, seismic upgrades.

Costa-Hawkins was the state legislature’s clear statement that property owners should periodically be allowed to catch up on very low rents. They did this largely in response to over-abusive controls in Berkeley. Ever since then, the rent board has been clawing back Costa-Hawkins increases by denying IRA requests. An IRA that is otherwise mandated by the board’s own regulation, is offset by any Costa-Hawkins increases taken on any unit in the property.

For example, under the board’s rules, a new roof may warrant a $15/month/unit increase. But if there were $15 of rent increases attributable to an owner’s right to a rent increase under  Costa-Hawkins, the IRA increase is offset and there will be no increase allowed. There were once hundreds of IRA petitions annually, but now due to the offset rule, there are none. The Board has essentially repealed the right to rent increases for capital expenditures, including, most egregiously, city-mandated seismic upgrades.

THE COOKIE JAR. In 1980, the initial rent board annual registration fee was set by the voters at $12 per unit. Corrected for inflation, this would be $38 today. This level of funding arguably expressed the voters’ intention as to the magnitude of the program. The current program is now financed by a $250 per unit fee. This covers board activities, demonstrably more expansive than those enumerated in and funded by the original ballot initiative of 1980.

Since that time, the [inflation-adjusted] rent board budget has increased SEVENFOLD, while its essential functions have decreased to virtually nothing. The vestigial rent control program could be run by two counselors answering questions behind the counter. Instead, the board collects and spends $6 million in total fees, which could be much better spent elsewhere.

The Berkeley Rent Stabilization Board has become a playground for a small cadre of uber-progressive housing activists. Despite its diminished function, the program has become more expensive and more expansive. According to Transparent California, the executive director, including salary and bennies in 2019, made $340,067 a year, almost as much as the city manager ($410,062) and more than the city attorney ($319,541) or the director of public works ($261,940)[1]. These other city administrators have far greater responsibilities and far larger staff than the rent board.

An impartial 2012 Alameda County Grand Jury report took the Rent Stabilization Board to the proverbial woodshed for high levels of overspending and maladministration.

LET’S MAKE IT EASY.  Consider Rent Board candidates who are more interested in fairness and balance rather than vitriol and political retribution. To end the monopolistic rule of the most extreme activists, remember this mnemonic:

What            Should           Berkeley        People          Do?

VOTE:             Wendy         Soulmaz        Bahman        Pawel            Dan

Albert Sukoff is a long-time Berkeley resident and member of the board of directors of the Berkeley Property Owners Association.