Tenant Opportunity
to Purchase Act is Bad Policy
Local elected officials are working to establish a radical housing policy called TOPA (Tenant Opportunity to Purchase Act). This legislation would allow local governments to dictate how long it takes to sell a property and to whom the owner should sell their property to. It's being sold as a way to provide property ownership for renters, without providing any funding to make that possible. Proponents of this policy want you to believe that it will "prevent displacement" of marginalized community members in cities like Oakland and Berkeley when in reality it threatens to harm the generational wealth those communities have built through private property ownership.
Washington D.C. has had this policy in place for over 40 years and the studies show that it has created no additional housing or private ownership for the vulnerable communities it claims to serve. Instead, it has chipped away at the opportunities for communities of color trying to build generational stability by making the process of selling a property difficult and drawn out.
Take a stand today and help us protect our community members who have worked hard to create a future for their families. Commerce and financial stability that should not be looked at as a negative, but as a positive to a healthy rental housing community. Demand that our elected officials conduct an equity study to understand the impact TOPA has on small legacy owners when they go to sell their properties.
Stay informed and learned more about impending housing policy. Sign up for TOPA Updates below.
Tenant Opportunity
to Purchase Act is Bad Policy
Local elected officials are working to establish a radical housing policy called TOPA (Tenant Opportunity to Purchase Act). This legislation would allow local governments to dictate how long it takes to sell a property and to whom the owner should sell their property to. It's being sold as a way to provide property ownership for renters, without providing any funding to make that possible. Proponents of this policy want you to believe that it will "prevent displacement" of marginalized community members in cities like Oakland and Berkeley when in reality it threatens to harm the generational wealth those communities have built through private property ownership.
Washington D.C. has had this policy in place for over 40 years and the studies show that it has created no additional housing or private ownership for the vulnerable communities it claims to serve. Instead, it has chipped away at the opportunities for communities of color trying to build generational stability by making the process of selling a property difficult and drawn out.
Take a stand today and help us protect our community members who have worked hard to create a future for their families. Commerce and financial stability that should not be looked at as a negative, but as a positive to a healthy rental housing community. Demand that our elected officials conduct an equity study to understand the impact TOPA has on small legacy owners when they go to sell their properties.
Stay informed and learned more about impending housing policy. Sign up for TOPA Updates below.
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Who really benefits from TOPA?
The primary beneficiaries of TOPA are special interest groups, non-profit housing organizations, outside investors, and developers who can exploit this legislation for exemptions from permanent affordability regulations, property taxes, or rent control limits. The bureaucratic nature of the ordinance also means increased administrative costs, diverting resources from more effective affordable housing programs like first-time home buyer incentives, down payment assistance, and property tax abatement programs.
Thinking of turning your home into a rental?
Think again.
If you turn your home into a rental or rent out rooms and then decide to sell it, TOPA gives renters and non-profit organizations the right of first refusal to purchase the property before it can be sold in a free market. The legislation can lead to transaction delays of up to a year or more, and multiple TOPA developers/investors can take turns causing these extended delays. TOPA significantly devalues properties and harms homeowners' equity.
Does TOPA create more housing?
Implementing TOPA wouldn’t produce the additional units needed in areas where housing is already deficient. In fact, it would reduce the housing stock, lead to increased rents, and harm renters. Moreover, it prevents a property from going on the free market for sale until every renter waives their rights in writing, creating unpredictable delays in the sales process. This is not the way to promote ownership opportunities for existing renters, nor is it an effective means of adding critically needed affordable housing to the market. In markets like the East Bay, where the average one-bedroom condo can be over $600K, a single-family home over $1M, and interest rates remain over 6%, home ownership continues to be out of reach for many renters without significant subsidies.
Government
Municipalities clear a path for non-profit housing organizations, backed by well-funded investors, in pursuit of increasing socialized and public housing programs. TOPA exemptions from rent control, tenant protection regulations, and property/business taxes and fees set up a socialized housing scheme that is a lose-lose proposition. Cities lose tax revenue to support critical services. Renters lose their protections from new nonprofit owners and are subject to habitability issues when non-profit funding from government grants dry up. According to Princeton's Eviction Lab 2023 data, nonprofit and public housing entities file the majority of all evictions for nonpayment of rent.
Renters
For renters seeking home ownership, the prospect of purchasing a property under municipal control may not be as appealing as it seems. In reality, TOPA strips away the financial benefits and flexibility of property ownership, such as property appreciation and income generation. Resident-owners are left with a host of responsibilities and greater financial risks. Furthermore, the imposition of "permanently affordable" deed restrictions could make it nearly impossible for resident-owners to secure loans from banks under such conditions. Finally, the high cost of Bay Area housing makes ownership out of reach for our most vulnerable renters.
Property Owners
TOPA introduces burdensome regulations that require homeowners and rental property owners to offer their properties to renters at prices dictated by "city-approved" appraisers. The potential for indefinite delays in the sales process can be a nightmare for property owners who have urgent financial obligations, need a timely sale, or want to sell to friends and family at a reduced price. This process also creates perverse incentives to devalue an owner's investment. Additionally, the 1031 Exchange market, which allows tax deferment for real estate investors who sell a property and use the proceeds to purchase another, would be significantly halted.
What is the East Bay Rental Housing Association (EBRHA)?
The East Bay Rental Housing Association is a non-profit organization that provides an essential service to the rental housing community in Alameda and Contra Costa Counties. We have over 1500 members who own and manage over 45,000 rental housing units and provide homes for over 120,000 residents. We are dedicated to helping our members provide fair, safe, and compliant housing through education, resources, and advocacy. With over 70 events a year, exclusive benefits, 100+ rental forms library, 100+ industry partner referrals, one-on-one support, and EVERYTHING else to support your rental housing business, EBRHA truly is the essential resource to the housing community.