Rent control vote in Richmond could come in July; council starkly divided on issue

Make Aldax - Jun 24, 2015
As expected, Richmond City Council was starkly divided Tuesday on whether rent control and just-cause eviction policies are right for the city.
Following a lengthy discussion in the packed council chambers, councilmembers ordered city staff to draft an ordinance that could be voted on in July. The issue is certain to remain contentious.
Councilmembers Eduardo Martinez, Gayle McLaughlin and Jovanka Beckles, who are members of the Richmond Progressive Alliance (RPA) and known to vote as a bloc, are advocating for the most vigorous proposals for renters protections. They are pushing to implement a cap on annual rent increases, otherwise known as rent control, and also a just-cause eviction policy to replace the current system where landlords only need to give notice, not a reason, for eviction.

Such renters’ protections are needed, they say, citing studies that state asking prices for monthly rents in Richmond have gone up more than 24-percent in the last four years. While some residents are facing increases of hundreds of dollars in monthly rent, their wages remain stagnate, tenant advocates said. Half of the city’s residents are renters.

“Displacement has become a real thing,” advocate Melvin Willis said during public comment Tuesday, adding residents are being “pushed out of the city at no fault of their own.”

But opponents of the rent control and just-eviction proposals – including Mayor Tom Butt and Councilmembers Nat Bates and Vinay Pimple – say such policies, while well-intentioned, are proven to be ineffective at addressing rising rents and would hurt landlords and negatively impact the city’s housing stock and revenue. Butt doesn’t believe rents are skyrocketing and says if they were, constructing additional housing supply to meet the demand would better work to keep rents affordable.
“Richmond is actually below the median for rent growth in Contra Costa County,” he said, adding rent-controlled cities like San Francisco, Berkeley and Oakland have been unable to keep rents from skyrocketing.

On Wednesday, Mayor Butt passed along a cautionary letter from the president of an Oakland real-estate investment company looking to purchase an $800,000 apartment building in Richmond. A rent control policy would not only burden landlords already facing a number of expenses, it would reduce the property’s market value and make it less likely that landlords would invest in physical improvements, wrote Steven Pinza of The Pinza Group.

“You can imagine the benefits in tax dollars for the city of Richmond with the higher sales price (transfer taxes, increased yearly property tax, etc.),” Pinza said. “Also, in order to achieve those high rents the owner will have to drop a ton of money into the building (seismic retrofit, paint, landscaping, windows, etc) this improves the quality of buildings throughout the city — a big issue in Richmond.”

Pimple also argued against the timing of the rent control policy decision. The issue has not been properly studied, Pimple said, adding that staff should not be studying the issue during a period in which the city is struggling financially and working to pass a balanced budget by July 1.

City Manager Bill Lindsay advocated for an incremental approach to installing renters protections.

“The council should adopt the least vigorous regulatory approach that is possible to achieve policy goals, then evaluate them over a period of time,” Lindsay said. “If it doesn’t achieve objectives, you can move to the more vigorous approach.”
RPA members, however, say the protections can’t wait. Displaced renters will lead to homelessness and other social problems that will also sap city resources and ultimately hurt Richmond’s progress, Beckles said.
McLaughlin said it’s a “question of what our social and political values are.”

“It’s protecting the culture we have today,” she said. “Protecting what we have worked hard for, that many people have contributed to.”

Bates said he agrees Richmond renters should not be “gouged,” but believes the good minds of Richmond can come together and find alternative solutions to rising rents.