News

Menlo Park ordinance in works to make landlords assist displaced renters

 

Menlo Park is in the process of developing an ordinance that, if passed, could require landlords who evict tenants without cause or impose rent increases over a certain level to give cash to those displaced.

While the city's Housing Commission discussed the terms of such a potential ordinance on Aug. 8, it left some matters still unresolved. The plan is to conduct public outreach before the matter is brought to the City Council, according to Clay Curtin, interim housing and economic development manager.

An early draft of the ordinance shows could be far-reaching in terms of the people it could impact. Tenants would be eligible to receive the cash equivalent of three, and in some cases, four months' market-rate rent from their landlords if they are evicted for a reason other than failing to pay rent, breaching a rental agreement or being a nuisance, or if they are vacating temporarily to allow for needed repairs. They would also be eligible for assistance if they are presented with any rent increase greater than the annual increase in the regional consumer price index (an indicator of natural increases in living costs) plus 5 percent, over the course of a year.

The landlord would then have to give a cash payment of three times whatever is considered the current Menlo Park market rate rent for the unit, or three times the tenant's rent, whichever is more, and a 60-day subscription to a rental agency service.

The commission also supports requiring the landlord to give an additional month's rent to displaced households that have at least one person who is over 62 years old, under 18, or disabled.

During the course of the Housing Commission's discussion, some commissioners said they favor broadening the terms of who would be eligible for assistance.

While the draft policy indicates that a tenant would have had to live in the same place for 36 months to be eligible for relocation assistance, several commissioners said they favor having no residency duration requirements.

The potential ordinance might apply more broadly than just to cash-strapped households. Housing Commissioner Karen Grove said she wants the ordinance to apply to any household earning less than one and a half or two times the area median income.

According to a staff report, the housing commissioners support having the ordinance apply to all rental units throughout the city, while staff recommends limiting the ordinance to target only rental properties of four or more units. If the commission sticks with its recommendation, staff suggest excluding housing already considered "affordable" through an agreement, secondary dwelling units, or households that rent a room to a third party.

Public responses

Three people who introduced themselves as part of the Redwood Landing Tenants Union spoke in favor of the potential ordinance, in addition to further legislative protections for renters. Sandra Zamora and Lilian Flores, renters at newly acquired apartments on Pierce Road in Belle Haven, said their rents were recently increased by $800 a month. Zamora said she is now paying the higher cost.

Flores said she considers herself lucky because she and her fiance were able to negotiate ending a contract that would otherwise have carried a roughly $5,000 penalty when they discovered, after agreeing to the new rent, that they couldn't afford it. The couple moved out of the apartment and are now sharing a bedroom in someone else's home, she said.

She added that they would not be able to save up for a wedding or pay their debts if they kept paying rent at that level.

Luis Carriel, a lifelong Menlo Park resident who said he lives in a nearby apartment purchased by the same owners, told The Almanac that under the new owners, rent at his two-bedroom apartment was doubled to $2,600 from $1,300, even while the new landlord stopped paying for utilities.

He said he negotiated for a $100 deduction in the rent increase to $2,500 a month, partly because he has been a tenant there for about 12 years.

Evan and Carol Collins, local landlords, expressed concerns about a provision that would require even landlords who rent to tenants at below market rate to provide tenants relocation assistance at market rate levels.

Rhovy Lyn Antonio, vice president of public affairs at the California Apartment Association, told the commission that while the association does not oppose a relocation assistance program, she believes that the commission's approach had deviated from the direction the City Council initially gave at a study session it held in January 2017. She said that the program should apply only to housing being sold or renovated, and opposed the inclusion of rent increases of 5 percent plus increases in the consumer price index as a trigger for the ordinance.

"That, to us, is a form of rent control," she said, adding that she hoped there would be more community outreach with local rental property owners.

Another question is how the city would realistically implement such a policy. According to Clay Curtin, interim housing and economic development manager, he and a provisional employee, Mike Noce, represent the city's entire housing department. Other cities have more robust groups and staff to help enact and enforce housing policy, such as rent stabilization boards.

Also, the city isn't in the practice of researching and maintaining information on current market-rate rents in the city or calculating what percentage of income a tenant spends on rent.

Curtin said that the legal language in the draft ordinance is drawn from several local cities that have tenant relocation assistance ordinance policies, such as Redwood City, Mountain View and San Leandro.

Redwood City passed a tenant relocation assistance ordinance in March, which will take effect in January. That policy applies only to apartment buildings of five or more units in situations where housing is being permanently taken off the rental market. To qualify, a tenant must have lived in the apartment for a year or more and earn no more than 80 percent of the area median income.

For households that qualify, a landlord would have to provide the cash equivalent of three months' rent, or four for households with a senior, child or person who is disabled; a refund on the tenant's security deposit; a 60-day subscription to a rental agency service; and an administrative fee.

Mountain View updated its policy in May. Mountain View now requires landlords to provide tenant relocation assistance to lease-compliant households that earn 120 percent or less than the area's median income, in the form of a full refund of a tenant’s security deposit, a 60-day subscription to a rental agency, the cash equivalent of three months' median market-rate rent for a similarly sized apartment, and an additional $3,000 for households with at least one person over 62 years of age, under 18, or disabled.

The city plans to begin public outreach on the potential ordinance after a revised draft is reviewed by a Housing Commission subcommittee.

--

Sign up for Almanac Express to get news updates. Follow us on Facebook and Twitter.

Comments

18 people like this
Posted by Tenant’s Roghts Advocate
a resident of another community
on Aug 14, 2018 at 12:19 pm

Kirsten Keith recently accepted campaign contributions of $500 from California Apartment Association PAC and $1000 from Tod Spieker, one of the largest apartment owners on the Peninsula.


2 people like this
Posted by homework
a resident of Menlo Park: other
on Aug 14, 2018 at 12:57 pm

Yes, all our council members have accepted those same contributions and they have still voted for ordinances to protect tenants. Do your homework.


26 people like this
Posted by Menlo Park Resident
a resident of Menlo Park: Central Menlo Park
on Aug 14, 2018 at 12:59 pm

This sounds great for renters, but it seems to assume that all landlords are evil & greedy? If, for instance, a landlord has been renting for many years below market, and due to circumstance needs to raise the rent to market, why does the landlord punitively bear the responsibility to maintain below market rent (or pay a significant penalty like several months of rent credit) at an operating loss? There are lots of quad-plexes owned as retirement investments, and the owners depend on the income- I know several personally. Granted, housing expenses are a serious issue for everyone in our overpriced neighborhoods, but why is it ethical to add more burden to the landlord? This proposed legislation is not a fair solution to the problem.


10 people like this
Posted by Tenant’s Roghts Advocate
a resident of another community
on Aug 14, 2018 at 1:07 pm

So everybody does it? That’s really the excuse you want to go with?


7 people like this
Posted by homework
a resident of Menlo Park: other
on Aug 14, 2018 at 1:51 pm

Not an excuse, just a lesson about integrity. You can review their voting record on tenant protections and look back to see those same contributions. Our elected officials have more integrity than you give them credit for. Keith has also accepted contributions from public figures publicly supporting rent control reform, do your homework.


6 people like this
Posted by Robert
a resident of Menlo Park: Allied Arts/Stanford Park
on Aug 14, 2018 at 5:11 pm

This is just ridiculed. Why should a landlord be singled out for a problem that they had no responsibility for creating? Most smaller landlord struggle to buy a rental unit, or a small multi unit apartment building. They probably experienced many years of negative cash flow (in this area) until their rent structure finally started to pay off. This is a business like any others and it’s as important for a landlord to make a profit as any other business. They are not responsible for the boom in employment or the high cost of property in this area. Why would any loanlord want to build more units and help cure the shortage of housing units if they have this burden while only realizing a 4-5% return if they are lucky. Maybe if they are charging significantly over market they should have restrictions but if they are only charging the market rates it makes no sense. Maybe the city and counties should bear the burden since those are the ones who permitted the rapid out of control growth and at the same time increase building cost so much that it’s nearly impossible to build any housing and rent it out and realize a decent profit.


4 people like this
Posted by Angila
a resident of Menlo Park: Central Menlo Park
on Aug 14, 2018 at 5:36 pm

Robert, are you unaware that most landlords are multi millionaires who only care about the almighty dollar and have absolutely no compassion for our fellow citizens who struggle with rent payments.
Landlords are at the very center of the housing problem because of their greed. Down with landlord, I say !!!! Let the cities take over all rental units, only they can cure this problem in a fair and honest way.


17 people like this
Posted by Karen Grove
a resident of Menlo Park: Sharon Heights
on Aug 14, 2018 at 5:48 pm

Karen Grove is a registered user.

I’m a Menlo Park Housing Commissioner, but I am writing as myself. I’m a resident of Menlo Park, and my day-job is as a philanthropist and activist for social justice. My family foundation has a local focus on the communities of East Palo Alto, North Fair Oaks, and our very own Belle Haven neighborhood in Menlo Park.

The primary objective of the Menlo Park Housing Commission’s proposed Tenant Relocation Assistance ordinance is to prevent homelessness.

I believe we can create a policy that supports tenants’ health and well-being by protecting them from homelessness, without causing hardship to conscientious landlords (which I believe includes most landlords – especially those who both rent and live our community).

Tenant relocation assistance prevents homeless by providing the tenant with the financial means to quickly find housing at market rate rents while they look for a more permanent, affordable, solution. Three months’ rent at market rate is the minimum assistance that can accomplish the objective: first and last months’ rent, plus a security deposit.

Landlords need never pay tenant relocation in the regular course of business.

• Landlords who raise rents by no more than an amount defined by the Terner Center for Housing Innovation at UC Berkeley as “rent-gouging” do not have to pay relocation assistance, even if the rent increase causes their tenants to leave.

• Landlords who evict tenants for failure to pay rent, failure to abide by the terms of the rental agreement, or who cause a nuisance do not have to pay relocation assistance.

• Landlords who need to move back into their rental home (perhaps because of their own financial challenges) do not have to pay relocation assistance. (I hope that in this situation we can provide assistance to the tenants through a city grant to a local non-profit for this purpose, but that remains to be discussed and determined.)

• Homeowners who rent an accessory dwelling unit or a room in their home are never required to pay relocation assistance.

According to the San Mateo County Eviction Report, 17.6% of San Mateo County tenants who defended evictions in court in 2014 were homeless in Spring of 2015. The average age of a homeless person in the United States is nine years old. In our county and city, 70% of families experiencing eviction include children, and 63% are female-headed households; Black and Latino families disproportionately experience eviction. And nearly half of evictions included in a 2016 San Mateo County Eviction Report were “no-fault” evictions.

We can and must do something to prevent our neighbors from experiencing the trauma of homelessness. No one – especially a child – should be without a home. This policy is a small step towards that goal. I hope my community will support it.


10 people like this
Posted by Menlo Voter.
a resident of Menlo Park: other
on Aug 14, 2018 at 7:54 pm

Menlo Voter. is a registered user.

Karen:

So what you're saying in a nut shell is that landlords should not have control over their own properties.

A landlord can charge market rate. Is that too expensive for some people? Yes. Is it the landlord's responsibility to keep their rent below market? NO. That's what a FREE market is all about. We aren't socialists. We're capitalists. If you want to see what happens in a socialist system, look at the old USSR.

You want landlords to keep their properties up or improve them? Then don't artificially control rents. If I were a landlord, the last thing I would be doing is putting money back into the property to improve it if I couldn't charge rents to cover said improvements. I'd put money in it to maintain it, not improve it. If I IMPROVE my property I can easily justify higher rents, it's more difficult, but not impossible if I don't.

If you want to tell landlords how to manage their properties, I suggest you buy said properties. Then you can rent them at any price you want to and you can go broke trying to provide housing at below market rates. Because the cost of providing that housing isn't cheap, nor is the cost of maintaining or improving it.

You ever seen section 8 housing and the problems associated with it? I have. Go buy some and knock yourself out.


9 people like this
Posted by kbehroozi
a resident of Menlo Park: Suburban Park/Lorelei Manor/Flood Park Triangle
on Aug 14, 2018 at 8:34 pm

kbehroozi is a registered user.

The rental market is already distorted by Prop 13. It's not a free market, and the costs are disproportionately being born by those who can least afford them.

Web Link





7 people like this
Posted by kbehroozi
a resident of Menlo Park: Suburban Park/Lorelei Manor/Flood Park Triangle
on Aug 14, 2018 at 8:42 pm

kbehroozi is a registered user.

Incidentally, here's a great article (written by a Menlo Park homeowner!) about how framing Prop 13 in terms of cost/benefit to homeowners probably misses the point:

Web Link


7 people like this
Posted by Michael Stogner
a resident of another community
on Aug 15, 2018 at 9:48 am

Government should stay out of the Real Estate Business.


9 people like this
Posted by Bob McGrew
a resident of Menlo Park: South of Seminary/Vintage Oaks
on Aug 15, 2018 at 10:21 am

I support an ordinance like this. We are definitely in a housing crisis, and I know many people who have been in this situation. , and it is hard to come up with enough money to move quickly. Karen Grove is absolutely right that homelessness is the Bay Area is driven by rent increases that go beyond what tenants can pay. Even for moderate income tenants, it can be hard to come up with enough money quickly.

This is not rent control. Three months rent after 36 months residency is a burden on landlords, but it's not a punitive one - and it only kicks in for rent increases over 7-8%.

It's fair to try to get the details right - what's the right residency requirement? why is it important to include single-family households? But the policy is reasonable and the burden on landlords is reasonable.


5 people like this
Posted by Bob McGrew
a resident of Menlo Park: South of Seminary/Vintage Oaks
on Aug 15, 2018 at 10:27 am

Also, everyone would prefer that we didn't need an ordinance like this. Everyone would prefer that rent in this area was reasonable and stayed reasonable.

If we want that, we need to make it *much* easier for people to build housing in Menlo Park. Until 2016, Menlo Park hadn't permitted a new apartment building since 1974, and if you look at the architecture, it shows. We've made some progress on this front with the Greenheart and Stanford projects, but we have a lot of opportunities to do more in the downtown and along El Camino. We have a lot of room for nice buildings that would help us do our part to address the housing crisis - and provide a place to live for both employees and customers of our downtown shops and restaurants.


2 people like this
Posted by Jack
a resident of Menlo Park: Felton Gables
on Aug 15, 2018 at 12:41 pm

The assumption is that Landlords are responsible for the housing crisis, either that or that they should somehow be willing to sacrifice in order to reduce this problem. Yes, prop 13 gives a few landlords an advantage but that is far from being the bulk of the housing stock. The major reason for the housing crisis is the shortage of housing which is caused more by zoneing regulations than anything.
Many developers are willing to build more housing but zoning regulations prevent development that can be cost effective. Everyone complains about the shortage of housing but at the same time they do not want development near where they live and certainly not if the development exceeds their idea of what height limmimts should be. Public opposition to development plus the extreamly high cost of obtaining approvals and permits, and current construction cost makes many projects financially impossible. At the same time cities continue to allow explosive growth which places a higher and higher demand on the current housing stock.
Any smaller landlord would be reluctant to expand their housing stock if they faced leak action if they evicicted a troublesome tenant. For just cause and then, after cleaning up a unit, decided to increase its rent closer to the current market price.
Please pick on the real guilty parties, the city planners and the citizens who fight every potential development on the basis that it is too close to their home and might disturb their quiet life style, all the while making money off the rapid uncontrolled growth taking place locally.


1 person likes this
Posted by Zoning
a resident of Menlo Park: other
on Aug 15, 2018 at 4:48 pm

Yes, zoning is the primary culprit. Prop 13 has limited effect on building new housing.

Ask yourself this. Would Menlo Park residents be ok if Stanford decided to triple the number of housing units planned for Middle Plaza? Santa Clara County is pressuring them to add more housing as they expand the campus. What if Greenheart decided to triple the number of apartments planned at Station 1300?

These developers would be happy to build higher and dense. One of their three biggest costs is land acquisition. You don't need to buy more land to build higher and denser.

There is a ton of housing demand, even with high construction prices. This demand likely will never be satiated because of....

...the NIMBY.

The NIMBY says Menlo Park is a suburb, not an urban area. They say the buildings are too tall. There is not enough parking. And when there is enough parking, there will be too much traffic. They throw up objection after objection. They fight tooth and nail. They even initiate a citizen election measure on occasion.

Time is money. So the developer builds less housing than the market demands to get the project done so that it can still make a profit.

If you really support more housing, then you should support state senator Scott Wiener and his efforts to give developers the right to build dense housing near transit.


2 people like this
Posted by Too late for us
a resident of Menlo Park: Linfield Oaks
on Aug 15, 2018 at 5:16 pm

Web Link


"The country's parliament on Wednesday passed a law banning foreigners from buying into most parts of its residential property market as the government seeks to cool red-hot house prices.

The Overseas Investment Amendment Bill will prevent overseas investors from purchasing existing properties in New Zealand, but they will still be able to buy into new apartment complexes and certain other parts of the housing market.

New Zealand Prime Minister Jacinda Ardern campaigned on a promise to clamp down on foreign buyers, blaming them for soaring prices that have left many New Zealanders unable to enter the property market.

"If you've got the right to live in New Zealand permanently, you've got the right to buy here," Trade Minister David Parker said during a final debate on the bill Wednesday. "We believe it's the birthright of New Zealanders to buy homes in New Zealand," he added.

Public policy firm Demographia regularly ranks Auckland, New Zealand's biggest city, as one of the world's least affordable places to buy a home.

House prices have almost doubled over the past decade, according to central bank data, and are up more than 5% so far this year. Home ownership rates among New Zealanders have also been falling in recent years.
But government data suggests that foreign buyers actually only make up a small part of the country's housing market. According to the latest official statistics, purchasers who don't hold New Zealand citizenship or residency make up less than 3% of total transactions.


Buyers of New Zealand property include billionaire investor Peter Thiel.
Most foreign buyers in New Zealand don't state where they're from, official data shows, but the majority of those who do are from China.

New Zealand has also proved to be a popular retreat for the rich and famous. Billionaire investor Peter Thiel and disgraced former NBC host Matt Lauer both own properties in the country.
Related: New Zealand is going to start taxing tourists

Analysts say it's still unclear how much difference the new law will make.
"We simply do not know how it will affect the market," Dominick Stephens, chief economist at the New Zealand division of banking group Westpac, said in a note to clients Wednesday. House prices could stop rising before the end of the year or even begin falling, he predicted.

Nearby Australia has also tried to slow runaway house prices with measures including a similar ban on foreign investors buying existing properties. Prices in the country have been falling since the end of last year.
The new law in New Zealand doesn't apply to Australian and Singaporean buyers because of existing arrangements between the countries. It still needs to receive royal assent, which is a formality, before it comes into force.

CNNMoney (Hong Kong)
First published August 15, 2018: 2:52 AM ET
Personal Finance

         
CNNMoney Sponsors
"


Like this comment
Posted by Hmmm
a resident of another community
on Aug 15, 2018 at 5:23 pm

It's about time Menlo did something, but I'm not holding my breath. Menlo has some lousy landlords and the City simply hasn't cared enough in the past to do anything to protect tenants.


20 people like this
Posted by Self made in Atherton
a resident of Atherton: other
on Aug 15, 2018 at 6:55 pm

I went to Grant Elementary in Richmond. My divorced mom, I and my half-brother RENTED in Richmond. We were briefly even on food stamps. We were so poor that when the rent was raised on our apartment in Richmond -- next to the drug-infested Nicol Park -- we couldn't afford RICHMOND, so we had to leave.

That's right, we couldn't afford RICHMOND. You know what we did? We F----NG moved, that's what we did. And when we were so poor we couldn't afford the Bay Area, you know what we did? We F----NG moved out of the Bay Area, that's what we did. I went to nondescript elementary schools, a nondescript middle school and a nondescript high school. I then moved back to the Bay Area and went to a nondescript CSU. I then rented a 8x10 bedroom room for years and worked my butt off putting in 60++ hour weeks to pay off college, then saved up for a condo for several more years. I kept working my butt off and now I own a home in Atherton and have a wife and kids. I am arguably more successful than all of my dozens of cousins, aunts and uncles, many of which went to prestigious high schools (Miramonte for example) and colleges (Cal and Stanford, for example).

That all said, I am sympathetic to the plight of renters in the area, and I have work colleagues and close friends that I fear every day will conclude its financially infeasible for them to stay. In the long-term, current rental rates will be damaging to our local economy, and it's in everyone's best interest...including landlords, of which I am one...to support denser housing.



However, I'm appalled at the ignorance shown in almanacnews and other blogging/comment sections. Landlords are not the primary source of the problem here, and turning them into villains is counterproductive, and rent control is flat-out unamerican and I hope someday is rendered unconstitutional. Instead we should focus on the primary causes of high rental rates, which are:

1: construction economics in the area encourage office buildings. Even a casual look at our skyline bears this out. Local governments are fully empowered to modify the economics to encourage more housing and less office space, but they have historically failed to do so.

2: Zoning rules need to be modified to encourage denser and taller housing, but shouldn't be defacto thrown out outright. There is definitely a large middle ground that has yet to be explored simply because the conversation on this is dominated by the far left and far right nutjobs.

3: our public transportation is atrocious, and unlikely to get better simply because the MTC doesn't give a crap about the peninsula: The vast majority of funding from Regional Measures 1, 2 and 3 go to San Jose, San Francisco and Bart (a significant amount for grade separation, which the powers-that-be claim is financially feasible everywhere EXCEPT here).

#3, IMHO, is particularly important because implementing good regional public transit is the way most other major metropolitan areas address the issues we have: namely road congestion and housing cost. It allows people to compete for high-paying jobs while living in lower-cost areas, thereby lowering demand in high-demand locations, lowering the costs for EVERYONE.


2 people like this
Posted by Joseph E. Davis
a resident of Woodside: Emerald Hills
on Aug 15, 2018 at 11:06 pm

This and similar rent control measures are badly misguided and will hurt those they are trying to help, as well as many others. Economic ignorance is to blame, and there's certainly no lack of that, especially in California.


3 people like this
Posted by MP mom
a resident of Menlo Park: Downtown
on Aug 16, 2018 at 9:29 am

As a former renter and current homeowner, I fully support the proposed ordinance.

While landlords are not the only source of this multi-faceted problem, they are unable or unwilling to be part of the solution.

There is too much evidence of rent-gouging, and seniors evicted, to continue to allow the current state. Seniors can't just move away, and are on fixed incomes. This ordinance still allows for substantial rent increases, just not in the order of 800-1500 increases per month, which is the gouging.

If landlords could self-police, this wouldn't be needed. Few industries have shown any capability of self-regulating, therefore the government is required to step in.

The situation is long past crisis levels. It needs addressed urgently.


Sorry, but further commenting on this topic has been closed.

Babka bakery to open Thursday in Palo Alto
By Elena Kadvany | 6 comments | 5,006 views

Couples: Child Loss, "No U-Turn at Mercy Street"
By Chandrama Anderson | 0 comments | 1,659 views

Which Cocktail Has the Least Calories?
By Laura Stec | 12 comments | 1,453 views

UCSB's CCS program
By John Raftrey and Lori McCormick | 3 comments | 645 views