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The Berkeley Rent Board entered a new era Monday, but the results looked a lot like the old as members agonized over a dizzying array of rent hike proposals—with the monthly dollar differences between the lower and higher increases barely enough to cover the cost of a cup of coffee. 

“We’re splitting hairs here,” said Rent Board Commissioner Paul Hogarth as he fought efforts to trim the rent increase he had proposed. 

Hogarth finally yielded to the majority of the nine-member board, which set the annual rent increase lower than both recommendations offered by the board’s subcommittee. 

Tenants in Berkeley’s roughly 19,000 rent-controlled units will pay between 1 and 1.6 percent more on rent next year, depending on whether the landlord invoked a 1999 state law that effectively ends rent control after units are vacated. Renters in private homes or buildings constructed after rent control went into effect in 1980 are not covered by rent control laws. 

The nine popularly elected rent board commissioners determined that since the law—known as Costa-Hawkins—has created a dual rental market in Berkeley in which tenants in unregulated units pay almost twice as much as other tenants, the annual rent adjustment should reflect that reality. 

Under the proposal finally adopted, landlords and tenants will probably need their calculators to figure out the new rents. 

Rents for tenants in market rate units will increase by one percent plus $3—a monthly increase of $15.20 for the average renter paying $1,220. 

Tenants covered by rent control—who pay an average rent of $698—will see rents jump by 1.5 percent plus $3, for an average monthly increase of $9.12. The extra three dollars are a pass along for unexpected costs from Berkeley’s new Rental Housing Safety Program. 

This year’s adjustment was supposed to have been simple. In February, the pro-tenant Rent Board settled a lawsuit brought against the panel by the Berkeley Property Owners Association (BPOA), which had charged that the board unfairly used its discretion to set arbitrarily low annual increases. 

To end 23 years of bickering, both sides agreed to follow the lead of other California cities with rent control and use a fixed formula to determine the annual increase—in Berkeley’s case, 65 percent of the Consumer Price Index (CPI). 

Voters must now ratify that agreement on next November’s ballot, but both sides agreed to use the formula this year so long as the CPI number didn’t vary too far from a report of owner expenses which the board commissioned a subcommittee to prepare. 

But that’s just what happened. 

While 65 percent of the CPI constituted a one percent rent hike, a series of unforeseen expenses to landlords—chief among them the city’s new safety program and increased Rent Board fees—added up to a 2.8 percent increase, turning the settlement designed to “free” the rent board into a political straitjacket. 

Legally obligated only to give owners the one percent increase, commissioners felt pressure from their tenant base not to pass along the entire 2.8 percent called for by the report.  

At the same time, the board didn’t want to antagonize landlords, whose support they need if voters are to approve the settlement agreement next year. 

“There was a concern not to engender a lot of hoopla that could put the November ballot at risk,” said Commissioner Bob Evans, the only member of the board who opposed the settlement. 

Landlords also acknowledged the political necessity of reaching a compromise. BPOA President Michael Wilson told the board before its deliberations that passing along owner expenses to tenants would be the “the politically intelligent thing to do.” 

“All of the tax increases that the city is going for right now, people are freaking out about it,” he said. “At the end of the day they are going to wonder if this settlement was intelligent or not depending in large part by what is decided here tonight.” 

The board struggled to reach a compromise, which requires the support of six members. Derided for years by property owners as a pro-tenant monolith, the panel divided over which owner expenses to pass on to tenants. 

The four-member subcommittee failed to agree on a recommendation to the full board, instead forwarding two proposals—one, submitted by Evans, for 1.8 percent plus $2 for market rate units and 1 percent plus $2 for controlled units, and the other, calling for 2 percent plus $3 and $1 plus $3, submitted by Selma Spector, who could not attend the full meeting. 

When the debate started, members first sought to bridge the difference between the two subcommittee suggestions. Hogarth, who supported a $4 passthrough for the safety program and the fee increases, adopted Spector’s proposal. 

Before the board could vote, Evans offered a counterproposal: 2 percent and 1 percent, but only a $2 passthrough, which the board rejected that 5-2-1-1—paving the way for Commissioner Howard Chong to alter the scope of the debate. 

Arguing that 2 percent was too high considering that many long-term tenants are on a fixed income and that the board did not need to go above 1 percent, Chong proposed 1.5 percent plus $4 and 1 percent plus $3. 

Hogarth held firm, arguing that the dollar amounts weren’t enough to abandon Spector’s proposal. “I don’t think that’s huge,” he said. 

“You don’t have to pay it,” declared Evans. 

Chong’s proposal also failed 5-2-1-1 when Commissioner Matthew Siegel—concerned that the different dollar passthroughs would be too confusing—joined Hogarth in opposition. Commissioner Chris Kavenaugh abstained. 

Siegel then tried to bridge the gap, proposing 1.8 percent plus $3 and 1 percent plus $3. “Don’t ask me for the rationale,” he said. 

The vote was agonizing. Three of the first five board members passed on voting, waiting for their colleagues to make the first move. 

“Wait, wait, wait, wait! Start at the other end of the alphabet please,” said Commissioner Judy Ann Alberti. When the vote came back to her 5-2 in favor, Alberti said, “I’m going to abstain.”  

Motion failed. 

Siegel tried again. “One percent plus $3 and 1.5 percent plus $3”—the lowest rent increase proposal of the night. That passed unanimously after Hogarth—his head in his hands—assented. 

Unlike other years, landlords didn’t rush to attack the board. “I acknowledge it as a good faith effort by the rent board to try to pass along costs, and I give them credit for that,” Wilson said. 

“This has never been about one tenant and one landlord; it’s about deeply held political philosophies,” he added. “That’s why it’s so difficult to get consensus from nine rent board members and that’s why we need the settlement to get us out of this.”