News

Menlo Park considers policy to help displaced renters

 

Following months of discussion by the public and the Menlo Park Housing Commission, the City Council has scheduled a study session about a potential tenant relocation assistance ordinance in Menlo Park for Tuesday, Feb. 12.

Such ordinances typically require landlords to provide assistance, often in the form of cash payments, to renters who are evicted for no reason.

The council was initially supposed to discuss the topic at its Jan. 29 meeting, but the matter was postponed because it was being reviewed by the city attorney, according to Mayor Ray Mueller.

The City Council may have discussed the matter in a closed session held that day, but the topic was not disclosed. Several people assumed the closed session was about a possible tenant relocation policy and gave public comments in advance, including Housing Leadership Council organizer Angie Evans and Menlo Park Housing Commissioner Karen Grove.

Another woman, Ingrid Rogers, missed the cutoff to comment that day but shared her written comments with The Almanac.

"Tenant relocation assistance would prevent homelessness by requiring that landlords who displace tenants without cause or by significant rent increases provide their tenants with financial assistance to relocate," she wrote.

The proposed policy has been under legal review because the city of Menlo Park in August received a letter from a law firm representing the owners of Anton Menlo, a new high-end apartment development at 3639 Haven Ave. in northeast Menlo Park, suggesting they might sue if the policy were enacted.

In a letter sent to the city on the owners' behalf by Ofer Elitzur of law firm Cox, Castle & Nicholson, LLP, Elitzur argues that the proposal conflicts with state law. He says that the Anton Menlo development should be exempt based on the Costa-Hawkins Rental Housing Act, a law that governs rent control policy in California and restricts what types of housing can be subjected to rent stabilization.

Since, under the Costa-Hawkins law, landlords of many properties are entitled to impose whatever rent they think the market will bear, it would be "hostile" to the law to impose an ordinance that penalizes owners "who (choose) to exercise such rights," he argued.

The Legal Aid Society of San Mateo County and Community Legal Services of East Palo Alto have responded that the Costa-Hawkins law would not apply to a tenant relocation assistance ordinance because landlords can still set whatever rental rates they wish, according to a staff report. However, courts have not yet ruled on this matter. Staff proposed a few options to work through that legal threat.

The ordinance

The Housing Commission began considering a possible ordinance in July. Over months of discussion and hours of public comment over the controversial policy, the commission fleshed out its recommended policy into the current iteration.

The ordinance would require landlords to provide cash assistance to tenants they evict for no reason, or who are no longer able to afford rent following an annual increase in rent greater than the annual rise in the consumer price index (an indicator of cost of living) plus 5 percent. Tenants would be eligible for this assistance if they earn up to 150 percent of the area median income, which is $177,600 for a family of four. The policy would be applied to tenants in all rental units except for secondary dwelling units, affordable housing units already restricted to income-qualified tenants, or homes where someone rents out a room.

Staffers want the council to weigh in on whether there should be an exception to the policy to permit landlords to not renew a lease after one year; how the city should define "significant rent increase" as a trigger for tenant relocation funds; whether the ordinance should apply to tenants in all housing units, with a few exceptions; and how the relocation assistance payments should be structured.

Some residents of Menlo Park facing imminent displacement have asked that the city apply a retroactive element to the policy so that landlords who have pressured tenants to leave to try to avoid paying relocation fees would also have to pay.

Toby Sanchez, who lives as a long-term tenant at the Stanford Inn, has been served with eviction papers. He and his roommate, who asked to not be named, say relocation help is greatly needed – they can't find anything in their budget in the area. Sanchez is preparing to live out of his car and his roommate is desperately looking for something in the $1,100 range and considering moving back to Europe where she is from.

Evans, from the Housing Leadership Council, has been hearing from other people facing evictions. "What we've heard is not uncommon in places where they start to talk about tenant protections," she said. "In many places where there are tenant protections brought up, you see increases in rent, landlord harassment and increases in evictions."

Other cities have moved far more quickly to pass such policies. The city of Palo Alto discussed and passed an emergency tenant relocation assistance ordinance in August, which initially restricted assistance to people earning under the area median income, or about $90,000 for a one-person household. Weeks later, the Palo Alto City Council acted to remove that income qualification.

The numbers

At a public hearing on the potential policy held before the Housing Commission Sept. 12, Shirley Gibson, directing attorney at the Legal Aid Society of San Mateo County, reported that nearly half of the evictions the organization has documented among its clients in Menlo Park between the start of 2016 and Aug. 1, 2018, were "no-fault" evictions.

During that period, she said, 46 percent of the 43 evictions that the Legal Aid Society documented in the city were no-fault evictions. Thirty-three percent came from non-payment and 21 percent were due to breach of contract or nuisance ordinances.

"We cannot know specifically what percentage of overall eviction activity in Menlo Park is represented by these 43 households, since service of eviction notices is not generally counted or recorded in any consistent way. We can be sure that 43 evictions reported to Legal Aid over a 32-month period is a small fraction of the actual eviction activity," she stated in a report.

These statistics are comparable to what the Legal Aid Society finds in the county as a whole – however, they are different from other Bay Area counties, Gibson notes. Generally, not paying the rent is the leading reason tenants are evicted. In Oakland, for instance, 75 percent of eviction notices between 2011 and 2016 were for non-payment of rent, while less than 1 percent were "no-fault" evictions, she said.

More often than not, she explained, no-fault evictions are due to business-related decisions by landlords. Perhaps they do so because they want to sell a house or duplex, rehab an old building, or meet investor expectations.

"Part of what we're suffering from is the insatiable appetite for real-estate income," she said. "It's an investor-oriented housing market."

At the September meeting, she encouraged the city to move quickly to pass the ordinance.

"We don't want to create lead time," she explained, noting that in other cities, landlords have acted preemptively to evict tenants if they know the city is considering an ordinance that would require them to pay relocation fees.

Further, evictions in Menlo Park are disproportionately leveled toward households that identify as Hispanic or Latino, as African American or Black, and as families with children, she explained.

Tenants who identified as Hispanic or Latino were "dramatically" over-represented among the no-fault evictions the Legal Aid Society recorded, Gibson said. People who identified as Hispanic or Latino were represented twice as often among victims of no-fault evictions than their population numbers would suggest, if such evictions were administered equally across the population, she noted. Tenants identified as Black or African American also appeared at a rate higher than the general population in cases recorded by the Legal Aid Society.

"Given that the Black/African American population in Menlo Park is now very small and steadily shrinking, it is not surprising that our sample size is also small," Gibson said in the report. "While it is hard to draw conclusions from this limited data, it is extremely likely that displacement by eviction is contributing to the steady decline in the city's Black/African American population."

In addition, Gibson notes, no-fault evictions disproportionately impact households with children. The Legal Aid Society's findings, according to the report, "indicate that where landlords exercise business discretion in initiating 'no fault' termination of tenancies, families with children are increasingly likely to be selected for displacement."

On the other hand, landlords have said the policy feels like a roundabout way to penalize them for giving substantial rent increases to tenants. Over the likely 100 or so emails and comments submitted to the City Council over the previous months as the Housing Commission discussed the matter, many landlords in Menlo Park have spoken against the proposed ordinance, describing it as a form of rent control.

"This is rent control in disguise," wrote Christine Chan, a self-described "small rental owner," in an email to the City Council. "These proposals jeopardize my ability to continue (to) provide safe, stable and reliable housing for Menlo Park residents," she added.

"If housing providers are required to pay a relocation penalty after every termination of tenancy or any time a tenant moves out after getting a rent increase, then housing providers will set rents higher to cover their costs," wrote Bruce Rueppel in an email to the council. Rueppel identified himself as a "housing provider."

Others argue that the measure could deter housing development. "Rather than trying to make Menlo Park's rental housing affordable by decree the City should adopt regulations that reduce development costs," wrote Curt Conroy, who identified himself as a local housing provider in an email to the council.

The council was also scheduled to discuss an appeal of the Planning Commission's approval of an office building at 40 Middlefield Road and the city's travel policy at its Feb. 12 meeting.

The Menlo Park City Council will meet for the study session at 6 p.m. in its chambers at 701 Laurel St. in the Menlo Park Civic Center. Access the agenda here or stream the meeting online here.

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Comments

33 people like this
Posted by Rent Control
a resident of Menlo Park: Downtown
on Feb 11, 2019 at 12:27 pm

This is rent control, no other way to describe it. The council created this mess by approving major expansion of Facebook offices and the new offices in Bohannon Park. Stop saying yes to FB, do not approve any further office expansion beyond current square footage footprint. In other words, only allow remodeling of EXISTING square footage. Put FB on notice that current plans for expansion are on hold until further notice. Own it City Council and do not put it on the backs of land owners. Approve more high density housing not high density offices.


22 people like this
Posted by Joseph E. Davis
a resident of Woodside: Emerald Hills
on Feb 11, 2019 at 12:34 pm

Certainly, this is a bad idea. Exactly how bad is hard to assess because the article does not say what the amount of the so-called assistance is.


7 people like this
Posted by Hmmm
a resident of another community
on Feb 11, 2019 at 12:42 pm

LOL, this is NOT rent control. It's not even rent stabilization. It's merely relocation assistance, which doesn't even mean it WILL prevent homelessness, but merely MIGHT. Menlo Park has historically never cared about renters. This is a chance to change that, in the most minimal way. Please do so.


12 people like this
Posted by Red Tape at its finest
a resident of Menlo Park: Fair Oaks
on Feb 11, 2019 at 2:19 pm

So how often will the landlords ask for verification of income? Will that be part of the lease? Very invasive. MP don't be the place that jumps to instituting rules before you think about how they will be applied! You've collected so much money from developers and the like that has just diminished in value over the years before getting into the hands of those in need...Can't you just require a longer lead time on the increases, so people can figure out their next step? If they are so close to the line that they are in dire straights financially, perhaps the city low income fee collection coffers can be put into helping hands and get distributed.


18 people like this
Posted by Audrey Medina
a resident of Menlo Park: Belle Haven
on Feb 11, 2019 at 3:09 pm

It walks like a duck. It quacks like a duck. It's a duck. It is rent control and no cause eviction of the worst sort. What will that get us ? Much less housing and higher rents.

There are 5,420 tenant occupied units in Menlo Park. 70 % of those are owned by small mom and pops. Why would anyone want to stay in the rental business with such high risk terms ? No way. buh bye mom and pop rentals.

The city council should work on preserving our limited housing, not pushing housing providers with over-the-top punitive penalties. Really ? $ 20.000 - $ 30,000 cash payments up front ? If this passes, I am going to rent another apartment just so I can object to a rent increase and collect. Pay dirt !


19 people like this
Posted by Downtown MP
a resident of Menlo Park: Downtown
on Feb 11, 2019 at 4:17 pm

This will sink property values in a second. No one wants people displaced but what this is does is gives zero rights to property owners. What is the point of owning anything with these restrictions? Menlo Park council has so many problems they need to deal with and it is crazy to me that this is what they are looking into.
We have a horrible downtown, no parking, and no leadership.
If this passes watch the market die in one second. This is an expensive place to live no doubt. But how can you penalize everyone? This is not great for renters either as there will be less rental units across the board. And please call it what it is RENT CONTROL.


16 people like this
Posted by Chunchi Ma
a resident of another community
on Feb 11, 2019 at 4:28 pm

What MP is attemping is RC in disguise, albeit a better name than RC. But make no doubt about it, it has the same effect as 5% rent cap on landlords as ill afford the relocation charge, hence effective rent control.

Landlord cause eviction is another code name for Just Cause eviction. Basically it takes the property owner's right in removing bad tenants. With the current legal system, there are plenty of tenant's protection bills as is, there is no need to add another hurdle for the landlords to pass. Most of the eviction cause cost landlords thousands of dollars in legal fee as is, no need to make it nearly impossible for landlords to do their jobs of keeping their properties in good order and provide a safe environment to other tenants and residents.


19 people like this
Posted by Steve
a resident of Menlo Park: Downtown
on Feb 11, 2019 at 4:46 pm

Rent Control as sneaky as it can get. This is a terrible idea and will end up costing renters more in the long run.


18 people like this
Posted by To-may-to vs To-mah-to
a resident of Menlo Park: Allied Arts/Stanford Park
on Feb 11, 2019 at 4:47 pm

This topic is on the front page of today's Daily Post. The headline says "rent caps." Isn't any cap of rents considered rent control? So yes, the Menlo Park proposal is rent control. I am shocked our city is even entertaining this. Our apartments are mostly 4-plexes, maybe some 10 unit buildings. Aren't those typically owned by family members who invest in residential buildings? We have a good rental community in Menlo Park. The landlords are good people who typically get along with their renters. It's a shame we have this group forcing this on our community, creating tension and division in a relatively quiet town. We don't need this type of politics. Menlo Park is not San Francisco, Oakland, or Berkeley.


15 people like this
Posted by Been There
a resident of Menlo Park: Downtown
on Feb 11, 2019 at 6:28 pm

This shortsighted concept will do more damage than good.
A bad idea.
All arguments against are valid.


15 people like this
Posted by Mom and Pop Apt Owner
a resident of Menlo Park: Downtown
on Feb 11, 2019 at 7:10 pm

This is a very unfortunate and unfair proposal for any one of us (Mom and Pop) that own these apartment buildings. This would be the same issue as someone who wants to buy a Mercedes on a VW budget! Would the city require the Mercedes dealer to take the price affordable by the VW buyer? Menlo Park needs to put their energy to better use and find a proper solution to homelessness and lower income housing by building units to house this population. Thats the job of the City - take care of the people who live here. Not punish the ones who have built Menlo Park into a great community and great place to live!!!


10 people like this
Posted by Should I Sell Now?
a resident of Menlo Park: Sharon Heights
on Feb 11, 2019 at 9:28 pm

Plain and simple, this is rent control. I own a rental in MP. This rental helps subsidize my income. Every year, my property taxes go up. My rents have stayed somewhat stable over the last four years with almost zero increase. If you hamper my ability to to maximize my investment, I will pull up stakes and sell my home. Then, you will have one less rental to worry about.
In the end, rent control will erode property value, lower the tax base and decrease the number of rentals available to those who wish to rent.
If you don't believe me about value, just ask the homeowners who own the townhomes behind the gates in Sharon Heights. Some mental giant in charge of the HOA thought it would be a good idea to limit the ability of homeowners to rent. The HOA passed a bylaw and now investors won't touch those units. On average those units sell a minimum 25% percent less than condo/townhomes in Sharon Heights without rent control. Wake up!


10 people like this
Posted by Missed opportunity
a resident of Menlo Park: The Willows
on Feb 11, 2019 at 9:37 pm

All these talks about rent control is hindering the ability to actually have a reasonable discussion on what to do when long time renters find themselves in a housing crunch. This is another proof that nothing good happens when rent control is in the picture. A better solution is for the city to stop talking about rent control and focus on a plan to provide a safety net for those unfortunate instances that people are suddenly without a home. Landlords should be a part of that discussion. Alienating and villying them will just add fuel to the fire. Get smarter people!


14 people like this
Posted by Call it what you wish
a resident of Menlo Park: Downtown
on Feb 12, 2019 at 6:56 am

I agree with several of the comments in the fact this is RENT CONTROL. It is not fair for the city to control our rental properties rents as the city does NOT pay for any of our: Property taxes - which increase every year, repairs, improvements, damages by tenants, late payments, etc.... Stop wasting all our time on considering and discussing rent control and focus on actual solutions for ones who find themselves displaced. You will soon find everyone selling their units in order to avoid your foolish laws and the home values of Menlo Park will begin to fall. You will essentially drive all of us who have brought value to the city, out and will be left with ones who don't have the same interest in beautifying and keeping the city a great place to live because the cost of owning units will not be worth it. It'll cost owners more than the income they receive to maintain properties and values will begin to plummet. That is a serious problem for the Menlo Park community.


15 people like this
Posted by Apartment Owner
a resident of Menlo Park: Downtown
on Feb 12, 2019 at 7:29 am

If this ordinance passes you will soon find many buildings on the market. It'll be far too costly for someone to own a building for rental property and not be allowed to charge rents based on fair market value - which is how we all price our units. We will all begin to sell and new owners won't be able to afford the same upkeep we all provide as the rents won't cover such expenses. Better think long and hard and consider all the affects of such an ordinance before making it policy.


10 people like this
Posted by new guy
a resident of Menlo Park: Downtown
on Feb 12, 2019 at 8:03 am

Honestly, this is a backdoor rent control measure. Other towns have tried this. Santa Cruz put it on the ballot last election which did not pass, but the run up to it caused many "mom and pop" landlords to sell their properties. I am not sure which side of this I am on. I am against rent control, but I am also for ownership over renters. If this passes, hopefully the old rental properties will sell out, get torn down for houses. Less renters = less people voting for additional property tax assessments. Less crowded schools and parks.


9 people like this
Posted by John Hall
a resident of Menlo Park: The Willows
on Feb 12, 2019 at 9:18 am

We see the proposed policy acts backwards; it does not promote the future economic prospect in Menlo Park City, but it just intends to depress the real estate development in the local community. A move that is not smart.


3 people like this
Posted by MP resident
a resident of Menlo Park: Central Menlo Park
on Feb 12, 2019 at 11:29 am

No one wants to see anyone forced into homelessness. The IDEA of Tenant Relocation Assistance is good. This proposal is BAD! It is punitive to small property owners and goes far beyond helping those in real need. It is too complicated and sets up the city for legal challenges galore.


4 people like this
Posted by Stu Soffer
a resident of Menlo Park: Linfield Oaks
on Feb 12, 2019 at 1:15 pm

As I read the dialogues on ‘tenant relocation assistance’ I surprise myself in that I conclude that this is a lousy idea.

Don't confuse rent control with other behavioral incentives. I grew up in a rent controlled building ~ 90 units in under 2 acres- and no parking. No big deal in the right city. AN this building is still rent controlled as opposed to having been converted to a coop.

About 10 years ago much ink was spilt on a enacting a granny unit ordinance (although this was mandated by the state). The idea was to encourage homeowners to include a granny unit. I suspect that the proposed relocation assistance ordinance will have among its unintended consequences the effect of taking granny units out of our housing inventory.

I would also be aware of potential conflicts of interests of participants who may have investments in housing partnerships.


3 people like this
Posted by duane delagnes
a resident of Menlo Park: University Heights
on Feb 12, 2019 at 7:20 pm

this is a blatant attempt to not only at rent control, but to force the mass sale of property to collect taxes. shame on you!
1) who of these voters have skin in the game?
2) how much of your money do you have invested in Menlo Park?
this is a bad idea from inception!


3 people like this
Posted by Landlord
a resident of Menlo Park: Fair Oaks
on Feb 12, 2019 at 11:27 pm

This is the price of liberalism. Don't build housing, and act shocked that the rents and prices increase. Add taxes and restrictions and fees, and moan about the high cost of housing.

The liberal solution? Take away property owners rights, and impost price controls. How quick we forget what the Soviets beget.

Check it out: Liberalism and Housing Prices

Web Link


2 people like this
Posted by Ana
a resident of Menlo Park: Belle Haven
49 minutes ago

Lol the owners of Anton Menlo are fighting this because they are actively displacing their BMR residents with twice yearly price hikes upwards of 10% in many cases. They're trying to actively circumvent the 12 month lease ordinance and probably their own regulatory agreement with the city by putting wording into their leases that allow for rent increases at any time and trying to force residents into month to month leases by refusing to provide 12 month leases by the time their current ones are up. Now they're acting like spoiled brats when these residents looked into the issue and saw they should be getting relocation assistance for being forced out of their homes and are trying to grandstand and pay for PR like they're helping the mom and pop rentals in MP by stopping a backdoor rent control ordinance when they will surely swoop in and gobble those properties up to build another hideous overpriced eyesore that will be 50% AirBnB's like they are now.


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