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 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.
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.