Public Comment

Demolition of Rent-Controlled Units Sets Bad Precedent

Berkeley Tenants Union
Friday November 06, 2015 - 04:02:00 PM

On Tuesday November 17, the City Council will hear Berkeley Tenants’ appeal of the demolition of 18 rent-controlled units at 2631 Durant. The units were 100% occupied when the owner applied for the demolition. 

Allowing the demolition presents dangerous precedents: 

1) The staff report and corresponding opinion by the City Attorney for 2631 Durant say that the requirement under BMC 23C.080 that any rent controlled unit be replaced with permanently affordable housing does not apply to demolitions at all, ever. 

2) The staff report also says that a 4.17% return on investment in the initial year is not enough profit to be called a “fair return” for the developer. In addition, that 4% estimate is based on a pro-forma using 2015 market rent ceilings for older, rent controlled units in the area (studio = $1495) while the Housing Element shows that market rents in a rehabilitated building would be much higher (studio = $2,239).  

This would be the first time Berkeley has allowed an owner to claim he can’t make a fair return on a rehabilitated building. 

3) There is one other disturbing fact in this case – developer Cliff Orloff argues that the building is infeasible to repair but the staff report shows they invited the Berkeley Fire Department to conduct exercises in the building, including cutting holes in the roof!! Additionally, the developer has been aware of termites since they bought the building several years ago, but has allowed their damage to go uncheck, and the developer left the building open, so damage was also caused by squatters, despite multiple notices from Code Enforcement. To grant this project as requested is to condone demolition by neglect.  

Please stand with Berkeley Tenants Union and Associated Students of UC Berkeley (ASUC) in asking that the Council honor the intent of the voter-approved Neighborhood Preservation Ordinance (1974), the Rent Removal Ordinance (1984) and the Demolition Ordinance: 

1) Loss of older, rent controlled or otherwise affordable housing must be mitigated by replacement with permanently affordable housing for Low or Very Low income renters.  

2) The pro-forma should be based on projected 2017 market rents for rehabilitated buildings. An initial Return on Investment of 4% is an acceptable return. 

3) Owners should not be rewarded for allowing buildings to fall apart. 

Join Us at City Council on November 17, and send an email to the City Council, marked “Durant Appeal, November 17” by writing 

– they should get your email by November 10th.