Update, 5/28: The Rent Board will discuss proposed ballot changes Friday, May 29 at 6 p.m. in a virtual meeting that can accommodate 500 participants. Email comments must be submitted that day by 3 p.m. and mailed to amueller@cityofberkeley.info. Details on how to access the meeting are here. The meeting will be recorded and posted to the Rent Board’s website.
Update, 5/22: The Rent Board deferred discussion of this issue until sometime next week; the day is yet to be determined. The commissioners tabled the item because the Rent Board had arranged a Zoom meeting that only allowed 100 remote participants. Many more wanted to get into the meeting but could not. For the next meeting, the Rent Board will arrange to allow 500 participants into the meeting.
Original story: For the last 40 years, ever since Berkeley voters adopted rent control, owners of duplexes who lived there and rented out their second units were mostly exempt from rent control.
The reason was simple: When an owner and tenant lived in close proximity and shared common spaces, they developed more than a landlord-tenant relationship.
As the Berkeley Rent Stabilization Board puts on its website: “The rationale for this exemption from rent control is the belief that an owner who shares a small property with a tenant will have a more familial relationship with his tenant and, therefore, there is less need for external rules to protect the tenant from unwarranted rent increases.”
But many of the current members of the Rent Board feel it is time to reassess the assumptions behind that philosophy, which one commissioner called “antiquated.” They are advocating to place a measure on the November ballot that will eliminate the rent control exemption for what are known as “golden duplexes.”
“All tenants need to receive the same protections,” said Rent Board Commissioner Leah Simon-Weisberg, who chaired the committee that developed the ballot measure. “For us to have this situation where some tenants get protections and other tenants don’t get any protections is not a good policy because all tenants need housing stability.”
The Rent Board will vote tonight to suggest changes to the 1980 Rent Stabilization and Eviction for Good Cause Ordinance. If the measure passes, it will be forwarded to Berkeley City Council, which has until its last meeting in July to decide whether to place the measure on the November ballot, according to Matt Brown, acting executive director for the rent board.
In addition to eliminating the exemption for golden duplexes, the Rent Board will consider adding language that would eliminate rent control exemptions for accessory dwelling units, or ADUs; require all newly-built apartments and all single-family homes that are rented out to register with the Rent Board and pay an annual fee; and to tighten up language to make it clear that landlords cannot ever evict tenants for the rent they deferred during the COVID-19 pandemic.
It is unclear how many units the ballot measure would impact. The Rent Board commissioners have not asked for any inventory of ADUs that would be impacted, said Brown, so the staff has not looked into it. The Rent Board doesn’t know how many “golden duplexes” there are either. In 2019, Krista Gulbransen, the executive director of the Berkeley Property Owners Association, a landlord advocacy group, said there were from 400 to 1,000 such units.
Certain ADUs could be subject to rent and eviction controls
The Rent Board will vote on adding language to the law to repeal a provision passed by voters in November 2018 that exempted from rent control ADUs built on residential lots where owners also lived.
In recent years, both the state and Berkeley have encouraged the construction of ADUs in backyards in residential zones as a way to increase the housing supply. The city streamlined its laws in 2018 and again in December to comply with state law. Now ADUs in most residential zones in Berkeley can be built “by right” without having to go through hearings. Restrictions and permits are still required in the hills, however, because of fire hazards and limited road access. The streamlining of the laws accelerated the construction of ADUs, which went from 14 permitted in 2016 to 57 permitted in 2017, to 80 permitted in 2018 to 70 in 2019, according to city records.
There are a lot of rental units in Berkeley that people colloquially refer to as ADUs, including in-law units or attic or basement living spaces. However, Berkeley has a specific definition for an ADU in the municipal code and these are the ones that would be affected, said Brown.
If the Rent Board’s proposed changes go into effect, those official ADUs that have had new tenants who moved in since November 2018 would lose their exemption and be subject to rent control. However, they might still qualify for a partial exemption under state law since they are new construction, said Brown.
In addition, the proposed language will close what commissioners perceive as a legal loophole that was created when Gov. Newsom signed AB 881, the bill that mandated how cities must treat ADU construction. The new law, which went into effect in January, might allow the resident-owner of a duplex or multi-plex who builds a new ADU on the property to be able to remove all their units from rent control, said Brown.
There is a lot of confusion in the community about the impact of the proposed changes. The title of the section that will be considered for the ballot is “Eliminating the Accessory Dwelling Unit Exemption.” There is no additional language or explanation.
“The agenda deliberately obfuscates,” said Evan Meyer, who plans to join the virtual meeting because he is the owner of a “golden duplex.”
Gulbransen said she cannot understand why the Rent Board wants to undo a law that many people in the community worked together to draft.
“Why are they trying to repeal what the voters decided less than two years ago?” she said.
The task force that helped craft the 2018 law asked residents about what they perceived as impediments to building ADUs, she said. The cost was the biggest obstacle. After that, people said they were afraid the ADUs would be subject to eviction protections.
Gulbransen said many City Council members have worked hard to increase the production of ADUs in Berkeley and may push back over the proposed changes the Rent Board might suggest.
“Golden duplexes” have a long history in Berkeley
Some members of the Rent Board have long felt uncomfortable with the exemptions given to “golden duplexes” and have worked to eliminate them. Simon-Weisberg said the exemptions were “antiquated.”
The 1980 law creating rent control in Berkeley said if an owner lived in a duplex by Dec. 31, 1979, and owned 50% of the property, the second unit was exempt from rent control. If the property owner moved out, rent control would apply. The exemption could be passed on to a new owner, however, but only if he or she owned 50% of the property and lived on the premises.
The law allows the owner of a “golden duplex” to evict a tenant for any reason. The reason can be as small as being annoying, said Simon-Weisberg.
Oakland had similar exemptions until 2018 when voters passed Measure Y, eliminating a loophole that allowed landlords living in a duplex or triplex to evict a tenant for any reason instead of for “just cause.”
Simon-Weisberg said all renters in Berkeley should have the same rent control and “just cause” eviction protections.
“If the only reason that tenant is not protected is because the landlord lives in another unit on the property we’re saying that tenants should have the same protections as their neighbors that don’t have a landlord living on the property.”
Meyer and his wife, Gay Lee Gulbrandson, have owned their “golden duplex” on Hopkins Street for 47 years and have rented their second unit — a 1,900-square foot, three-bedroom home – out to about 20 tenants in that time. Meyer said he has had a good relationship with every tenant and has never evicted anyone. He said it was his “policy” never to raise the rent on any existing tenant. In the last four years, he has spent $35,000 to remodel the kitchen and bathroom in the unit. Despite those costs, when advertising for his current tenant, he lowered the rent by $1,000 because he could see there was a softening in the market.
If rent control exemptions for “golden duplexes” are removed, Meyer said he would take his unit off the market and turn it into a short-term rental or have one of his children move in.
“We’ve been landlords a long time,” said Meyer. “Sometimes it’s stressful. We don’t need that.”
Simon-Weisberg said that even if “golden duplexes” are subject to rent and eviction controls, landlords could still evict an unruly or destructive tenant.
Gulbransen pushed back against that assertions. She said that is is very difficult to evict a tenant; Berkeley has a 1% eviction rate. The fight to do so can cost $15,000 to $20,000, she said.
Rent Board has tried to change the “golden duplex” exemptions in the past
In June 2018, the Rent Board discussed asking the City Council to put an amendment to the rent ordinance on the ballot to require any new owner of a golden duplex to live there for three years before the property would once again be exempt from rent or eviction controls. The impetus was to stop new owners from greatly increasing the rent on the second unit after they moved in, according to a Rent Board agenda minutes.
Before the Rent Board voted on the measure, Commissioner Alejandro Soto-Vigil introduced a substitute motion to put a measure on the ballot to entirely eliminate “golden duplexes,” according to Rent Board minutes. While Soto-Vigil, Simon-Weisberg and Maria Poblet voted in favor of that, the rest of the nine-member board voted against it, so it failed. Then the Rent Board decided not to send any measure involving “golden duplexes” to the City Council.
In 2019, the Rent Board told a number of owners of “golden duplexes” that they had lost their rent control exemptions.
A number of “golden duplex” property owners transferred their ownership into revocable living trusts, a legal mechanism that allows people to pass property on to their heirs without going through probate. It is a common estate-planning tool used by people who don’t want the court system to play a role in the distribution of an estate.
But in 2013, the Rent Board voted to require that a “natural person” must own a golden duplex to keep it exempt from rent control. The board did that to make sure a bank couldn’t take over the property and keep it exempt from rent control.
But the rent board did not recognize a difference between a corporation and a revocable living trust and informed many golden duplex owners that their property was now subject to rent control. After owners of “golden duplexes” protested, the Rent Board adopted new language that permitted the living trusts.
At the time, Simon-Weisberg told Berkeleyside that there was no push to change the golden duplex law – even though she had voted a year earlier to try and eliminate them.
“I don’t think there’s any attempt to change anything around how we regulate golden duplexes,” she said in 2019.
