East Palo Alto's rent stabilization and eviction ordinance, Measure H, was approved in Tuesday's election by a wide margin, according to the San Mateo County Registrar.
The Rent Stabilization and Just Cause for Eviction Ordinance passed with 78.41 percent of the votes, according to unofficial election results.
The measure's passage repeals the city's prior rent-stabilization ordinance, which was challenged in court by Palo Alto developer Page Mill Properties, previous owner of 1,800 rental units in the city. Measure H addresses a major dispute that was the basis for the Page Mill lawsuit.
City law allowed for regulated annual rental increases. But Page Mill applied several years worth of annual allowances that had not been passed on to tenants all at one time.
Renters were forced to suddenly pay as much as four to five times their rent or face eviction, City Councilman Ruben Abrica said.
"Part of it was the way the law was written. The new law makes it very clear," he said.
The law gives landlords a fair return on their investments, he said. Landlords can increase rent once per year and can pass the costs of justifiable capital improvements on to tenants.
"The annual increase can be 75 percent of the Consumer Price Index. However, if landlords want, they can bank it and take the increase later on within three years and it can't be more than 10 percent," Abrica said.
Fifty percent of East Palo Alto's residents are renters. The revised law protects the city's most vulnerable population, many of whom work low-paying menial jobs for people in Palo Alto, he said.
Tenants are protected from arbitrary evictions, although they can still be evicted for nonpayment of rent or numerous noise complaints -- just causes, he said.
"In most cities a landlord only has to give a tenant 30 to 60 days' notice," he said.
The new law continues a tradition in East Palo Alto, Abrica said.
"We have had a rent-stabilization law from the very beginning when the city incorporated. It was challenged by landlords and went before the voters in 1984," he said.
The law also protects residents from harassment, retaliatory evictions and rent increases, Abrica said.
"There is something new that unfortunately came out of Page Mill. The law is now stronger in terms of protecting tenants from harassment if they bring issues to the fore. There are more penalties for harassment," he said.
Page Mill defaulted on its loan for the properties, failing to make a $50 million payment. All 1,800 properties were foreclosed on and reverted back to Wells Fargo Bank on March 2. A bank auction of the properties that day attracted no bidders.