Public Comment

Over the past few weeks, Chris Kavanagh and his comrades have flooded the Daily Planet with denunciations of Measure I, the citizen initiative that would allow a limited number of surplus rental units to be converted to condominiums. According to Kavanagh the measure is nothing but a conspiracy to evict thousands of tenants. Simply stated, the truth has not been told. 

Let me set the record straight. Measure I not only preserves existing protections enjoyed by Berkeley tenants, it adds to them. In the process, it addresses the most serious problem facing our city: the loss of our middle class due to a lack of entry-level housing. Workers and young families can’t pay $700,000 for a “starter” home. Our own children cannot afford to stay in the town where they grew up. Since few people want to remain tenants forever, they move away, leaving behind a city divided between real-estate haves and have-nots. 

We are becoming a city where the people who work here—teachers, firefighters, librarians and clerks cannot afford to live here. 

Our population becomes less and less diverse each year as enrollment in our public schools decline. This as rental vacancy rates have climbed from between 6-10 percent city-wide, double the norm of a healthy rental market! 

The City Council agrees there is a problem. Two years ago it passed a law encouraging the conversion of apartments into condominiums in an effort to create a form of affordable home ownership. But their law is not working. Their cap on conversions (100 per year) is too low, and their fee is far too high. 

Fourteen percent of the gross sale price of a converted condominium (12.5 percent conversion fee, plus 1.5 percent transfer tax) is paid to the city. None of this money goes to tenants who need and deserve a chance to become homeowners. Furthermore, these fees will simply inflate sale prices reducing the affordability of condominiums. While the actual statistics are hard to find, it appears that after two years, not one unit of converted housing has been created and no conversion fees have come into the city treasury. Lastly, a long-promised public workshop on the subject has been canceled or postponed indefinitely. 

What would Measure I do? 

Measure I would allow the conversion of a limited number of surplus rental units to be converted to condominiums, provided that the present owner: 

1. Pay a substantial fee to the city’s Affordable Housing Trust Fund (about $8,000 for a typical unit). This fee must be paid up front, regardless of whether the unit is ever sold. Under current law an owner may obtain a subdivision map and not pay anything until and unless he sells to a third party. 

2. Give existing tenants a right to buy their own unit and cash equal to 5 percent of the purchase price (typically, about $20,000), thus covering part or all of the down payment. This redirects funds to tenant(s) that under current law goes to the city. No city in California has such an aggressive program to assist new homeowners. 

3. Observe all existing tenant rights under Berkeley’s rent control and “just cause eviction” laws. 

4. Agrees to pay tenants who choose not to buy their unit relocation benefits twice the amount they would receive under current law. 

5. Agrees not to exercise their right to evict under California’s Ellis Act until and unless the tenant’s lease has expired and all of the benefits described above have been offered and refused by the tenant. 

What about mass evictions?  

It cannot happen! Under Measure I conversions are limited to about 2 percent of the rental stock. If vacancy rates fall below 3 percent, conversions stop. Berkeley has about 20,000 rental units. If (conservatively) there is a 5 percent vacancy rate, the conversion of 500 units (about 2 percent of the stock) would return us to the current quota. The “thousands of evictions” threatened by Kavanagh are mathematically impossible. He is not merely incorrect but engaging in irresponsible scare tactics designed to obstruct affordable home ownership in Berkeley. 

The elephant in the corner (which Measure I opponents ignore) is the threat of conversion of rental units to tenants that is common (TICs). By court order, cities cannot collect fees on or limit the number of such conversions any longer. 

TIC ownership is complex, highly unregulated, does not generate city conversion revenues and provides no purchasing assistance to tenants. However, in the face of current condominium conversion restrictions, TIC conversions will occur to the detriment of the city, tenants and buyers alike. 

There are two different visions of Berkeley. One, a place divided between rich homeowners and permanent tenants who have no hope of climbing the ownership ladder. This is the “rich city, poor city” phenomenon that economists and sociologists warn of. That’s where Berkeley seems to be headed. The city has told the federal government that affordable home ownership is a “low priority” here and that our focus is rental housing. The results are all around us. Ownership is beyond the reach of all but the rich. Rental units are vacant or under-occupied yet more are being built. Older buildings decay and the tax rolls are filled with under-valued properties. Tenants who want to set down roots and raise families must go elsewhere. 

Measure I helps to solve these problems. It allows surplus rental units to be converted to affordable housing with fees paid up front. Measure I helps tenants become owners and increases tax revenues paid to the city. Measure I will keep young families in Berkeley, put more children in our public schools and allow more public safety workers to live alongside the people they protect. Measure I is good for tenants, homeowners, the city and everyone who hopes for the freedom and security that home ownership provides.  

Kavanagh and his ilk seek to keep tenants in a state of perpetual economic disenfranchisement. Measure I does the opposite. Measure I helps erase the line between the real estate haves and have-nots, creating a city of greater stability, equality and security. 

John Koenigshofer is a Berkeley landlord. 

Opinions expressed in Daily Planet commentary and letters to the editor are those of the authors and do not necessarily reflect the views of the Daily Planet or its staff.