The state has reached a $3.5 million settlement with corporate real estate investor Wedgewood, known for its stand-off with Oakland activists Moms 4 Housing.
The agreement requires the southern California company to revamp its business practices, adhere to stringent state and local renter protections and submit regular compliance reports to the department of justice, Attorney General Rob Bonta announced Wednesday. About $2.75 million of the settlement will be paid to tenants unlawfully evicted by Wedgewood across the state.
“As we battle this housing crisis of epic proportion, our housing laws, especially our tenant protections, have never been more vital,” Bonta said. “Unfortunately, even amid this crisis, there are some who pursue profits over the interests of families.”
In a statement, Wedgewood denied any wrongdoing, and said the accusations were based on company actions prior to 2016. The company added that it was “100{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} cooperative and transparent” during the state’s five-year investigation.
The attorney general’s announcement follows other, recent state efforts to address the state’s housing crisis — by encouraging production and protecting vulnerable renters during the ongoing Covid-19 pandemic. Bonta last month launched a task force dedicated to enforcing state housing laws against cities that improperly reject residential developments.
Wedgewood owned the West Oakland house occupied by homeless mothers and their children in 2019. The housing activists took over the empty home to highlight the city’s homeless problem and protest the spread of real estate speculation and corporate ownership. They said investors pushed up rents and drove out long-time residents. The group, which drew national attention, squatted illegally in the house for two months before being evicted by sheriff’s officials.
Wedgewood eventually agreed to sell the Magnolia Street property to the nonprofit Oakland Community Land Trust in October 2020. Wedgewood, known for purchasing investment properties and flipping homes, also said it would offer to sell its portfolio of more than 100 homes to the land trust.
Bonta accused the company of unlawful and harassing tactics, often depriving tenants of their legal right to stay in their homes. Wedgewood owns properties across the state, including San Francisco, Oakland, Berkeley, Hayward and East Palo Alto.
Wedgewood is a private real estate investment company focused on buying and flipping foreclosed homes, according to court filings. Many of the Redondo Beach company’s newly acquired properties have tenants living in the homes.
Renters have legal protections from harassment and certain types of evictions. In California, tenants with long-term agreements may be allowed to stay until the end of their lease. Renters with month-to-month leases must receive a 90-day notice to vacate. And some local ordinances limit the reasons a landlord can evict tenants.
In a complaint filed in Alameda County Superior Court, the state charged that Wedgewood “engaged in a variety of deceptive and unlawful business practices that have deprived California tenants of their rights.”
Company representatives routinely told tenants it does not rent, asking them to move out regardless of their lease terms, according to the complaint. In some cases, utilities were cut off in an effort to force residents to leave.
The state also alleged that Wedgewood filed eviction suits riddled with errors in their efforts to quickly clear properties of tenants. “These practices have harmed hundreds if not thousands of California tenants and their families,” the complaint says, “mainly in low income and minority communities.”
Madeline Howard, senior attorney at the Western Center on Law and Poverty, said communities of color have often been the target of corporate real estate investors, leading to gentrification and displacement.
Since most tenants do not have lawyers, Howard said, “It’s particularly important to enforce tenant protections when the property owner is a corporation.”
The pandemic has sharpened the need for enforcement, she said. “There’s such a direct connection between tenants rights and homelessness.”
In addition to restitution paid to tenants, Wedgewood agreed to pay $250,000 in civil penalties and $500,000 to support tenant programs or efforts to combat homelessness.
The settlement agreement has been submitted to the court and is awaiting final approval.