The Berkeley City Council will soon have to decide if voters should repeal a law they passed overwhelmingly just two years ago.
On Friday, the Berkeley Rent Stabilization Board voted 5-2-2 to put ADUs, or accessory dwelling units, under rent control. To do so, the City Council must agree to put the proposed changes to the 1980 Rent Stabilization and Eviction for Good Cause Ordinance on the November ballot.
In 2018, Berkeley voters adopted Measure Q, which exempted ADUs from rent control, among other things, by 71% of the vote.
“It doesn’t feel good to me to vote on something that was decided two years ago,” Commissioner Igor Tregub said during a virtual special meeting of the Rent Board on May 29.
Tregub abstained from the vote, as did Commissioner Mari Mendonca. Commissioners Alejandro Soto-Vigil and James Chang voted against the proposal, while Rent Board Chair Paola Laverde and commissioners Leah Simon-Weisberg, Soli Alpert, Maria Poblet and John Selawsky voted in favor of the changes.
During the meeting, commissioners also voted to propose three other ballot changes to its governing law:
- Remove the exemption “golden duplexes” have enjoyed for 40 years and make them subject to rent and eviction controls. A “golden duplex” is a two-unit property where the owner lives in one unit. The property had to be owner-occupied on Dec. 31, 1979, to qualify.
- Require all single-family homes now rented out, as well as new apartments, to register with the Rent Board. This would help the Rent Board build a more complete inventory of what rental units exist in the city, which would allow it to better monitor the housing crisis. Currently, these types of properties don’t have to register with the Rent Board, although new apartments are subject to just cause eviction laws. The owners would have to pay an annual rental registration fee, but it would be lower than the $250 annual fee that landlords now pay to register each of their rent-controlled units.
- Ensure that no tenant could be evicted because of delayed payments resulting from the COVID-19 crisis.
The registration requirement and COVID-19 protections passed unanimously. The provision to remove the exemption for “golden duplexes” passed 7-2 after a lengthy and sometimes emotional discussion. Soto-Vigil and Chang voted no on the proposed changes.
The proposal, if adopted by voters, would overturn a 40-year law that allows certain owners living in a duplex to rent out their second unit without being subject to rent or eviction controls. That means owners can ask a tenant to leave for any reason and can raise their rents as much as they choose.
The Rent Board, which has looked at changes to golden duplex laws in the past, has never had a firm idea on the number of units that would be affected. On Friday, however, Nick Mcllroy, a community services specialist for the Rent Board, said that 475 “golden duplexes” were currently claiming exemptions, although not all are rented out. A review of county records in 2003 indicated there may be an additional 480 “golden duplexes” in Berkeley, he said, making the total 955. There are also 1,078 duplexes in the city that are not “golden” said Mcllroy.
Forty-seven members of the public signed up to virtually address the Rent Board, with the vast majority talking about the changes to the golden duplex law. About 10-12 people urged the board to pass the measure, arguing that every renter in Berkeley deserves protections and it is unfair to make people living in golden duplexes vulnerable to the whims of their landlords. The rest told the Rent Board they were opposed to changes for “golden duplexes” or ADUs.
Nahuala Quen said she had the misfortune of living in a golden duplex with a landlord who was mentally ill. He yelled, “excessively about minor things, getting enraged over this and that.” He then evicted her suddenly. She is a single mother with a young child and had to move quickly and the next place she found was inadequate, she said.
“It’s really bad to have these units exempt because the owners live there,” said Quen. “Those landlords should be under the same regulation as other Berkeley landlords are under. They can do things with impunity and they do.”
Agnes Cho agreed.
“Housing is a human right,” said Cho. “It seems ridiculous to me there is a small group of tenants who are arbitrarily not covered like the rest of the tenants are. It seems unfair.”
Many golden duplex owners, in contrast, painted a cordial, even affectionate, picture of the relationships they had with their tenants. Some said they had owned their golden duplexes for decades, often rented the units out for below-market-rate rent, and had close friendships with their tenants. They said the proposed changes to the rent control law would upset the existing balance that has worked for 40 years. Many also said the extra income is the only way they can afford to stay in Berkeley.
David Barr said he has been renting out his second unit in South Berkeley at “extremely below market rates” for about 35 years. He has a good relationship with his tenants.
“I don’t think there are many people profiteering here on golden duplexes,” said Barr.
Karla Simmons owns a golden duplex with her brother. It has been in her family since the 1930s. Family members have lived in one unit, and when they aged and needed help, caretakers lived in the second unit, she said. Her mother is 81 and Simmons said there will be a time when she will bring her mother to live with her. She will want to put a caretaker in the second unit. Under the law the Rent Board is considering, Simmons could not ask an existing tenant to leave in order to have a caretaker move in, she said.
“The Rent Board seems determined to change the law, which will greatly change our situation,” said Simmons. “We gave been good landlords,” said Simmons, who added she has been unemployed since the coronavirus crisis.
If the law passes, she and her brother will consider selling the property or converting it to a single-family home, she said. That sentiment was echoed by a number of other “golden duplex” owners.
Simon-Weisberg, who lives in a golden duplex in Berkeley, discounted the threats of owners taking units off the market if they were subject to rent and eviction controls. She said that is a threat “that is regularly made,” but it “doesn’t happen.”
“The golden duplex exemption is an enormous priority because I feel so strongly that all tenants need those protections,” said said.
Berkeleyside reached out to Simon-Weisberg after the meeting to ask if she lived in a “golden duplex” and whether that created a conflict of interest. Simon-Weisberg said she had checked with Rent Board attorneys to see if there was a conflict of interest and she should abstain from voting. They told her there wasn’t a conflict, she said.
Matt Brown, the Rent Board’s acting executive director, said in an email to Berkeleyside: “The Political Reform Act limits conflicts of interest to situations in which an official has an interest that is distinguishable from the interest held by the public generally. Commissioners are free to participate in discussions and vote upon proposals that may have direct consequences for their personal housing situation or the financial performance of their rental property, so long as the proposal does not treat the Commissioners any differently from anyone else who owns or lives in the same type of property.”
The majority of the commissioners seemed unsympathetic with the arguments of the golden duplex owners. They pointed out that they had profited from Proposition 13, which kept property taxes low, and the huge escalation of home values in Berkeley. Most importantly, renting out a unit is business and should be treated that way, some commissioners argued.
“It’s a business transaction,” said Selawsky. “It’s not buddy, buddy, a shaking of hands. I believe in reasonable regulation of businesses.”
Laverde agreed with that assessment.
“They are business owners,” she said. “Buying a property is a business decision. When you decide you will make money by renting out property, then you want the person renting to have no power at all.”
Soto-Vigil argued against approving changes to the golden duplex law as well as the ADU law because the Rent Board had so little data on the impact of the changes.
“We have zero facts,” he said. “We didn’t have facts last week. We don’t have facts this week… Policymaking isn’t based on intuition.”
Which ADUs will be impacted if the voters adopt changes?
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, said Brown.
Berkeley issued 240 permits for newly-constructed ADUs from 2016 to 2019, according to Timothy Burroughs, the director of planning. He did not have figures for 2020 but a Rent Board staff member said during the virtual meeting that the 2020 pace seemed to be the same as in recent years.
Currently, the ADUs that are exempt from rent and eviction control protections are those owner-occupied, built with a permit, and have a tenant who moved in after Nov. 7, 2018. If the Rent Board’s proposed changes go into effect, those ADUs would be subject to rent control. However, they might still qualify for a partial exemption under state law since they are new construction, said Brown. Then they would have to abide by just cause eviction laws but not rent control laws.
Most “junior” ADUs carved out from existing space in a home would be covered by rent and eviction controls if voters agree.
In addition, the proposed changes will close a 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.
Many ADU owners sent emails to the Rent Board explaining why the law should remain the way voters agreed in 2018.
“What is wrong with the Rent Board?” Joann Sullivan said in an email. “Do they not understand that the voters have spoken and said that increased regulation of owner-occupied parcels is a hindrance to the creation of ADUs? The Rent Board is acting tone-deaf in ignoring the will of the voter.”
Commissioner Alpert said the gap between what the rent board wants — bringing as many units under rent protections as possible — and what older homeowners want reflects a generational divide. The older homeowners want to protect what they have. But younger people, like himself, don’t believe they will ever be able to afford a home in Berkeley so they need as much rental protection as possible.
The Berkeley City Council will have to vote on putting the proposed changes by its last meeting in July in order to get it on the November ballot in time.
Questions about whether the City Council will put ADUs under rent control
Mayor Jesse Arreguín said today that he did not think his colleagues on the council would support placing ADUs under rent control because the city is prioritizing the creation of housing. Because of the coronavirus, the Rent Board and City Council did not meet in its usual 4×4 committee, where members usually confer. He would have preferred if the Rent Board had conferred with council and stakeholders before going forward, he said.
Arreguín said he would not support immediately removing the exemptions on golden duplexes either.
“I don’t think it’s fair for existing property owners to pull the rug out from under them and change their living situations,” he said.
However, Arreguín said is conflicted about golden duplexes. He doesn’t know why the golden duplex owners are completely exempt from rent and eviction controls. He would like to look at a phased approach to look at removing those exemptions, he said.
[Featured photo: David Wakely]
