A 3 percent rent cap on hikes for rent-controlled apartments in Oakland is a win for tenants in older apartments but has landlords crying foul over inflation.
The City of Oakland voted 6-1 to cap rent increases at 3 percent for rent-controlled apartments, the San Francisco Chronicle reported.
The move prevents landlords from hiking rents by 6.7 percent in July–a move that was approved based on the formula for figuring the annual adjustment. It would have been among the highest one-year increases in city history, accounting for the recent surge of inflation, which has approached an annual rate of eight percent recently.
The cap came amid strong support from tenants’ rights advocates. They said a significant rent increase could have a catastrophic impact on a city grappling with rising homelessness while residents struggle to emerge from the pandemic downturn.
The ordinance changes Oakland’s rent increase formula to factor in 60 percent of the rise or fall in the Consumer Price Index, or limit rent hikes to a maximum 3 percent each year, whichever is lower. Last year’s rent hike was 1.9 percent.
Before the vote, Council Member Carroll Fife, who introduced the measure, said tenants faced an “unprecedented” rent increase that would disproportionately impact Black and Latino renters. Cutting the size of that increase would result in the “best outcome for the entire city,” she said.
Oakland’s current rent control covers most of the apartments in the city built before 1983. On July 1 of each year, landlords can implement “allowable rent increases,” using a city formula that factors in inflation at a rate of 100 percent of annual change in the federal Consumer Price Index.
San Francisco and Berkeley also use their own rent control formulas, but factor in 60 percent or 65 percent of the national inflation rate. Residents there face lower increases this year of around 2 percent.
Renters urged the council to approve the ordinance, saying that a nearly 7 percent rent increase could force them out of their homes.
“We really don’t need increases in rent for more people to become homeless,” said Linda Warrick, a renter. “People who work everyday with no cost-of-living increases can’t afford housing even now. You are killing us here in Oakland.”
Landlords, however, urged the council to reject Fife’s proposal, saying the cap didn’t keep up with inflation. Property owners also expressed concern they wouldn’t be able to pay for repairs and energy costs.
M. Gabriel, a landlord in Oakland, said he hasn’t raised rent in three years and it’s not up to landlords to deal with Oakland’s homelessness and housing crises. “Housing is a right, but housing costs money to keep in place,” Gabriel said. “Landlords cannot solve all of Oakland’s social problems.”
Another landlord, Adam Masri, said that under Fife’s proposed cap, “We will never catch up with the rate of inflation,” Masri said. “Eventually inflation will overtake us with this proposal and we will be destroyed by it.”
Chanee Franklin Minor, director of the city’s Rent Adjustment Program, said city programs can transfer repair costs and other increases to the tenant. She called the council’s action “sound policy.”
“We’ve heard directly from a lot of renters who are very fearful … of becoming homeless,” Minor said of a 6.7 percent rent hike.
[San Francisco Chronicle] – Dana Bartholomew
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