OAKLAND — Galvanized by the Moms 4 Housing standoff that drew
national attention to the region’s affordability crisis, Oakland
officials may soon overhaul the way homes are bought and sold —
and other Bay Area cities are considering similar measures.
The policies would give tenants or affordable housing nonprofits
first dibs to buy certain residential properties for market value.
The move is intended to beef up the local supply of low-income
units, while curbing the influence of real estate speculators on
the overheated housing market that is pricing out many long-term
for a “right of first refusal” policy is a novel approach,
but not without precedent. San Francisco recently adopted a right
of first refusal policy — it went into effect in September —
and Berkeley and East Palo Alto are considering similar rules.
Washington, D.C., has had such a policy on the books for more than
Bay Area activists say they’ve been working behind the scenes
on these measures for years, but they’ve only recently picked up
the momentum needed to potentially propel them into law.
“The housing crisis has gotten so much worse that people are
ready to embrace the policies that will actually address it,”
said Leah Simon-Weisberg of the Alliance of Californians for
Community Empowerment, which has been working with Oakland
officials on the new policy.
Oakland Councilwoman Nikki Fortunato Bas recently
introduced the ordinance, dubbed the Moms 4 Housing Tenant
Opportunity to Purchase Act, which would give tenants a chance to
make an offer if their landlord decides to sell.
The ordinance is named for the Moms 4 Housing activists — a
group of homeless women who spent two months squatting in an empty,
investor-owned house in West Oakland. The authors hope to add
language that also would allow the city or a qualified nonprofit
the first bite when a vacant property goes up for sale. And while
the language has not been finalized, Mayor Libby Schaaf previously
expressed interest in targeting corporate landlords, rather than
Such an ordinance could have a big impact — there are
5,898 vacant homes in Oakland, according to census data
released in December.
Fortunato Bas’ act would mark a big shift in Oakland’s real
estate market, and the prospect has property rights lawyers and
landlord groups on edge. Part of what makes it so galling, they
say, is that it seems to reward Moms 4 Housing’s illegal
Several of those activists were evicted last month from the
Magnolia Street house owned by real estate company Wedgewood and
arrested. But shortly after, under pressure from the mayor and Gov.
Gavin Newsom, Wedgewood
agreed to sell the house to the Oakland Community Land Trust
and let the activists move back in. Wedgewood also agreed to let
the city or a local affordable housing nonprofit make offers on the
dozens of other properties it owns in Oakland.
“It’s extremely frightening for people who respect private
property and believe in private property,” said San
Francisco-based property rights attorney Andrew Zacks.
Still, experts say a right of first refusal policy likely would
be legally sound.
“It has some significant precedent, and it hasn’t been
successfully challenged in court,” said Oakland-based real estate
attorney Rob Selna. “And many other cities are pursuing
On the other side of the bay, San Francisco’s Community
Opportunity to Purchase Act requires all owners of multi-family
buildings, or vacant lots where a multi-family building could be
built, to notify a list of six qualified affordable housing
nonprofits when they intend to sell.
If one of the nonprofits makes an offer, the owner is free to
reject it. But if the owner gets a better offer on the open market,
the owner must give the nonprofit a chance to match it — a policy
known as the “right of first refusal.” If the nonprofit matches
the better offer, the owner is required to sell to the
So far, nonprofits have bought just two buildings using the new
program, according to Max Barnes, spokesman for Mayor London
Breed’s Office of Housing and Community Development. Both
purchases — a seven-unit building on 16th Street and a six-unit
building on 24th Street — were made by Mission Economic
Development Agency. The agency plans to close on its third
purchase, an 11-unit building on 23rd Street, later this month,
said spokesman Christopher Gil.
Part of the reason for the low number of purchases may be a lack of
funds. The city loans money to nonprofits for these types of
purchases through its Small Sites program. Even so, the San
Francisco Community Land Trust — one of the six certified
nonprofits — has been notified of several hundred buildings going
up for sale but hasn’t yet had the cash to buy one.
“We’ve been close,” said Keith Cooley, director of asset
management for the land trust, which already owns 13 buildings
around San Francisco. “We’ve looked at several buildings very
closely, but we just don’t have the capacity at the
The intent of the San Francisco policy was to help nonprofits
compete with fast-moving real estate speculators and their all-cash
offers, said Cooley, who helped draft the act. For example, he
said, the land trust was putting together an offer in 2018 to buy a
six-unit building in the city’s Western Addition district
occupied entirely by seniors. Some of the tenants had been there
for as long as 40 years.
“Before we could complete our offer, a speculator was able to
buy the building for all cash,” Cooley said.
Now, the new owner is planning to evict the tenants, he
Berkeley’s efforts to draft a similar measure
got a boost this week with a $220,000 grant from a
group of businesses, nonprofits and other groups called the
Partnership for the Bay’s Future. The grant gives Berkeley and
the East Bay Community Law Center, which has been working with the
city on a tenant opportunity to purchase act, extra resources to
get the measure off the ground.
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As far as landlord attorney Daniel Bornstein is concerned, these
types of policies add extra confusion and hurdles to the sale
He said the San Francisco ordinance sent shock waves through the
industry last year. It’s not fair to allow a handful of
nonprofits to jump the line and snatch a property away from another
potential buyer — a young couple looking to buy a first home, for
example, Bornstein said. Furthermore, it’s not an effective
replacement for building new affordable housing.
“It’s now ‘s**y’ public policy because the hard public
policy decisions are not being made,” he said. “It’s a
feel-good measure, but it isn’t going to accomplish the overall
Source: FS – All – Real Estate News 1
Moms 4 Housing-inspired policy could shake up Oakland real estate market