News

Council OKs stripped-down law to aid evicted renters

Menlo Park's ordinance, passed on 3-2 vote, is modeled on Redwood City law

Menlo Park landlords won a compromise they likely won't file suit over following a fierce, hours-long debate at the Menlo Park City Council on Feb. 26 over the details of a proposed ordinance requiring landlords to pay a fee to aid renters in the moving process when they are evicted.

The nuances of which renters will be covered, the conditions under which they are forced out and what kinds of homes the policy will apply to, as well as who will pay the relocation fees, have been under discussion since last July, when the Housing Commission first took up the challenge of crafting a tenant relocation ordinance for the city.

Ultimately, in a 3-2 vote with Vice Mayor Cecilia Taylor and Councilwoman Betsy Nash opposed, the council disregarded most of the Housing Commission's recommendations, in addition to a set of revisions Taylor and Nash had drafted, in favor of a more limited ordinance modeled on one passed in Redwood City last year.

The debate, at times bordering on vitriolic, pointed to the markedly different interests of the city's landlords and its renters.

Many of the landlords identified themselves as "mom and pop" housing providers who saved for years for their rental properties, rarely raise rents. They said they need to retain flexibility to raise rent in an unfettered manner, given the boom-and-bust nature of the Silicon Valley economy and the age of much of Menlo Park's housing stock. Older buildings can mean costly repairs that sometimes must be passed on to renters, they explained.

They argued that passing a tenant relocation assistance ordinance that was triggered when a renter has to move out due to a rent increase would have an impact similar to rent control in deterring major rent increases.

Renters and housing advocates argue that the major rent increases seen in Menlo Park are having an adverse impact in the city – from accelerating the displacement of low-income residents, especially low-income minority residents, to furthering the dearth of service workers, those who work in the arts, and general non-tech employees who might have lived in town and enriched the community.

According to statistics sourced by Menlo Park staff from rentcafe.com, the average rent for an apartment in Menlo Park is now $4,087, up 17 percent from a year ago – the highest year-over-year increase reported in San Mateo County.

One notable case of major rent escalation is that involving residents of apartments near Facebook recently acquired by the investment group Menlo LLC. After the purchase, tenants saw their monthly rent go up $800 or more.

The scaled-back ordinance that prevailed on Feb. 26 will apply only to low-income renters forced out of their homes because the landlord of a property of five or more units is opting to permanently remove the unit from the rental housing market.

In those situations, landlords will be expected to pay for three months of fair-market rent to low-income renters forced out – which, as currently defined, would be $8,427 for a household in a two-bedroom apartment – as well as a two-month subscription to a rental agency service. Households with elderly people, children, or people with disabilities will get payment for an extra month of fair-market rent, or an additional $2,809.

The council also agreed to create a fund to help pay for tenant relocations in situations when a landlord can prove that paying the relocation fee would present a financial hardship. The details were scheduled to be hashed out at a future date, following subcommittee work on the matter by Councilman Drew Combs and Vice Mayor Cecilia Taylor.

The ordinance will take effect 30 days after its second reading because it did not receive the four votes needed to pass it as an "urgency" ordinance, in which case it would have taken effect immediately.

The more expansive version favored by the Housing Commission, as well as by Nash and Taylor, would have extended tenant relocation assistance to people earning up to the area median income and in situations when a renter is forced out because he or she can't afford a major rent increase or is evicted for no reason.

Tenant advocates argued that exempting such households from relocation help renders the policy toothless as far as aiding the people most at risk of displacement in Menlo Park. In general, the people most at risk, they say, are minority, low-income, and rent-burdened, most of whom live in Belle Haven, where most of the housing stock takes the form of single-family homes.

During public comment, the vast majority of landlords favored adopting an ordinance modeled on one in effect in Redwood City, or neither of the proposed options, while housing experts and renters favored the revised Housing Commission ordinance, as written or with expanded provisions to make more people eligible for the relocation assistance.

The lawsuit question

Anton Menlo, a new high-end apartment development in eastern Menlo Park, threatened to sue the city if the council didn't significantly restrict the type of housing that the ordinance would apply to.

Under the state's Costa-Hawkins Act, rent control can be applied only to multifamily units built before 1995. In a letter sent to the council Feb. 25, Ofer Elitzur, a lawyer representing Anton Menlo, stated that if the city didn't revise the ordinance to exclude those properties that are exempt from rent control under the Costa-Hawkins law, "Anton Menlo and other owners are prepared to take whatever legal action is necessary, including filing a petition for writ of mandate and the seeking of monetary damages as appropriate."

In response, representatives from Community Legal Services in East Palo Alto and the Legal Aid Society of San Mateo County, argued that the drafted ordinance does not violate the Costa-Hawkins Act because "it has no bearing on and does not substantially burden the ability of landlords to establish rental rates."

California courts have not yet ruled on this issue.

Karyl Eldridge pointed out that the city's exclusion of single-family homes from the ordinance – given the fact that so many renters in Belle Haven are both minorities and tenants in single-family homes – means that the ordinance may have the effect of being applied unevenly across different racial groups, with minorities less likely to get relocation help. She indicated that might also open the city to legal action, under fair housing law.

Support

A number of supporters of the revised Housing Commission policy shared stories of the impacts of displacement.

Dr. Jackie Newton, a doctor for the homeless and a San Mateo County resident, said that she's been working with a female patient in her 60s who was evicted for no reason. She had worked for decades as a librarian, but retired, and when the eviction came, she couldn't afford a new place.

"I was shocked to learn she had started doing sex work to afford a few hotel nights," Newton told the council. "I couldn't give her housing," she said. "I ended up treating her for chlamydia. I'm holding my breath to see what she comes in with next."

Ine Grewe talked about how her grandparents and extended family have left her neighborhood to move hours away, and some of her friends have had to relocate.

Ofelia Bello, an East Palo Alto resident and the new director for Youth United for Community Action, said that the revised policy recommended by the Housing Commission "will help maintain vibrancy" and "make Menlo Park one of the leaders in the region."

"It's responsive to the community while taking into account the hardships landlords may face," she said.

Redwood City Councilwoman Diana Reddy urged the Menlo Park council in a written statement to adopt the revised Housing Commission ordinance, not the Redwood City-based law.

"We are facing the closure of three schools due to the loss of families and the inability of the district to hire and retain teachers, who are also being displaced from our community," she wrote. The ordinance originally proposed by the Housing Commission "will actually protect tenants," she said.

Mark Mollineaux, who runs a radio show at Stanford focused on housing policy and is a critic of Proposition 13, pointed out that landowners benefit tremendously from rising property and land values, while renters never benefit from those increases, and instead have their stability threatened. "This measure does a small, small amount to begin to redress the giant imbalance between the landed and the landless," he said.

Housing Commissioner Rachel Horst said, "I don't feel particularly thrilled to be part of a community that is losing people, losing touch with reality and (failing) to realize what inequity looks like in our city limits. ... This is a modest proposal to deal with a massive problem."

"Most of San Mateo County is the Wild West for renters," summarized Jordan Grimes, a member of Peninsula YIMBY, a pro-housing group.

"The Housing Commission took a ton of time thinking through aspects of this ordinance," said housing finance consultant Meg McGraw-Scherer, a housing commissioner speaking on her own behalf. "If we don't include (single-family homes), the ordinance is meaningless."

She also spoke against the idea of applying for county funds from measures A and K to bolster the relocation assistance fund. "I don't want public funds to be subsidizing landlords," she said.

Opposition

Opponents of the policy argued that the city shouldn't interfere with market affairs and should instead focus its efforts on building more housing, because housing scarcity is the real source of the crisis.

The ordinance, which they see as punitive toward landlords, would create new administrative costs and could generate unintended consequences, such as a reduction in investment in the area or a decline in the rental market, they said. Landlords they added, could see the relocation assistance fees as too onerous and simply take their homes off the rental market.

"Investment capital goes where it is treated best," stated Mike Haddock.

Penelope Huang said she knows an older man who is struggling to pay his mortgage on a fixed income so has to rent out the house and doesn't know how to pay for needed repairs except by raising the rent. Though he has a property with a significant value, she said, he is one step from homelessness. "It's a vicious cycle," she added.

Jeff Deng asked why it should be a landlord's responsibility to assist a renter if the tenant can't pay market rate rent.

Paula Macchello said it was a bad policy that doesn't factor in the needs of landlords.

Council opinions

Councilman Drew Combs spoke most vehemently against the revised Housing Commission ordinance, and made proposals to weaken an ordinance modeled on the Redwood City law further, but backed off of support for such amendments when it was clear he wouldn't get the needed three votes to pass such an ordinance.

Relocation assistance, he argued, should be about helping people priced out of the community to find a home somewhere else. He added that he didn't believe it should cover any household earning more than what's considered "low income," or 80 percent of the area median income, and favored lowering that threshold further to make the policy apply only to those who are "truly at risk of homelessness."

"I feel (the Redwood City-based ordinance) is going to provide protections in a thoughtful way to address the issue," Councilwoman Catherine Carlton said, adding that the council can always bring the topic back at a later date if the policy doesn't work.

Mayor Ray Mueller explained that he'd rather not have the ordinance get potentially hung up in limbo as it works through the courts for an unknown outcome. He said he believes that the Redwood City ordinance would earn the support of private partners to help provide funds to create a citywide tenant relocation assistance fund.

"If we go with (the revised Housing Commission ordinance), I think we end up in a lawsuit, and I think it's a long time before we're able to provide any help to anyone pragmatically," he said.

Both Taylor and Nash argued in favor of the revised Housing Commission ordinance. When it was clear that proposal wouldn't get enough votes to pass, Nash proposed a number of variations to the Redwood City-modeled ordinance to make it more inclusive, including an effort to expand the policy to renter households evicted for no cause, but none of her suggested changes received the necessary third vote.

"I believe tenants are worth fighting for," Taylor said, noting that the rules the council endorsed won't help renters in single-family homes in Belle Haven. "I think Menlo Park can do more."

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Comments

31 people like this
Posted by henry fox
a resident of Menlo Park: The Willows
on Feb 27, 2019 at 12:31 pm

henry fox is a registered user.

Kate bradshaw writes: "Menlo Park landlords won a victory..." I think Menlo Park won a victory, and that Bradshaw's comment belongs in an editorial.

The tenant relocation bill submitted by the Housing Commission, if passed, would have tempted Landlords to raise rents to highest levels allowed in order to fund up against capricious rulings by mediators and big relocation fines. This is only one of many unintended consequences.

The worst IMO, is that we would have to hire more staff and incur more pension debt for an ordinance that would benefit very few. Neither Nash or Taylor ever questioned staff about the cost of administering their ordinance.

Combs, Carlton and Mueller found a better way to help tenants relocate. Kudos to them.




14 people like this
Posted by Happy Resident
a resident of Menlo Park: Sharon Heights
on Feb 27, 2019 at 12:46 pm

Happy Resident is a registered user.

Congratulations and Thanks to Combs, Carlton and Mueller for finding a Better Way to bring this matter to a close.


8 people like this
Posted by Renter
a resident of Menlo Park: Belle Haven
on Feb 27, 2019 at 1:08 pm

Over 40 people asked for renter protections! This is more comprehensive than the story in the post.


16 people like this
Posted by Thomas Paine
a resident of Menlo Park: Downtown
on Feb 27, 2019 at 3:22 pm

Rental prices are largely dictated by supply and demand. We can make an immediate dent in rental costs by requiring every Menlo Park homeowner to make unused bedrooms available to those who need them. The sudden addition of 3,000-4,000 housing units would immediately stop rent increases and probably lead to rental price decreases. I know of at least 6-homes on my block with one or more unused bedrooms. This approach meets the restrictions of Costa-Hawkins as it does not add price controls. I believe Betsy Nash has an unused bedroom I her home and I would hope she shows leadership by offering that room for rent immediately.


20 people like this
Posted by new guy
a resident of Menlo Park: Downtown
on Feb 27, 2019 at 4:28 pm

Who is Mark Mollineaux? Can someone please explain what he is stating? "the giant imbalance between the landed and the landless??? I might be wrong, but I think there are more renters than owners in MP/ Also, how does a landowner/landlord benefit from rising property values unless they sell for more than they bought, otherwise property taxes keep going up. Does he suggest renters get a stake in the building they rent? If so, does he suggest if there are repairs needed, that the renter also have a stake in those costs, how about the increase in property taxes each year. Oh, and what happens when/if values go down, what happens if the renter moves out, does the landlord owe the tenant a share of the (unrealized) appreciation?

quote below:

"Mark Mollineaux pointed out that landowners benefit tremendously from rising property and land values, while renters never benefit from those increases, and instead have their stability threatened. "This measure does a small, small amount to begin to redress the giant imbalance between the landed and the landless," he said."

AND:

Ms. Taylor: "I think Menlo Park can do more"... what does that even mean? Why does MP have to do more? More of what?


8 people like this
Posted by Lawman
a resident of Menlo Park: Allied Arts/Stanford Park
on Feb 27, 2019 at 4:47 pm

I think most readers appreciate that @Thomas Paine comment above is his attempt at satire, as his comment is the antithesis of Paine's beliefs: The poster's statement "We can make an immediate dent in rental costs by requiring every Menlo Park homeowner to make unused bedrooms available to those who need them." is ludicrous on its face.


3 people like this
Posted by Menlo Skeptic
a resident of Menlo Park: Park Forest
on Feb 27, 2019 at 6:40 pm

Lawman:

Paine's satire is as ludicrous as the concept of forcing landlords to subsidize renters. If we, as a community, want to maintain affordable housing we have two basic choices; 1. change the zoning laws to allow for dramatically more density. Or 2. provide subsidies from the city general fund to renters based on some defined criteria.


15 people like this
Posted by new guy
a resident of Menlo Park: Downtown
on Feb 27, 2019 at 8:30 pm

Hey, I really really want to live in Atherton. My family could use an acre of land to play in, have a bedroom for each child, have a pool, have a large garage where there actually would be space to put my cars, maybe a basketball hoop too. Oh, I cannot afford it, I can ONLY afford to live in Menlo Park. How about WE (meaning YOU) subsidize this for me! It is only fair! As fair as subsidizing someone to live in Menlo Park. But they are poor you say, and I am sure those in Atherton consider me poor as well.


15 people like this
Posted by Menlo Boomer
a resident of Menlo Park: Linfield Oaks
on Feb 27, 2019 at 8:32 pm

Thank you to Combs, Carlton, and most of all Mueller for standing up for our beloved ~housing providers~! The idea that they would be limited to raising rents by *ONLY CPI + 5%* from one year to another is laughable and probably unconstitutional based on what I think I heard Sean Hannity say about millennials, or something.

Menlo Park is ~full~, get used to it! "new guy" and my anonymous buddy "Brian" from the Willows know what's what.


13 people like this
Posted by Unpopular opinion
a resident of Menlo Park: Downtown
on Feb 27, 2019 at 9:34 pm

Are you kidding me? Yet again, the landlords win and the renters lose. All heil to the 1% (or perhaps its the top 10%).

When is the town going to do something that benefits more renters, and not cater to the developers and wealthy? When the town is empty of all but the top 1%


6 people like this
Posted by Shea
a resident of Menlo Park: Downtown
on Feb 27, 2019 at 9:50 pm

Now we know who funds Ray's campaign...


18 people like this
Posted by Buzarre
a resident of Menlo Park: Suburban Park/Lorelei Manor/Flood Park Triangle
on Feb 27, 2019 at 10:04 pm

Am I missing something?

The Council passed the same ordinance as Redwood City plus created a community fund. Now people are attacking Carlton Combs. and Mueller for it?

Soooo Menlo Park is supposed to pass an ordinance that’s different than Redwood City?


12 people like this
Posted by Truth came out
a resident of Menlo Park: Central Menlo Park
on Feb 27, 2019 at 11:05 pm

The truth came out and we saw the real goal of Nash, Taylor, and the Housing Commission - bring rent control and just cause eviction to Menlo Park. Despite their repeated denial, all their arguments lead to the same conclusion. Betsy practically admitted it during the debate when she said she wants to limit a landlords ability to raise rents by government imposing deterrents. Hey Bets, that’s rent control.

Just cause eviction? That’s what they called “landlord-caused termination.” How sneaky of Betsy to repeatedly try to pass just cause eviction with her amendments and change of terminologies.

Making public policy based on personal idealogies hurts the city. I guess that’s what you get when you elect a neighborhood activist vs a policy maker who is supposed to represent ALL constituents.


16 people like this
Posted by Menlo Momma
a resident of Menlo Park: Central Menlo Park
on Feb 28, 2019 at 10:56 am

I am so relieved to read the Council made this decision.
Since comments here from the angry crowd are being focused on Mayor Mueller, I just want to say thank you Ray. Families in this town trust and support you. Once again you have earned it. We don’t need extreme ideological decisions like this being forced on our City Council. Also thank you Drew and Cat.


6 people like this
Posted by Brian
a resident of Menlo Park: The Willows
on Feb 28, 2019 at 11:26 am

Menlo Boomer,

I have refrained from getting into this discussion for many reasons, so I am not sure why you are bringing me into it.

I am a home owner and my family has owned houses in Menlo Park for close to 100 years. I think home ownership is a wonderful thing but I have also rented and have many friends that do and seeing them get priced out of the area over time is heartbreaking. Do I support rent control, I don't. Am I in favor of changing zoning to allow for density housing, definitely not. Menlo Park is a great community they way it is. Adding massive amounts of new housing is just going to exacerbate the existing problems. Personally I take the approach of limiting new office space until the current problems are resolved.


16 people like this
Posted by Hancock Nguyen
a resident of Menlo Park: Allied Arts/Stanford Park
on Feb 28, 2019 at 11:48 am

When did compromise carry such a negative tone? Mayor Mueller heard all sides and came up with a solution that's right for Menlo Park. I heard a lot of people speak at the council meeting who came from other cities to tell us what we should do. That's outrageous. Mayor Mueller recognized the need to help struggling tenants while creating an environment that keeps Menlo Park competitive for jobs and housing. What was passed the other night struck that balance and I applaud Ray and the council for their great work.


13 people like this
Posted by Joseph E. Davis
a resident of Woodside: Emerald Hills
on Feb 28, 2019 at 12:19 pm

Everybody wants a handout from somebody. I'd like to live in Atherton or Portola Valley for cheap. Perhaps the government should subsidize me or force homeowners there to make rental properties available at low rates?

The steady march towards government interference in so many private matters is a trend that bodes very badly for the future.


2 people like this
Posted by Gratitude
a resident of Menlo Park: Sharon Heights
on Feb 28, 2019 at 4:25 pm

Thank you Mayor Mueller and CM Combs and Carlton for making the right decision for all of us. People often forget the non-landlords and renters in this debate. At the end of the day, we residents suffer the consequences of bad laws. I sincerely appreciate these three for their vote. It was the right decision for Menlo Park.


4 people like this
Posted by Menlo Provider
a resident of Menlo Park: Sharon Heights
on Feb 28, 2019 at 5:37 pm

"Most of San Mateo County is the Wild West for renters," summarized Jordan Grimes, a member of Peninsula YIMBY, a pro-housing group.

Now the out of town stack n pack YIMBEES are coming for our property rights! Were they not happy enough with degrading our quality of life and suburban lifestyles with high density monstrosities.

Housing costs what it will cost. We worked hard for many years to afford our rental properties. It is our right to charge whatever we want for them. And no one will take that away from us!

Thank you to Combs Mueller and Carlton for a sensible solution.


4 people like this
Posted by mper
a resident of Menlo Park: Suburban Park/Lorelei Manor/Flood Park Triangle
on Feb 28, 2019 at 6:01 pm

Thank you to our new mayor who makes an effort to hear and consider all sides before making a decision. Thank you also to Drew Combs for representing us! It's a first! It was frightening how fast this moved -- no better than pushing big development through without considering its impact. There are so many 'mom and pop' owners that would have been hurt had ideology become law. We need to find other ways to address affordable housing shortages -- I know it's unpopular to say, but I agree with, 'stop further corporate development until we've considered and addressed the potential impact to our community - our schools, traffic, emergency services, affordable housing and so forth. Like, if you're gonna build that huge housing development or office building -- how are you going to make sure you don't break everything else around you in the process? What will you give back to the community -- not just the immmediate neighborhood, but everything outside your project boundaties that's impacted by what you're doing within your project boundaries.


6 people like this
Posted by Mark Mollineaux
a resident of another community
on Feb 28, 2019 at 6:03 pm

> Who is Mark Mollineaux? Can someone please explain what he is stating? "the giant imbalance between the landed and the landless??? I might be wrong, but I think there are more renters than owners in MP/ Also, how does a landowner/landlord benefit from rising property values unless they sell for more than they bought, otherwise property taxes keep going up.

Hi there, let me introduce you to Prop 13, a 40-year-old amendment to the California Constitution that caps property taxes at 2% per year (Menlo Park real estate has been appreciating a rate far exceeding 2%).

> Does he suggest renters get a stake in the building they rent?

The land, and not the building, but yes.

> If so, does he suggest if there are repairs needed, that the renter also have a stake in those costs, how about the increase in property taxes each year.

Note I say "the land," not "the building." Those who repair physical structures ought to see their just return.

> Oh, and what happens when/if values go down, what happens if the renter moves out, does the landlord owe the tenant a share of the (unrealized) appreciation?

Ideally, yes, but it should be done more generally, through taxation reforms at the highest level. It would be rather tedious to have every tenant bill their landlord invoices for pieces of land appreciation.


Like this comment
Posted by Jillian
a resident of Menlo Park: The Willows
on Feb 28, 2019 at 10:41 pm

Good move. No complaints here. Nobody wants to see a lawsuit for a law that's unnecessary to begin with. Combs, Mueller, and Carlton looked out for the interest of the city. Don't attack them. Thank them.


Like this comment
Posted by Big Brother
a resident of Menlo Park: Allied Arts/Stanford Park
on Mar 3, 2019 at 3:47 pm

it’s interesting that a publication that boasts the wealthy and upscale cities “Menlo Park - Atherton - Portola Valley - Woodside” in its banner continually remnoves comments that point to residents who don’t want renters or rent control. People work all their lives to buy into a community like these because they want to be a part of what’s here. I’m sorry that’s vague, they won’t let me post anything more specific.

[Editor's note: The only comments removed from this thread were one in which the person commenting used the name of a frequent poster, making the post deceptive right out of the gate, and another that was disrespectful of specific groups of people. Town Square is not The Wild Wild West, and we do not apologize for setting rules and expecting posters to respect them.]


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