Oakland Landlords Can Still Pass Their Debt Onto Tenants, For Now

The Community and Economic Development Committee of the Oakland City Council failed yesterday to decide whether to reform or remove “debt services” as a justification to raise rent.

Oakland is one of only a few districts that allow landlords with a negative cash flow to pass that debt (typically the mortgage) onto tenants by increasing rent. The Oakland Rent Board is the only board in the state of California that allows the landlord to pass up to 95 percent of said debt onto renters.

Connie Taylor of the Housing, Residential Rent and Relocation Board recommended capping debt service at 7 percent and creating a grandfather amendment to exempt established landlords. Taylor also mentioned the option of removing the debt service provision entirely.

The issue is contentious and opinions varied widely during the meeting. Fifteen members of the public came forward to discuss debt services, and their arguments fell cleanly into two categories: tenant rights activists, and landlords/developers.

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