A constant attack on Berkeley housing.

PROTECTING PROPERTY OWNERS

A constant attack on Berkeley housing.

Don't be fooled, this is Eminent Domain in disguise.

Background

Mayor Jesse Arreguin (in coordination with Rent Board Commissioner Leah Simon-Weisberg) has announced his intention to introduce the "Tenant Opportunity to Purchase Act" (TOPA) in 2019. In 2020, we put up a fight and were able to stop the legislation in its tracks. It was re-introduced by the Mayor in March 2021.

Originally Inspired by the Oakland Moms 4 Housing movement, its sponsors claim TOPA will "prevent displacement" and will increase ownership opportunities for tenants. But this is far from the truth.

TOPA has been in the works for years. It is clear that the true intention of the legislation is not to help underprivileged tenants, or aim to prevent homelessness at all. In reality, it's granting the city the power to dictate how properties are sold, to whom they can be sold, and even how much they can be sold for!

This is the most aggressive assault on private property rights. TOPA is eminent domain in disguise. It will have devastating effects on owners, tenants and the future of our city. This only benefits outside special interest groups, lawyers, and complicit politicians.

Modeled on the failed Washington D.C. legislation, and on the heels of total non-partisan rejection by outraged City of Richmond residents in 2019, the Berkeley bill goes as far as it can to stepping on private property rights.

Read the Ordinance Here

What This Means to Property Owners

First right of offer. TOPA demands you offer your property to all tenants, before it is placed on the open market. This prevents your property from going on the market for sale, until every renter waives his or her rights in writing. This will create lengthy, unpredictable time periods that will frustrate a sale and create perverse incentives for tenants.

First right of offer AND first right of refusal. In addition to offering the tenant a first right of refusal, each owner will also need to inform each and every listed "Qualified Nonprofit" - approved by the city - of the owner's intent to sell. And even if they say "no thanks" and the owner goes to the market for a buyer, the owner must notify the tenants and qualified nonprofits of the offer made by another party and give the tenant or Qualified Nonprofits the First Right of Refusal.

Any owner found in violation of TOPA could be fined $1,000 per day, per unit!

Summary of Tenant Opportunity to Purchase Act

How TOPA Works in a Nutshell

1. Tenants and tenant organizations have the right to purchase your rental property before you may sell, demolish, or withdraw the property from the rental market. This includes any property in which a tenant has residency, including single family homes, Golden Duplexes, triplexes, multi-units and more! Owners may set the asking price (note: don't be fooled - "asking price" does not equal "market price.")

2. Tenant(s) may activate their right to purchase or they may assign the right to the city-approved nonprofits (aka "Qualified Organizations") .

3. Tenants or the nonprofits have extended period of times to organize themselves, present a Letter of Intent, provide an Offer of Sale, secure financing, and close the sale. Some sales could take over one year if all timelines are maximized.

4. Even if the tenant (or Qualified Nonprofit) do not want to act on an offer of sale, the owner must wait a specified period of time before going out to the market for a third party offer.

5. Once the owner has gone out to the market and secures a new offer, the owner must go back to the tenant(s) and Qualified Nonprofit, offering them a second bite at the apple. The tenant(s) or QO will have additional days to counter or refuse the offer.

6. The owner may not request that a tenant waive their right of first refusal ,nor may an owner require a tenant to prove their financial ability to purchase upfront.

7. An owner violating any of the TOPA provisions is subject to a $1,000 per day, per unit fine.

PROTECTING PROPERTY OWNERS