Owners of the 194-unit Creekview Condominiums in Richmond say they are being unfairly slandered amid a vigorous campaign to pass a rent control ordinance in Richmond in the November election.
Tenants rights groups supported by the Richmond Progressive Alliance (RPA) have been pushing for a rent control policy locally and in other Bay Area cities, saying rents are surging and displacing low-income residents. Despite warnings from a majority of economists that rent control policies do more harm than good, supporters gathered enough signatures this past summer to place the measure on the Nov. 8 ballot.
The measure came at an inopportune time for PMI Properties, owner of Creekview Condominiums, according to spokesman David Silver. The nine-building complex at 3535 El Portal Dr. developed a mold problem so pervasive that it needed to be vacated and rebuilt “from ground up,” Silver said.
Creekview’s decision to vacate the complex for a complete reconstruction mobilized tenants rights advocates who support Measure L, the rent control measure that would prevent landlords from increasing rents by more than the Consumer Price Index, about 2 percent a year. The policy would affect about 10,000 Richmond units and would create a rent control board estimated to cost the city between $1.5 million and $3 million annually.
Advocates and RPA members have accused Creekview of purposefully evicting tenants in advance of the possibility that voters will approve rent control on Nov. 8. They have joined tenants in holding demonstrations at the property, as well as a demonstration during a vote on rent control at Richmond City Council. Activists and tenants proclaimed the evictions were a result of greed rather than concern over the health risks from a growing mold problem.
Silver flatly denied any link between the decision to vacate residents and the impending rent control vote. He sent the Richmond Standard a “fact sheet” (posted in full below) that he says disproves claims by tenant rights advocates.
“During these years of rebuilding, we are losing millions in rents and investing millions to make the entire 194 units safe to live in,” Silver said, adding the property isn’t expected to be completed until 2018.
The RPA and supporters, according to Silver, have ignored the fact that Creekview managers had informed a majority of its residents about mold issues as early as December 2014, well before the rent control measure was put on the ballot. He said property owners have worked closely with the city of Richmond’s building staff to obtain the proper permits for the remediation and rebuild.
Richmond Mayor Tom Butt, a veteran architect who opposes rent control, has backed Silver’s claims, saying the building repairs “would not be possible with tenants present.”
“Because of a combination of design flaws and construction defects, the buildings have been subjected to massive water damage that has resulted in widespread mold,” Butt said in his e-forum newsletter.
The same activists targeting Creekview were recently accused of unfairly branding an elderly Iron Triangle resident as a greedy landlord, holding protests in front of her home as part of the campaign to promote rent control as a necessary policy for the city.
Mayor Butt and Councilmember Vinay Pimple, who faced a flurry of insults after voting against a temporary moratorium on evictions, have said the RPA’s actions on rent control are mostly for the purpose of “political theater.”
Creekview ended up falsely cast a bad actor, according to Silver.
Tenants were made aware of a significant water intrusion in Building H as early as December 2014, he said. Property managers attributed it to shoddy construction when the structure was built in the early 1990s. Despite remediation attempts the mold problem only worsened. “Engineers, architects, mold specialists and health specialists” had “all agreed” the structure required total rebuilding, he said.
Then, rains this past winter invited mold in all the other buildings, Silver said. Despite relocating residents to other units during repairs, the mold problem persisted. Further investigation, including a demolition on the C and D buildings in May, led experts to conclude it was unsafe and dangerous for families to live in the complex.
Owners decided to move all tenants out for a complete rebuild prior to the coming winter rains, Silver said.
Here’s the “fact-sheet” sent by Silver:
Creekview – Another False Rent Control and Just Cause Poster Child
By Mayor Tom Butt
The Richmond Progressive Alliance and twelve other organizations known as Fair and Affordable Richmond are backing Measure L on the November 8 ballot that will impose rent control and just cause on Richmond and set up a multimillion bureaucracy to run it.
As the latest poster child to support their campaign, they cite recent actions by Creekview Apartments not to renew the month-to-month rentals of a large number of tenants. RPA members Gayle McLaughlin and Melvin Willis have recently participated in demonstrations at Creekview to protest the action, and they claim that The Richmond Fair Rent, Just Cause For Eviction And Homeowner Protection Ordinance would have prevented this.
The problem is that this is simply not true. The Creekview Condominiums (actual name, even though they are rented) is vacating units in order to make significant repairs on the buildings that would not be possible with tenants present. Because of a combination of design flaws and construction defects, the buildings have been subjected to massive water damage that has resulted in widespread mold.
The Just Cause part of the proposed ordinance allows eviction for repairs (11.100.050(a) (5)), so it would not have prevented vacation of units at Creekview. It also requires relocation payment “…amounts shall be determined by the City Council through a Relocation Ordinance,” but there is no “Relocation Ordinance,” and no amount specified for relocation payments. Determination of relocation payments are not in the list of powers and duties of the Rent Board. This is one of many examples of how the rent control and just cause ordinance is flawed. It was hastily drafted by amateurs without any public input.
The repair project started in 2014 with Building H (“Richmond tenants battle Beverly Hills developer to keep their homes,” December 18, 2014, Richmond Confidential). On December 9, 2015, and June 22, 2106, the City of Richmond Design Review Board conducted public hearings “… to consider a design review permit for phase II consisting of exterior renovation to existing multifamily Residential buildings (building A to G), including deck repair, Window and roof replacement, and removal of siding for new exterior stucco.” No one showed up to protest.
A building permit was issued on November 30, 2015, for the exterior renovation of Building H (a 3-Story, 30-Unit Residential Structure) and the Club House (a 2-Story Community Space). The last building inspection was on July 12, 2016. The owner mentioned that subsequently it was found extensive mold damage in the interior of the apartments and the scope of the work has been extended. A second building permit was issued on June 21, 2016, for phase II for the remaining buildings; work is currently underway.
The bottom line is that the work has to be done, and the buildings have to be vacated to do it. The tenants are victims of bad design and shoddy construction, as is the owner, who is also suffering significant losses. You can’t insure against this type of damage.
Notwithstanding the inconvenience, this would be far less of a tragedy if sufficient housing units existed nearby for tenants to relocate. But the market is tight, and it is getting tighter all the time because of the fear of rent control and just cause. Housing developers are bypassing Richmond in favor of more business-friendly places. That not only constricts supply, but it drives up rents, a significant unintended consequence of rent control and just cause.
In the end, rent control and just cause, if it passes in Richmond, may benefit a few people for a while, but in the long term it will hurt Richmond renters and the City of Richmond big time. The people who drafted and now back The Richmond Fair Rent, Just Cause For Eviction And Homeowner Protection Ordinance are well meaning and compassionate, but they don’t understand real estate economics, the real estate marketplace or the construction industry. They continue to put ideology ahead of practicality.
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