Not only has rent control in Richmond restrained a housing providers ability to maintain sufficient working capital through its retroactive regulation of rents, it has also introduced a significant amount of risk to the rental business. Below are highlighted aspects of Measure L our group feels makes providing rental housing in Richmond an increasingly unfavorable situation.

               Details of Richmond's Measure L

-Implemented Dec 30 2016, required that rent rates be rolled back nearly a year and a half (to July 21st 2015). This was arguably just two years into the recovery from the recession that had hit Richmond’s housing and rental market arguably harder than any other bay area city. Subsequent rent increases are now held at the inflation rate (CPI). So far no considerations have been made for the many owners stuck with severely under market recession level rents.

-Insists that Richmond’s housing providers are to be allowed a “fair return on their investment”. The fair return regulations were transcribed by a tenant lawyer in Australia, cited as “the only expert who could draft these regulations”. His known definition of fair return is a "constitutional minimum" amount.  After waiting for fair return hearings to be scheduled since the inception of rent control, 20 months into the program petitioners were sent a 22 page re-application, essentially starting the petition process from scratch.

-The same 22 page application must be submitted for capital expenditures (improvements) Only required health and safety improvements will be considered for an allowable rent raise, with an amortization schedule that assumes that the owner will be qualified for a loan for expensive maintenance projects. Allowable rent increase amounts mimic what monthly payments on the hypothetical loan might be.

-Requires that housing providers pay the entire cost of the rent program with a current budget of roughly $2.8M. This budget has no set limit or allowed oversight by the city manager or council. The rent department can hire as many employees and spend as much as they see fit, sending the bill to rental property owners.

-If a housing provider is not in compliance with the overly complicated and unclear registration requirements put forth by the city, all tenants of the building are given the right to stop paying rent entirely, until the owner comes into compliance. Whether or not the owner is compensated for the lost rent after reaching compliance is up to the rent department to decide.

-All three day notices must be submitted to the rent program for review. Of which, tenant’s rights lawyers, paid for through owners fees, will and have attempted to nullify the evictions by proving that the owner is not in complete compliance, or has committed any other technical violation. ( a non functioning smoke detector qualifies as a violation). It appears the goal of this service is not to prevent unjust evictions, but all evictions, regardless of fault of tenant.

-Allows all spouses, relatives, and caretakers, whether on the lease or not to become tenants of the unit with no allowed rent increase. There are no set occupancy per unit limits by the rent program.

-Should an owner wish to the exit the rental business via Ellis Act, owners are required to pay up to $16,800 to each qualified unit, regardless of length of the tenancy. This amounts to roughly 3.3% of the average single family home value in Richmond, and roughly 9% of the value of a 4 unit building (2018). Owners who wish to move back into their homes after leasing for 1 year or more are required to pay the tenant $8,400

-If damage is done to a building or unit that requires one or more tenants to temporarily vacate their unit for repairs, owners are required to pay each household temporary relocation payments. The fee schedule breakdown is $149 per household per day, $30/per person per day, $28/cat per day and $52/dog per day and $1/laundry per day. (For a family of five with one dog and one cat this would amount to $12,080/month minus the lawful rent they were paying). This fee schedule does not take into account whether insurance will cover the property damage, nor if the damage caused was by a tenant. If multiple units are affected, this exorbitant fee is compounded, threatening immediate bankruptcy to the housing provider.

-Data used to rationalize Richmond’s rent ordinance was taken from buildings of 50 units or more, of which only 18 exist in the city. Our data shows that roughly 75% of Richmond’s rental stock are small buildings (1-4 units) most of which is locally owned. As many as 25% of 2-4 unit buildings appear to be owner occupied.

-Community members greatly affected by this ordinance have essentially been left out of the conversation. Our group has met with the rent program countless to strive to achieve a balanced system that takes into account the needs of the average small time housing provider in the city. Thus far it has been all in vain, and the program believes their mission is to suppress rents to to lowest possible amounts at any and all costs.