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New: Councilmember/Realtor Capitelli and the Police Chief’s $500,000 House Loan from the City of Berkeley

By Zelda Bronstein
Wednesday October 31, 2012 - 09:35:00 AM

On November 10, 2009, Laurie Capitelli joined the rest of the Berkeley City Council in approving the appointment of Michael Meehan as the City’s new police chief, effective December 13, 2009. The resolution of approval authorized “a housing assistance loan of up to $500,000 for the purchase of a residence within the City of Berkeley”.

In 2010 Chief Meehan moved into a home in the Thousand Oaks neighborhood in north Berkeley. I assume that he used his $500,000 loan from the City to purchase that property, which sold for $1,185,000. The seller used an agent from Northbrae Properties; the buyer used Red Oak real estate agent and Berkeley Councilmember Laurie Capitelli. 

The official website of the National Association of Realtors states that when it comes to commissions, “most areas have a standard percentage that agents expect to receive” and that [t]his amount usually is 6 percent of the sales price.” The website also explains that every “real estate agent must work for a real estate broker”; that both the seller’s and buyer’s agent are paid by the broker for whom they work; and that “generally the agent and the broker split the commission that is paid to the seller’s and buyer’s broker upon the sale of the house.” Commonly, the listing broker shares the commission with the buyer’s broker, though the split is not always equal. 

If the commission on the Meehan house was 6 percent of the sales price, it would have been $71,100. If Northbrae and Red Oak split the commission equally, Red Oak would have received $35,550. Laurie Capitelli is a Red Oak Realty Partner. If Capitelli didn’t personally pocket part of the $35,550—or whatever Red Oak received—the business in which he is a principal did. 

It would appear that part of the $500,000 “housing assistance loan” approved by members of the city council went toward paying a real estate commission to a member of the city council. 

Full disclosure is called for, immediately. 

Zelda Bronstein is a former chair of the Berkeley Planning Commission, a former president of the Thousand Oaks Neighborhood Association and a resident of District 5.