The Oakland Rent Control Board decided that Mills College is allowed to assign its own rent rates for residences in Faculty Village, despite protests by some residents that the rents are too high.
Board arbitrator Doris Brown made the decision following a hearing that took place nearly a year ago on December 5, 2000. During the hearing four long-term Faculty Village residents presented a petition to block the rent increases proposed by the College.
The dispute arose when Jerry Clegg, Jim Wright, Carlotta Caulfield and Steve Givant notified the college that they would petition the Rent Board to block the proposed rent increases. They said that the college was proposing rent increases that violated an Oakland rent ordinance that allows only a three percent rent increase annually.
Some of the proposed increases were as high as 75 percent, although such increases were replaced with more moderate ones when the college received notice of the petition.
Wright said that the rent increases were unfair because they were designed to deter senior members of the faculty from living in Faculty Village. He said that Faculty Village residents are protected under Oakland law against such high rent increases. Wright, former department head of dramatic arts and media studies, has since retired and moved out of Faculty Village.
Robin Isenberg, legal representative for the College, said that the College was attempting to reach a balance between Oakland law and IRS requirements.
The IRS requires Faculty Village residents to pay at least five percent of their unit’s appraised value in rent. If less than five percent is paid in rent, the remaining amount must be paid as taxable income.
For example, if five percent of the appraised value is $1,000 and only $500 is paid as rent, then the renter must pay income tax on the remaining $500 said Elizabeth Burwell, acting vice president for finance, administration and treasurer.
Isenberg said the college should be exempted from the Oakland rent ordinance because Mills was following federal law. In addition, in order to remain a “vital institution” the college needs to bring new faculty to the college, she said. Faculty Village is used to attract new professors to the college.
“Faculty Village is a lovely place to start a career at Mills and get acquainted with the area and the college at the same time,” said Burwell.
Residences in Faculty Village must be vacated in order to provide new faculty members with on-campus housing, and the college needs to be able to increase the rents of Faculty Village residents who are paying below market-rate for their residences, said Isenberg. Raising rents makes it less appealing to stay in Faculty Village, thereby allowing vacancies in the Village to open up.
Hearing officer Brown ruled in favor of the college, exempting it from the rent increase restrictions imposed by the Oakland rent ordinance. Isenberg said that Brown “seemed to find validity in the argument that the college needed some freedom or discretion to set rents in pursuit of important educational goals.” Bringing new faculty to the college is one such educational goal.
Isenberg said that the initial ruling is subject to appeal once it is issued in written form. Once the written ruling is issued, the faculty petitioners will be given a chance to appeal the ruling. If they choose not to pursue an appeal or fail to do so within the allotted time, the written ruling will become final.
Once that occurs, the college will be able to use the written ruling as documentation of its exemption from the rent ordinance she said.
The written ruling was supposed to have come out within 30 days of Dec. 5, 2000, but Isenberg said the college has still not received anything from the Rent Board. “The Rent Board is short staffed and overwhelmed with work, so the delay may be the effect of an administrative backlog,” she said.
“Until we receive the written ruling and appeal rights are exhausted, there is no certainty of result in the case,” she said.
Isenberg said that so far, no further developments regarding the issue have occurred.
None of the faculty petitioners could be reached in time to offer any comment on whether they plan to appeal the ruling.