Berkeley and Oakland are working on a policy to preserve affordable housing that would be the first of its kind in California.
By Hewot Shankute
Hewot Shankute is a staff attorney and clinical supervisor at East Bay Community Law Center in Berkeley, firstname.lastname@example.org.
Seema Rupani, Special to CalMatters
Seema Rupani is a staff attorney and clinical supervisor at East Bay Community Law Center in Berkeley, email@example.com.
Though legislators in Sacramento squandered the opportunity to advance sweeping housing reform this year, advocates of affordable housing should still take heart in the passage of Senate Bill 1079. But to truly save our housing, we need to go further. And we can’t wait, and we don’t need to wait for the California Legislature to reconvene to do so.
State Sen. Nancy Skinner’s SB 1079 is an effective tool to stop corporate speculators from snatching up distressed properties in the aftermath of the pandemic by giving would-be owner-occupants priority in purchasing dwellings entering foreclosure.
Along with SB 1079, there is a real appetite for progressive reforms that will increase stable, decent, affordable housing for years to come. The city of Berkeley is working with our team at East Bay Community Law Center on an ordinance to preserve affordable housing, the first of its kind in California.
Berkeley’s Tenant Opportunity to Purchase Act, or TOPA, is an anti-displacement housing policy that gives tenants options to buy the property they rent when it goes up for sale. Similar policies are being developed in Oakland, Minneapolis and New York. The policy was piloted in Washington, D.C., in 1980, and helped preserve more than 3,500 housing units for tenants between 2002 and 2018, many in neighborhoods experiencing gentrification.
Our bill provides tenants an opportunity to buy anytime an owner is ready to sell the rental property unlike SB 1079 that only applies in foreclosure scenarios. Tenants can collectively decide to make the first offer (right of first offer) and match an outside offer (right of first refusal) to buy the property. If tenants are unable to purchase their home, they can assign rights to a vetted affordable housing developer who promises to keep rents low.
This Berkeley policy is poised to become law, and other cities have followed our lead in developing local TOPA measures to fight off predatory speculators.
The act centers tenant empowerment by prioritizing current tenants and extending transaction timelines, giving tenants a meaningful chance to purchase. In hot California housing markets, especially in the Bay Area, the rapid rate of home sales coupled with high offers results in bidding wars that privilege all-cash investors over buyers using conventional financing.
By extending the timeline for purchase, we can offer renters and vetted affordable housing developers a fair shot at organizing, securing financing and closing a deal. Buyers commit to ensuring the property remains affordable for future generations.
Not only will the policies create necessary stability for all tenants during the impending economic crisis – they are also a force for racial justice.
We know that speculative investment in rental properties helped fuel gentrification over the last decade since the Great Recession, pushing Black and Brown families out of our cities and making our state home to the most unaffordable housing markets in the United States.
It’s easy to blame discriminatory federal policies such as the G.I. Bill for fomenting our nation’s staggering racial wealth gap – but local policies and practices, including redlining and prejudicial lending, are equally to blame. It’s high time our city governments atone for this legacy by making it easier for under-resourced Black people and people of color to become homeowners through the Tenant Opportunity to Purchase Act and similar policies. If they don’t, the impending recession will surely exacerbate the racial inequities making homeownership impossible for many Californians of color.
There’s no question that this pandemic will have adverse impacts on low-income renters and homeowners, but we don’t have to resign ourselves to reliving 2008, when investors and developers, detached from our communities, gobbled up properties and drove the rents up even more.
Through the Tenant Opportunity to Purchase Act, renters and low-income communities of color can achieve a new, collective vision of the American Dream: homeownership for all families and affordable housing for their neighborhoods for years to come. While we can’t change the foundation laid yesterday, we can start to build a better future for tomorrow – so that when the next crisis hits, neighborhoods will have deeper roots to weather the storm.