Rent control clarification

Rent control clarification

Investor/Agent · San Francisco, CA · Member since 2016 · 77 posts · 25 votes

Hey guys - I'm looking to buy a triplex/quad in Oakland and wanted to get some clarification on rent control.

1. What is qualified as "substantial capital improvements" to a property? And does this completely remove any rent control protection whatsoever for current tenants?

2. For owner occupied properties, is rent control fully removed for all units after living in the complex for 1 year?

3. Otherwise, is the standard rent increase still 2%? What other ways can I raise rents on tenants that have substantially under-market rents?

Thanks!

1Reply
31 views

Most Popular Reply

Real Estate Agent · San Leandro, CA · Member since 2016 · 46 posts · 71 votes
9y

Howdy, if you head to http://www2.oaklandnet.com/government/o/hcd/s/Land...

you can view the most current rent adjustment regulations via the links there. Knowing all of this is going to be helpful, however if you zip to section 10(p25) I think you will find the answers to what you're looking for! Let me know if you have any questions after reading, I'd be happy to offer my input! 

See this reply in the discussion

7 Replies

Jump to latestLatest
  • Real Estate Agent · San Leandro, CA · Member since 2016 · 46 posts · 71 votes
    9y

    Howdy, if you head to http://www2.oaklandnet.com/government/o/hcd/s/Land...

    you can view the most current rent adjustment regulations via the links there. Knowing all of this is going to be helpful, however if you zip to section 10(p25) I think you will find the answers to what you're looking for! Let me know if you have any questions after reading, I'd be happy to offer my input! 

  • Property Manager · Castro Valley, CA · Member since 2016 · 212 posts · 110 votes
    9y

    Hi Armand,

    @Robert Marston's link will give you more details, but I can give you some quick info:

    Starting Feb. 1, Capital improvement increases will be stretched over the useful life of the improvement pretty much making doing a CapX increase moot.  Redo a roof, get to bill tenants 70% back over 25 years.  

    I have seen owners of buildings try to throw in things like replacement appliances.  Even with the older rules, this makes so little difference for an increase, it isn't really worth the paperwork. I don't know how the rent board rules on those smaller things.  

    I would say substantial would be doing a remodel, upgrading electric, replacing roof, doing soft-story, repainting the building.  


    I think that owner occupied has changed to 2 at least, possibly 3.  The link will probably give you a solid number.

    There isn't a way to raise rents on under-market rents beyond making sure banked rent increases have been taken.  Each year the standard increase is different.

  • Fresno, CA · Member since 2015 · 552 posts · 181 votes
    9y
    Originally posted by @Robert Marston:

    Howdy, if you head to http://www2.oaklandnet.com/government/o/hcd/s/Land...

    you can view the most current rent adjustment regulations via the links there. Knowing all of this is going to be helpful, however if you zip to section 10(p25) I think you will find the answers to what you're looking for! Let me know if you have any questions after reading, I'd be happy to offer my input! 

     Here's a little update by the California Apartment Association. 

    https://caanet.org/criticism-of-rent-control-mount...


    It looks like some rent control will spread in California but the apartment associations are using studies and economic consultants who are unbiased to prove that it is bad when rent control is broadly placed in cities.

    Rent control seems to work for a few renters to keep them in but eventually ends up in less housing stock and leads to housing crisis and underbuilding.  Basically investors leave cities that have rent control for nearby cities ---or even leave the state and bring their money and revive other buildings in other areas

  • Realtor · Oakland, CA and a Real Estate Investor with Multi-Family Units and a Self Storage Facility · Member since 2016 · 2k+ posts · 2k+ votes
    9y

    @Armand Farr  @Susan O.  @Ryan Scott Isacksen  @Robert Marston

    Consult an attorney to verify, but this is whai I found after a few hours research...... the "solution" is simple IF you are willing to do the following

    Owner Occupy a FOURPLEX.....in Oakland that you buy..... .not a duplex or triplex.............AND

    Rent to Section 8 Tenants........

    Helpful Links................In the first line it says Section 8 Tenants are NOT COVERED by the Oakland Rent Control Ordinance

    https://www.tobenerlaw.com/oakland-rent-control/

    http://www.tenantsunion.org/en/rights/section/subsidized-housing-section-8

    In the above it states thatHUD Housing and Section 8 Housing is considered Government Subsidized Housing and is therefore considered EXEMPT from Oakland Rent Adjustment Program!!!!!

    Therefore you can can raise rent by up to 10% a year!!!!!!!!!

    Now let's say you buy a FOURPLEX......again....not a duplex or triplex, but a Fourplex and you OWNER Occupy it.....it appears you can evict the tenants (and put your own tenants in) if they (have been living there less than 5 years, are not over 60, are not disabled, and are not catastrophically sick.

    In section F on page 3 of the following link it states that Just Cause Protection Applies to the following..........

    file:///C:/Users/bgarlington/Downloads/OAK036393%20(2).pdf

    A rental unit in a residential property that is divided into a maximum of three units, one of which is occupied by the owner of record as his or her principal residence.

    Again.....check with your attorney,...but THIS Sounds like Owner Occupying a Fourplex in Oakland AND renting to section 8 tenants is a legal way to raise rents by up to 10% in Oakland AND if you want to NOT deal with inheriting tenants and you want to put your own tenants in your FOURPLEX you can do so. 

  • Property Manager · Castro Valley, CA · Member since 2016 · 212 posts · 110 votes
    9y

    @Brian Garlington

    Great info!  
    Thank you for links supporting that as well.

  • Fresno, CA · Member since 2015 · 552 posts · 181 votes
    9y
    Originally posted by @Brian Garlington:

    @Armand Farr  @Susan O.  @Ryan Scott Isacksen  @Robert Marston

    Consult an attorney to verify, but this is whai I found after a few hours research...... the "solution" is simple IF you are willing to do the following

    Owner Occupy a FOURPLEX.....in Oakland that you buy..... .not a duplex or triplex.............AND

    Rent to Section 8 Tenants........

    Helpful Links................In the first line it says Section 8 Tenants are NOT COVERED by the Oakland Rent Control Ordinance

    https://www.tobenerlaw.com/oakland-rent-control/

    http://www.tenantsunion.org/en/rights/section/subsidized-housing-section-8

    In the above it states thatHUD Housing and Section 8 Housing is considered Government Subsidized Housing and is therefore considered EXEMPT from Oakland Rent Adjustment Program!!!!!

    Therefore you can can raise rent by up to 10% a year!!!!!!!!!

    Now let's say you buy a FOURPLEX......again....not a duplex or triplex, but a Fourplex and you OWNER Occupy it.....it appears you can evict the tenants (and put your own tenants in) if they (have been living there less than 5 years, are not over 60, are not disabled, and are not catastrophically sick.

    In section F on page 3 of the following link it states that Just Cause Protection Applies to the following..........

    file:///C:/Users/bgarlington/Downloads/OAK036393%20(2).pdf

    A rental unit in a residential property that is divided into a maximum of three units, one of which is occupied by the owner of record as his or her principal residence.

    Again.....check with your attorney,...but THIS Sounds like Owner Occupying a Fourplex in Oakland AND renting to section 8 tenants is a legal way to raise rents by up to 10% in Oakland AND if you want to NOT deal with inheriting tenants and you want to put your own tenants in your FOURPLEX you can do so. 

    Thanks

    As long as they don't change it with the AB 1506 ruling next year

    http://www.latimes.com/business/la-fi-costa-hawkin...

    If you live in California write your local politicians

  • Realtor · Oakland, CA and a Real Estate Investor with Multi-Family Units and a Self Storage Facility · Member since 2016 · 2k+ posts · 2k+ votes
    9y

    @Susan O.

    @Susan O.Just to give further clarification. If a person has a HCV (Housing Choice Voucher THEY ARE NOT SUBJECT TO RENT CONTROL IN OAKLAND.   IF someone's rent is government subsidized then you are not limited to the 2.3% limit that is throughout the rest of Oakland....I was just at a workshop that the Oakland Housing Authority put on for us landlords that rent to section 8 tenants......and they emphasized this.....

Join the conversationCreate a free account to reply, vote on answers and follow this thread.