As Prop. 10 looms, some landlords raise rents
The Election Day showdown is still days away, but some rental industry experts say a push to expand rent control already is affecting a handful of Bay Area tenants — and not in the way proponents are seeking.
Some landlords, worried that Californians will vote to allow cities to cap rents on more homes, are rushing to raise rents before the new regulations can take effect. Much of the anxiety is rooted in uncertainty, landlords and their lawyers say, because they don’t know whether the measure will pass or how their properties would be impacted by the change.
Voters on Tuesday will weigh in on Proposition 10, which would repeal Costa-Hawkins, a 1995 state law limiting rent control. If passed, the ballot measure would open the door for cities to expand rent control to previously exempt properties — single-family homes, condos and apartments built after 1995. And cities would be allowed to impose vacancy control, which would prohibit landlords from raising rents to market rate after tenants protected by rent control move out.
“It’s just reacting to the fear — the possibility of Proposition 10 passing,” said Eduardo Torres, Northern California regional coordinator of Tenants Together, who said he’s seen landlords preemptively raising rents over the past few months.
Daniel Bornstein, a lawyer who represents Bay Area landlords,
has helped dozens of clients raise rents in anticipation of Prop. 10 passing and recently wrote a blog post advising landlords who currently are exempt from rent control to consider rent increases before any rule change takes effect. The goal is to protect landlords, especially those who haven’t been raising their rents regularly, from getting locked into belowmarket prices, he said.
“Being proactive is good legal counseling,” Bornstein said. “So rents have been imposed — reasonably, you know, market-rate rents — in anticipation of potentially being regulated in the future.”
Even so, many landlords are keeping rents as is and waiting to see what happens Tuesday.
“I don’t know that there’s anything you can do proactively to get yourself ready for it if it does pass,” said Santa Clara-based landlord attorney Todd Rothbard.
Rosemary Esmedina, a 72-year-old retired restaurant hostess, was hit by a pre-Prop. 10 rent increase last month. Esmedina, who has lived in a two-bedroom single-family home in Alameda for 20 years, was paying $1,000 a month — far below market rate — and last received a rent hike in 2014. As the election approached, Esmedina’s landlord announced the rent would jump to $1,500 — a 50 percent increase.
During a meeting last month before the city’s Rent Review Advisory Committee — a volunteer group that helps mediate rent disputes — Esmedina’s landlord said the threat of repealing CostaHawkins was part of what motivated her to raise the rent. The landlord, who asked not to be identified during a brief interview after the hearing, also cited financial troubles and the need for her family to collect more income from the rental property, which serves as her disabled sister-in-law’s only source of income.
As a compromise, she agreed to raise the rent 30 percent instead, to $1,300, effective Oct. 28. But it’s still more than Esmedina, who receives $1,222 a month in Social Security, can afford.
“Right now I’m living off a little bit of my 401(k) that’s left over and my annuity, but that’s very minimal,” she said. “So I might have to look for work.”
That’s not the first preelection rent increase tenants’ rights activist Brad Hirn has seen. Hirn works as a lead organizer with the Housing Rights Committee of San Francisco and volunteers with the Alameda Renters Coalition.
“It seems widespread to me,” said Hirn, who worked on Esmedina’s case. “Sometimes we hear landlords say, ‘With the election coming up, we don’t know what’s going to happen, so here you go.’ ”
In the Los Angeles area, the owner of an apartment complex who recently raised rents told residents that Prop. 10 was to blame for the increases — and promised to rescind the rent hikes if the ballot measure failed, the Los Angeles Times reported in September.
If Prop. 10 passes, rent control won’t immediately expand to cover previously exempt properties in California. Cities that want to expand renter protections would first need to approve changes to their individual rental ordinances.
And once the ballots are counted, Prop. 10 may be moot anyway. Last month, just 25 percent of likely California voters said they would vote for the measure, down from 36 percent who supported it the month before, according to a poll by the Public Policy Institute of California.
But even if Prop. 10 falls flat next week, the rent control debate likely is far from dead.
“If this does not make it, we will try again,” Hirn said.
When more than two dozen residents were displaced from their Concord apartment complex this year, and the building’s new owner announced plans to renovate the units and raise rents, blame quickly fell on Prop. 10.
“They wanted to beat the Costa-Hawkins repeal, which is the only reason they issued all of the units the notice, almost immediately on the close of escrow,” Andrea Ouse, Concord’s director of community and economic engagement, wrote in a September email sent to city officials.
According to the email, Ouse based the statement on a conversation she’d had with Peter Wilson, president of building owner PTLA Real Estate Group.
In an interview with this news organization, Wilson said the main reason tenants were forced to move out of the Parkside Gardens apartments was to complete needed renovations, not the upcoming election.
But he acknowledged it would be easier to carry out his plans for the property without the uncertainty of rent control changes.
“It is certainly easier operating in a known environment than an unknown,” Wilson said.
Even so, after protests from displaced tenants, Wilson’s team extended the move-out date from October to the end of the year and offered residents $5,000 to cover their relocation expenses. But most of the tenants have moved out already, and PTLA has started construction.