The following is a recap of the February 23 Rent Board hearing on a proposed increase in the Rent Adjustment Program (RAP) fee, which tenant advocates believe is actually passed on to renters. For more on the fee increase see: Council Drops Fee Increase, After Outcry
Note: The fee increase proposal is currently scheduled to be heard before the City Council’s Finance & Management Committee on Tuesday March 22 at 9:30am. That date may change, so renters interested in speaking out against the fee increase should look out for the the meeting agenda & reports which are typically posted 10 days before the meeting. Renters need to call, write and more importantly appear in person to express their demand that there be NO fee increase.
RAP Hearing Recap, February 23:
An estimated 30 landlords appeared, while 3 renters appeared. Also in attendance were employees of the East Bay Rental Housing Association (a rentier group), the RAP program manager, the City Attorney’s staff member designated for the RAP, two hearing officers, and a low-key presence by staff member of the City Auditor. At the prompting of renters, there is an audit being conducted of this self-supporting program – self-supported by renters...
The first 90 minutes of the hearing was devoted to hearing the various landlords express their concerns over this possible fee increase which they stressed, when coupled with the recent City Council approved increases for garbage & recycling collection, would be too much. Of course, they also expressed their displeasure with the RAP because in their determination the hearing officers side with the renters. None mentioned the ordinance & regulations have been written by & for landlords and real estate interests. Many offered suggestions of reducing the almost non-existent protections currently “provided.” It was hard to determine if it was ignorance or maliciousness, but many seemed to be playing-dumb in pretending not to comprehend the RAP ordinance & regulations. Some landlords even complained that the renters weren’t paying the fee when requested. Kudos to those renters!
The RAP fee only covers those units covered by the RAP and by the Just Cause for Eviction. There is a different subset of units that are covered by Just Cause but are not covered by the RAP. Even with this lesser coverage, those renters still pay the full amount if the landlord actually pays the fee on their behalf. Many don’t.
In actuality, the renters pay all of the fee! The landlord is paid what is known as the gross income (the entire rent amount collected). From that is deducted all of the expenses: property & business taxes, insurance, common-area utilities, garbage/recycling, the RAP fee, a landlord advocacy group membership fee, management overhead and gardening/janitorial costs. What remains is known as the net income. From this is deducted any mortgage payment that might still exist. The remainder is the profit. Notice all of this is taken from the gross rent – the renter pays for everything involved with the building. In the rare situation in which the landlord is running a loss, it might then be considered possible that the landlord might be paying their half of the RAP fee. You might have noticed that maintenance was not included in the expenses. Oakland allows the owner to pass on maintenance as an extra – what is known as Capital Improvements.
A volunteer member of the Oakland Tenants Union relayed renters' concerns when renters were allowed to speak during the last 30 minutes. These same concerns were raised by OTU and other renter advocates at a Council hearing in January on this fee increase (see here for more). The RAP program manager stated the fee increase proposal will once again be heard before the City Council’s Finance & Management Committee on Tuesday March 22 at 9:30am. That date may change. The agenda & reports are typically posted 10 days before the meeting. Renters need to call, write and more importantly appear in person to express their demand that there be NO fee increase.