In November 1998, Republicans suffered huge losses at the polling place as a backlash to their impeachment effort against Bill Clinton. Nevertheless, the lame-duck House of Representatives voted to impeach the President anyway. Now Oakland City Councilman Ignacio De La Fuente (a failed Mayoral candidate) wants to rush through a condo conversion bill to reward his allies in the real estate industry – even though incoming Mayor-elect Ron Dellums opposes the plan. Dellums won over 50% of the vote last June, and mayoral candidates opposed to increased condo conversions won 66% of the vote. De La Fuente’s ordinance is a slap in the face at Oakland voters, and will be an early Holiday present for real estate speculators who stand to make massive profits. But it would be the Nightmare Before Christmas for Oakland’s low-income, elderly or disabled tenants.
Oakland protects tenants who are in danger of losing their homes through condominium conversions. Under the current law, property owners who want to convert a building that has five or more units must buy a “conversion right.” Either they must build new replacement units for the evicted tenants, or they can (and the vast majority of them do this) find someone who has built a condo complex that agrees to rent to the tenants for seven years. Speculators hate this “conversion right” requirement because it slows down the potential gentrification of Oakland. Still, there have been 390 condo conversions in Oakland in 2006 alone (more than the total number of conversions from 1981-1999) – and most of them have been in buildings of 2-4 rental units where no “conversion right” is required.
De La Fuente’s proposal would give speculators a third option – rather than building (or finding) a new rental unit for the evicted tenant, they could simply pay a conversion fee to the City’s Affordable Housing Trust fund. But the fee would only be $2000-$3000 per rental room lost to a condo conversion, when the city’s own figures prove that it will cost up to $150,000 to build a replacement rental unit. There would be an annual “cap” on condo conversions of 800 a year (De La Fuente originally proposed 1,500) – but that would still give the real estate industry ample opportunities to displace tenants. In the last election, Berkeley decisively rejected an ordinance that would have increased its cap from 100 to 500 conversions a year – because a well-run campaign showed how devastating it would be to the city’s affordable housing stock. San Francisco has a cap of only 200 condo conversions a year, and most Supervisors know better than to encourage mass displacements.
For the sixty percent of Oakland residents who are tenants, a law that greases the wheels for more condo conversions is a frightening prospect. “Supporters claim that evictions won’t happen because tenants in converted units would be protected by rent control and just cause,” said Margaretta Lin of the East Bay Community Law Center. “But that’s not true because state law exempts all condominium units from rent control. The practical effect is that tenants will lose their protections. We’re already seeing clients in this dilemma who were paying $600-$700 a month for their rental units and are now being asked to pay twice as much for the same apartment after the conversion.”
Supporters say that the Ordinance would give tenants a 10% “discount” to purchase their own units – but that’s a cruel hoax. The average condominium in Oakland sells for $350,000-$400,000 – far out of reach for the typical tenant, even with a small discount – and the monthly cost of owning a unit is twice as much as renting one.
Incredibly, De La Fuente -- along with Councilmembers Henry Chang and Delsey Brooks -- want to ram this Ordinance through without the City conducting a report on its potential socio-economic effects. State law requires such an impact study to be made, and Oakland has routinely done so in the past (such as the Wood Street housing project’s EIR back in 2004.) There’s only one reason why they would want this rushed, and it’s called politics. At least for now, De La Fuente has the votes.
The Oakland City Council is scheduled to vote on December 5th – and currently, four of the eight council members are on the record supporting the ordinance. If the Council gets deadlocked with a 4-4 vote, the Mayor of Oakland gets to break the tie. Lame-duck Mayor Jerry Brown, who has shown a frightening indifference to the plight of tenants during his eight years in office as he cheerleads downtown Oakland’s real estate development, would be expected to support it. Ron Dellums, on the other hand, would not. That’s why De La Fuente and the real estate lobby want to pass it now.
It is against state law for the City Council to approve this Ordinance without the staff conducting an impact report on its socio-economic effects. It is despicable politics for the City Council to plow this through after the people clearly spoke that they want new progressive leadership -- but before that new leadership has picked up the reins of power. If De La Fuente bears a grudge over losing the Mayor’s race to Ron Dellums, he is free to run again in four years.
But do us a favor, Ignacio. Don’t facilitate the mass displacement of poor people because you’re not going to be Mayor next year.
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