Tenants protected by rent control have been eagerly anticipating the California Court of Appeal First Appellate District’s holding in the much anticipated Owens v. City of Oakland Housing, Residential Rent and Relocation Board.  On May 29, 2020, the California Court of Appeal published its opinion, which reaffirms the widespread notion that tenants leasing individual rooms in single-family home boarding houses are covered by municipal rent control.  Although the opinion pertained to an Oakland tenancy, tenants can likely rely on the opinion when municipal rent control provides coverage, such as in San Francisco, Berkeley, and Richmond, California.  What about tenants that may qualify for California Rent Control protection?

Since the penalties and damages for violating California’s several rent control laws can be severe, tenants renting individual rooms in single-family homes and condominiums in cities with rent control now have confirmation that they too are entitled to rent ordinance protections.  The struggle for affordable housing continues, but the Owens’ holding insulates thousands of California tenants from unscrupulous landlord abuse, retaliation, and rent gouging.

Please note that this article refers to tenants separately renting rooms in single-family homes and condominiums as boarding houses.  This is not intended to act as a legal definition, nor refer to short-term rental boarding houses, but rather a brevity-related editorial choice.

Single-Family Home Boarding Houses: More Prevalent Than You Think 

Owens’ genesis arose out of an Oakland Rent Board decrease in services petition after an Oakland tenant had enough of her landlord failing to respond to legitimate complaints regarding persistent disruptive and hazardous construction work on the property.  Ordinarily, tenants routinely file and prevail on decrease in service petitions without the matter ever reaching the Court of Appeal.  Not so here.

In addition to terminating the tenancy and filing a retaliatory eviction action, the landlord disputed the tenant’s ability to seek redress at the Oakland Rent Board on the theory that the Oakland Rent Ordinance did not cover the tenant because she rented a room in a single-family home, which are exempt from rent control by state law.  Specifically, the landlord argued that the tenancy was exempt from Oakland Rent Control under the Costa-Hawkins Act – which exempts single-family homes and condominiums from rent control – and that the tenant only rented a room in the building was irrelevant.

Ultimately, the Oakland Rent Board disagreed and determined the Oakland Rent Ordinance applied as the landlord separately leased bedrooms to individual tenants.  In doing so, the landlord chose to transform the single-family home into a multi-unit dwelling.

The landlord’s appeal to the trial court was similarly unsuccessful.

Unsurprisingly, this rental arrangement is widespread in cities with rent control.  Thousands of Californians reside in single-family homes and condominiums situated in cities with rent control.

Local Rent Control Protects California Boarding Houses 

In upholding the Oakland Rent Board’s determination, the California Court of Appeal focused on the legal definition of a rental or dwelling unit.  Indeed, California law draws distinctions between how planning/building codes and landlord/tenant law define and interpret the term dwelling unit.  “For purposes of landlord-tenant law as “a structure or the part of a structure that is used as a home, residence, or sleeping place…” Owens v. City of Oakland Housing, Residential Rent and Relocation Board, No. A157663.

Against this backdrop, the Court of Appeal determined that Costa-Hawkins did not exempt separately rented bedrooms in a single-family home or condominium from rent control since each unit was not itself “separately alienable from the title to any other dwelling unit.”  Id. In light of the Court’s opinion, tenants in Oakland, and likely every other city with rent control, renting rooms in boarding homes are not exempt from rent control under the perilous Costa-Hawkins Act.

Please note that the Costa-Hawkins Act continues wreaking havoc on many California tenants, destroying communities, and wresting housing policy control from local cities.  The fight to repeal the Costa-Hawkins continues. Click here to join the fight to repeal Costa-Hawkins!

Does Owens Apply to California Rent Control?

In January 2020, California Rent Control, officially known as the California Tenant Protection Act of 2019, extended just cause for eviction protections and rent cap protections statewide.  Now, tenants who have resided in covered units for at least a year may have California Rent Control protections.  Once owners satisfy certain conditions, California Rent Control expressly exempts single-family homes and condominiums individually owned.  Does the Owens holding apply to tenants in boarding houses that are otherwise protected by California Rent Control?

Unfortunately, the Owenscourt failed to answer this question. However, boarding house tenants can use the opinion’s favorable language to illuminate arguments in favor of California Rent Control application.  Presumably, the Owens’court language referenced above could apply to boarding house tenants in single-family homes or condominiums.  However, California Rent Control has yet to receive court interpretation and possesses a unique statutory construction, which could frustrate short-term Owens’ application.  Hopefully, California tenants can establish favorable case law rapidly.

Click here to read the unabridged Owens v. City of Oakland Housing, Residential Rent and Relocation Board opinion.