Oakland Has Placed a Moratorium on “Substantial Rehabilitation” Rent Ordinance Exemption Applications

Oakland recently placed a moratorium on a landlord’s ability to apply for an exemption from the Oakland Rent Adjustment Ordinance based on a “substantial rehabilitation” of a rental property. While the moratorium will remain in effect until October 21, 2018, because it was not made retroactive, landlords are continuing to pursue approval of their previously submitted exemption applications.

The exemption’s intent is to bring abandoned and uninhabited housing back on the market, but because it is poorly written, landlords have been given a loophole to remove continuously occupied properties from rent control. An owner merely needs to prove that the cost to fix up the property was at least fifty percent of what it would cost to build new equivalent units in order to qualify for the exemption. OAKLAND, CAL., MUN. CODE § 8.22.030.B.2. The entire building must qualify for the exemption, not just a single
unit. Id.

Instead of making big overhaul improvements to fix uninhabitable housing, landlords often apply for the exemption using exaggerated routine maintenance costs and small capital improvements added up over many years for units that have tenants currently in them. And, in at least one instance, an owner used his own construction company to provide the receipts showing the amount spent on alleged improvements. If applications are approved under these circumstances, tenants will be unjustly forced out of their homes.

If you have received a notice stating that your landlord has applied for a “substantial rehabilitation” exemption from the Oakland Rent Adjustment Ordinance, or if you have received a notice to raise your rent or a notice of eviction, you should immediately consult with an experienced Oakland tenant rights attorneys at Tobener Ravenscroft LLP.