City Council decided not to implement a funding plan that would have determined how to allocate the cost of the Rent Review, Rent Stabilization and Limitations on Evictions Ordinance at its meeting on June 21.
The rent ordinance, which came into effect March 31, is projected to cost $1.95 million annually, according to Alameda Community Development Director Debbie Potter and SCI Consulting Group, a Fairfield-based consulting firm that assists public agencies with establishment and administration of taxes, assessments, fees and other special levies.
There were six public speakers at the meeting, representing both landlords and tens, and they all were not in favor of the funding plan.
“The only people who benefit are the renters,” said Melinda Samuelson, a landlord. “We’re the ones paying the property tax. You have created a monster that will cost $2 million.”
Renters were just as strongly against the plan.
“Don’t implement this plan,” said Alameda renter Carrie Rosenbaum. “I recommend we have a rent cap and a just-cause ordinance.”
Councilmembers were also skeptical of the plan. Councilman Tony Daysog questioned what the methodology was for coming to the $1.95 million figure.
Potter said majority of the costs would come from hiring 10 “full-time equivalent” employees. They would be administrative staff that would track rent increase notices, scheduling hearings and other tasks, and hearing officers tasked with settling landlord/tenant rent price disputes.
Vice Mayor Frank Matarrese asked if the $1.95 million cost and number of rental units is accurate. SCI representative John Bliss said with more research maybe there figures could possibly change. Council then decided that holding off for six months would be the best course of action.
Currently, the ordinance is being paid for by the General Fund. The Council already allocated $793,000 from the fund to finance the ordinance through the end of the year.
The plan would have placed the tenants and landlords on the hook for the costs. SCI’s study revealed there are 14,899 rental units in Alameda. Landlords would be responsible for the cost under the plan. That would amount to $131 a year per unit. However, the plan would have allowed landlords to pass up to 50 percent of this fee on to its tenants. That would amount to $65.50 a year, or $5.46 a month, to be paid by the landlord and tenant — the $131 fee would come from the city to the landlord, while the landlord would collect the $65.50 fee from the tenant.
The plan would include an additional fee for tenants and landlords who wish to take a rent dispute to a neutral hearing officer. If a landlord increases a rent by more than five percent the Rent Review Advisory Committee (RRAC) would make a decision on if the rent increase is allowable or not, or they can make their own recommendation. If the tenant or landlord does not agree with the RRAC they can bring their case to a neutral hearing officer, who will have the final say. Under SCI and Potter’s study, they believe each hearing would cost $4,705 — $4,500 of that going to the officer at $300-an-hour for 15 hours.
If the tenant asks for the hearing, they would have to pay five percent of the $4,705 fee or $235. If the landlord asks for the hearing they would have to pay 10 percent of the fee, or $471. The rest of the cost would be apportioned to all the owners of the non-exempt rental units the following fiscal year.
Potter will make a revised recommendation at a council meeting in December.