Loophole allowed landlord developer to evict Hayward apartment complex

HAYWARD, Calif. (KTVU) - A plan to provide more affordable housing in Hayward has come with some unforeseen consequences.

As an existing building was reclassified as affordable housing, many tenants were forced out.

Hayward has a just cause Eviction ordinance. It means a landlord can't evict someone without good reason.

Well, months ago the city council passed an emergency ordinance that gave this property an exemption because the owners said they needed it order to turn the property into affordable housing.

The Reliant Group bought the 68-unit leisure terrace apartments on E street in February.

In March, the city council passed the ordinance exempting the property from just cause evictions.

"The amendment was to allow affordable conversion units to happen and take place without the just cause being a barrier to it,"said Hayward city council member Aisha Wahab.

Shortly after the exemption passed, tenants say they got a notice from the new owners.

"We got a threat of eviction notice, a 60-day notice saying we needed to move," said former tenant Derek Braselton.

The couple says they were verbally told they could reapply, so they did, but we're denied.

"According to them, we make too much money. That's it. That's as far as I know," said Braselton.

They say they and many others were forced out, because their incomes we're too high.

Ironically, as they were searching for new apartments, they say they saw their very apartment already listed online.

"We saw it listed when we were still in it packing up and getting ready to go listed as available for $400 more than what we were paying. It doesn't even make any sense," said Brittney Abraham.

A spokesman for the Reliant Group says before the apartment turned affordable, average rent was $1492 a month, but now it's $1549, so it's actually increased.

But they also say being affordable housing allowed the company to qualify for tax credits that helped them make improvements to the property inside and out.

"I have new flooring, new bathroom, new cabinets, everything," said Gabriela Cifuentes.

No one is confirming how many tenants were forced out based on their incomes.

But the city wants those displaced to be compensated by The Reliant Group.

And the city is now considering closing the loophole that led to problem.

"The way that it was executed was not the way any of us intended," said Wahab.

The Reliant Group, which owns properties in several other Bay Area cities, issued a statement saying

The city council will be meeting in a few weeks to consider reversing that emergency exemption.