News


East Palo Alto residents protest Palo Alto landlord's massive rent increase

Rent on family of six was increased $1,050 a month

More than 50 people descended outside a Palo Alto business on Wednesday afternoon to protest a rent increase by more than $1,000 on an East Palo Alto family, which threatens to force a father, mother and four children out of their home.

Vowing to shame the company, Working Dirt LLC, for what the group called the company's unbridled greed, supporters of the Fetuu family stood on four corners outside the business at 801 High St. near Homer Avenue with signs and chanted slogans against the predatory rent increases that are pushing families from their homes and community. The business's entrance was locked, so they slipped a letter of protest under the door.

The protesters said they want to bring attention to what they called obscene rental increases and to urge the repeal of the 20-year-old Costa-Hawkins Act, which restricts renter protections on single-family homes. The act is an outdated, real estate industry-backed law that protects landlords' profits and not people, said Stewart Hyland, a community organizer with Faith in Action Bay Area.

"Corporations and speculators have started to dominate the rental market since the foreclosure crisis. Hundreds of houses in East Palo Alto have been snapped up and middle-income renter families need real protection. We need to repeal Costa-Hawkins so that cities can protect our families from displacement by vulture investors," he said.

The protest perhaps marks a new turn in East Palo Alto activism, one that is shining the spotlight on actions that hurt the community by coming directly to the door of the speculators and corporate investors.

East Palo housing prices have climbed rapidly, as affordable housing in surrounding communities such as Palo Alto, Menlo Park and Mountain View have gone out of reach for nearly all except the wealthy. The city once known for its crime statistics is now becoming known as the last bastion of affordable housing on the Peninsula, although that term is relative.

The median home value in East Palo Alto is now in the mid-$700,000s, an increase by 12.5 percent over the past year,according to online real estate website Zillow. According to rent-trend data from Trulia.com, as of April 2017, the median rental within the city is $2,950. The one-bedroom unit median is $1,700; two-bedroom is $2,950 and a three-bedroom rental is $3,500, according to Trulia.

The Fetuu family recently received a rent increase of $1,050 dollars a month, raising their payments from $2,800 to $3,850 a month. That sum comes on top of a previous increase of $300 a month, which was already a burden on the family, father Saia Fetuu said.

Fetuu, a self-employed landscaper by trade, said the family previously owned the home on Clarence Court. They lost it in a short sale in 2011 during the housing crisis.

A large balloon payment raised their mortgage to $4,500 a month — a 16 percent increase, he said. Working Dirt snapped up the property along with 17 others.

The family stayed on as renters. They have lived in the home since 2004, but nothing gets fixed when it is broken, they said.

When the family faced the $300 rent increase last year, mother Malina, a homemaker, took a job as a babysitter to help make ends meet. But the family, which includes children Sione, 17; Latai, 16; Nesi, 14, and Ofa, 10, now cannot meet the $1,050 a month increase, a fee the landlord said was required two months ago.

The Fetuu family is not alone.

"There has been a mass exodus of people from East Palo Alto who now have to travel three to four hours to work. It's an atrocity. It is like racist displacement. You know people there can't afford these rent raises," Shanna Uhila, a supporter, said.

"Stop Racist Displacement," a cardboard sign Uhila held read.

Uhila said she has lived in East Palo Alto since 1980.

"This is a challenging thing for me. I have never done anything like this before. But I've seen bullets in my town; I've seen drugs. But I've never seen people who have pushed people out of their homes." And that's another kind of violence, she added.

Jason Tarricone, directing attorney for the housing program at Community Legal Services in East Palo Alto, said he has written two letters to Working Dirt, which is headed by investor Abraham Farag, requesting that the landlord rescind the rent increase and talk to the family about a more reasonable rent, but the company has refused to budge.

Tarricone and the protesters said they understand that the high rent increases are not illegal per se. "But it is immoral," Tarricone said.

"They are already making a huge profit. They bought these homes for pennies. They have already taken the money out of East Palo Alto. The rent is already $2,800. I'm a homeowner. That's more than my mortgage," he said.

The protesters said they have no grudge against mom-and-pop landlords with one or two properties; it's the corporate investors who snatch up large numbers of properties with whom they take umbrage.

"Don't be a vulture investor. Don't come into poor communities and price people out. Be a good, scrupulous landlord," said Patty Garcia, a volunteer supporter with El Comite de Vecinos, a local community-action group.

Farag and the company could not be reached for comment. Court records filed in U.S. District Court in San Francisco show he is one of five men indicted in October 2014 for bid-rigging and mail fraud related to real estate transactions at public auctions. The men obtained dozens of properties in San Mateo County, including in East Palo Alto, according to the indictment by the U.S. Department of Justice. The case is still active, although the two counts for mail fraud were dismissed against Farag on Oct. 13, according to court records. He still faces the bid-rigging charge.

Although an immediate goal is to reduce the Fetuu family's rent, the protesters are also asking state representatives to change the Costa-Hawkins law, which they said is hurting so many other working families.

"There's no rent control on any single-family homes or condominiums, even if a Wall Street private equity firm owns 20,000 homes," Daniel Saver, Community Legal Services housing program senior staff attorney, said.

CORRECTION: A previous version of this story stated that Patty Garcia is with El Comite Latino.

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Comments

15 people like this
Posted by ABC
a resident of East Palo Alto
on May 18, 2017 at 7:26 pm

"I've never seen people who have pushed people out of their homes". It's not their homes. Just Not their.


37 people like this
Posted by Curmudgeon
a resident of Downtown North
on May 18, 2017 at 8:23 pm

--Working Dirt--

The synonyms abound.


39 people like this
Posted by East PA Forward
a resident of Another Palo Alto neighborhood
on May 18, 2017 at 9:30 pm

The silence from the usual Affordable Housing Now crew is pretty deafening. Don't they care about rampant speculation by real estate investor businesses?


38 people like this
Posted by Sarah
a resident of South of Midtown
on May 18, 2017 at 11:07 pm

It was the family's choice to take a mortgage with a balloon payment. What did they think would happen.

The new rent rate is reasonable and they should feel lucky to have had such a low rent for so long.

This is not about race. That's rediculous. It's about business.


23 people like this
Posted by musical
a resident of Palo Verde
on May 18, 2017 at 11:28 pm

Parallels the bad old days of pre-1978 Tax Collectors raising their demands by obscene amounts, unbridled greed pushing families from their homes and community.


13 people like this
Posted by need more info
a resident of Fairmeadow
on May 19, 2017 at 12:37 am

How many BR and BA does this SFH have? This info is needed to decide whether the new price is reasonable or not. Hopefully the residents can move to an apt that would be covered by EPA's rent control.


30 people like this
Posted by Single income
a resident of Mountain View
on May 19, 2017 at 10:28 am

I'm sorry but they expect to live in a highly desirable area with only one income? And so what, everyone else is supposed to step up and cover the difference just because they want to live here?

Sorry but I don't feel the need to subsidize someone else's lifestyle. Harsh perhaps but we've been a two income family for years just so we can afford to live here.


20 people like this
Posted by resident 1
a resident of Duveneck/St. Francis
on May 19, 2017 at 10:33 am

This landlord is a nice guy. Bad decision in the past, for sure, but blaming him for raising rent to market is totally unfair. He can raise it to $10,000 and the tenant has the right to renew or relocate. Shame on them for trying to shame him into submission.


29 people like this
Posted by Green Bean
a resident of South of Midtown
on May 19, 2017 at 11:55 am

Repealing the Costa - Hawkins act makes a lot of sense for today's problems.
I'm so glad I don't know "Sarah" and "Single Mom" !


5 people like this
Posted by YIMBY
a resident of Mountain View
on May 19, 2017 at 12:02 pm

"I'm sorry but they expect to live in a highly desirable area with only one income? And so what, everyone else is supposed to step up and cover the difference just because they want to live here? "

And thus Prop 13 was born.


36 people like this
Posted by Juan
a resident of Mountain View
on May 19, 2017 at 12:06 pm

$3,850 is above market for rent in that area. It's doubtful the landlord could get $3,850 from a new tenant. The complaints are legitimate, is sounds like the landlord is trying to force the family from the house without actually going through the proper process (which may involve cash compensation, depending on city rules).


11 people like this
Posted by BH
a resident of Fairmeadow School
on May 19, 2017 at 12:42 pm

Raising by a huge amount is a Jerk move. but he has a right to do it.


27 people like this
Posted by ChrisC
a resident of College Terrace
on May 19, 2017 at 2:14 pm

I wish I'd known .. I'd have joined the protesters. Is there a website or a list server I can join to aid the resistance? I agree that it doesn't seem racist .. that's too easy a card to play.It's all about greed, greed, greed, lack of compassion and human kindness.


49 people like this
Posted by East Palo Alto Forward
a resident of Another Palo Alto neighborhood
on May 19, 2017 at 2:29 pm

Let me get this straight. We're supposed to provide housing help to government workers who already have huge benefits and salaries, to techies who have huge benefits and salaries and to everyone else who thinks they have a right to live in Palo Alto without doing the hard work to build equity by living elsewhere and then moving to Palo Alto, but not to these folks who got caught up in the national mortgage scams like millions of others.

We're supposed to blame homeowners for Prop 13 "abuse" but not businesses who invest in real estate and enjoy the benefits of Prop 13 even more than the residents do.

What kind of logic are they teaching these days! This new morality is SO confusing.


31 people like this
Posted by Debbie Mytels
a resident of Midtown
on May 19, 2017 at 3:09 pm

Some of the comments in this thread make me ashamed to live in this town. These real estate businesses that are cashing in on the misfortunes of others are despicable. As one commentator says, what they are doing may not be illegal -- but it is certainly immoral. It seems that the indictments of Farag for his other real estate dealings were well deserved and further investigation into his business practices seems warranted.
And yes, with the skyrocketing rents all around, it's time to repeal Costa-Hawkins.


17 people like this
Posted by Factoid
a resident of Triple El
on May 19, 2017 at 3:20 pm

The house in question is less than 1200 sf, has three bedrooms and only one bathroom for six people.

The lot is about 6000 sf, not much room for expansion.

It's in a rather bad location in EPA...needs repairs including a new roof, probably not worth more than $2500/month rent.

You can get a 3 bed, two bath house, in great condition, about 1700/1800 sf on the same size lot or slightly larger, on a quiet street in Midtown for what the [portion removed] landlord wants to raise this family's rent to!

[Portion removed.]


13 people like this
Posted by Dan
a resident of Midtown
on May 19, 2017 at 3:44 pm

The call to repeal Costa-Hawkins is absurd ... this is one of the few laws in California that protects us from the craziness of increasing government takeover of private property. Repeal it and you will see lots of homes immediately withdrawn from the rental market anywhere that rent control is on the public agenda. Renters don't own the property ... they are renting. The government doesn't own the property either ... it takes no risk of ownership so it has no right to burden owners with requirements to pay off renters when a private rental contract on a SFH expires. Basic principles ... if you want more of something (such as lower cost housing), you don't get there by making it less desirable to provide it.


23 people like this
Posted by No ethics
a resident of Another Palo Alto neighborhood
on May 19, 2017 at 4:23 pm

[Portion removed.] [T]his is a tiny little house with only one bathroom; pretty tight for a couple with four children. Dumpy and in disrepair as well, in a horrible litter strewn area, it is not worth what the family pays now.


2 people like this
Posted by YIMBY
a resident of Mountain View
on May 19, 2017 at 6:54 pm

@Dan

Prop 13 was just as absurd, but the call to curb property tax increase lest Grandma be forced to move due to increasing housing costs was enough to pass it. Well, what if Grandma is renting? Same moral argument applies.


44 people like this
Posted by Marrol
a resident of Embarcadero Oaks/Leland
on May 19, 2017 at 7:14 pm

It's not an issue of race, bias, or unfairness. It's about respecting the rights of property owners. The market dictates what a property is worth in overall value as well as rental rates. The owner should have every right and expectation to charge whatever rate the market is willing to match. The property owner has invested the time, capital, energy, insurance, and liability that goes with ownership. They have earned that distinction through ownership, and there should be zero expectation for anyone, including local government, to dictate to them and limit how they may profit from their investment. Bottom line, it's not their personal responsibility to provide affordable housing from private ownership. If local government wishes to invest in affordable housing, like the Buena Vista Mobile Home Park venture, then put your money where your mouth is and cover the cost. Otherwise, no one should be imposing themselves or expecting a property owner to make less profit on their investment.

The times and demographics are changing. These previously low-rent housing units and apartment buildings will make way for new development. It's driven by the market and value of the property. Gentrification is progress and it's moving in the right direction. Can't happen soon enough.


23 people like this
Posted by Arrow
a resident of Fairmeadow
on May 19, 2017 at 10:55 pm

Just so many observations to make here -
* Gentrification is inevitably setting in everywhere - East Palo Alto, Oakland. Just the natural course of things.
* Ridiculous rents and poor maintenance is a scourge every where in the Bay Area. The local governments should already have done something by now to get it in check. Probably good they didn't do anything - I have zero confidence they can do anything right.
* Any group that organizes wins. Especially when it can throw around "racism" and browbeat PC folks into submission.
* The high rent here seems ridiculous. Would the tenant consider leaving? We've had to move out of rentals when the rent to benefit ratio no longer made sense.
* I second Single income's comment. Really hard to feel empathy for the tenant's wife having to take on a part time job when we slog at 2 jobs, get to spend very little time with our children and pretty much pay the 2nd income for childcare.


25 people like this
Posted by Dan
a resident of Midtown
on May 20, 2017 at 12:39 pm

Prop 13 is one of the other few lifelines against the excesses of growing government in this state. One of the best laws on the books.


14 people like this
Posted by Robert
a resident of another community
on May 20, 2017 at 12:50 pm

@Dan

I know right? Imagine how much taxes would on the full value of people's homes, I'm glad nobody has to experience that.


2 people like this
Posted by YIMBY
a resident of Mountain View
on May 20, 2017 at 2:09 pm

@Dan

It's funny how we see these things so differently. You see it as a constraint on the excesses of government, whereas I see it as all of us having to subsidize you and your property so you can keep living here.


18 people like this
Posted by Dan
a resident of Midtown
on May 20, 2017 at 11:58 pm

Yes YIMBY ... there is probably not much in life that we agree on. You aren't subsidizing me, what a joke! If you aren't potentially benefiting from the value of prop 13 now, or in the future, then it means you don't own any property or plan to own, and it is you who are probably being "subsidized" by others paying an extraordinary high tax burden... which you then turn around and re-pay in terms of higher rents. I don't harbor envy towards neighbors who pay far less property tax than me because they have lived here much longer , but I do value the ability to have some control and predictability in property tax. Perhaps you can justify to yourself why a tax burden should double because someone has a wheelbarrow full of money to buy the house across the street from mine, but to me that makes no sense. The only other law that keeps this place semi-habitable is the 2/3rds vote requirement on tax increases ... but then at least they can always just raise "fees" to bypass it, or pass "bond" measures, or raise utility rates, vehicle license fees ...
Of course the thing that I was originally addressing was the lack of solid logic behind rent control...


1 person likes this
Posted by Housing Crunch
a resident of University South
on May 21, 2017 at 12:10 am

Wow, @Factoid... If you've got a 3/2 in great shape on a 6,000 ft lot in Midtown you'll rent for $3,800/month then I'LL TAKE IT (with a sublet clause)! Sorry if that was snarky, I just disagree with where the rental market is.


17 people like this
Posted by Hmmm
a resident of East Palo Alto
on May 21, 2017 at 12:17 am

[Portion removed.]
This isn't a standard rent increase but rather an overt attempt to get rid of the residents (from a house that needs a lot of work) in order to avoid following the laws voted in by the residents of the city. Juan is right - 4K is way too much for that place. [Portion removed.]

Hey Single Income - how are you subsidizing EPA residents? How do you feel about the money spent on investigating, prosecuting and housing scumbags like slumlords? How do you feel about the costs to cities and counties for dealing with them? We all subsidize each other, and we all bear the brunt of the problems wrought by scumbags.


5 people like this
Posted by YIMBY
a resident of Mountain View
on May 21, 2017 at 3:33 am

@Dan

Prop 13 limiting tax revenue from property meant that that taxes had to be spread out in other forms, such as sales taxes, plus the gutting of our school system. No, I and the rest of this state are subsidizing you so you can continue to live in your property shielded from the affects of rising housing costs, and quite frankly it's not worth it.


19 people like this
Posted by East Palo Alto Forward
a resident of Another Palo Alto neighborhood
on May 21, 2017 at 9:22 am

Instead of just complaining about "subsidizing" residential property owners, how about equal time for all the non-profits we're subsidizing like the Chamber of Commerce and PAF, about all the churches and religious institutions that we're subsidizing with their tax exemptions and then there's big tax-exempt educational entities like Stanford University. And health non-profits like Sutter and Stanford Hospital....

We're subsidizing all of these with real money and by dealing with the congestion they're creating and espousing.

Every college town is facing this same tax dilemma where residents keep subsiding the colleges with huge tax increases. Read up on what's happening in Princeton. NJ.


Posted by YIMBY
a resident of Mountain View

on May 21, 2017 at 1:32 pm


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16 people like this
Posted by OPar
a resident of another community
on May 21, 2017 at 4:12 pm

EPA is not Palo Alto. No one there is paying a premium for excellent schools, good services, etc. So, yeah, the giant rent hike is all about forcing out that family--and probably tear down or flip a house that the owner has let deteriorate.

The fact that the owner's been indicted on a bid-rigging charge really makes me doubt that he's a "nice guy."

By the way, all of us are relying on people who live in EPA--those people are maintaining our landscapes, staffing our restaurants, taking care of our children--doing all the jobs that we take for granted, but don't want to do ourselves.

And, yes, Palo Alto Forward could do something about this--but PAF has been its own version of "Me First".


3 people like this
Posted by @East Palo Alto Forward
a resident of East Palo Alto
on May 21, 2017 at 7:36 pm

Stanford is NOT tax exempt.


11 people like this
Posted by Hmmm
a resident of East Palo Alto
on May 21, 2017 at 8:12 pm

OPAR - thank you for your comment. As the market is softening a bit, this huge rent hike for a place in disrepair is indicative of the owner/flipper/landlord wanting to avoid doing things legally. And please don't forget - this town has plenty of professionals.


12 people like this
Posted by Nayeli
a resident of Midtown
on May 21, 2017 at 8:42 pm

@ YIMBY - You wrote: "Because subsidizing education and health care IS worth it." That is debatable too -- because left-wing politicians will always find something new to "subsidize" and "spread the wealth" in order to solicit new voters to their cause (i.e., reelection to stay in power).

I'd love to vote out any politician who voted to increase gas taxes by enormous amounts. California is quickly becoming the state that truly believes that certain European-style "democratic socialism" (most often less "democratic" than they claim) is a better form of economy than the American one. However, those same people often fail to realize that the entitlement society in most of those smaller European countries don't have "easy access" to certain social-welfare entitlements here. They don't wrestle with massive pensions for taxpayer-funded government workers either.


Posted by YIMBY
a resident of Mountain View

on May 21, 2017 at 9:03 pm


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17 people like this
Posted by East Palo Alto Forward
a resident of Embarcadero Oaks/Leland
on May 21, 2017 at 10:05 pm

Stanford University most certainly is tax exempt.

Web Link
Washington Post "Why Should Rich Universities Get Huge Property Tax Exemptions"
"Thanks to the Santa Clara County assessor, we also know that Stanford University holds one of California’s largest property tax exemptions, with about $8 billion worth of property removed from the tax rolls. Since tax-limiting Proposition 13 was passed, California communities are generally held to a 1 percent property tax rate. In Santa Clara County the average is closer to 1.1 percent, but even at the lower rate Stanford is enjoying a tax break worth about $80 million a year."

Web Link From Wikipedia

Stanford University is a tax-exempt corporate trust governed by a privately appointed Board of Trustees with a maximum membership of 38. Trustees serve five-year terms ...(not more than two consecutive terms) and meet five times annually.... Stanford is the beneficiary of a special clause in the California Constitution, which explicitly exempts Stanford property from taxation so long as the property is used for educational purposes.[74]



13 people like this
Posted by Remember Lotto?
a resident of Barron Park
on May 22, 2017 at 1:08 pm

[Post removed due to same poster using multiple names]


8 people like this
Posted by Yimbytastic
a resident of Evergreen Park
on May 22, 2017 at 4:05 pm

"The Lottery was established to make money that would go to the schools."

Which it does.

"This was voted in soon after Prop 13."

Would the alternative - forcing many existing residents out if their homes - have been better? The state cut funding to schools after the lottery was implemented. They could have cut spending elsewhere instead.


6 people like this
Posted by Irritated
a resident of Another Palo Alto neighborhood
on May 22, 2017 at 4:23 pm

[Post removed due to same poster using multiple names]


7 people like this
Posted by Yimbytastic
a resident of Evergreen Park
on May 23, 2017 at 12:41 am

"Prop 13 limiting tax revenue from property meant that that taxes had to be spread out in other forms, such as sales taxes, plus the gutting of our school system. No, I and the rest of this state are subsidizing you so you can continue to live in your property shielded from the affects of rising housing costs, and quite frankly it's not worth it."

Prop 13 was enacted a million years ago. As their owners moved or died off, the number of properties affected has dropped d dramatically. It is only a fraction of the original total and continues to decline.

If it is not worth living in such an area, or if the rent is too high, then simply move to a more affordable state, or to a more affordable part of this state. A lot of people have already done so.


Like this comment
Posted by musical
a resident of Palo Verde
on May 23, 2017 at 12:53 am

^ Well no. More properties are affected by Prop 13 than ever before.
That must be what attracts so many people and businesses.


Posted by YIMBY
a resident of Mountain View

on May 23, 2017 at 2:15 am


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Like this comment
Posted by Jack
a resident of another community
on May 24, 2017 at 2:46 pm

Too bad! My family moved out of San Carlos, sold our house for $350,000 in 1998 certainly poor timing for us, so I think someone should pay us for selling at the wrong time. It is racism, for sure; we were white folks being displaced by East Indian and Chinese with tons of cash. So, pay up or I will call the ACLU!


Sorry, but further commenting on this topic has been closed.

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