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Menlo Park council splits on law to help displaced renters relocate

A proposed law to help renters forced out of their homes for no cause or because they cannot afford major rent increases received mixed responses from the Menlo Park City Council on Feb. 12.

Because the review of the proposal was at a study session, the council couldn't vote on the policy. Councilwoman Betsy Nash and Vice Mayor Cecilia Taylor were in favor of an ordinance that would give broader support to displaced renters. Council members Drew Combs and Catherine Carlton opposed the draft ordinance as it was written. Mayor Ray Mueller fell somewhere in the middle.

Under the proposed ordinance, landlords can continue to set whatever rent the market will bear for their tenants. However, if a landlord evicts a renter for no reason, or if the landlord proposes a rent increase of more than 5 percent plus the annual increase in the consumer price index – an increase defined as "rent gouging" by the Terner Center for Housing Innovation at the University of California, Berkeley, he or she would be expected to pay the equivalent of three months' "fair market" rent, as defined by the U.S. Department of Housing and Urban Development for the area, with additional funding for some households.

As of last December, the consumer price index (CPI) was up 4.5 percent from the previous year, so that would mean a tenant would be eligible for rental relocation help if a landlord raised rent more than 9.5 percent in one year and the tenant opted to move out.

Landlords would be expected to pay three times the fair-market-rate rent and offer renters a 60-day rental service subscription. Displaced renter households with a person over 62 years old, a child under 18, or a person with disabilities would be eligible for four months' worth of fair-market-rate rent.

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For landlords who can demonstrate that they can't afford to pay for the relocation help, the city is considering a "hardship" exemption, which would likely take the form of a separate fund to aid displaced renters.

The requirement would apply only to renters who have lived in a unit for a year or more and who earn up to 150 percent of the area median income, or $124,350 for a one-person household.

According to Clay Curtin, the city's interim housing manager, the idea behind the policy is to reduce the short-term financial burden on households that are displaced and to reduce displacement of community members from the city's neighborhoods and schools. People facing eviction often struggle to pay the first and last months' rent as well as a security deposit needed to move somewhere new, he said.

By including a trigger based on major rent increases, the ordinance also aims to deter landlords from rent gouging, he added.

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"We have the opportunity with this policy to actually make a difference in the community," Nash said. She explained that, while campaigning for her City Council seat last year, she asked residents in her district what they thought about this kind of policy. "I heard a groundswell of support from homeowners, apartment renters and other renters in District 4 as I was campaigning," she said.

"Landlords have purchased property that is an asset rising along with rents. That's something that must be taken into account," she added, noting that the policy is intended to deter explosive rent increases, not normal business procedures.

"There's a small portion of landlords this might even affect," she said.

Taylor said that displacement has been a problem in Menlo Park, and an acute problem in her district, which includes the Belle Haven neighborhood, for well over a decade. Some developers and some landlords are acting unethically, she said, and people are being pushed into poverty and forced out of the community or onto the streets as a result.

She cited what's happened to Sandra Zamora, a Belle Haven renter who was active during earlier months of the city's public outreach process on this proposed policy.

Zamora's rent was increased $800 per month after the apartment building she lived in was sold to a group of investors last year.

She and others in the building formed the Redwood Landing Tenants Union and publicly shared their experiences at several of the city's Housing Commission discussions on the matter, which began last July.

On Feb. 1, Zamora wrote the following to the City Council in an email: "It is unbelievable that nothing has (been) done to support and implement the Tenant Relocation Assistance in Menlo Park. We (tenants) fought hard to bring some kind of attention to the problem …

"I, and many of other (tenants) in Belle Haven Community are leaving our homes this month. This is because the rents are extremely high and there are NO PROTECTIONS for the hard working human. WE HAVE BEEN DISPLACED!!! And you have (no) idea of what this causes to people. It places people/me in the brink of being homeless. … Please do not let Greedy Landlords/ Investors take over the community that once was Menlo Park."

Opposition

Other council members saw things differently. Calling in from Dubai, Carlton echoed many of the landlords who said they believe that the ordinance would be "functionally rent control." She also said landlords should retain the right to ask tenants to leave because they don't like them, and speculated that adding any costs for landlords might lead to properties falling into disrepair.

Combs called the process "unwieldy," and said that a provision to extend eligibility for relocation assistance to households earning up to 150 percent of the area median income was "incredibly problematic." He suggested that the terms of relocation eligibility be narrowed to renters of old apartments so as to not risk any chance of conflict with the Costa-Hawkins Rental Housing Act.

That law governs rent control policy in California and restricts what types of housing can be subjected to rent control. Under the Costa-Hawkins law, landlords of most properties – including single-family homes and any apartments built after 1995 – are entitled to impose whatever rent they want to.

The city of Menlo Park in August received a letter from a law firm representing Anton Menlo, a high-end apartment development in eastern Menlo Park, threatening litigation should the tenant relocation policy be enacted. In that letter, attorney Ofer Elitzur of Cox Castle & Nicholson LLP argued that the ordinance would be "hostile" to the Costa-Hawkins Act because it would penalize owners who choose "to exercise such rights."

However, legal experts, including assistant City Attorney Cara Silver, argued numerous times that a tenant relocation assistance ordinance is not rent control.

'Mom and pop' landlords

Menlo Park landlords who gave public comment, many of whom introduced themselves as "mom and pop housing providers," presented a number of arguments opposing the ordinance. Many said they don't raise rent more than a couple of percentage points a year but objected to the concept of the ordinance on principle.

"The market is just as hard on providers as it is on renters," said landlord Mike Haddock.

Some said they felt the policy would unfairly target landlords to pay to help fix the housing crisis, which they say has larger root causes.

"Rising rent is not caused by us," said Helen Chen, a small-scale landlord. "It's caused by Facebook, which pays (high) salaries to people."

Richard Li blamed the city for not permitting more housing density near mass transit. Others blamed the city for enabling too many new jobs and too few new housing units.

Others noted that much of the rental housing stock in Menlo Park is old and sometimes requires landlords to incur unexpected maintenance and investment to keep it safe and habitable, which they sometimes have to pass onto renters.

Yet others said the city shouldn't try to interfere in the market. "I believe the free market should take care of this," said homeowner Bill Lamkin, urging the council to tackle other problems.

A number of landlords added that the introduction of new bureaucracy and regulations might push them to avoid the hassle and sell their properties and take their rental units off the market entirely.

Questions and next steps

Mueller recommended that Taylor and Nash develop a draft version of the policy they want, which would largely align with the Housing Commission's recommendations, while staff lines up the Redwood City ordinance as a backup. He also said he wants to discuss setting up a landlord-tenant mediation board for alleged rent gouging cases and to look into using Measure K funds from San Mateo County to create a fund to aid displaced renters.

The council also agreed to consider putting city resources into a "hardship" fund to help renters in need find funds to relocate.

Taylor and Nash favor the Housing Commission's recommendations to make the law an "urgency ordinance," meaning it can be implemented faster if it receives support from four out of five council members; and to apply eligibility to renters in all kinds of housing, except for people who rent rooms, live in secondary units or rent affordable housing units already restricted to income-qualified tenants.

Redwood City's ordinance is more modest in its scope and restricts recipients of such assistance to renters earning 80 percent of the area median income, or about $82,200 for a one-person household. Relocation assistance is triggered if a home is withdrawn from the rental housing market, demolished or converted into a condo.

One question is: How does Menlo Park's proposed policy compare with other cities' ordinances? A number of Menlo Park's neighbors have such policies, which vary substantially in the triggers, eligibility requirements, and required assistance levels.

Other cities have triggers based on rent increases, such as San Leandro, which requires relocation assistance after a renter is displaced following a 12 percent raise over the base rent in a year. In Portland, tenant relocation help is triggered when rent increases more than 10 percent in a year, and in Santa Cruz, it is triggered in scenarios when rent increases more than 5 percent in one year or cumulatively more than 7 percent in any two consecutive years.

The matter is expected to be brought back to the council at its Feb. 26 meeting.

Correction: An earlier version of this story incorrectly identified Vice Mayor Cecilia Taylor as the only renter on the City Council. Councilman Drew Combs is also a renter.

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Kate Bradshaw
   
Kate Bradshaw reports food news and feature stories all over the Peninsula, from south of San Francisco to north of San José. Since she began working with Embarcadero Media in 2015, she's reported on everything from Menlo Park's City Hall politics to Mountain View's education system. She has won awards from the California News Publishers Association for her coverage of local government, elections and land use reporting. Read more >>

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Menlo Park council splits on law to help displaced renters relocate

by / Almanac

Uploaded: Wed, Feb 13, 2019, 1:02 pm

A proposed law to help renters forced out of their homes for no cause or because they cannot afford major rent increases received mixed responses from the Menlo Park City Council on Feb. 12.

Because the review of the proposal was at a study session, the council couldn't vote on the policy. Councilwoman Betsy Nash and Vice Mayor Cecilia Taylor were in favor of an ordinance that would give broader support to displaced renters. Council members Drew Combs and Catherine Carlton opposed the draft ordinance as it was written. Mayor Ray Mueller fell somewhere in the middle.

Under the proposed ordinance, landlords can continue to set whatever rent the market will bear for their tenants. However, if a landlord evicts a renter for no reason, or if the landlord proposes a rent increase of more than 5 percent plus the annual increase in the consumer price index – an increase defined as "rent gouging" by the Terner Center for Housing Innovation at the University of California, Berkeley, he or she would be expected to pay the equivalent of three months' "fair market" rent, as defined by the U.S. Department of Housing and Urban Development for the area, with additional funding for some households.

As of last December, the consumer price index (CPI) was up 4.5 percent from the previous year, so that would mean a tenant would be eligible for rental relocation help if a landlord raised rent more than 9.5 percent in one year and the tenant opted to move out.

Landlords would be expected to pay three times the fair-market-rate rent and offer renters a 60-day rental service subscription. Displaced renter households with a person over 62 years old, a child under 18, or a person with disabilities would be eligible for four months' worth of fair-market-rate rent.

For landlords who can demonstrate that they can't afford to pay for the relocation help, the city is considering a "hardship" exemption, which would likely take the form of a separate fund to aid displaced renters.

The requirement would apply only to renters who have lived in a unit for a year or more and who earn up to 150 percent of the area median income, or $124,350 for a one-person household.

According to Clay Curtin, the city's interim housing manager, the idea behind the policy is to reduce the short-term financial burden on households that are displaced and to reduce displacement of community members from the city's neighborhoods and schools. People facing eviction often struggle to pay the first and last months' rent as well as a security deposit needed to move somewhere new, he said.

By including a trigger based on major rent increases, the ordinance also aims to deter landlords from rent gouging, he added.

Support

"We have the opportunity with this policy to actually make a difference in the community," Nash said. She explained that, while campaigning for her City Council seat last year, she asked residents in her district what they thought about this kind of policy. "I heard a groundswell of support from homeowners, apartment renters and other renters in District 4 as I was campaigning," she said.

"Landlords have purchased property that is an asset rising along with rents. That's something that must be taken into account," she added, noting that the policy is intended to deter explosive rent increases, not normal business procedures.

"There's a small portion of landlords this might even affect," she said.

Taylor said that displacement has been a problem in Menlo Park, and an acute problem in her district, which includes the Belle Haven neighborhood, for well over a decade. Some developers and some landlords are acting unethically, she said, and people are being pushed into poverty and forced out of the community or onto the streets as a result.

She cited what's happened to Sandra Zamora, a Belle Haven renter who was active during earlier months of the city's public outreach process on this proposed policy.

Zamora's rent was increased $800 per month after the apartment building she lived in was sold to a group of investors last year.

She and others in the building formed the Redwood Landing Tenants Union and publicly shared their experiences at several of the city's Housing Commission discussions on the matter, which began last July.

On Feb. 1, Zamora wrote the following to the City Council in an email: "It is unbelievable that nothing has (been) done to support and implement the Tenant Relocation Assistance in Menlo Park. We (tenants) fought hard to bring some kind of attention to the problem …

"I, and many of other (tenants) in Belle Haven Community are leaving our homes this month. This is because the rents are extremely high and there are NO PROTECTIONS for the hard working human. WE HAVE BEEN DISPLACED!!! And you have (no) idea of what this causes to people. It places people/me in the brink of being homeless. … Please do not let Greedy Landlords/ Investors take over the community that once was Menlo Park."

Opposition

Other council members saw things differently. Calling in from Dubai, Carlton echoed many of the landlords who said they believe that the ordinance would be "functionally rent control." She also said landlords should retain the right to ask tenants to leave because they don't like them, and speculated that adding any costs for landlords might lead to properties falling into disrepair.

Combs called the process "unwieldy," and said that a provision to extend eligibility for relocation assistance to households earning up to 150 percent of the area median income was "incredibly problematic." He suggested that the terms of relocation eligibility be narrowed to renters of old apartments so as to not risk any chance of conflict with the Costa-Hawkins Rental Housing Act.

That law governs rent control policy in California and restricts what types of housing can be subjected to rent control. Under the Costa-Hawkins law, landlords of most properties – including single-family homes and any apartments built after 1995 – are entitled to impose whatever rent they want to.

The city of Menlo Park in August received a letter from a law firm representing Anton Menlo, a high-end apartment development in eastern Menlo Park, threatening litigation should the tenant relocation policy be enacted. In that letter, attorney Ofer Elitzur of Cox Castle & Nicholson LLP argued that the ordinance would be "hostile" to the Costa-Hawkins Act because it would penalize owners who choose "to exercise such rights."

However, legal experts, including assistant City Attorney Cara Silver, argued numerous times that a tenant relocation assistance ordinance is not rent control.

'Mom and pop' landlords

Menlo Park landlords who gave public comment, many of whom introduced themselves as "mom and pop housing providers," presented a number of arguments opposing the ordinance. Many said they don't raise rent more than a couple of percentage points a year but objected to the concept of the ordinance on principle.

"The market is just as hard on providers as it is on renters," said landlord Mike Haddock.

Some said they felt the policy would unfairly target landlords to pay to help fix the housing crisis, which they say has larger root causes.

"Rising rent is not caused by us," said Helen Chen, a small-scale landlord. "It's caused by Facebook, which pays (high) salaries to people."

Richard Li blamed the city for not permitting more housing density near mass transit. Others blamed the city for enabling too many new jobs and too few new housing units.

Others noted that much of the rental housing stock in Menlo Park is old and sometimes requires landlords to incur unexpected maintenance and investment to keep it safe and habitable, which they sometimes have to pass onto renters.

Yet others said the city shouldn't try to interfere in the market. "I believe the free market should take care of this," said homeowner Bill Lamkin, urging the council to tackle other problems.

A number of landlords added that the introduction of new bureaucracy and regulations might push them to avoid the hassle and sell their properties and take their rental units off the market entirely.

Questions and next steps

Mueller recommended that Taylor and Nash develop a draft version of the policy they want, which would largely align with the Housing Commission's recommendations, while staff lines up the Redwood City ordinance as a backup. He also said he wants to discuss setting up a landlord-tenant mediation board for alleged rent gouging cases and to look into using Measure K funds from San Mateo County to create a fund to aid displaced renters.

The council also agreed to consider putting city resources into a "hardship" fund to help renters in need find funds to relocate.

Taylor and Nash favor the Housing Commission's recommendations to make the law an "urgency ordinance," meaning it can be implemented faster if it receives support from four out of five council members; and to apply eligibility to renters in all kinds of housing, except for people who rent rooms, live in secondary units or rent affordable housing units already restricted to income-qualified tenants.

Redwood City's ordinance is more modest in its scope and restricts recipients of such assistance to renters earning 80 percent of the area median income, or about $82,200 for a one-person household. Relocation assistance is triggered if a home is withdrawn from the rental housing market, demolished or converted into a condo.

One question is: How does Menlo Park's proposed policy compare with other cities' ordinances? A number of Menlo Park's neighbors have such policies, which vary substantially in the triggers, eligibility requirements, and required assistance levels.

Other cities have triggers based on rent increases, such as San Leandro, which requires relocation assistance after a renter is displaced following a 12 percent raise over the base rent in a year. In Portland, tenant relocation help is triggered when rent increases more than 10 percent in a year, and in Santa Cruz, it is triggered in scenarios when rent increases more than 5 percent in one year or cumulatively more than 7 percent in any two consecutive years.

The matter is expected to be brought back to the council at its Feb. 26 meeting.

Correction: An earlier version of this story incorrectly identified Vice Mayor Cecilia Taylor as the only renter on the City Council. Councilman Drew Combs is also a renter.

Comments

P. Anders
Menlo Park: Menlo Oaks
on Feb 13, 2019 at 4:25 pm
P. Anders, Menlo Park: Menlo Oaks
on Feb 13, 2019 at 4:25 pm

I do not support these Nanny State laws. If the City of Menlo Park wants to ease the financial hardships from displaced renters, then the city should dispense and distribute financial aid from the general fund. Property owners should be left free to lease, or not lease, and to manage the lease of their property as they see fit. If market rates increase, then market rates increase.

It is up to the renter to decide what type of leasing arrangement they want to join into. If the rental terms are not to their liking, then they should not rent the property. That said, if a landlord is going to price gouge and run up rents, then they are going to find themselves with vacant properties. But that is their prerogative.


new guy
Menlo Park: Downtown
on Feb 13, 2019 at 6:01 pm
new guy, Menlo Park: Downtown
on Feb 13, 2019 at 6:01 pm

Love that people brought pictures of people that they have selected as the winners in this proposed deal. I bet these people would also like to end prop 13. Oh wait, creating winners for those already here is the same thing!


Thomas Paine
Menlo Park: Felton Gables
on Feb 14, 2019 at 9:20 am
Thomas Paine, Menlo Park: Felton Gables
on Feb 14, 2019 at 9:20 am

Be careful what you wish for. When LA passed a rent control ordinance restricting increases to 2% annually, many landlords who did not plan on increasing rents were forced to raise rents. I know because I was one of them. What will happen in MP if this passes is that landlords will increase rents every year just under the threshold of incurring relocation assistance. If MP wants to assist renters, it should provide a subsidy out of the general fund based on income/need. It could also require developers of any new construction to add housing to their projects. Imagine what happen if Facebook was given an exemption to add an additional story to their new buildings containing apartments. X percent would be mandated to be available for teachers, firefighters and police.


SandyB
Registered user
Menlo Park: Downtown
on Feb 14, 2019 at 12:30 pm
SandyB, Menlo Park: Downtown
Registered user
on Feb 14, 2019 at 12:30 pm

No matter if you are neutral, for or against this proposal, it requires a very large bureaucracy for enforcement with many opportunities for challenges. Who will pay for this oversight? Time churns slowly in a bureaucracy.
It is now very difficult for a single homeowner to add to the housing stock. I look at my neighbor who wanted to add a granny unit to her property. The planning department moved very slowly (I understand that was due to staffing shortages), then demanded a revision that significantly increased the cost thereby pricing the construction to an uneconomical level.
This new layer of bureaucracy will not encourage an increase in rental units in Menlo Park. Any new units will need to be built by large corporations for they will be the only ones who have the time and the resources to build and sustain.


Joseph E. Davis
Woodside: Emerald Hills
on Feb 14, 2019 at 2:40 pm
Joseph E. Davis, Woodside: Emerald Hills
on Feb 14, 2019 at 2:40 pm

It would make just as much sense to force Menlo Park home owners to limit the resale price of their homes to purchase price plus CPI over their period of ownership.

That is to say, very little sense indeed.


lnon
Menlo Park: Sharon Heights
on Feb 14, 2019 at 3:06 pm
lnon, Menlo Park: Sharon Heights
on Feb 14, 2019 at 3:06 pm

It looks like MP wants to turn into SF South in this case. We already have our little infestation of homeless people complete with multiple shopping carts on Santa Cruz Ave. What's next---poop in the streets and people shooting up in front of Starbucks? I didn't move to MP to have the geniuses in local government tell me what to do or not do with my private property. Let the market decide. Get out of our faces, and let the landlords decide what they want to do. If a landlord wants to give below-market rents, God bless them, they should be allowed. If a landlord wants to charge above market, good luck on getting renters. The market, and the property owners should decide what happens, not our local politicians.


Fact Cheque
Menlo Park: Central Menlo Park
on Feb 14, 2019 at 7:34 pm
Fact Cheque, Menlo Park: Central Menlo Park
on Feb 14, 2019 at 7:34 pm

The initial version of this article said something like "Cecilia Taylor, the only renter on the Council..." but that text is no longer there. Did something change with that statement? On top-notch news sites, a correction is appended to an article letting readers know if published text was found to be inaccurate.


Kate Bradshaw - Almanac Reporter
Registered user
Menlo Park: Sharon Heights
on Feb 15, 2019 at 10:16 am
Kate Bradshaw - Almanac Reporter, Menlo Park: Sharon Heights
Registered user
on Feb 15, 2019 at 10:16 am

Hi Fact Cheque, thanks for your attention to detail. One of our readers flagged the detail for me and I took it down while I was checking it. It turns out I was wrong and I have posted a correction.


Peter Carpenter
Registered user
Atherton: Lindenwood
on Feb 15, 2019 at 11:49 am
Peter Carpenter, Atherton: Lindenwood
Registered user
on Feb 15, 2019 at 11:49 am

Kate-Superbly well handled:

"Correction: An earlier version of this story incorrectly identified Vice Mayor Cecilia Taylor as the only renter on the City Council. Councilman Drew Combs is also a renter."

Thank you!


Heather Hopkins
Registered user
Las Lomitas School
on Feb 15, 2019 at 1:17 pm
Heather Hopkins, Las Lomitas School
Registered user
on Feb 15, 2019 at 1:17 pm

Inon, I can't think of a less kind descriptor of people experiencing homelessness.


lnon
Menlo Park: Sharon Heights
on Feb 15, 2019 at 2:40 pm
lnon, Menlo Park: Sharon Heights
on Feb 15, 2019 at 2:40 pm

Heather:
Just reality. There are multiple organizations in our area who offer housing, especially for those with chronic homelessness or mental issues. It is sad that these folks aren't taking up the offers of housing from those charitable and/or governmental organizations. It is, indeed, very unfortunate.


Where in the world?
Menlo Park: Downtown
on Feb 15, 2019 at 3:15 pm
Where in the world?, Menlo Park: Downtown
on Feb 15, 2019 at 3:15 pm

Calling in from Dubai....Catherine Carlton....


Jen Mazzon
Registered user
Menlo Park: The Willows
on Feb 16, 2019 at 10:34 am
Jen Mazzon, Menlo Park: The Willows
Registered user
on Feb 16, 2019 at 10:34 am

This ordinance is not rent control because it sets no limit for rent increases.

With the proposed ordinance, landlords can still charge whatever they want for rent. Only if the increase is above a certain amount AND the renter earns below a certain amount would relocation assistance kick in. With relocation assistance, the outgoing tenant receives a cash disbursement to avoid temporary homelessness, and the landlord can charge whatever they want to the incoming tenant.



Name hidden
Portola Valley: other

on Feb 17, 2019 at 1:48 pm
Name hidden, Portola Valley: other

on Feb 17, 2019 at 1:48 pm

Due to repeated violations of our Terms of Use, comments from this poster are automatically removed. Why?


Name hidden
Portola Valley: other

on Feb 17, 2019 at 1:49 pm
Name hidden, Portola Valley: other

on Feb 17, 2019 at 1:49 pm

Due to repeated violations of our Terms of Use, comments from this poster are automatically removed. Why?


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