Bay Area

Oakland Landlords Allowed to Raise Rents Aug. 1

Starting on August 1, the amount that landlords can increase the rent for tenants living in rent-controlled units in Oakland will change. For most tenants living in these units, landlords cannot raise their rent more than 2.3%, a figure called the annual allowable rent increase, which is based off of calculating 60% of this years’ change in the consumer price index, or CPI. The city has long limited rent increases to 60% of CPI, and starting in 2022, Oakland passed an ordinance capping rent increases at 3% if the CPI increase exceeds that rate.

Published

2 years ago

August 17, 2024

Oakland Post

A rent controlled duplex located in West Oakland. Photographed on July 22 by Zack Haber.

By Zack Haber

Starting on August 1, the amount that landlords can increase the rent for tenants living in rent-controlled units in Oakland will change.

For most tenants living in these units, landlords cannot raise their rent more than 2.3%, a figure called the annual allowable rent increase, which is based off of calculating 60% of this years’ change in the consumer price index, or CPI.

The city has long limited rent increases to 60% of CPI, and starting in 2022, Oakland passed an ordinance capping rent increases at 3% if the CPI increase exceeds that rate.

Landlords can’t raise rent more than once a year, and they need to inform tenants in writing 30 days prior to any increase going into effect. The current 2.3% annual allowable rent increase will be in effect until Aug 1, 2025.

In Oakland, rent control applies to most tenants living in units built before 1983, but excludes those living in all condos and almost all single-family homes, regardless of when those units were built.

Most renters who don’t live in a rent-controlled units have their rent increases limited by a separate state law, which allows a higher increase: 5% plus CPI, or 10%, whichever is less. That limitation, however, doesn’t apply to certain types of housing units, including those built within the last 15 years.

Under certain circumstances, some landlords with tenants living in rent-controlled units will be able to raise the rent higher than 2.3% as well. In each of these circumstances, the landlord must inform their tenant why the rent increase exceeds the annual allowable rent increase.

The most common way an Oakland tenant living in a rent-controlled unit could legally be charged more than the 2.3% limit is through ‘banking.’ In this case, ‘banking’ is a process where a landlord who didn’t raise a tenants’ rent to a maximum allowable amount in one or more of the previous 10 years can bank that increase and apply it to the present year. Essentially, a landlord can calculate how much 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.

The new banked increase, however, has a further limitation: it can’t exceed three times the amount of the current years’ annual allowable rent increase. That means that this year, no landlord can raise a tenants’ rent more than 6.9% through banking.

Calculating what is legally allowed in a banked rent increase can involve some complicated math. But the city has provided a list of previous years’ maximum allowable rent increases, a banking rent increase calculator, and instructions for its use on its website.

In addition to banking, there are few other ways an Oakland landlord can increase the rent higher than the annual allowable limit including capital improvement, increased housing service costs, uninsured repair costs, and fair return.

In each of these cases though, the landlord must file a petition with Oakland’s rent adjustment board and get the board’s approval for the increase. Before making any ruling, the board must also inform the tenant of their landlord’s petition and offer them an opportunity to challenge the increase.

A capital improvement increase could include some reimbursement for property improvements that benefit the tenant.

An uninsured repair increase could occur if the landlord can prove increased costs arose due to a disaster causing damage that they have to repair to comply with state or local law. A fair return increase could be applied if a landlord chooses to combine any of the previously mentioned increases.

If a landlord of a rent-controlled unit raises a tenants’ rent over annual allowable amount for any reason other than banking, they have to include the paperwork from Oakland’s rent board showing the board has allowed the increase.

Jackie Zaneri, tenant attorney and manager of California Center of Movement Legal Services, said that if a tenant got a rent increase that they aren’t sure is valid, they should check with an attorney and the rent board.

The city’s website lists out legal nonprofits that tenants can check in with for free about the validity of a rent increase. The list includes Bay Area Legal Aid, Central Legal de la Raza, and East Bay Community Law Center. Oakland’s rent board is available by phone Monday through Thursday from 9:30 am to 4:30 pm, and by email at RAP@oaklandca.gov.