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Menlo Park eyes below-market rental housing

Original post made on Apr 26, 2012

Menlo Park has its eye on a Willow Road apartment complex that might be purchased for use as below-market-rate rental housing -- something that currently doesn't exist in Menlo Park.

Read the full story here Web Link posted Thursday, April 26, 2012, 10:12 AM

Comments (36)

Posted by numbers, a resident of another community
on Apr 26, 2012 at 12:22 pm

Okay so that works out to about $170K per unit, then staff time to administer. What is the projected cost to the city annually per housing unit. Would it be more efficient to just pay another apartment owner a subsidy rather than the city being amateur landlords with typical waste? And does a system that serves 12 "lottery winners" of 127 qualified really serve? And of course the owner wants to sell sooner than later, as apparently no private buyer in this hot market has stepped up at that price.

Posted by Joseph E. Davis, a resident of Woodside: Emerald Hills
on Apr 26, 2012 at 12:59 pm

At some point, one would think that local governments would learn that tampering in the operation of the housing market is a complete and utter waste of taxpayers' money, except for any fees and kickbacks that can be directed to favored cronies. Perhaps the latter is the entire point of such schemes.

Posted by new guy, a resident of Menlo Park: Downtown
on Apr 26, 2012 at 1:27 pm

Ok. I just do not feel bad that people cannot afford to life exactly where they want to. I was lucky enough to put myself through undergrad, then grad school but working while going to school. Then working to save for a down payment, then lucky enough to buy a small home in MP.

Please do not spend my money to buy housing.

Or, if you do, where is the list I can put myself on for a subsidized house in Atherton. I mean, I really want to live there. It would be closer to my job, and I am sure I make less than the median income of Atherton.

Seriously, $2.6 Million for 12 people who do not make enough to get by in the bay area. Who does this help?

Posted by new guy, a resident of Menlo Park: Downtown
on Apr 26, 2012 at 1:31 pm

by the way. Just looked up the property. The place is even vacant in google street view. and looks pretty bad. Obviously the buyer wants MP to pay for it, since no one else will.

Posted by Outraged - Again, a resident of Menlo Park: Central Menlo Park
on Apr 26, 2012 at 3:15 pm

Another poor use of taxpayer money! I pay taxes to fund municipal services that are shared by all city residents for things like police and fire protection, the public library, and park and road maintenance. I do NOT pay taxes to provide a few lucky lottery winners housing in Menlo Park. Why not buy a few condos in Florida to let them live there in style? I agree with the fellow who would like to be subsidized to have a home in Atherton. Affordable housing is a ridiculous concept. Housing is always is affordable to someone, or the market adjusts the price downwards. The marketplace should dictate housing, not the connections or luck of a few "winners". I am outraged that this is even being considered when the city is pleading poverty and cannot properly fund road maintenance and parks.

Posted by reality, a resident of Menlo Park: other
on Apr 26, 2012 at 5:41 pm

The BMR fund is not "taxpayer money" as "Outraged - Again" suggests. Developers have paid into the BMR fund in lieu of building BMR units, that they would be otherwise mandated to provide. The fund can only be used to purchase BMR units, and HIP would do most of the work. The only questions, "is this a good deal?"

Posted by Hmmm, a resident of another community
on Apr 26, 2012 at 5:56 pm

I know that area. Heck, I live in EPA & I wouldn't live in that building. But seriously, where's Menlo going to have space for 12 units, Facebook or not? Realistically, doesn't Menlo prefer to keep BMR east of 101? Yeah, I know that sounds snotty, but Menlo has evolved in that direction.

Would this be considered part of the county's affordable housing?

I'd tentatively say it's an okay idea because it's already built & has had some interesting improvements. Waiting too long is probably not a good idea, hoping that Facebook's presence will present other opportunities.

Posted by Gov't out of control, a resident of Menlo Park: other
on Apr 26, 2012 at 6:41 pm

Are the taxpayers still paying down the over $1 million mortgage from 2 or 3 years ago for a BMR condo unit that the woman stopped paying the mortgage on and lived in rent free for 6 months.

I pay ridiculous rent in MP and ridiculous taxes. You can rent in RWC for a $1000. Please stop the social engineering. You cause more problems than solve.

I would also like to sign up for the Atherton program. Are servants included?

Posted by POGO, a resident of Woodside: other
on Apr 26, 2012 at 7:40 pm

Why do this?

Because it makes a very large group of citizens feel good about themselves.

But why stop at housing? Why not provide them food, entertainment, transportation, lattes, etc. Have you no compassion?

Posted by Hmmm, a resident of another community
on Apr 26, 2012 at 8:19 pm

POGO - lattes should be easy w/all of the coffeehouses nearby. I prefer a cappuccino, thanks.

But your words make me want to understand the background of BMR laws, of which I know little. I personally am glad that the developers are forced to pay the piper.

Posted by POGO, a resident of Woodside: other
on Apr 26, 2012 at 9:42 pm

Ah, you've identified the sleight of hand. Congratulations!

The developers aren't "paying the piper." YOU ARE.

Posted by Hmmm, a resident of another community
on Apr 26, 2012 at 10:44 pm

POGO - do you have the time & inclination to explain? Or, point me toward some info? Of course, I might need a latte, too, but I can make that at home :-)

Posted by Fred, a resident of Atherton: other
on Apr 27, 2012 at 7:42 am

The elected love to spend other people's money. It looks good to act as if they are "helping" the poor. I like new guys story. Work hard not live on excuses for failure and 'woe is me' attitudes. I live in challenged neighborhood where each holiday season new bicycles are given out and less than a few months later, they are broken and are left out for the metal pick up people as here is no vested interest in the free stuff. Sorry to be harsh, but stop rewarding people for years of bad decisions...and/or ignorance. Blight enforcement helps prevent properties get in these situations. Hold the municipality accountable, not bail out the land profiteer.

Posted by POGO, a resident of Woodside: other
on Apr 27, 2012 at 7:57 am

Hmmm -

Do you think that businesses just "absorb" these costs or do they pass them on to customers? (Hint: Check the gas pump the next time you fill up)

Of course they pass these new costs on to their customers. That means you and me. We will all end up paying for them.

So a developer takes a little loss on Project A to satisfy a new regulatory requirement. Do you think that developer is not going to pass that on to Project B (the approval of which is the reward for doing Project A)? Of course they are. The objective of a business is not philanthropy; they are there primarily to make money. That shouldn't be a revelation to anyone.

Even if you're not looking to purchase or lease space in Project B, those higher rates will impact you. If you're a tenant or business somewhere else, there is now a new comparable rate that your landlord will use to raise YOUR rent. And the new higher cost of buying or leasing property in Menlo Park gets passed on to their customers.

Gee, do you think all these regulations that our government imposes on businesses just might have something to do with the higher prices we Californians pay for gasoline, water, property, cars, schools, prisons, food, etc.? Ya think?

Posted by Hmmm, a resident of another community
on Apr 27, 2012 at 12:58 pm

Thank you, POGO. I thought perhaps there was some extra special secret sauce type of passing the buck going on, a la The Sopranos, rather than the standard passing the buck. We're stuck w/this type of thing due to various mandates.

BTW, Fred, I recall when Menlo Park police did blight abatement & it was the perfect entre to getting rid of drug houses & nailing scofflaw landlords. I don't know if they still have the program.

Posted by mortgagee, a resident of Menlo Park: Felton Gables
on Apr 27, 2012 at 1:38 pm

Social engineering is bad enough without forcing the taxpayer to foot the bill. And, after a couple of costly experiences, you'd think our city would have realized that it should not be in the landlord business. If staff doesn't have enough work as it is, maybe it's time for a staff reduction!

I've noticed that city staffers and their relatives seem to rise to the top of the list for BMR housing. So perhaps that is a factor. But the underlying concept is misguided and wrong: people should live where they can afford to live. Let the free market do its thing.

Posted by Not Affordable, a resident of Menlo Park: Linfield Oaks
on Apr 27, 2012 at 1:59 pm

Affordable housing is a necessity for any community or it wouldn't have a place for its firefighters, teachers, police officers and other service providers to live. But this scheme is not affordable and not responsible. As any rental property owner knows, there are ongoing maintenance costs beyond whatever initial costs are incurred for getting a property up to code. Whether it's politically correct to say or not, the lower the rent the higher the maintenance, so just looking at the initial purchase cost is naive. Do we have plumbers, electricians, carpenters, etc. on call 24/7 for burst pipes and broken windows? Has the City factored in legal fees -- what have we budgeted for ongoing costs such as legal fees to evict tenants who don't pay their rent, or to defend the City from liability claims when someone trips on the stairs? Correct me if I'm wrong but I don't think operating fees can come out of the BMR fund so this is probably not a break-even situation even after the real estate cost. I have no confidence that a realistic cost:benefit analysis could have been done to support this even factoring in the social responsibility. What a bad idea.

Posted by Hmmm, a resident of another community
on Apr 27, 2012 at 2:03 pm

Mortgagee- how did you learn that city employees and/or their relatives are on the top of the BMR list?

Menlo Park historically has had really lousy landlords, which is a shame for such a nice community.

I personally like to see the economically disadvantaged have opportunities to make forward strides in their lives. Maybe I've been naive in thinking that BMR is part of that. Does anyone have any BMR success stories?

That said, I've never signed up for BMR housing & there've been times that even as a salaried employee working more than 40 hours a week, I've taken on additional work to make ends meet. I also left a job that I loved that was lower paying but w/excellent benefits & where I excelled to take a higher paying, salaried job w/no benefits when I had a rent increase. I've never even looked at BMR requirements because I didn't want to take up the space of someone w/kids who needed access to opportunities that I didn't need.

I think one of the biggest bummers about this BMR opportunity (aside from all everything else stated) is that it's not in a good school district. If I were a low income parent, that would be my concern.

Posted by WhoRUpeople, a resident of another community
on Apr 27, 2012 at 2:07 pm

Most of the comments in this string of posts represent the reason for my handle--who are you people? Some famous guy once said, "if everyone went to Oxford, who would grub my sewer?" The people who serve you are good people. Either pay them more, or allow them to live close to their work. Gees!!!!

Posted by mortgagee, a resident of Menlo Park: Felton Gables
on Apr 27, 2012 at 2:58 pm

You are right, Who. But subsidizing a handful of people (who may or may not be doing work of social merit) is not even going to put a dent in the problem. On the other hand, if the landed gentry cannot hire housekeepers, nannies, and gardeners due to lack of available housing, they will either raise the salaries or provide housing themselves. Without government intervention or social engineering. That's how the free market works.

By the way, even though BMR housing is not allocated by profession, Menlo Park police officers and firefighters earn higher salaries than most people I know. Given that we're already providing them with good incomes and ridiculous pensions, I don't think we need to pay for their homes too.

The PA Weekly ran an article a few years ago outlining many of the problems with BMR housing. Rather than reiterate their points, I recommend that anyone interested take a look: Web Link

Posted by Hmmm, a resident of another community
on Apr 27, 2012 at 3:33 pm

I think there are good points on both sides of the argument. FWIW, when we've had a housecleaner, she was paid pretty well - & part of that was yes, because she was a widowed mother going to school. I've always advocated for affordable housing for exactly the reasons Who mentions. Beyond the practical, an economically diverse area is generally rich & healthy in other ways.

But is BMR worth the problems that go along w/it, including who oversees it? Living here in EPA I've heard some stories about how poorly some nonprofits have run housing. But otoh, the hell we've been through w/crooked landlords have been ahem! memorable. If there are problems w/local city government, then the housing they oversee will be problematic & they'll be less competent in handling problems that pop up.

What worries me, overall, is not what "social engineering" has wrought, but the downside of what Sili Valley has resulted in: a lot of snotty criticism, elitism & NIMBYism clearly lacking in tolerance. If we're going to criticize recipients of BMR (aside from city staffers & their faves), we need to criticize the corporate welfare recipients - a lot of them are local & personally, the value that they've added to *my* life is arguable.

If it ends up costing approx 210k per unit (incl the 600k in improvements & not including administrative costs), is that a bad deal?

Posted by Menlo Voter, a resident of Menlo Park: other
on Apr 27, 2012 at 4:46 pm

The people that end up in BMR housing are not police officers, firefighters or teachers. They all make too much money to qualify.

A good example is Menlo Square. They were required to provide 4 BMR units as part of the project, ostensibly for "police, firefighter and teachers." They couldn't sell a single one of them. The developers ended up having to buy them and rent them out at BMR. Having had offices next to there for several years I can tell you they weren't being rented to police officers, firefighters or teachers either.

BMR is a joke. It costs us all a lot of money and does nothing to actually provide housing to the people that everyone thinks they are helping.

I'd love to live in Atherton. I can't afford to. I deal with it. I don't expect the developers in that town to provide me with a house I can afford because I want it. I can't afford to live there. Housekeepers, et al can't either. They can't afford to live where I live either. So what? It's called a free market. If they want to be able to live where I live then they need to take the steps I did (working my way through college to get a degree and a variety of other things)so they can earn enough money to live here. If not, San Jose is just down the road. That's where I lived when I couldn't afford to live here. I just don't understand why people have such a problem with this concept.

Posted by Joseph E. Davis, a resident of Woodside: Emerald Hills
on Apr 27, 2012 at 4:49 pm

The idea that the Menlo Park government should buy a building so that its citizens may continue to receive police, fire, and housekeeping services is preposterous and reflects a fundamental misunderstanding of the economy.

It would be far better for Menlo Park to leave the housing market alone and focus on honest, efficient, and high quality local governance - areas that leave much to be desired.

Posted by Hmmm, a resident of another community
on Apr 27, 2012 at 5:08 pm

But, Menlo Voter, isn't it not so much our opinion but the legal mandates that matter, so there has to be BMR unless the law changes? Free markets are also used as an excuse for poorer people to not get any assistance. And let's be honest - we don't live in a fully free market, anyway.

How much does it cost a city and/or county taxpayer, per person, to have BMR in our county? (I don't expect you to know this.)

It's good to hear your knowledge of the subject since I've never lived or worked near BMR units. Any ideas why the Menlo Square places didn't sell & had to be rented out?

With all of the corporate welfare, why shouldn't individuals get a helping hand?

I do live near a low income housing development, not sure who runs it. I must say, the residents seem to run the same gamut from hardworking to scumsucking, as those that live in my neighborhood. Of course, given that it's EPA, the scumsuckers are more obvious - they don't live behind tall gates.

Posted by POGO, a resident of Woodside: other
on Apr 27, 2012 at 5:13 pm

Good thread and lots of good thoughts. I only hope our elected officials are reading it.

And Menlo Voter's point is spot on. The reason for BMR is always to provide housing for our police, firefighters, teachers, etc. Have you checked the salaries of your police and firefighters? A two income family headed by a teacher and police officer makes a pretty good living!

Hmmm said (correctly) that "...we're stuck w/this type of thing due to various mandates." EXACTLY. And that's the point. We need our elected officials to stop mandating everything from how many BMR housing a developer must provide to get their project approved, to the kind of light bulbs that you can use. Stop the mandates!

Posted by Hmmm, a resident of another community
on Apr 27, 2012 at 5:34 pm

POGO - what teachers are you talking about? Many of them have pretty low salaries for a long time, especially when you factor in their education level necessary, the stress & even the danger. Out of the 3 groups mentioned, teachers are usually the ones who make the least - & they don't make overtime.

Maybe I'm not up on what local public school teachers make?

I do know how the administration tries to game substitute teachers out of decent pay - it's despicable.

I'm betting that there are some BMR success stories, but perhaps not in Menlo or any other city w/mediocre government.

Hah, I just remembered - the only person I know of who applied for BMR housing was in Palo Alto. She had kids at a very young age, was a single mom, the dad was a jerk. I guess it's pretty hard for some people to do family planning, but it was never hard for me.

Posted by mortgagee, a resident of Menlo Park: Felton Gables
on Apr 27, 2012 at 6:31 pm

For 2009-2010 the average teacher salary for MPCSD was $88k, for LLESD $89k. Web Link

With the Menlo Square units, I believe it was the *city council* not the developer who voted to buy the unsold units. The city then became the landlord.

The problem with condo BMRs is the monthly homeowner fee. Though the price of the condo is discounted, the homeowner fee is not. So people whose salary is low enough to qualify them for BMR units often cannot get bank loans because the mortgage+fee exceeds the amount they can afford. Hence, the BMRs sit empty...unless the city ponies up. Shameful all around.

P.S. Like many posters here, I was not born into wealth, nor do I live high on the hog now. I got scholarships and a good education that led to remunerative work. But around here, I feel downright poor compared to all the people with family money or successful IPOs. I'd like to live in a $5mm house too, but it's not going to happen, and I wouldn't endorse any system that expected rich people to buy me a house like theirs!

Posted by Hmmm, a resident of another community
on Apr 27, 2012 at 7:11 pm

Mortgagee- thanks so much for educating me on these various things. I was wondering how a BMR recipient could pay condo fees. We have a place in another country (not BMR) but things are done so differently there that it's hard to compare w/the US.

I do wish, for balance, that we'd get all het up on local corporate welfare recipients, but they don't seem to make the local news for that reason all that often.

Felton Gables is nice & I'm glad you've done well. Starting off financially disadvantaged can take awhile to overcome, but it's doable. I have a friend whose company IPO'd last year & while he's not the first I've known in that financially lucky position, he's a cofounder, so as you can imagine, he's now worth a *lot*. It's weird - he hasn't worked any harder than my parents, nor has he saved any lives like they have (that's one of my personal barometers). I used to work that hard, but I left tech. And one of the big differences between us is that he comes up w/these interesting ideas - I don't. As he says - it was finally a success after several failures & so he's happy to pick up the lunch tab. I'm so relieved that he hasn't changed!

But, for balance, when I think of Eric Salvatierra, the fine gentleman who committed suicide last month, his money & brains didn't help him, at the end. It's sobering to be reminded of the differences that money can & can't make in our lives.

Posted by Joseph E. Davis, a resident of Woodside: Emerald Hills
on Apr 27, 2012 at 8:41 pm

Hmmm, I fully agree with you that corporate welfare is disgusting and wrong. However we should not compound that mistake with additional flawed measures.

The right way to fix the problem is to do away with both corporate welfare and futile, money-wasting attempts like this to interfere in the housing economy.

Posted by Menlo Voter, a resident of Menlo Park: other
on Apr 28, 2012 at 8:03 am

The Menlo Square units didn't sell because the people who were ostensibly supposed to buy them were way over the maximum income to qualify. As someone else posted teaschers around here make $80k a year. Firefighters are making around $110k and so are police officers. That's too much income to qualify. So then we look to other lower paid workers. A carpenter is making around $40k to $50k. that qualifies but most of those folks don't have the down payment and can't make the mortgage because BMR in this area is still pretty darn expensive when compared to places like San Jose. So the units don't get sold.

Posted by involve nonprofits, a resident of Menlo Park: Central Menlo Park
on Apr 28, 2012 at 4:32 pm

No developer wants to provide BMR units because it's cheaper for them to pay in lieu fees. Available land is an issue. The BMR fees could pay for land. Nonprofits like Habitat for Humanity can build the units.

It's not just the salaries of firefighters and police and teachers that are an issue (and don't teachers get that much for 9 months work, and could get more for the other 3?) for why they don't live in BMR units. Many of them want a single family dwelling with a yard. So they are willing to commute from where they can get that. More likely to live in BMR are the hourly workers who prepare and serve food, clean houses, etc. Oh, and some of the Stanford staff (not faculty).

It would help to know exactly what requirements the city has for providing BMR units and what happens if that doesn't happen.

Posted by POGO, a resident of Woodside: other
on Apr 29, 2012 at 7:36 am

Thanks to the others for posting the average wages for these workers (which are often forgotten).

My point is that if your family is headed by a teacher making $70k and a firefighter making $110k, that's hardly a POOR family - even for the Bay Area.

Posted by Past SF Resident, a resident of Portola Valley: Westridge
on Apr 29, 2012 at 3:51 pm

mortgagee wrote:

> I've noticed that city staffers and their relatives
> seem to rise to the top of the list for BMR housing.

When I was involved with BMR units in SF most of them (and Section 8 units) went to the people that worked for big donors. When you pay the lady who cleans your house in cash she will "qualify" for a BMR unit and she will be happy if you can get her a nice BMR unit for a low rent.

Posted by involve nonprofits, a resident of Menlo Park: Central Menlo Park
on Apr 29, 2012 at 5:55 pm

what requirements does the city have for providing BMR units?
what happens if they ignore the requirements?
It's hard to believe that Atherton, Portola valley, and Woodside are doing a lot. maybe they are?

Posted by Steve, a resident of Menlo Park: Central Menlo Park
on Apr 30, 2012 at 12:28 pm

I happen to know a teacher in the MP schools who was able to rent one of the BMR units at Menlo Square. She was a single parent with two young children at the time who attended MP schools. She benefited from the arrangement and I believe both the school & city benefited from having her & her children as part of the community. No way she could have afforded that apartment on her teaching salary alone.
My daughter now is teaching in MP schools, tutoring in the evenings, and working to pay down her school loans by living at home. No way she could afford an apartment and pay off her loans. Maybe if she were married to a firefighter earning $80K but she doesn't meet many fire fighters in her line of work.

Posted by Hmmm, a resident of another community
on Apr 30, 2012 at 8:08 pm

I'm really appreciating the various viewpoints and knowledge shared here.

Steve, I'm so glad that your daughter is employed & in a position to be paying down her debt. Many of us know how hard that is - & it's been even harder these past few years. BTW, one of my teacher friends only bought his place in San Jose because he tutored for extra money, coached for extra money & then was lucky enough to get an inheritance. He's well-educated & hard-working like most teachers & loves his job, but it can be a challenge to pay the bills sometimes.

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