How much can Oakland landlords raise the rent?
City law will limit the amount that many landlords can raise the rent to 2.3% for about the next year
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 for most tenants living in units built before 1983, but excludes almost all of those living in condos and 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. 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 ten 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. There had been a moratorium on banking increases that started in 2020 due to the pandemic, but starting on Aug 1, that moratorium will be lifted.
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. If a landlord does bank a rent increase above the allowable annual limit, they must inform their tenant how much of the increase was banked.
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 increased housing service cost increase could be applied if operating expenses like utilities and maintenance significantly increase. An uninsured repairs 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, manager attorney 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.
Zaneri also suggested that tenants who suspect an invalid rent increase should communicate with neighbors who have the same landlord, to see if they are experiencing the same thing.
“If they think together their increases are invalid they can present that to their landlord,” Zaneri said. “I think it’s a benefit if they organize rather than approach the landlord as an individual. The law has recognized tenants’ ability to organize.”
State law bars landlords for retaliating against tenants for participating in an “association or an organization advocating [tenants’] rights.” In Oakland, tenants that have organized together to go on rent strikes, sue their landlord, stike a deal to buy the building they live in, and form a union that secured pandemic related rent cancellations and reductions.
Note: A similar version of this story is scheduled to appear in The Oakland Post and on The Post News Group’s website.