Mayor: Tenants’ ‘first dibs to buy’ policy on hold until fall due to feasibility, timing

Mayor Jesse Arreguín received pushback from supporters and opposition of the Tenant’s Opportunity to Purchase Act during the months-long process.

An apartment for rent in Berkeley. Photo: Frances Dinkelspiel

The Tenant Opportunity to Purchase Act is on hold in Berkeley until at least the fall after Mayor Jesse Arreguín, who introduced the housing equity proposal last year, concluded that the concept was no longer currently feasible, or a priority for the city.

The policy allows tenants first dibs on purchasing their rented units, or homes, when the owner puts the building up for sale with a “right of first refusal.” If they want the building, they could then tap into city subsidies or nonprofit partnerships to purchase the property.

Advocates said it would prevent displacement and help people of color buy property to remain in the city, but others maintained that it would extend property sales to unwieldy timelines and overall contribute an insignificant amount of affordable (or subsidized) housing units to the market.

Arreguín championed the policy while it slowly moved through the City Council, the Land Use Committee and related city commissions over the course of the last year. It was due for a special Council meeting for followup in mid-June, and was last heard on May 20 at the Land Use Committee.

Following feedback from community organizations, small property owners and real estate groups, he made several amendments to the initial policy that added exemptions for non-corporate owned, single-family homes, homes with owner-occupied accessory dwelling units and units with five units or less when an owner has an immediate health need, among others.

“We think this could be an effective way to prevent displacement and I think, you know, help curb the exodus of Black people and other low-income communities in Berkeley,” Arreguín told Berkeleyside in early June. “This is a very bold, transformative policy.”

These changes, however, were not popular with those that advocated for TOPA. The Berkeley Tenants Union (BTU) saw the amendments as watering down the policy’s effectiveness by removing hundreds of single-family homes and de-centering tenants from the conversation.

Mayor Jesse Arreguín in front of City Hall. Photo: Pete Rosos

Staff were in the process of studying the amendments, finances and more, but Arreguín ultimately decided to pull the plug on the project for the time being — despite months of community forums from City Council members, supporters, opposition and ongoing local discussions.

“I made the call to delay bringing it to Council given pressing business such as adoption of the city budget, labor negotiations, and other immediate priorities,” Arreguín said Friday. “I want to ensure that the Council has the attention and time to discuss this important policy.”

“I believe the amendments reflect important stakeholder input from small property owners, and will help move the Council closer to consensus on this policy,” he added.

BTU committee member Paola Laverde said Friday that she’s disappointed that the legislation has fallen flat for the time being, after receiving support from dozens of community-based organizations, unions and community leaders who endorsed a stronger, tenant-based legislation.

“TOPA evened the playing field — there’s nothing wrong with that, and somehow that was just too much,” Laverde said, explaining that TOPA slowed down the sale process with the intention of giving tenants, or nonprofits, time to arrange a purchase. “Now, we’re stuck with the status quo, which only benefits people with cash money on hand, who are willing to plop down hundreds of thousands over the asking price (to buy a home).”

She also criticized real estate groups for protecting their own interests, and said they spread misinformation targeting people of color.

Among those groups were the Berkeley-based Bridge Association of Realtors, which mailed out a controversial flyer opposing TOPA prior to the Land Use Committee’s May 20 meeting. It stated that TOPA helped developers and lawyers, but hurt tenants and people of color — including those who own homes. The flyer was published prior to the mayor’s most recent amendments, according to Kiran Shenoy, director of government affairs for the realtors’ organization, and sent to homeowners in Berkeley.

Shenoy said the legislation is “bad policy,” and the money that would be spent on administering TOPA could be used for other programs that are more beneficial to Berkeley residents, such as a down payment assistance program or consistent rent relief.

“We’re glad that it’s stalled out for now. The way this was rolled out was anything but transparent and it did not involve all of the stakeholders that would be affected by this legislation,” Shenoy said. “If it were to come back, we would hope that the mayor and proponents would hold true to their word and actually invite everyone to the table.”

If Berkeley had moved forward with TOPA, it would have been the first in the the state to adopt the legislation. San Francisco has a similar policy — COPA — and Oakland was poised to follow suit with Berkeley.

Supriya Yelimeli is Berkeleyside's homelessness and housing reporter. Email: supriya@berkeleyside.org. Twitter: SupriyaYelimeli. Phone: 510-585-8315.