re: Item 1, Second Reading of Short Term Rentals Law
Berkeley Tenants Union letter to City Council
February 14, 2017
Berkeley Tenants Union members have spent countless hours waiting to address the City Council in the past several years to deliver our message: in order to protect our rental housing stock, Council should only ease the ban on Short Term Rentals (STRs) a little bit at a time. We have been asking City Council for years to please JUST allow renters and owners to rent THEIR OWN HOMES for the short term, and move on to enforcing the existing ban on other STRs as soon as possible.
We remind you that the ban on renting for less than 14 days was created to make sure there was not an easy way around rent control protections.
We remind you that all permanent housing – even housing that is not rent controlled – contributes to the diversity and affordability of Berkeley.
Some people say they want a compromise; allowing short term rentals for unlimited days when the owner is present WAS a compromise — those rooms could ALSO be used for students and other permanent residents.
We join the Rent Board in asking Council to please change the language in Section 23C.22.020D – BTU has always asked that Council not allow rentals for less than 14 days in any whole unit that could be used for people who live and work in Berkeley. Berkeley Tenants need you to preserve all existing housing for residents, and to create new housing. We do not want new accessory dwelling units (ADUs) to be used as vacation rentals – we worked hard to get that into the initial Council referral for the ADU law many years ago – but it did not get put into that final draft. Berkeley Tenants have always asked that Council not allow STRs in any existing in-laws, or even converted garages – if they have a kitchen. It doesn’t matter if someone bought it last week, wants to use it for their nanny, father or second cousin. Berkeley people need that housing!
We are very concerned that Section 23C.22.020D will encourage new owners to evict long term tenants.
BTU members have also been consistent in our other message — simple laws make for better enforcement. Allowing some ADUs to be short term rentals but not others will be confusing for owners as well as adding an additional layer, and thus additional costs, for enforcement.
We did not send people to the Council meeting on January 24th because we thought that the leaders we worked so hard to get elected this fall had heard our pleas. We are not asking members to come out on Tuesday for the same reason – we expect you to preserve housing and create new housing, not establish new hotel rooms.
Short Term Rentals to new City Council January 24th
There are two proposals before the Council tomorrow. One would allow folks who have been breaking the law by renting their “in-law” unit to visitors to continue to do so while continuing to ban others with in-laws (the ones who have been abiding by the current law) from short term rentals. Yes, you heard me. Item 41a would reward some duplex owners who have been breaking the law by “grandfathering” their short term rentals! This item is a carry-over from the previous City Council, and BTU hopes and expects the new Council to see the inherent risk to renters and reject Item 41a.
Instead, BTU is asking the City Council to support proposals by the Rent Stabilization Board (see below) which would make Item 41b into a short term rentals law much closer to what we have all hoped for: one that would protect our housing stock while allowing owners and tenants to rent their own homes out on AirBnB and other platforms now and again for some extra cash.
When is a Kitchen not a Kitchen?
The whole vote on Tuesday will be made extra-confusing by an adjunct proposal; Item 42 changes the definition of kitchen. This may also be an issue renters and those concerned with housing policies will want to weigh in on: can folks rent their converted garage or other “Accessory Building” as a short term rental? Under Item 41b and 42 the answer will be yes, as long as the building does not have a history of being rented for the long term.
There is just one problem with this compromise regarding Accessory Buildings: the new definition of kitchen says a kitchen is not a kitchen if the refrigerator is small! A kitchen would now be defined as “A habitable space used for preparation of food that contains at least a sink, a refrigerator of no less than 10 cubic feet, and either a cooktop and an oven, or a range.” This leads to the questions: if you can put a full kitchen in your garage, then why would we allow it to be a vacation rental but not a permanent home at a time when we need housing? If you put a kitchen in your garage, will it be safe for short or long-term renters? BTU has always said we are fine with folks renting their garage as a short term rental if it does not have a kitchen, and thus could not be used for long-term housing.
Short Term Rentals Enforcement
Last summer the Council also directed staff to take action to enforce the existing ban on rentals of less than 14 days if an owner had more than three units listed for the short term. BTU worked with Councilmember Worthington’s office to provide information about several such owners. So far we have not heard of any action taken. Also last summer, the staff from Berkeley put out an RFP and decided to hire a private firm called Host Compliance to enforce the new rules. The firm also contracts with Oakland, Napa, Los Angeles, Denver, Toronto and many other cities, according to their website.
The Rent Board’s recommendations to Council also include language to make enforcement of the new law more effective.
Rent Board Gives Advice “The Board is requesting that Council consider proposed revisions to language in the definition of Short-Term Rental (23C.22030 –D) and Host Residence (23C.22030 –D). I addition, we believe there should be a definition for Long-Term Rental and have provided possible language. The Board also recommended that Council adopt enforcement language similar to the City of San Francisco to prevent hosting platforms from ignoring local regulations.” RSB to Council: rent-board-strs-2017 Harr / Simon-Weisberg Proposal: harr-simonweisberg-strs-2017
Soto-Vigil Proposal: soto-vigil-strs-2017
Student Groups Support Harrison in District 4 “We have an opportunity in Berkeley today to lead the way on progressive solutions to our nation’s challenges and ensure that the legacy we leave for those who follow in our paths is an equitable, sustainable, affordable and livable community for years to come. Kate will bring the lessons she has learned from her work as a consultant on the global stage to keep our city welcoming and inclusive and make it an even better place to call home.” http://www.dailycal.org/2017/01/20/students-support-kate-harrison-district-4-city-council-special-election/
Permits Bureaucracy Drives Events Underground “Everything about the permitting system is designed to discourage the type of electronic music events that people want to hold, Keenan said, from dropping off special permit applications at the city’s Eastmont police substation on 73rd Avenue, to the applications themselves that say in block-faced letters: “Dancing is not permitted between 1 a.m. and 9 a.m.” Plus, permits have to be filed at least 30 days in advance. And, it can also be incredibly costly, he said. Each permit has its own associated fee, and while special event permits are only $50, extended-hour cabaret licenses can run as high as $2,900, according to the city’s master fee schedule. There’s also the added cost of hiring security for the event if the city deems it necessary, and acquiring insurance, which is also required.” http://www.eastbaytimes.com/2016/12/09/musicians-artists-costly-permitting-system-forces-events-underground/
Oakland Tries to Shut Down Legit Activist Space David Keenan is a BTU Member. “Omni founding member David Keenan said the experience calls into question public statements from Mayor Libby Schaaf that city officials would not be conducting a “witch hunt” and would be using “compassion” in their handling of fire and code enforcement complaints. Those types of complaints spiked in the two weeks after the deadly Ghost Ship warehouse fire in Oakland’s Fruitvale neighborhood earlier this month.” http://www.eastbaytimes.com/2016/12/28/omni-commons-experience-highlights-oaklands-heavy-handed-approach-for-artist-spaces/
Thanks to California Senator Diane Feinstein, there is a national movement to call for the Federal Trade Commission to investigate how commercial landlords using short term rental platformsare impacting housing shortages and contributing to high rents nationwide.
Now you can join their calls for a national investigation.
Congressional Black Caucus On Airbnb Racism “Members of the CBC are deeply concerned about recent reports of exclusion of African-Americans on the Airbnb platform, and we sincerely hope the leadership of Airbnb will take the issue of discrimination seriously and implement common sense measures to prevent such discrimination and ill-treatment of its customers in the future.” http://blackamericaweb.com/2016/06/27/airbnb-racism-allegations-head-to-capitol-hill/
More on Warren’s Call for Investigation: “Opponents argue that Airbnb, a platform that allows users to rent out their homes to strangers, is aggravating housing crises in cities across the country by flooding markets with short-term rentals and, as a result, reducing much-needed affordable housing. While Airbnb claims that many of its users are occasionally renting out rooms to make extra cash, some experts who have studied the limited data available argue that the platform is allowing people to operate sophisticated hotel businesses while dodging taxes and other key regulations.” https://www.theguardian.com/technology/2016/jul/13/elizabeth-warren-airbnb-government-investigation
We have one step forward and two steps back:
The good news is that the City Council voted July 7th to demand enforcement of the existing law prohibiting short term rentals if an owner has three or more units offered as vacation rentals in Berkeley. BTU is sending updated info about the owners we complained about last summer – and we would like you to send any information about big landlords breaking the law to the City Council, and to us, too!
The bad news is that the Council majority may be selling tenants out for some tax revenue so they can cut a deal with megacorps like AirBnB. After promises from Bates and Capitelli to continue the ban on short term rentals of units that are not someone’s home, they voted to “have staff consider the possibility of grandfathering in permits for accessory dwelling units currently being rented out on a short-term basis.” In other words, if you own a duplex and are following the law, you are screwed, but people who have been breaking it might be allowed to legalize their small business.
Durant Demolition Granted
(with Unknown Mitigation)
We have mostly a success story on our continuing opposition to the demolition of 18 rent controlled units on Durant. This is because while the BTU/ASUC appeal was going through a ridiculous year-long city process, the Council passed a new version of the demolition ordinance which requires a mitigation fee for the loss of rent control.
However, the Council did not set the fee. State law says you have to show a direct relationship between the level of a mitigation fee and the damage to society that the money is meant to offset. Council first commissioned a “nexus study” on demolition of rent controlled units several years ago, but they say they still don’t have it back. Some activists think they are waiting until after the election to make an unpopular vote.
BTU plans to demand that the fee be as high as the study says it needs to be to provide for one-for-one replacement of rent controlled units with real affordable housing.
Lawsuit on Durant Demolition Developer Orloff claims there is an inherent “right to develop.”
“…plaintiffs fault Berkeley for “its enactment of legislation that illegally and unconstitutionally requires property owners to transfer massive sums of money to the City and tenants in order to exercise an essential right of property ownership: the right to develop property.” They seek, among other relief, a declaration from the court that the ordinance violates the Fifth Amendment of the Constitution and its Due Process Clause, and is therefore invalid….The city, in its motion to dismiss, argues that there is a definite nexus between mitigation fees and the public purpose of mitigating the loss of affordable housing…” http://www.eastbaytimes.com/breaking-news/ci_30145194/berkeley-landlord-sues-city-over-demolition-fees
Evictions from Unpermitted Units in SF “Though S.F. has proven to be an inhospitable place for renters the last several years, the circumstances surrounding this eviction are particularly startling. It seems that Malliett’s new landlords—Mathieu Verbeeck, a VP of product development at Mubi, and Catherine Crevels, a marketing manager at Intuit—are testing out a novel strategy for ejecting tenants. They contend that Malliett and her daughter are causing a “nuisance” by living in a unit that lacks the proper permits. The Board of Supervisors has…” http://www.modernluxury.com/san-francisco/story/tech-workers-evict-kindergarten-teacher-mission-apartment-using-appliances
After a year of public hearings and debate, Berkeley Mayor Tom Bates is proposing to change the Short Term Rentals law which Berkeley City Council passed on May 31. Every law in Berkeley must be voted on twice, and in between vote one and vote two, Berkeley leaders are appearing to waiver.
Berkeley City Council votes Thursday, July 7th at a special 5:30pm meeting.
Bates has introduced a proposed contract with Airbnb to collect tax for Berkeley if Berkeley does not compel Airbnb to share any data that might allow our city to enforce the law and protect our housing supply. This contract comes at the same time that Oakland has cut a similar deal, but while San Francisco is increasing fines and being sued by the corporate platform.
The new law is already a compromise which allows residents to rent their homes, or rooms in their homes, while continuing the (as yet unenforced) ban on rentals of empty homes. The reason that rentals of less than 14 days have been against the law in Berkeley is because such rentals allow an owner to get around tenant protections and rent control.
It is important that Berkeley Tenants who have not written to Council since May 31 send them a letter asking that they approve the second reading of the law which has gone through a long public process already. It is important that everyone read this ridiculous contract with Airbnb and let the Mayor know that he can’t give away our hard-won tenants rights as one of his last acts in office!
WE CANNOT ALLOW HOUSING TO BE CONVERTED TO HOTEL ROOMS
WE MUST REQUIRE LICENSE NUMBERS ON ADVERTISING
BERKELEY SHOULD NEVER SIGN A CONTRACT WITH AUDIT RESTRICTIONS
The Contract Offer: – Stays over 29 days in duration will not be subject to tax
– Berkeley waives all taxes not paid before contract date
– The Department of Finance will not directly or indirectly audit any Host
– Airbnb will not provide personally identifiable information regarding its Hosts
– Berkeley can audit Airbnb no more frequently than every four years 2016 STRs air bnb contract
Short Term Rentals held over by Berkeley City Council until Thursday July 7. BTU will post an update in a couple of days regarding the Mayor’s last-minute introduction of a proposed contract with Airbnb.
Durant Demolition approved under new demolition law which calls for mitigation of the loss of rent controlled housing through a fee to fund new low-income housing – however, the fee has not been set yet! Also, that developer has filed a lawsuit against the new version of the law.
Two Competing Landlord Taxes on Berkeley Ballot
“Depending on the business license tax rate increase, the CSAH measure would fund 40 to 70 units annually, while BRHC’s would pay for just 12, Barton added. The measures also differ on exemptions. The apartment owners’ measure raises taxes on every rental housing unit currently taxed.
“The additional tax would raise an additional $5 million a year from landlords over the current $3.5 million, for a total of $8.5 million a year, according to estimates by the Committee for Safe and Affordable Housing, which supports the measure. Apartments rented to Section 8 tenants, apartments with tenants in occupancy since before 1999, and certain other properties, would be exempt from the tax increase; there also would be a hardship exemption. The measure would prohibit passing the business tax increase along to most tenants. Proceeds of the tax increase would facilitate 45 affordable housing units per year.” http://www.eastbaytimes.com/breaking-news/ci_29974957/berkeley-council-oks-funding-measures-november-ballot
This Tuesday, Berkeley’s City Council indicated they might backtrack on the decent short term rentals law they passed on May 31st. The second reading of the new law was held over at Councilman Capitelli’s request, and will be heard June 28th. Councilman Capitelli is also running for Mayor.
Basically, Berkeley Tenants have until next week to get as many letters to the City Council as AirBnB hosts already sent, or we will continue to see our rent controlled housing converted to hotel rooms. Air BnB got at least 200 Berkeley users to send our elected leaders form letters last week, and that’s all it took for Council to start wavering from the strong referral they made last summer.
Thank you for passing a fair short term rentals law.
I support allowing people to rent their homes when they are on vacation, but I stand with the Berkeley Tenants Union in asking for strict enforcement of a ban on converting empty units into tourist rentals. It’s important that “hosts” be required to have a business license just like any other small business in Berkeley, pay their fair share of taxes, and display that license on their listings so it will be easier to enforce the law.
So far, the Rent Board, Planning Commission, and Housing Advisory Commission agreed about most provisions of the new law – The same provisions the Council itself asked for after a long public process last summer! But because a couple folks who are already breaking the law by renting their second unit as a short term rental pleaded that they will lose their homes if they are not allowed to continue to break the law, Council is wavering on a decades-old policy of not letting folks circumvent rent control by renting for less than 14 days. Also, because of pressure from corporations like HomeAway and Airbnb, Council is wavering on the only enforcement mechanism in the new law: requiring the business license on advertising.
This late first step toward dealing with the problems caused by short-term rentals in Berkeley comes at the same moment that San Francisco is revising their law to fine corporations like Airbnb $1000 per day if they advertise places that are not registered with that city, because so far only 25% of hosts in San Francisco are legal. San Francisco collected over half a million dollars in fines in the first six months of its new program.
City Council has asked staff to come back with more information on the 28th: Info on the business license process, What is a Zoning Certificate? Why is displaying the license number on the ads is key to enforcement? What is the new San Francisco law? What is the difference between the staff and planning commission drafts? What is an ADU? What about in-laws with no separate kitchen? What are penalties for non-compliance? How will enforcement occur?
The Berkeley City Council may finally pass some Short Term Rental (STR) laws on Tuesday, May 31. The problem for tenants is that city staff won’t enforce the existing ban on STRs until Council makes the new laws, yet the draft being contemplated by Berkeley repeats the mistakes that have caused problems for San Francisco, Portland and other cities with tight rental markets that are popular tourist destinations.
In May and June of 2015, several activists and tenants impacted by short term rentals in their building filed code enforcement complaints on behalf of BTU against some of the landlords who are listing multiple empty units on AirBnB and other websites.
So far, Berkeley has refused to act on these and other complaints.
A new report from San Francisco on the impact of AirBnB on the rental housing market calls for SF Supervisors to require “hosting platforms” to only advertise rentals that are legally listed with the city. Yet Berkeley’s draft recommended by planning Staff does even require that an advertisement show an identifying license number.
We ask Berkeley Tenants to join BTU in asking the City Council to enact legislation requiring hosting platforms to only list units and hosts that are registered with our City and to fine hosing platforms like HomeAway, FlipKey and Airbnb if they advertise rentals which are not legal here. This would allow less expensive enforcement of the new laws, which will allow regular folks to rent out their own home. We hope the new law will stop large landlords from turning whole apartment buildings into hotels – as several have done already!
We also want to support the Rent Board, Planning Commission and Housing Commission in suggesting that units where tenants have been evicted through OMI or Ellis Act evictions should not be allowed to be short term rentals in Berkeley. Please take a look at the report from the Rent Board, which is an attachment below.
Finally, we suggest you write to the City Council to request that no whole units, not even in-law or accessory units, be converted to hotel rooms when we need every single housing unit to be offered to folks who live and work in Berkeley! Although the original Council referral asked that the law require any short term rental to be someone’s primary home, the Staff draft of the new law would allow some 2nd units on owner-occupied properties to be offered as tourist rentals. As the analysis of the impact of Airbnb in San Francisco shows, losing units to short term rentals does drive up housing costs.
Item 19 Support AB 2502 Inclusionary Housing
Ask the state to allow local requirements for affordable rental housing. Right now, Berkeley can’t require that developers include lower-income units on site if the housing being built will be rental housing. California needs to make a law to allow Berkeley control over local zoning mitigations.
Item 21 – End Discrimination Based on Tenant’s Income Source
Owners would have to accept Section 8 Housing Vouchers.
Item 27– Placing a Measure on the November 8, 2016 Ballot to Increase the Business License Tax on Owners of Five or More Residential Rental Units
EDIT: Planning Commission final public hearing 1/20 Housing Commission Strengthens Recommendations for Local Law Berkeley’s Housing Advisory Commission sent a follow-up to their earlier short-term rentals recommendations. The HAC did this both because the draft ordinance does not seem to reflect their recommendations and because there were additional issues to address. “During the meeting, Darrow expressed concerns that current regulations could allow owners to turn rent-controlled housing units into short-term rentals by evicting all tenants in a building under the Ellis Act, a state law that allows property owners to evict tenants in order to “go out of business.”
According to the new language approved by the commission at the meeting, if an owner evicts a tenant from a unit through no fault of the tenant, the owner must wait five years before the property can be turned into a short-term rental. Additionally, owners must obtain a business license through the city and list their license number in their rental listings.” http://www.dailycal.org/2015/12/06/citys-housing-advisory-commission-approves-short-term-rental-recommendations/
Draft Law Making Final Rounds The draft of Berkeley’s Short Term Rental (STRs) ordinance is now available to the public. The next step is for the Planning Commission to hold a final public hearing, then the law will go back to the City Council, which last discussed the matter in July. Unfortunately, the staff report specifically says they did not address concerns from the Housing Commission in the draft.
It is also unfortunate that the draft law seems to contravene two Council referrals (one on ADUs and one on STRs) by allowing accessory dwelling units (ADUs) on the same property in which an owner occupies another unit as her primary residence to be used as hotel rooms. As usual, the language in the draft law is unclear: “Host present” means the host is living at the premises of the dwelling unit that is being used for STRs during the short-term rental period or living in the Primary Residence or the Accessory Dwelling Unit.” Read the Draft: 2015-12-16_Information_Item_Draft Short Term Rental Ordinance-Combined The Planning Commission is expected to hold a public hearing on January 20 or February 3rd.
Berkeley Owners Sent Warning Letters
At the 4×4 Committee meeting in December, Planning Director Eric Angstadt told Council leaders and Rent Board Commissioners that the City Manager’s office sent warning letters to several STR operators who are violating Berkeley’s current ban on rentals of less than 14 days. BTU has done a public records request to see if letters were sent to the 4 owners BTU filed complaints about in May and June of 2015.
STRs in the News
Ousted Tenants Sue In Los Angeles “Their rent-controlled building allowed them to enjoy below-market rents of less than $2,000 a month for their two-bedroom pads in the upscale neighborhood. That came to an end in late 2013 when the owners evicted them under the Ellis Act, a state law that allows landlords to get out of the rental business….Within weeks, their apartments began appearing on Airbnb — a short-term rental site geared at tourists — for nightly rates that could total $15,000 a month, they said.” http://www.latimes.com/local/westside/la-me-1217-ellis-suit-20151217-story.html
Airbnb Fined for Offering Lodgings Without Permits in Barcelona “With the aid of a software programme, the town hall detected listings for 1,891 lodgings that did not have proper permits on Airbnb, and another 3,929 on HomeAway, it said in a statement. Each have been issued a fine of €60,000 ($65,000).
Since taking office in June, Barcelona mayor Ada Colau, a former anti-eviction activist, has kept her pledge to try to curb a boom in visitor numbers that she fears could drive out poor residents and spoil the charm of Spain’s second largest city.” http://www.thelocal.es/20151222/barcelona-city-hall-fines-airbnb
Balcony Lawsuit Says Owners Knew About Problems If we had the proactive inspections program the City Council will discuss on December 1, then this tragedy may have been prevented. “The lawsuit claims that Segue used cheaper materials to construct the balcony, making it more susceptible to water damage, and left it exposed to rain during construction in 2005…. Previous tenants reported seeing mushrooms – a clear sign of rot.” http://theindianrepublic.com/lawsuits-filed-in-deadly-berkeley-balcony-collapse-reveal-3892.html
Rent Wars Excellent overview of California’s housing crisis and current tenant’s movement. “Activists in cities that have long had rent control laws are pushing for stronger measures. In Los Angeles, activists like Larry Gross, Director of the Coalition for Economic Survival, want the city to stop allowing tenants to be evicted so that speculators can demolish their rent-controlled buildings.” http://www.beyondchron.org/the-new-rent-control-wars/
Berkeley Fair Election Initiative “But when elections are determined by fundraising alone, communities pay the price. And when the perception is that only money matters in campaigns, it erodes public faith in government. With voter turnout at historic lows, we need to do everything we can to increase participation.
What if I told you there was a proposal to encourage local candidates to spend more time talking to voters and less time dialing for dollars? What if this proposal could diversify the local donor pool, encourage more voters to participate and make City Council more responsive to the citizens they are elected to serve?” http://www.berkeleyside.com/2015/11/06/lets-amplify-local-voices-in-berkeley-city-hall/
Evictions and Air BnB “Data analysis of Airbnb usage in San Francisco tells a decidedly different story about who is benefiting. Although Airbnb refuses to share its numbers, a 2014 report commissioned by the San Francisco Chronicle found that of the (at the time) nearly 5,000 homes, apartments, and private or shared rooms for rent via Airbnb, two-thirds were entire houses or apartments with no owner present during the rental period, and almost a third of Airbnb rentals were controlled by people with two or more listings. Some of the “whole house” or “whole apartment” rentals are from hosts who happen to be away. But many others are being rented out by professional property managers who are handling multiple Airbnb rentals on behalf of absentee home- and condo owners. A separate study conducted by data analyst Tom Slee found similar results. He calculated that about 70 percent of Airbnb revenue comes from hosts who are renting out an entire home or apartment, and 40 percent comes from Airbnb hosts with multiple listings.” http://prospect.org/article/evictions-and-conversions-dark-side-airbnb
Is Berkeley Like Disneyland?
“More than 40% of the homes that have permits to rent in Anaheim are owned by real estate companies, investment firms or the owners of multiple properties, according to city records.
“These are basically unsupervised mini hotels in our neighborhoods,” said Cornejo, who has called the police on his neighbors several times for late-night noise.
With so many strangers visiting their communities, some residents recently urged Anaheim council members to consider safety and security issues. Renter safety too has become a growing concern in the wake of some well-publicized reports of sexual assault, injuries and deaths at short-term lodgings in other towns.” http://www.latimes.com/business/la-fi-anaheim-short-term-rentals-20151111-story.html