.Pushing Out Tenants

After an investor bought their building, two Oakland tenants temporarily stopped a 120 percent rent increase, but their neighbor fears that he will become homeless.

Nine years ago, Richard Wingart moved into a five-unit rent-controlled apartment building in North Oakland. He paid his rent on time and obeyed the rules. That should have been enough to safeguard Wingart against displacement. But instead, the owner of the building converted it into condos. Then, a new landlord doubled Wingart’s rent and hired an attorney who specializes in evictions to push him out. Now, Wingart has to vacate his home by November, and he has no idea where he’ll go.

“The other night I got in my car and I laid down across my backseat,” he said. “If I lay at a certain angle, I’ll be all right, but I wanted to test for when that day comes — if I’m homeless and I have to sleep in my car, I’ll be mentally and emotionally ready for it.”

Wingart is being pushed out of his home by Arlen Chou, an investor who bought Wingart’s building last February. If this story sounds familiar, it’s because I reported on it in May (see “Jacking Up Rents in Oakland,” 5/20). A lot has happened since then. To recap, Wingart’s problems began years ago. And he’s not the only person facing displacement. Cris Cruz and Kendahsi Haley, two other tenants in the same building, are still fighting a 120 percent rent increase sought by Chou, and even though they recently won a hearing before Oakland’s rent board to stop the increase, Chou and his lawyers are appealing, and have said they’ll go to state court, or even resell the units to void rent controls.

This renters’ nightmare began in 2010 when the building’s then-owner, Kenneth Kolevzon, who also lived in it, converted the five-unit structure into four units, and then converted those units into four condos. Kolevzon said he wanted to sell the condos to Wingart, Cruz, and Haley at affordable prices, and keep one for himself, but banks wouldn’t lend, and so because he was running out of money and desperate, he had to sell. In February, Golden State Ventures, LLC, a company operated by Chou, bought all four units in the building, and Kolevzon moved out of Oakland.

Chou bragged about his purchase in a forum post on Biggerpockets.com, a real estate investor website: “The best part of the property is that as they are condominiums, they are EXEMPT from rent control! I will soon own a little island of rent control free property in a rising neighborhood in Oakland.” He immediately raised Haley and Cruz’s rent from $600 a month each to $1,350 each, and increased Wingart’s $700 to $1,450.

Cruz, Haley, and Wingart filed petitions with Oakland’s rent adjustment program to stop the rent increases. Two advocates eventually stepped forward to help them navigate Oakland’s complicated system of landlord-tenant laws. James Vann, co-founder of the Oakland Tenants Union, drafted a brief for their rent adjustment program hearing. And their next door neighbor, Tal Klement, who works by day as a public defender in San Francisco, also stepped up. Klement read through state and local laws and drafted a second brief for the hearing.

But Wingart didn’t make it as far as the rent board. Chou hired the Bornstein & Bornstein law firm to evict him. The Bornstein & Bornstein law firm — founded by brothers Daniel and Jonathan Bornstein — is known as an aggressive advocate for landlords. Daniel Bornstein, a partner in the firm, runs what critics call “eviction bootcamps” that teach landlords how to push out low-income renters in order to maximize profits.

In May, the Bornsteins tacked a three-day notice to pay rent of $1,450 or immediately move out on Wingart’s front door. Wingart said that he mailed his rent to Chou, but it was the $700 he normally paid, not $1,450. And by then, the rent board had agreed to hear Wingart, Cruz, and Haley’s petitions against Chou’s rent increases. The board even issued a letter stating that Chou could not increase their rent until their case was resolved in September. Wingart assumed he was in the clear.

But the Bornsteins ratcheted up the pressure. Late one night, a stranger came to Wingart’s home. “She asked through the window, ‘Are you Richard?’ And so I said, ‘Yes,'” said Wingart in an interview. “So, she said, ‘Consider yourself served,’ and she dropped the court papers on my porch.”

It was the beginning of the eviction process. Wingart said that the Bornstein & Bornstein law firm warned him that he would have an eviction permanently on his credit record unless he complied. They demanded that he immediately pay $1,450 in rent or vacate his home. Wingart feared an eviction would prevent him from finding a new home if he and his neighbors lost their petitions to the rent board. He had no savings to hire an attorney who could represent him. Bornstein offered Wingart a deal: the firm wouldn’t go to court to evict him, but he would have to leave in November, drop his petition before the rent board, and sign away his rights to sue in the future. He signed. Chou threw in a $500 check as conciliation.

“I don’t know a thing about the law,” said Wingart. “I was signing under distress, and I wasn’t in a clear mind. I’m exhausted from this whole thing from the very beginning. I’m basically being pushed out into the street. I’m going to become a statistic.”

Chou did not respond to multiple phone calls and emails seeking his version of events.

“It was a tragedy,” said Klement about the agreement Wingart signed. “He got pressured into signing something that gave up his rights.”

Vann said the Bornstein & Bornstein attorneys used a legal tactic to remove Wingart, and to ensure that the subsequent rent for the unit could be maximally raised. “That was really taking advantage of him,” said Vann. “If the owner evicted him, the rent for the new tenant couldn’t have been raised. But now that Richard took an agreement, that’s a voluntary term, and now the owner can set the new rent at whatever they want it to be.”

Haley and Cruz’s petitions against Chou’s rent increases were considered on September 1 by Stephen Kasdin, a hearing officer for Oakland’s rent adjustment program. In support of the 120 percent rent increase, Chou told Kasdin that state law provides a blanket exemption for condos from local rent control laws, according to a one-page brief drafted by Chou that I reviewed. He cited Costa Hawkins, a state law passed in 1995 that is widely thought to bar cities from putting single-family homes and condos under rent control.

Vann and Klement argued, to the contrary, that the condos Haley, Cruz, and Wingart reside in are not exempt from Oakland’s rent control law. While Chou purchased each condo in a separate financial transaction, each with its own paperwork, Chou was still purchasing the entire building, as would a landlord or developer, and therefore the condo conversion process wasn’t yet complete. Only when the condos are sold separately to individual purchasers is the process done, and only then does Costa Hawkins apply.

“The wrinkle in this case was, when does a condo become a condo?” said Vann in an interview. “Is it when the construction is completed and the owner files the necessary papers on the building, or is it when a unit is actually being operated as the new purchaser’s condo home?”

“The purpose of Costa Hawkins wasn’t to facilitate evictions of existing tenants by increasing their rents,” said Klement. “The purpose was to allow for exceptions to rent control when individuals purchased individual condos, not when they purchased entire buildings.”

Kasdin, the hearing officer, agreed with Vann and Klement’s reading of Costa Hawkins. For now, Cruz and Haley’s rents will remain at $600. But Cruz and Haley haven’t had much time to celebrate their win. Instead, it looks as if they’ll have to fight Chou for months to come. Chou informed them last week that he was considering reselling their condos in order to void rent control, said Haley. Then on Monday of this week, Bornstein filed an appeal to the Oakland rent board to overturn Kasdin’s decision. If Chou loses there, he can also file a lawsuit in state court.

Wingart said the whole experience has destroyed his faith in Oakland’s ability and willingness to protect low-income renters like him. Although he is looking into ways to reinstate his petition to the Oakland rent board, and to somehow get out of the agreement he signed with Chou’s attorneys, he said he feels that the system is rigged in favor of landlords, and that the city has too few protections in place, and virtually no resources to help tenants understand their rights. Although he’s grateful to Vann and Klement for their hours of assistance, Wingart said it’s hard to fight landlords and professional attorneys who specialize in pushing out low-income renters. Wingart said the city needs to dedicate more resources to helping renters stay in their homes.

“I think the City of Oakland is allowing this kind of thing to happen,” said Wingart. “They know it’s happening, but they’re turning their backs on us renters.”


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