By Zack Haber
Starting August 1, the amount by which landlords can increase rent for tenants in rent-controlled units in Oakland will change.
For most tenants of these units Landlords may not increase their rent by more than 2.3%a value known as the annual allowable rent increase, which is based on the calculation of 60% of that year’s change in the Consumer Price Index (CPI).
The city has long capped rent increases at 60% of the consumer price index, and from 2022 Oakland issued an ordinance Limiting rent increases to 3% if the CPI increase exceeds this rate.
Landlords are not allowed to increase rent more than once a year and must notify tenants in writing 30 days before an increase takes effect. The currently permitted annual rent increase of 2.3% is valid until August 1, 2025.
In Oakland, rent control applies to most tenants living in apartments built before 1983. However, all residents of condominiums and almost all single-family homes, regardless of the year these apartments were built, are exempt.
For most tenants who do not live in a rent-controlled apartment, the rent increase is covered by a separate State lawwhich allows a higher increase: 5% plus the Consumer Price Index or 10%, whichever is lower. However, this restriction does not apply to certain types of housing units, including those built in the last 15 years.
In certain circumstances, some landlords whose tenants live in rent-controlled apartments may also increase the rent by more than 2.3%. In each of these cases, the landlord must inform their tenant why the rent increase exceeds the annual allowable rent increase.
The most common way a tenant in Oakland living in a rent-controlled apartment can legally be charged more than the 2.3% limit is through “banking.” In this case, “banking” is a process by which a landlord who has not increased a tenant’s rent to a maximum allowable amount in one or more of the past 10 years can save that increase and apply it to the current year. Essentially, a landlord can calculate what a tenant’s rent would be if they had charged the maximum allowable increase during those years and apply that increase to the current year.
However, the new bridged increase has another restriction: it cannot exceed three times the current year’s annual permitted rent increase. This means that no landlord can increase a tenant’s rent by more than 6.9% this year through bank transfers.
Calculating the legally permissible rent increases can require complicated calculations. However, the city has a List of maximum allowable rent increases from previous years, a bank rent increase calculator and instructions on how to use it on its website.
In addition to banking, there are several other ways an Oakland landlord can increase rent above the annual maximum allowable, including Capital improvementincreased costs for housing supplies, uninsured repair costs and reasonable returns.
In any of these cases, however, the landlord must submit a request to the Oakland Rent Adjustment Board and obtain its approval for the increase. Before the board makes a decision, it must also notify the tenant of their landlord’s request and give them an opportunity to appeal the increase.
An increase in capital improvement costs could include reimbursement for property improvements that benefit the tenant.
An increase in uninsured repair costs may apply if the landlord can prove that increased costs were incurred due to a disaster that caused damage that they must repair to comply with state or local laws. A reasonable return increase may apply if a landlord chooses to combine any of the previously mentioned increases.
If the landlord of a rent-controlled housing unit increases a tenant’s rent above the annual allowable amount for any reason other than banking, the landlord must provide documentation to the Oakland Rent Authority showing that the authority approved the increase.
Jackie Zaneri, tenant advocate and manager of Legal Services of the California Center of Movementsaid if a tenant has received a rent increase and is unsure whether it is justified, they should contact a lawyer and the rental authority.
City website lists legal non-profit organizations where tenants can check the validity of a rent increase free of charge. The list includes Legal Aid in the Bay Area, Central Legal Department of the RepublicAnd East Bay Community Legal CenterOakland’s leasing office can be reached by phone Monday through Thursday from 9:30 a.m. to 4:30 p.m. and by email at . [email protected].
