San Francisco Chronicle

Tenants seeking help as inflation drives up rents

- By Lauren Hepler

Gas prices are going up. Food costs are climbing. But in Oakland, officials are moving to limit how much inflation drives up local rents.

Council Member Carroll Fife is leading an effort to bring the East Bay city in line with neighbors such as San Francisco by further limiting price increases on rent-controlled apartments. The shift comes after Oakland housing regulators announced that, starting in July, landlords would have the option of increasing rent up to 6.7% because of inflation, the highest such oneyear jump on record.

Reconsider­ing how rent caps are calculated is the latest example of how Bay Area cities are grappling with the pandemic’s housing fallout — a task pitting landlords against tenants in eviction courts, lawsuits and now, city meetings.

“Who should absorb the impact of all of this?” said Derek Barnes, CEO of landlord advocacy group the East Bay Rental Housing Associatio­n.

“That’s really the question.”

Oakland’s decades-old rent control program, formally known as a Rent Adjustment Program, covers most of the thousands of apartments in the city built before 1983. Landlords have the option under this program of doling out “allowable rent increases” after July 1 each year, which are currently calculated using a longstandi­ng city formula that factors in inflation at a rate of 100% of annual change in the federal Consumer Price Index.

Neighborin­g cities with their own rent control formulas, including San Francisco and Berkeley, factor in 60% or 65% of the national inflation rate, meaning residents there are facing lower increases in the 2% range this year. If allowed to proceed, Oakland’s 6.7% allowable increase this summer would be more than triple last year’s local 1.9% rent hike.

It may all sound like an overcompli­cated math problem, but residents of rent-controlled Oakland apartments like Mark Dias and Emily Wheeler say it adds up to a crucial moment in a pandemic that continues to exact an uneven toll.

“We were flabbergas­ted,” said Dias, an East Bay native who helps counsel fellow renters with the Oakland Tenants Union. “We were trying to figure out, if we were going to get City Council or someone involved, what would we be able to do?”

An alternativ­e emerged this month: Fife introduced a measure at a city meeting that would change Oakland’s rent increase formula to factor in just 60% of change in the Consumer Price Index, or limit rent hikes to a maximum 3% annually, whichever is lower. The measure is scheduled for debate at a City Council meeting in late May, and several fellow council members have expressed their support.

About 60% of Oakland residents are renters, and 51% of those households are very low-income, Fife said in a news release announcing the measure, which in Alameda County means a household income of less than about $71,400 for a family of four. Of particular concern, she said, are nonEnglish-speaking renters and other tenants stuck waiting for payments from “confusing” pandemic rent relief programs.

“We cannot see this happening,” Fife said in a statement, “and continue to think that tenants can endure this record high allowable rent increase.”

In the past year, rents across the country spiked an unpreceden­ted 16%, surging far above prepandemi­c levels in lowercost states like Florida and Arizona, according to Apartment List.

But the Bay Area has been a different story, thanks to highest-in-thenation housing costs before the coronaviru­s. As of April, the average rent for a two-bedroom apartment in Oakland was around $1,800, Apartment List found, up 5% from the same time last year but 9% below March 2020 rates.

Neat financial charts obscure a messier reality. Thousands of tenants and landlords are still facing pandemic rent debt after applicatio­ns closed for $5 billion in statewide rent relief funds. In Alameda County, property owners also recently sued over a local eviction moratorium after similar state and federal measures expired.

For Wheeler, a nonprofit worker who grew up in Oakland, it’s a new chapter in what has long been a challengin­g housing market. She joined the Oakland Tenants Union about four years ago, after trying to figure out what her legal rights were while dealing with apartment issues like mold and rat infestatio­ns. Now, after the shock of the pandemic, she said it’s unfair to ask tenants already paying high prices to stomach a nearly 7% rent hike.

“For tenants, high inflation means everything costs more,” Wheeler said. “The effect on me versus my landlord is very lopsided.”

Researcher­s are also rushing to understand who most feels the impacts of inflation. One report late last year, by Columbia University’s Center on Poverty and Social Policy, identified a burgeoning issue of “inflation inequality,” where the bottom 20% of earners have already experience­d what amounts to a 7% pay cut since 2004 due to inflation.

“As income inequality has increased, companies have increasing­ly catered to families with high incomes, driving down prices for the goods they buy,” the authors wrote. “In the meantime, poor families face prices and price changes that are ‘business as usual.’ ”

Barnes of the East Bay Rental Housing Associatio­n counters that, while landlords do not face the same kind of annual price hikes with mortgage payments, they do still have to cover rising costs of building materials and service providers charging more for house calls. During the course of the pandemic, he said the membership organizati­on has seen “hundreds” of Alameda County landlords sell or lose properties.

Because the group’s 1,600 members are over 50% women and 45% non-white, he warns that more limits on small local landlords could reduce that diversity and lead to more out-of-town owners less willing to work with tenants.

“Either they’re getting out of the business, or they’re reinvestin­g elsewhere where it’s less arduous,” Barnes said. “Someone’s going to buy these properties. There are these unintended consequenc­es to all this stuff.”

For Leah Simon-Weisberg, legal director of tenant advocacy group the Alliance of California­ns for Community Empowermen­t, the recent backlash in Oakland could be just the beginning of more political pressure in months to come.

Other California cities, from Antioch to San Diego, are considerin­g stronger eviction protection­s more in line with cities such as Oakland. Nearby, in Richmond, she said tenants are also facing rent increases at 100% of inflation, barring political interventi­on.

“Landlords are making the mistake of raising rents,” Simon-Weisberg said. “By doing that, people will step in.”

 ?? Don Feria / Special to The Chronicle ?? Oakland renters such as Mark Dias, an organizer with the Oakland Tenants Union, face increases as high as 6.7% as inflation drives up expenses.
Don Feria / Special to The Chronicle Oakland renters such as Mark Dias, an organizer with the Oakland Tenants Union, face increases as high as 6.7% as inflation drives up expenses.

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