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[EDITOR'S NOTE: A more detailed response to the Grand Jury's review of the Berkeley Rent stabilization board, along with supporting documents including the full report, can be found here in PDF format.]

The Alameda County Civil Grand Jury has just completed a review of the Berkeley Rent Stabilization Board’s budget, fees and personnel procedures and issued a Final Report. From the outset of its inquiry, we offered our full cooperation and provided extensive written documentation to support our oral testimony.

Civil Grand Juries can perform a vital role in our modern democracy by reviewing the activities of public agencies and acting as “watchdog” to ensure that those agencies are not abusing the public’s trust. We would have welcomed a critical, fact-based analysis of the Rent Board’s charge under the City Charter: the administration of the Rent Stabilization and Eviction for Good Cause Ordinance. Unfortunately, this Grand Jury missed such an opportunity. Instead, it has issued a report that ignored significant evidence substantiating the effective enforcement and reasonableness of the administration of Berkeley’s rent and eviction laws, choosing to mask a disagreement about what type of rent control law Berkeley should have under the guise of criticism of administrative issues. Even more troubling for a report from a public body is the reliance on inaccuracies, innuendo and “perceived” problems, to give a veneer of plausibility to its conclusions.  

In the normal course of events, I would ask the Board to respond to inquiries about the Grand Jury report if and when they arose. The factual errors and insinuation of impropriety in this case are so egregious that to not respond immediately does a disservice not only to the dedicated public servants who provide services to landlords and tenants alike on a daily basis, but to the voters who have consistently supported fair and active enforcement of the Ordinance. The Board may issue a formal response in the future. 

Civil Grand Jury testimony is confidential. Testimony and evidence recounted here is mine and that of the Executive Director, Jay Kelekian. Although we do not know the substance or origin of the complaints that triggered this investigation, the initial inquiries to which we responded and much of the Final Report mirror the June 28, 2011 letter sent to the City Auditor by Sid Lakireddy on behalf of the Berkeley Property Owners’ Association (BPOA) (attached). The BPOA has been a consistent opponent of Berkeley’s rent control laws since the late 1970’s. 

It is important to point out that despite a nine-month investigation, the Grand Jury found nothing illegal or unethical, and that none of the Board’s activities were outside the scope of the Ordinance. Instead, the Grand Jury opined on what type of rent control Berkeley should have without any indication that they understood the distinctive nature of Berkeley’s type of rent control and without any consideration of the strengths, weaknesses and costs of different approaches. The voters of Berkeley have consistently supported Berkeley’s form of rent control over the 32 years it has been in effect. Our staffing levels and fees are in line with cities that have a similar form of rent control (Santa Monica, West Hollywood and East Palo Alto). 

In its report, the Grand Jury either ignored or misstated numerous key points, including: 

• The elected Board is accountable to the voters, who have repeatedly made clear that they support full enforcement of the Rent Stabilization & Eviction for Good Cause Ordinance.

• The purpose of the Ordinance is to create a reasonable balance between the interests of landlords and tenants in an unbalanced housing market.

• The increases to the initial annual registration fee have been passed through to most tenants and are paid through the rent.

• The Board carries out extensive review and oversight and does so transparently and in public. Board meetings are televised (with transcription), broadcast on radio and web cast to maximize total transparency and accessibility.

• The Board has six standing committees that meet regularly with staff to provide effective oversight.

• The staff at the Rent Board has decreased as needs have changed. At the height of rent control, the Rent Board had 36 FTE. Since the passage of vacancy decontrol the staffing level gone down from 27 to between 19 - 21 FTE the past few years.

• Due to the foreclosure crisis and the increased incentive that vacancy decontrol created to evict long-term tenants, the need for the Rent Program’s services has increased. We receive over 10,000 client contacts a year.

• Overwhelmingly, tenants and most landlords (regardless of their opinion about the law) believe that the services they receive from the Rent Board staff are fair and professional.
• Berkeley’s registration fee is within the range of the California cities with strong rent control enforcement policies: Santa Monica, East Palo Alto and West Hollywood.

• Los Angeles, San Francisco and Oakland charge lower fees, but studies have shown that these cities have a far higher rate of non-compliance with their ordinances and they have much larger populations and benefit from economies of scale.

• All Rent Board employees are hired through the City’s civil service system, administered by the Human Resources Department, which ranks job applicants by their qualifications. Those hired at the Rent Board are judged the most qualified candidates by this process.

• The Executive Director’s pay is similar to what other directors are paid in similar cities.

• The elected Board’s compensation has not increased in 25 years, since 1987.

• Like most local and independent governmental agencies, the Board has a lobbyist to represent its interests in Sacramento and has had one since 1984 which includes the period when the majority of the Board were people supported by landlord organizations.

• The Board has detailed published regulations that govern the late payment penalty/waiver process and all waivers are reviewed by the Director to assure rules are applied correctly.

• We are fortunate that at a time when tax limitations and recession are crippling local government services, the Berkeley Rent Board is able to charge adequate fees and ensure that the Rent Stabilization and Eviction for Good Cause Ordinance is properly enforced.

Finally, perhaps what is most disturbing are the numerous unfounded and undocumented references to “potential areas of misuse” or “perceptions of impropriety” made by opponents of the Program. Anyone can make unfounded accusations and create a “perception” problem – we live in a time when many people claim the President of the United States is not really an American. The Civil Grand Jury’s inaccurate and inconclusive review of these issues in and of itself contributes to these “perceptions of impropriety”. 

The attached document does not discuss “potential” problems or “perceptions” but rather the facts that were presented to, but often not included in, the Grand Jury’s analysis or Final Report.