Developer Clifford Orloff filed a second lawsuit against the city of Berkeley on Friday, alleging that it charged him unreasonable fees associated with demolishing and rebuilding a property located on Durant Avenue across from Unit 1.
In January, Orloff’s company OPHCA demolished the property — located at 2631 Durant Ave. — making it the first rent-controlled building in the city to be destroyed, Orloff said. He plans to build a new five story, 56-unit apartment complex in its place.
The city is requiring that Orloff pay a demolition fee, an affordable housing mitigation fee and a building permit fee — which together could amount to more than $3 million, according to the lawsuit, which was filed with the state of California. The demolition fee has not yet been determined by the city but has been proposed to cost more than $100,000 per unit, according to the lawsuit. Orloff has been charged more than $420,000 for the building permit and will be charged about $1.1 million because the new building is not set to include on-site affordable housing units.
Orloff previously filed a federal lawsuit in June 2016 challenging city fees, which is currently suspended.
Orloff alleged he bought the nearly century old three-story, 18-unit property in 2012 hoping to renovate the apartment, but soon found the property too damaged for repair.
“We have never built a building from scratch,” Orloff said, “We always renovate. But if there was an earthquake we wouldn’t know if it could stand. (The property) was beyond repair.”
Berkeley City Council granted Orloff a permit to demolish and rebuild on the property in 2015 after years of discussion. Chair of the ASUC Housing Commission Matthew Lewis and other activists have alleged that Orloff deliberately neglected the building and then used its disrepair as a pretext to illegally evict tenants.
Lewis said if the city made exceptions for Orloff and took away his mandatory fees, it would incentivize other landlords to also demolish rent-controlled buildings. He added that, as a result, there would be less affordable housing for students.
“Because he demolished affordable units he needs to make up for taking something away — you need to choose building (affordable units) or paying for them,” said Councilmember Kriss Worthington.
Orloff said the fees associated with the demolition and rebuild are excessive, especially because the previous property was uninhabitable and the “worst (he) has ever seen.” Orloff added that the city’s strict regulations on housing make it difficult for developers to build, exacerbating the housing crisis in Berkeley.
“They’re creating a problem they want to solve,” Orloff said. “The rents are too high because they make it hard to develop a lot of housing.”
Despite Orloff’s allegations, Worthington said the fees were carefully put into place after research by consultants and finance experts. Additionally, Worthington said it would be irresponsible for the city to not have policies in place discouraging the elimination of affordable housing.