As rising rents continue to drive longtime residents out of Palo Alto, city officials are preparing to adopt regulations that would offer renters greater protection.
The regulations are the latest attempt by the City Council to address the city's shortage of affordable housing, a problem that council members identified as a top priority this year. The proposals include an annual cap on rent increases for apartment buildings and measures to protect tenants from eviction without just cause, according to a memo submitted by council members Tom DuBois, Karen Holman and Lydia Kou.
The memo, which the council is scheduled to discuss on Oct. 16, acknowledges that Palo Alto's affordable-housing supply is far below demand, while the cost of building below-market-rate housing "dwarfs our available resources." It also notes that many vital members of the community have moderate incomes and thus don't qualify for affordable housing. Teachers, police officers, service workers, nurses and health care providers "are continuing to be priced out of their homes and are being forced to leave the community."
The trio also noted that monthly rent in Palo Alto has soared by 50 percent since 2011, while Santa Clara County's median income has risen at less than one-tenth of that rate -- a rate they call unsustainable.
"Although the growth in our tech economy has been a boon to many, that growth has been accompanied by negative disruptions, including a steep increase in demand (for housing) that has severely degraded our housing affordability and resulted in many long-term renters being forced out or having to spend inordinate amounts of their incomes on housing," the memo states.
Palo Alto isn't the only city in the area dealing with the problem. Last November, the voters of Mountain View passed Measure V, a rent-control charter amendment that created a rental-housing committee to regulate rent increases. The measure also forced landlords to roll back rents earlier this year to October 2015 levels.
In San Jose, the City Council approved in May an urgency ordinance banning landlords from evicting tenants without demonstrating cause.
The Palo Alto proposal would borrow elements from each of these efforts. The annual cap on rent increases, by a percentage, would apply to buildings that were constructed before Feb. 1, 1995, and have five units or more. State law limits cities from imposing renter-protections on apartment buildings that went up after 1995.
The eviction measure would "protect tenants against termination without just cause while protecting the fair rights of property owners," the memo states. Both proposals would be vetted by the council's Policy and Services Committee before returning to the council for possible approval.
One goal of the proposal, DuBois said, is to allow the council to come up with a good process for developing sensible rental-protection regulations over time, as opposed to having them determined by a voter initiative.
"Some of these rent increases are really high," DuBois said. "You can have a revolt like in Mountain View."
DuBois said he and his colleagues have no intention of freezing rents by adopting rent-control measures like the ones commonly associated with New York City. The goal, he said, is to "find something that's as balanced as possible between landlords and tenants and prevent massive increases that really force people out of places they've been renting for a long time."
The memo cites ordinances that the city had adopted in the past, which went beyond state law in protecting renters. These include a requirement of a 60-day notice for large rent increases in apartment buildings and a prohibition stopping landlords from requiring fewer than two occupants per bedroom to occupy a unit. The city also offers a mediation service to landlords and tenants.
Current ordinances, DuBois said, don't seem like they're doing enough to prevent displacement of renters, who comprise about 44 percent of Palo Alto's residents.
"With the kind of boom periods that we've been through, we see less socioeconomic diversity (in the city)," DuBois said. "In the past, Palo Alto hasn't really been comfortable talking about this kind of thing, but I really think it's time."
Holman said the goal is to limit rent increases to the 5 to 10 percent range, which she called reasonable.
"I've heard from a number of people who've had to move because rent was jacked up by 40 percent or 50 percent," Holman said. "I hear people comment that their rents were doubled.
"When incomes don't rise to that level -- which of course they don't -- it's just not possible to cope with such a change."
Holman said the measures proposed in the memo are part of a multipronged approach that the council should pursue to protect the city's existing supply of housing. Other areas include limiting abuses of short-term rentals and "investment homes" that are left vacant for extended periods of time.
The memo comes at a time when the council is preparing to adopt an updated Comprehensive Plan, a document that spells out the city's land-use vision. The city's Planning and Transportation Commission, which completed its review of the updated Comprehensive Plan last month, recognized the urgent nature of the city's housing problems when it unanimously recommended on Sept. 27 that the council strengthen the affordable-housing policies in the plan.
The housing crunch has gotten so bad that even tech professionals can't afford a "starter home" in Palo Alto anymore, Commissioner Susan Monk said at the Sept. 27 meeting. Monk, the sole renter on the commission, cited the recent departure of Kate Downing, a former Planning and Transportation commissioner who made national headlines when she resigned and blamed the city's housing policies for making it impossible for her and her husband to afford a Palo Alto home.
"This is a truly a crisis here," Monk said. "We need to look at what the middle-class needs."