A 96-year-old woman, a teacher, a small business owner and nine other people were evicted last year from an apartment building on Solano Avenue.
Working with a local land trust, the tenants banded together to try to buy the property from the landlords. Now, months later, they’re scattered throughout the Bay Area while they wait for the owners to entertain their offer.
A new proposed ordinance in Berkeley, the Tenant Opportunity to Purchase Act, or TOPA, would give tenants the first right to purchase their building when the owner wants to sell it. While TOPA might not have shielded the Solano tenants from their Ellis Act eviction, the idea is to stop the displacement of groups similar to theirs.
The ordinance has not yet reached the City Council, but it’s already generating plenty of controversy, and support.
Under TOPA, authored by Mayor Jesse Arreguín, landlords who wanted to sell their rental property would have to give their tenants the first right of refusal to buy it, at a price named by the owner. The tenants can assign their rights to a city-approved affordable housing organization — like a land trust — if they couldn’t afford the cost themselves. If the tenants decided to move out instead of buying the building, those housing organizations would get second dibs.
Proponents say the policy “levels the playing field,” providing a rare opportunity for stability to middle- and lower-income community members who could never dream of buying a home in Berkeley today. Given the high cost of building affordable housing, they say it’s important to preserve existing units and — permanently — keep them out of the hands of speculators.
Opponents say the policy places the burden of stemming a housing crisis on small owners who’ve invested their savings in a property and whose families are counting on being able to sell it quickly and for a market rate. The proposal allows tenants to request an appraisal (splitting the cost with the owner and city) if the landlord’s price seems unfair, a provision criticized by owners who say it will delay the sale. They say TOPA would further discourage regular people from owning in Berkeley, leaving the rental stock controlled by corporations that can afford to navigate the policies and fees.
Members of a City Council policy committee — which fine-tunes legislation before it goes before the full council — barely got a word in at Thursday’s meeting on TOPA. In an overflowing conference room at 2180 Milvia St., members of the public spent more than an hour sharing their thoughts on the proposal — and getting admonished by officials for shouting and interrupting other speakers. There was a large contingent of property owners in the room, who carried signs calling TOPA the “Take Our Property Away” policy. A number of residents and tenant advocates who are cheering on the ordinance also spoke at the 10:30 a.m. meeting.
The Land Use, Housing & Economic Development Committee members — the City Council’s Ben Bartlett, Lori Droste and Kate Harrison — ultimately voted to give themselves and the proposal’s authors more time to review TOPA and “workshop” it with groups who’d be affected. They now have until the end of 2020 to send it off for a council vote.
“For many, [ownership] is an unachievable dream in our city and region,” said Mayor Jesse Arreguín, himself a Berkeley renter, at the meeting. TOPA could “help maintain diversity,” he said.
According to the proposal, homeownership is decreasing nationally, and especially among African Americans, a population that has plummeted in Berkeley.
Berkeley got a grant from the San Francisco Foundation to work with the East Bay Community Law Center to develop the TOPA policy. The mayor’s office and city staff have also worked with tenant organizations and land trusts on the ordinance. The proposal says the city would need to allocate more funding to implement TOPA if it passed.
As written, TOPA would apply to all private rental properties, except owner-occupied single family homes, or single family homes with ADUs where the owner lives in one of the units. Sellers would only have to pay 25% of the typical transfer tax. TOPA-acquired homes would become permanently affordable for tenants making 80% of the area median income, meaning a tenant-buyer couldn’t just flip the property for a higher price.
Many owners at Thursday’s meeting urged the TOPA authors to exempt more properties.
One young woman broke down in tears, pleading with officials to exclude owner-occupied duplexes, like the one she lives in and is scared she won’t be able to sell for a fair price if she has children and needs to move out.
The proposal includes longer-than-average escrow periods to allow tenants to organize and secure financing, giving them 20-45 days to submit a statement of interest, depending on the property size, 30-120 days to get financing and two weeks to close.
While the mayor’s office has been pursuing a TOPA policy since 2017, the proposal comes on the heels of the Moms 4 Housing movement in Oakland, where homeless mothers occupied a vacant investor-owned house until Wedgewood Properties agreed to sell it to a land trust. The case drew large protests, heavily armed officers, arrests, and national attention around concepts of democratic ownership of housing and community take-back of property from speculators. Moms 4 Housing prompted Oakland officials to introduce their own TOPA policy there.
One of the “Moms,” Dominique Walker, lives in Berkeley now — at another property, on Tenth Street, that is being purchased by a land trust with financing from the city.
The Berkeley City Council is also set to consider a proposal next week to ban criminal background checks of prospective tenants. Advocates say that “fair chance” proposal could pair with TOPA to newly empower Berkeley tenants.
But many of the landlords who mobilized to come to the Land Use meeting said they have nothing in common with some cold, anonymous, out-of-state corporation.
“I have never evicted anyone,” said Sasha Futran, who’s lived in the Central Berkeley triplex she owns for decades. Futran is in her seventies and said she still has a mortgage on her home since she had to refinance.
“You can’t keep discriminating against your elderly, small-time property owners,” she said.
“I regularly vote against my interests in Berkeley,” said another landlord, who described herself as a strong supporter of rent control. “However, this is a step too far,” she said, contending that it would “decimate” single people like herself.
A couple people simply accused the TOPA authors of “communism.”
Several residents said that even what those small owners have is unobtainable for them.
“There are very few, if any, opportunities for me to become a homeowner here in the Bay Area, where I grew up, even though I work as an attorney,” said a South Berkeley renter. “I look forward to more ownership opportunities.”
“I’m not shocked that people who want to make a profit are upset that people like me who are low-income might have a chance to own property,” said another woman, who lives in an affordable housing complex.
The exact likely impact in Berkeley of TOPA is unclear. How many tenant households, in a city with many students, will even want to buy, or be able to afford, a property? Could land trusts secure financing for frequent TOPA purchases, when recent acquisitions have taken months or years?
TOPA has existed in Washington, D.C., since 1980, and has been used to preserve more than 3,500 units since 2002, according to the mayor’s proposal. One speaker Thursday said she lived in D.C. and saw multiple buildings on her own block stay in the hands of long-time, Latino tenants through TOPA, while two others were turned into “luxury condos.” However, D.C. has increasingly funded its program, dedicating $10 million a year.
Committee members, for their part, had more questions than comments Thursday — which they rattled off in the few minutes they had to speak before the meeting ended.
Droste asked why the authors had moved away from an initial idea of only including three-unit properties or larger, and how many staff would be needed to oversee the expanded program.
“And there’s this concern around being able to liquidate quickly,” she said. “There needs to be a workshopping of this, especially with a lot of these small property owners we’ve heard from.”
Harrison implored the tenants and landlords to empathize with one another.
“It’s really the really rich that are causing these tensions and anxieties,” she said. “We are all being squeezed.”
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