Sustainability

NO 2 TOPA

 Proponents of Washington D.C.’s Tenant Opportunity to Purchase Act TOPA hope to bring the policy to Bay Area communities as a way to combat displacement and gentrification.  They claim that TOPA is geared to help low income tenants and communities of color, however, the majority of people ultimately benefiting from TOPA will be wealthy tenants and special interest groups.

TOPA proponents initially claimed they wanted to target corporate owned rental housing.  However, this was just a ploy to introduce legislation that would make it easier to undercut long-standing, minority mom & pop owners in historically segregated communities. 

TOPA would

-          Give wealthy tenants leverage to undercut poor property owners in historically segregated communities.

-          Allow tenants to assign their rights to “non-profit” developers who can then build market rate units on the property. 

(developers are less likely to create missing middle housing, if TOPA is in place)

-          Allocate a lucrative $1 million dollar annual contract to the special interest group advocating for TOPA to provide “technical assistance” without requiring the program to actually work.

-          Fine poor property owners $1,000/per day per unit for who may not understand the complicated regulatory process. 

- Promotes a sense of false ownership for poor tenants who will be responsible for paying mortgage, interests and taxes without gaining the promise of inter-generational wealth. 

Tenant Opportunity to Purchase Act (TOPA)

Berkeley, like the rest of the Bay Area, faces a housing crisis, one driven by rising rental prices and a hot housing market. With 75% of the city’s low-income census tracts at risk of or undergoing displacement and a continued loss of thousands of Black households, Berkeley desperately needs anti-displacement strategies that prioritize low income renters and communities of color. One of those strategies is the Tenant Opportunity to Purchase Act (TOPA).

TOPA prevents displacement by empowering tenants with choices for their future housing when the owner of a rental property decides to sell (learn how it works here!). In Washington, DC, TOPA has helped preserve over 3500 units of affordable housing since 2002, and those numbers continue to grow. 

Berkeley’s TOPA policy is designed to:

  • Prevent displacement of low-income communities of color and marginalized tenants

  • Create permanently affordable housing

  • Create pathways to ownership for tenants and promote democratic residential control

  • Stabilize housing for existing tenants

  • Give tenants choice and voice regarding their housing

  • Protect rental housing from speculative investment by keeping them in the community

Now is the time for Berkeley to pass a TOPA policy that helps meet Berkeley’s housing crisis and needs. 

Tenant Opportunity to Purchase Act (TOPA)

The Oakland and Berkeley City Council are currently considering a radical ordinance called TOPA (Tenant’s Opportunity to Purchase Act). TOPA is being sold as a way to prevent displacement and promote ownership opportunities for tenants by giving them first right to buy the property they live in. However, once the public is given the opportunity to read the specific details of the legislation, it will quickly become clear that this proposal will not create opportunity for any of our residents. It uses our underprivileged as a front to grant the city the power to dictate how properties are sold, to who they can be sold, and even how much they can be sold for. All while solely benefitting third party special interest groups.

This is not a pro-tenant or pro-property owner argument; both sides will be harmed. TOPA only benefits outside special interest groups at the expense of everyone else and our Cities as a whole. Let’s protect our Cities from this destructive proposal, band together, and demand the City Council Stop TOPA.

What is TOPA

 TOPA empowers tenants with options when the property they live in is going to be sold. Tenants can purchase the property or assign rights to a qualified organization (QO), such as a community land trust, nonprofit housing developer or cooperative. Tenants will be able to explore different ownership options (limited equity homes, condos, cooperatives, etc.) as well as choose to remain renters at an affordable rate. 

Right of first offer & refusal – TOPA will create legal rights for tenants to make the first offer to purchase the property they live in when the owner decides to sell. Alternatively, tenants can assign their rights to a QO to make an offer. If tenants waive their rights, QOs have an opportunity to make an offer on the property, for the purpose of stabilizing housing for the tenants and preserving the property as permanently affordable. If a seller rejects the initial offer from tenants/QO and subsequently receives a third-party contract on the market, then tenants/QO (whoever made the initial offer) have the right to match the offer and purchase the property.  

Extended timelines – Alameda County is one of the least affordable housing markets in the country. The rapid rate of home sales coupled with cash offers, results in bidding wars that privileges all-cash investors over buyers who use conventional financing. TOPA levels the playing field with timelines that make it possible for tenants and QOs to organize, negotiate a contract, secure financing, and close a deal. (See timelines and timeline FAQs)

Technical assistance – If tenants decide to make an offer, they will work with a Supportive Partner (such as a tenant rights nonprofit, legal service provider, etc.)  to understand the steps for completing a purchase or assigning rights. Supportive Partners will help tenants understand financing and ownership options.

Permanent affordability - Many tenant TOPA purchases will happen with subsidy that requires that TOPA buyers keep the property affordable for generations to come.  And when qualified organizations are the TOPA buyer, TOPA requires that they commit to keeping properties purchased through TOPA permanently affordable for future generations, regardless of the funding source. TOPA will lead to the creation of more permanently affordable housing in a place that is experiencing an affordable housing shortage.*

*Note: This reflects proposed changes to the policy; see “Proposed Changes to the TOPA Policy.”

Berkeley TOPA Timeline

Since 2015 - Tenants rights groups, community law centers, and land trusts began exploring TOPA as an anti-displacement strategy locally and regionally, using Washington D.C.’s TOPA and other similar policies as models.

Starting in 2019 -The East Bay Community Law Center (EBCLC), Northern California Land Trust, and Bay Area Community Land Trust worked closely with Mayor Jesse Arreguin, and consulted with tenants, tenant advocates, lending institutions, real estate brokers and others, to develop a TOPA policy tailored for Berkeley – one that stays true to Berkeley’s vision of democratic, community controlled affordable housing.

Early 2020 - The City of Berkeley and EBCLC are awarded a Partnership for the Bay’s Future Challenge Grant to support implementation of TOPA.

February 20, 2020 – Mayor Arreguin announced TOPA at a Southwest Berkley property where tenants had partnered with a community land trust to purchase their homes and keep them permanently affordable.

March 5, 2020 – TOPA was presented to the Land Use, Housing and Economic Development Committee followed by public comment and initial discussion/questions by committee members. See detailed background information and legislation here, as well as the presentation.

January 27, 2020 - Preventing Displacement & Creating Homeownership Opportunity: A Community Conversation on Berkeley's TOPA Proposal
https://youtu.be/i_TG0-USqf8

  • Call out on BS 1

  • Call out on BS 2