|Just Cause Coming to Richmond?
August 21, 2004
Advocacy for a “Just Cause” ordinance in Richmond that would expand the rights of residential tenants beyond state law has been moving forward for several months. The leader in this move is Richmond Vision 2000, described as “a coalition of labor, faith and community organizations,” that claims success, among other things, for passage of Richmond’s Living Wage Ordinance and Industrial Safety Ordinance.
So called “Just Cause” ordinances have been adopted in a number of cities, including Oakland and Glendale, California and Seattle, Washington. A lot of information, both pro and con, is available on the Internet with a search for “just cause eviction.”
Adoption of a Just Cause ordinance in Richmond is listed as the No. 1 priority in the “Rights and Policy Recommendations” of the Richmond’s People’s Convention Candidate’s Forum being held on August 21, with sponsors that include ACORN, Richmond Progressive Alliance, Richmond Improvement Association, Richmond Vision 2000, SEIU Local 790, RMEA, Richmond Building Trades and Contra Costa Central Labor Council.
Although the proposed Just Cause ordinance has not appeared on any City Council agenda, there is speculation that it will be introduced on September 21, 2004. The proposal is generating a substantial number of phone calls and emails to City Council members – so far all opposed.
A summary of the proposed Just Cause ordinance and some rebuttals to critics are attached as MSWORD files. Copies of some of the emails I have received are attached as a third MSWORD file.
The Richmond City Council appears to have an aversion to regulation of rental housing. About four years ago, a rent control ordinance was floated by former Council Member John Marquez, but was hastily withdrawn. Last year, the City Council instructed staff to cease operation and enforcement of a decade-old ordinance requiring health and safety inspection of rental housing units. Earlier this year, with the City in financial meltdown, it was pointed out that Richmond is one of only a few cities that does not require rental housing owners to purchase a business license and pay a business tax. The ensuing debate broke down over arguments about whether it should be a unit-based fee or a gross receipts-based fee. Ultimately, the City Council did nothing.
Opposition to the Just Cause proposal is being led by the California Apartment Association, Contra Costa County Division, which can be reached at 925/746-7131. In May of 2004, Theresa M. Karr of the California Apartment Association wrote to City Council members:
It has just come to my attention that tomorrow, May 22nd there is going to be a "Just Cause Eviction & Fair Rent Town Hall Meeting at the Grace Lutheran Church in Richmond. I believe the intent is to make Rent Control a November election issue. The proposed "Just Cause Eviction and Fair Rent Ordinance" is a Rent Control Ordinance. This is a blatant attempt to coerce City Council Members into adopting a Rent Control Ordinance in the City of Richmond. Rents in Richmond have dropped by approximately 3.6 % and vacancy rates have significantly increased since 2001. The Richmond Progressive Alliance would like you to believe that rents are rising and people are being evicted from their homes because they cannot afford the rent increases. It is true most evictions are for non-payment of rent but not because the rent has been increased.
"Just Cause Evictions" present a mired of problems for the city some that will impact you financially through additional police involvement on rental properties. A few other obvious problems:
* Put good tenants at risk and allow bad tenants to remain in properties.
* Restricts on-site managers authority when trying to responsibly manage their units.
* Good tenants move elsewhere when problems on rental properties persist.
* Owners lose more money through lawsuits, payoffs and more vacancies.
Restricting rents is Rent Control and I don't think I need to explain what Rent Control does to a community. You all have good examples of the results of Rent Control in Oakland, Berkeley and San Francisco. If you would like information on the long-term effects of Rent Control I will be glad to provide you with updated reports and data.
No less than our former Mayor, Rosemary Corbin, who is an owner of a number of apartment units in Richmond, is also opposed to Just Cause:
The ordinance will not hurt us financially, but some of the statistics the proponents are quoting are incorrect. If you go to “Homefinders” you will find that the average rent for a 2 bedroom apartment in Richmond is less than $1,000 per month (maybe quite a bit less). That is our experience. Rents have been going down. We reduced the rents for several tenants in December because we were not able to rent other apartments in the same buildings for what they were paying. The Proponents say that rents went up 35% between 1990 and 2000. That probably reflects the cost of living rise. And, rents have gone down since then. And, our one big concern is how do you get rid of problem tenants? The City has ordered landlords to evict drug dealers, but, that will be very difficult under this ordinance because they will need witnesses, and neighboring tenants who are being harassed by the problem tenants are reluctant to testify”, so it will probably pass, but, when the residents of the Iron Triangle find out that drug dealers and prostitutes cannot be evicted from their area they will be mad.
One of the arguments for Just Cause is rent gouging by landlords. This is a tough sell in Richmond, which enjoys possibly the lowest residential rental rates in the Bay Area. Berkeley, on the other hand, which is help up by Just Cause proponents as an example, has the highest rental costs.
Statistics back up the argument that rents are falling, not rising. Less than a year ago, the Economic Development Alliance for Business reported:
On the real estate side of the equation, the picture remains largely the same—it’s a renters market for commercial properties (including apartments) and a seller’s market for houses. Of the four major investment property types, retail has been the most stable. Rental prices for retail space declined only 10% in San Jose and San Francisco over the past 2 years, despite the economic woes of these two communities, and 6% in the East Bay.
In contrast, rental rates for apartments have fallen by nearly 30% for most of the Bay Area. Here the East Bay has been hit as hard as its two neighbors, hardly a surprise given the commuting patterns of the region.
Similarly, a Contra Costa Times article earlier this year headlined “Bay Area Apartment Rents Dip” provided the following:
Bay Area Apartment rents in the Bay Area sagged during the fourth quarter while vacancy rates changed little but remained high, according to a new survey by RealFacts, a market data firm in Novato.
The rental news was grim for landlords, cheery for tenants and new grist for the mill of economists embroiled in a debate about whether an insupportable bubble of inflation now props up house prices here. Bay Area house prices have continued to rise despite massive job losses.
But rents, which typically move parallel to house prices, have fallen. The average monthly rent was $1,283 for the 213,000 units in 1,200 Bay Area apartment complexes during the last three months of 2003, RealFacts found. The vacancy rate was 5.9 percent. In the third quarter the average rent was $1,292, with 5.7 percent of units vacant; a year ago the average rent was $1,337, and the vacancy rate 6.3 percent. The average size of units surveyed was 830 square feet.
East Bay rents were even lower. The average monthly rent was $1,188 for the 75,000 units surveyed in Alameda and Contra Costa counties, down less than 1 percent from the third-quarter average rent of $1,194 and about 2 percent from a year ago.
The fourth-quarter vacancy rate in the East Bay was 5.2 percent, up a notch from 5.1 percent in the third quarter and more than six times the 0.8 percent vacancy rate during the second quarter of 2000. Strikingly, average rents remained about 15 percent lower than the peak of $1,405 reached during the second quarter of 2001.
The average rent for a one-bedroom, one-bath unit in the East Bay was $1,049, while the average for two-bedroom, two-bath units was $1,310. Developers added 535 units to the market in 2003, down from the 1,325 units built in 2002.
Fremont, with nearly 14,000 units commanding an average rent of $1,207, is the apartment capital of the East Bay. Berkeley's 222 units in large complexes were the priciest, with an average rent of $1,766.
Whether or not Just Cause will take root in Richmond remains to be seen, but it is clear that it is intended to become an election issue.