OAKLAND — Real estate consultant Jerry Williams looks at the rental housing in this city's run-down neighborhoods and sees a path out of poverty for tenants -- if the city would only make it easier for them to purchase their units.
"What we're trying to do is generate wealth," said Williams, who, along with his boss -- real estate broker Michael Smith -- envisions creating a whole new class of low- to middle-income homeowners. "We're trying to empower these people to create new lives for themselves."
But when a city councilwoman embraced the concerns of the real estate firm and quietly proposed that the city scrap its 23-year-old restrictions on condominium conversions, tenants' rights advocates objected loudly. And in this city better known for its murder rate than its mortgages, the debate has become another fight between the haves and have-nots.
The Bay Area's technology boom triggered a wave of gentrification in the late 1990s that altered the complexion of the region. As San Francisco rents soared, middle-income renters found a haven in Oakland, displacing some of the city's poor. The current proposal, tenants' advocates fear, would only spur more displacement by pricing locals out of their homes.
"We're talking about converting the city for an entirely different population than the ones who live here now," Oakland Tenants Union co-founder James Vann said at a recent Planning Commission meeting packed with opponents of the proposal. "Nobody in the flatlands will be able to afford a condo for $300,000," the low-end price Vann and others predicted the converted units would command.
If proponents of the change prevail, landlords who convert buildings of five or more units into condominiums would no longer have to replace them with an equal number of rental units or purchase credits from someone who has. And under state law, the new condominiums wouldn't be subject to Oakland's rent control ordinance.
The neighboring cities of Berkeley and San Francisco place tight restrictions on condominium conversions, limiting the number and requiring that a certain percentage of tenants in converted buildings become owners. The proposed change to Oakland's law contains no similar provisions -- although state law requires that tenants be granted the right of first refusal.
Critics also argue that the proposal is payback for landlords who fiercely opposed a tenants' rights measure that was narrowly approved by voters in 2002. The measure prohibits evictions unless landlords can cite at least one of 11 listed criteria and protects the elderly, disabled and chronically ill.
Since then, however, landlords have won several key victories in disputes with Oakland's City Council. Rental restrictions were lifted from landlords who accept federal housing subsidy vouchers. And last fall, rent control was abolished for two- and three-unit buildings where an owner or close relative is an occupant.
Adam Gold, lead organizer for the tenant advocacy group Just Cause, said allowing widespread condominium conversions would further weaken protections for Oakland's low-income renters at a time when they have already been priced out of several thousand new market-rate units being developed in their neighborhoods. Those projects are part of Mayor Jerry Brown's effort to redevelop a city plagued by poverty and crime, and bring 10,000 new owners to downtown Oakland.
"We maintain very strongly that there can be healthy and vital working-class communities," Gold said. "To solve West Oakland's problems doesn't mean you have to bring in a bunch of wealthier people. It means you have to get people jobs."
At issue is a 1981 ordinance that put a damper on condominium conversions by requiring owners to replace each new condo in the city's desirable Lake Merritt and Adams Point neighborhoods with a rental unit in that same area. In an eight year-period in the 1970s, those neighborhoods lost 25% of their rental stock to conversions, according to Vann of the Oakland Tenants Union. (Outside that designated area, only conversions of buildings with five or more units require replacements, and those can be built anywhere in the city.)
The ordinance all but stopped conversions of larger buildings citywide and eliminated them completely in the area surrounding Lake Merritt, said Oakland Housing and Community Development Director Roy Schweyer. In the last few years, Schweyer said, a handful of tenant groups interested in buying their buildings approached his office for help. (Residents can purchase their buildings as tenants-in-common but often avoid doing so because that approach links them on shared deeds and mortgages.) Schweyer said he also tried to help Williams' group -- Michael Smith & Associates -- hunt down conversion credits, but was unable to do so.