Dear Mayor McQuaid and members of the City Council,
My name is Sam Sorokin, I am one of the founding board members for Albany Property Rights Advocates and the managing partner of Premium Properties. We currently manage three properties in Albany, two of which are residential. I should also point out that I was a Berkeley Rent Board Commissioner from 1992 – 1996, during a short period of time, when unlike today, rent boards employed a truly fair and objective system. I am writing to each of you because I believe that my position within APRA as well as my experience allows me to offer a unique perspective and it is my sincere hope that you will each give it due consideration and reach out to me or the other board members to expound upon the conversation.
Unfortunately, I was not able to attend the last City council meeting when rent review was discussed. However, I watched the video and have been participating in the process through APRA and co-authored with Ian Bennett a Mediation Ordinance that our organization could stand behind. It was very frustrating after all the work we put in to create a draft ordinance (see attached) and our group’s participation in the task force, that nothing in our version of the proposed Ordinance appeared to garner any serious consideration or even be presented by City management for your discussion.
Instead, it is apparent that your staff simply cut and pasted the ordinance from Union City, a very different town with very different goals. I urge you to discard the present draft and give this very important topic the time and debate it deserves. This issue has been a year and a half in the making and to simply rubber stamp a carbon copy of a flawed and incomplete proposal for the sake of showing that you can get something done would be irresponsible and a disservice to all the hard work and effort that has gone into this issue. This is a seminal moment for this City and for each of you as members of the City Council. What you do here will leave a mark on our community for years to come. Please, get it right and show us that Albany, as many are so fond of saying, is and indeed can be different.
Please now consider the following:
Rent Review is Rent Control
One thing that was said by each member of the council was that this program is not intended to be rent control. The Council and even rent control proponents within SEJC and DHWG have claimed that such is not the intent, but actions speak louder than words.
The draft Ordinance regrettably makes one of two things clear, which is that the Council and City management and commissions either do not truly understand what is and is not rent control, or that an element within your administration is being duplicitous.
As offered, the Ordinance provides that if an owner decides not to participate in the process, or through some unspecified process it is determined that an owner failed to give proper notice of the program, their rent increase can be denied and will not be allowed to be claimed as a legal increase by any court of law. This is rent control.
Our version of the Ordinance proposed a system of fines for non-compliance that would not only avoid the introduction of rent control and potential legal challenges but could actually form part of the basis for funding the program.
Instead, what is presented to you is contrary to your stated desire, is certainly not what is wanted by your constituents and may in fact be illegal. Accordingly, we urge you to eliminate the consequence as proposed. Not doing so will obligate us to take a proactive step to inform the entire City that rent control is coming to Albany and in so doing, hopefully, the voters will react as we expect and insist that any such damaging elements of a program be rescinded. Moreover, in view of the letter from the Oakland/Berkeley Association of Realtors warning that your contemplated actions will violate the Costa Hawkins Vacancy Decontrol Act, we are of the opinion that it is your duty to formally seek legal guidance on this and instruct your City Attorney to research and prepare a formal opinion of counsel or else seek outside assistance.
Rent Mediation instead of Rent Review
It is important to note that even the program being called Rent Review indicates that there is ultimately a goal of determining that one party is right, and one party is wrong. This was never supposed to be the goal. This is why we suggest it be called a Rent Mediation Program. Many statements made by all the council members during the meeting were very similar to the vernacular regularly utilized by Rent Board Commissioners and City Council Members in Berkeley when discussing the elements of rent control, including references to whether or not a rent increase is ‘proper’. I realize that this may not be intentional, but rhetoric is nonetheless important because what each of you say and how you say it conveys a profound element of intent regarding the program, and your entire community is paying attention. We certainly appreciate all that you do for this City and I recognize that you simply want to do something to help people. For that, we all thank you in no uncertain terms. However, it is critical to recognize that words matter. Particularly in this case the program that appears to be up for consideration severely misses the mark.
The Trigger
The purpose of having a trigger for the program was to limit the size and scope of the program. The City has limited resources and frankly should only be involved in mediating situations of significant circumstance or need. Our draft ordinance specifically accounted for this with the aim of enabling the program to be successful by not having it become mired down by claims over relatively small increases that cannot reasonably be viewed as any sort of contributing factor to a housing crisis or lack of affordable housing in Albany. This was the basis for the suggested trigger of 10% and minimum dollar amount threshold that would scale based upon the number of bedrooms in a rental unit. Conversely, rent control proponents in SEJC and DHWG sought the use of the CPI as a trigger basis, offering no credible statement as to why this was appropriate if the goal is to ensure the availability of affordable housing.
While Ms. DeLuc was supposed to convey this and other such differences of opinion from the Task Force (as per your own direction), this did not happen as to this issue nor numerous others put forth in the recommended Ordinance. Instead, the recommended Ordinance was presented with a 7% trigger on the strength of virtually no explanation and then, for reasons the still elude us, was ultimately dropped to 5% near the conclusion of your meeting.
Making the trigger 5% without any conditions or credible analysis as to why this number might be appropriate or preserve the intended structure and purpose of the program will not be acceptable to our organization.
I understand that any trigger may exclude somebody in need of help. But, making the trigger so low will inevitably expand the program further than what you have likely envisioned in terms of time, expense and the trouble of sorting out meritorious claims as opposed to those that are merely veiled request for subsidization of those living beyond their means. During the meeting, it was pointed out that a 7% increase once every 5 years is impacts a renter very differently than a 7% increase every year for five years. So, another alternative would be to have a trigger that is based on whether the rent increase results in an average rent increase of over 7% (or 10% which is what we suggest). Figuring out whether this trigger was met would be simple – subtract the move in rent from the rent after the proposed rent increase, then divide it by the number of years of tenancy. If and only if the result was greater than the trigger percentage, then the rent increase would be subject to the ordinance. This then incentivizes property owners to not raise rent annually.
Skin in the Game
When this program was originally discussed, it was made clear to us that it would be financed by the City. If the City wants to expand its services to renters, then the City should use its own resources to make it happen. While we recognize that $15 per unit isn’t a huge amount of money, over time it will add up and will make us use our resources for a program that doesn’t benefit us. It also represents a huge percentage increase to the business license tax that we already pay, which is ironic given the low percentage increase now being considered as a trigger for mediation to begin with. Accordingly, we urge you to consider waiving this per unit fee. However, if you don’t agree to do so, at minimum it is important that renters have “skin in the game”. The owner is already paying a fee and spending their time to participate in the program, the renter should have to pay something meaningful for initiating a request under the program, otherwise it is again inviting a deluge of frivolous claims that stand to potentially derail the effectiveness of the program. We therefore suggest a $100 application fee (which is still less than any lawsuit filing—even in small claims—and thousands less than private mediation would normally cost) and lower fees could also be acceptable if and only if a showing of means qualification is met.
What Crisis?
Among the most troubling aspects of the current state of affairs is the fact that the Council seems to acknowledge that the perceived ‘crisis’ is no-longer in existence (raising the question as to whether or not it ever did in the first place), and yet there appears to be a burning desire and willingness to go forward with implementation of a program that is so severely under-considered and flawed in its present form, that its own design may doom it to failure.
Your original RFP was intended to cause the hiring of an organization to analyze the needs of the community and then propose a program you have long acknowledged, recognizing that more information on the issue is needed. When the RFP did not pan out, the Council then acquiesced to the demands of SEJC to bring the issue of a rent mediation program back into their purview. In the interest of creating a more even playing field where opinions on all sides of the matter would actually have an opportunity to be duly heard and reported upon, the Council declined to simply relegate the matter to SEJC and Ms. DeLuc, and instead created a task force to advise management on the issues and in turn have management present recommendations and points of agreement, disagreement and their respective bases for due consideration. That task force then met only once with a great many issues not being fully developed and ultimately none of the issues being conveyed to the Council in terms of the full discourse that occurred. Shockingly, the meeting was not even recorded and so the Council is simply left with a presentation from City Management, which if compared with the draft Ordinance prior to the task force meeting, will reveal that essentially none of the discussed points were truly considered, let alone implemented or presented for actual consideration by the Council.
We understand that you want to get something done. But, a new program, creates a new bureaucracy. This should only happen if there is a need and that need should be based on evidence. To date, no survey was completed, nor has any study been analyzed, and as a Council, the one source of information that you indicated you wanted to receive (management recommendations coupled with an actual report on points discussed by the task force) was not even provided in the fashion which you instructed. Nonetheless, you now seem to be prepared to proceed, even in the face of clearly stated problems with the proposal as it stands and the process, or lack thereof, by which it was realized. This is not responsible governance.
Based on what we have seen, rents are reasonable in Albany, property owners are willing to speak and negotiate with their renters and renters are not being displaced from their homes in droves. If that wasn’t the case, then wouldn’t you have expected a huge turnout of renters advocating for this program, especially after sending a postcard to every resident of Albany? Instead, only three tenants showed up. Indeed, the people that have demonstrated the most interest in and commitment to the crafting of a program that actually makes sense are also the ones that it stands to hurt, and their voices are being ignored. Unfortunately, the Social and Economic Justice Commission and DHWG want you to believe that a huge problem exists so that they can push their agenda, the implications of which they don’t even understand or are willing to ignore in favor of political ideology.
So, we urge you to think again if this program and all its costs are really necessary. In its presently proposed form, we cannot support this program and will be forced to oppose its implementation. Unless a significant change of course occurs, we would instead advocate that the City create an emergency fund available for long term housing to those with low or fixed incomes and/or disabilities, so that a reasonable subsidy and assistance program can be achieved to address a problem that is actually known to be of issue.
Again, I want to thank you for reading this letter. I am hoping that it has made you rethink your position. I encourage you to re-read our draft Ordinance and to carefully consider the similarities of the program proposal as prepared by management both before and after the task force meeting and to then instruct all those interested that Albany as a community demands better before you, as a Council, can act with that community’s actual and best interests truly in mind. In this spirit, APRA can remain committed to being a partner with the City Council for the good of all the members of the Albany community.
Feel free to contact me at 510.594.1222 to set up a time to speak with me. I look forward to continuing our dialogue.
Sincerely,
Sam Sorokin
Board Chairman
Albany Property Rights Advocates