With competing ballot measures in Berkeley, tenants’ advocates get their wish list passed.

With competing ballot measures in Berkeley, tenants’ advocates get their wish list passed.

On decision day,  voters had to weigh two competing narratives.

One balanced measure was backed by the landlord camp and the other was supported by tenants’ advocates to advance their agenda. The initiative set forth by tenants’ advocates prevailed, namely Measure BB. Let’s go over what this means for owners of rental properties in Berkeley.

Lowers the maximum annual rent increase to 5% from 7%.

This is a moot point because Berkeley’s Annual General Adjustment is set at 65% of the Consumer Price Index and we have not reached this level in decades. It would be a treat for Berkeley owners fully covered by the rent ordinance to raise the rents to 5%, so barring rampant inflation, this is an academic change.

Remove rent control exemptions for units where owners share kitchens or bathrooms if the owner moves in after tenancy begins. 

We think that this flies in the face of state law and hope that this is challenged in the courts.

Impose new limits on evictions for breaches of the lease.

It stands to reason that landlords can evict a tenant for a breach of the lease. After all, it is a covenant between two parties, and if the tenant violates their obligations, they can be evicted, right?

Not so fast. Berkeley lawmakers say that the owner must be directly harmed by the breach of the lease through “substantial injury,” and that the tenant has been warned in a manner that “any reasonable person could understand it.”

There is some ambiguity as to the part of how the owner is directly harmed. For example, if a tenant threatens or harms another tenant without personally harming the owner, can an eviction be pursued for a breach of the lease? We trust that sober-minded judges and juries will see past these semantics and arrive at a fair decision whenever a tenant violates the lease.

Prohibit evictions for failure to renew a lease. 

Currently, landlords could demand a one-year renewal and if the tenant refuses to sign it, they can face eviction for not signing a “substantially similar” lease. Not anymore. The tenant can elect to sign a month-to-month lease without fear of reprisal.

Codify tenants’ rights to organize as an association with a simple majority in properties with 10 or more units, or at smaller properties that are managed by property management companies.

Collective bargaining and procedures to air out grievances are normally associated with labor unions attempting to bring justice and democracy to the shop floor but increasingly, tenants are holding the picket signs. In what was traditionally reserved for workers, it is remarkable to see a growing movement for tenants to unionize, and Berkeley has joined the bandwagon.

Landlords must “confer in good faith” with any newly formed tenant associations, but what does this mean? It means that landlords have to recognize them, come to the table, and hear them out in a constructive dialogue. It does not mean that housing providers have to capitulate to unreasonable demands.

Prohibits utility charges for leases inked after February 6, 2024, unless the charges are included in base rents and fixed rents “is separately metered in the tenant’s name or complies with policies the rent board deems similar metering.”

Ratio Utility Billing Systems - known as RUBS - is a system whereby the property’s utilities - water, sewage, electricity, trash collection, waste management, and gas - are proportionally divided based upon a formula that takes into account factors like square footage, number of bedrooms in a unit, and the number of household members. There may be other considerations such as washing machines and dryers in individual units, for example, that are factored into the equation.

Following in the footsteps of Oakland, Berkeley voters have put an end to RUBS.

For leases entered into between February 7th and the effective date of this new regulation, the Rent Board will establish a process to allow owners to petition for an adjustment to the rent ceiling.

The most pernicious of all: prohibiting evictions for nonpayment of rent if the amount owed is less than one month of Fair Market Value, as determined by HUD. 

We cannot evict on nonpayment of rent unless the rent debt reaches a certain threshold is reached. Take, for instance, a one-bedroom apartment with a Fair Market Value of $2,230 but the rent is below that, at $1,700. We can’t evict if the tenant misses a month of rent because they don’t owe the $2,230 necessary.

This punishes affordable housing providers and is even more painful for landlords with tenants in low-income and subsidized housing. An easy example: A tenant is in Section 8 housing being rented for $1,000 a month and the tenant is responsible for paying $200. The Fair Market rate is $1,200. The tenant can evade payments for several months until their rent arrears reach $1,200.

Other provisions

Under current law, owners must file eviction notices and legal complaints with the Rent Board within 10 days. Now, the required notice must be filed within 3 days.

Owners must also notify tenants of their rights under the rent ordinance, and of any exemptions they claim, within 15 days of move-in. We are awaiting a new notice created by the Rent Board. Finally, we remind Berkeley landlords of the importance of complying with registration requirements to avoid penalties.