Racial Equity FAQs

What are some of the racial equity policy goals of TOPA?

By opening up pathways to ownership for tenants, TOPA represents an opportunity to reduce barriers to homeownership. Barriers to homeownership, like redlining (see Berkeley’s redlining map), have led to the racial wealth gap. And this wealth gap is clear in Berkeley’s homeownership numbers: 52% of Berkeley’s white households own a home, but only 29% of Black households here are homeowners, and only 28% of Latinx households (American Community Survey, 2019). TOPA represents one part of a strategy to confront this racial wealth gap.

Washington DC has had TOPA in place since 1980 and its impacts demonstrate this. DC TOPA has led to the creation of limited equity housing cooperatives (LEHCs) with thousands of affordable homeownership units. Of over 100 active LEHCs documented in a 2020 Coalition for Nonprofit Housing and Economic Development report, the median share of cooperative residents who are people of color is 75%.These affordable homeownership opportunities have led to housing stability as well as community stability, with most of these cooperatives located in neighborhoods with rapidly rising housing prices. Broadly, this kind of preservation also has the potential to create below-market rate units in higher-opportunity neighborhoods that resist the production of new affordable housing.

The District’s Home Purchase Assistance Program (HPAP) provides zero-interest downpayment loans and closing cost assistance. In its over 30 years of existence, HPAP loans have  allowed over 15,000 DC residents to make the transition into homeownership, including tenants who purchased their homes through TOPA. In 2019, 85% of the 343 HPAP loans went to black applicants - DC’s population in 2019 was 46% Black. 

Given that many of Berkeley’s Black residents have already been displaced, how can we ensure that this policy still benefits Black people with ties to Berkeley?

While there is no explicit ‘right to return’ in TOPA, there is potential for TOPA to be a layered strategy with a ‘right of return’ preference policy being developed in the City of Berkeley. While TOPA is initially going to benefit those who are already in a building to help them stay, there would be opportunities with vacancies in TOPA buildings to potentially apply such a preference policy. In other words, TOPA is about preventing displacement of current residents AND, through the creation of permanently affordable housing, creating a more accessible and less exclusionary Berkeley in the long run.

In Washington DC, the core idea behind the Housing for All Campaign is a “Continuum of Housing,” supporting the preservation and development of different types of affordable housing and highlighting the ability for residents to move along the Continuum to different types of affordable housing over time (ie from rental to ownership). And if a right of return/preference policy prioritizes residents who have been displaced from Berkeley, that could help with bringing people back to Berkeley, especially in TOPA projects that have any public subsidy in them.

Another concrete way that TOPA can potentially benefit Black residents is through the funding. For example, Small Sites Program (SSP) criteria could be revised so that funding for TOPA acquisitions is targeted to long-term BIPOC residents and neighborhoods most at risk of displacement. We also hope that TOPA will be a model for other cities (and it already has) like Oakland and Richmond, where there are more Black renters (some who have been pushed out of Berkeley) and TOPA can prevent further displacement. 

What are the impacts of TOPA on intergenerational wealth-building in communities of color?

TOPA exempts transfers, even when money is offered, between immediate family members, including spouses, domestic partners, parent and child, siblings, grandparent and grandchild. TOPA also does not interfere with transfers of property to one’s heirs upon the death of the owner.

Additionally, TOPA has been modified from a previous version of the proposed policy. The previous proposed policy requires permanent affordability (for example, through recorded deed resale restrictions) on all TOPA purchases. The revised proposal removes this permanent affordability (PA) requirement for tenant purchases financed without public subsidies. While TOPA’s PA requirements remain unchanged for Qualified Organization purchasers, for tenant-purchased properties PA requirements will now be dictated by the terms of applicable subsidies or limited equity ownership models. 

This revision responds to feedback from community groups that unfunded PA mandates constrain wealth-building. This revision promotes wealth building for tenants able to leverage their own resources and reduces administrative redundancies and burden. For those tenant purchases funded exclusively with private capital  that are not subject to any PA restrictions, a penalty for sales occurring less than 36 months from the purchase date was added to the policy, with decreasing penalty amounts to deter the potential of speculation.

How will this impact property owners for whom their rental property is one of their only assets?

Property owners selling under TOPA will still get Fair Market Value when selling their property. An appraisal provision that raised concerns about this for some property owners has been removed from the policy in response to feedback. Additionally, there is an exemption from TOPA when a small property owner needs to sell property quickly for a health care emergency. This exemption is limited to an Owner who owns only one Rental Housing Accommodation with five or fewer rental units.

Why should property owners of color, who have had to come up against systematic discrimination, have to comply with a process for how they sell their property?

The impacts on property owners from the TOPA policy are minimal; property owners can still sell to family, TOPA does not interfere with estates, and there is a medical emergency hardship exemption for small landlords (see FAQs for Landlords). For those property owners who do participate, the TOPA process adds time but does not control the sales price. Additionally, there are benefits to participation, such as a partial Transfer Tax rebate for those who sell during the Right of First Offer stage, and working with buyers who are familiar with the state of the property.

At the same time, the potential positive impacts for marginalized renters and for making Berkeley a less exclusive place into the future are large. As described at the beginning of this page, in Washington DC, the cooperatives that TOPA has helped create are on average majority people of color. It is the goal of the TOPA working group to continue pursuing how the policy can be implemented with racial equity goals at the forefront; for instance, by modifying Small Sites Program criteria, by applying a “right of return” preference policy to vacancies in cooperatives and/or condominium TOPA purchase buildings, and by targeted outreach (all described above).