With a new state law set to take effect on Jan. 1 that caps allowable rent increases, the Palo Alto City Council is preparing to pass an emergency ordinance Monday that would ban landlords from evicting tenants without just cause before the law kicks in.
The goal of the local ordinance is to offer expanded protections to "long-term, lower-income tenants" in situations where the landlord wants to evict them to raise rents and attract wealthier tenants, according to a memo from Council members Tom DuBois and Lydia Kou, who authored the proposal.
The memo responds to Assembly Bill 1482, legislation from Assemblyman David Chiu, D-San Francisco, which was signed by Gov. Gavin Newsom on Oct. 8. Also known as the Tenant Protection Act of 2019, the law caps annual rent increases at 5%, plus inflation, for buildings 15 years and older and bans landlords from evicting tenants who have lived in their apartments for a year or more without "just cause."
DuBois told the Weekly that the proposal was inspired by reports he's been getting from renters about significant rent increases and evictions. Multiple groups of tenants have contacted him to discuss the issue since the bill passed. Some have been reporting rent hikes of 25% or more, he said.
Since the law passed, there has been "an escalation of harassment by landlords in order to encourage tenants to move out voluntarily," the memo states. Tenants have also complained of "increases in costs of parking, lock services and other bundled amenities," according to the memo.
"While landlords may properly evict tenants for cause under the provision of state law, landlords should not be able to evict tenants in good standing without cause simply to avoid the limitation on rent gouging afforded to renters under the new law," the memo states. "Hence, it is imperative for the city of Palo Alto to issue an emergency ordinance to keep people housed and provide a sense of stability."
The ordinance would direct the city attorney to report on a temporary moratorium on no-fault evictions and direct city staff to inform residents of their rights, along with other actions.
Among the groups that have approached council members are tenants of Hohbach Realty, which owns several apartment buildings near the California Avenue business district. Over the summer, the company informed residents that it would be raising rates by 25%. After protests, the company scaled back the increase to 7%, according to leases and emails reviewed by the Weekly, as well as interviews with tenants.
The tenants, who withheld their names for fear of retribution, alleged in their Oct. 30 letter to the council that the company attempted to raise rents in anticipation of the state legislation, which would cap rent increases. They criticized the company for what they called a "cavalier attitude of 'if you don't like it, get out.'"
"Living is becoming untenable with uncapped rent raises while basic treatment and living standards are being neglected," the tenants' letter states.
But AB 1482 does contain a "retroactive" clause intended to prevent last-minute rent hikes by landlords.
The provision rolls back rent hikes imposed after March 15, 2019 to the 5% plus inflation level. Many residents aren't aware of that, DuBois said.
"As long as the eviction hasn't been completed, they don't have to pay the increase that they are being asked to pay," DuBois told the Weekly. "The important thing is that people don't just move out."
Marcus Wood, property manager at Hohbach Realty, vehemently denied the allegations in the tenants' letter and told the Weekly that the company remains committed to keeping its rents below market rate. The company's founder, Harold Hohbach, who died in December 2018, refrained from raising rents in the last five years of his life, Wood said. As a result, many apartments remain well below market rate.
In late August and September, the company considered 25% increases for some of the units that were "significantly below market rate," Wood said, while still keeping them below market rate.
After the company issued the notifications of a 25% increase in August and September, it realized AB 1482 was pending, Wood said.
"When we realized that is happening, we withdrew it. In other words, it didn't happen," Wood said.
The tenants argued that the company's email notification of a 25% increase did not mention the pending legislation or the "rollback provision" that would invalidate the increases that go beyond the level permitted by AB 1482. As a result, some tenants opted to leave before the rents were rescinded, one current tenant told the Weekly.
DuBois' and Kou's memo states that escalating real estate values, along with deregulation of zoning, provides "an incentive to landlords to evict long-term, lower-income tenants, in order to raise rents and attract wealthier tenants."
Kou said one goal of the proposed ordinance is to educate tenants about the new legislation. She said she has seen numerous emails from lawyers who have been educating landlords on how to move ahead with evictions, in light of AB 1482. She has not, however, seen any handouts geared toward informing tenants about their rights under the new law.
"I think that's one-sided," Kou told the Weekly. "I just want to make sure that our current residents are not being harassed or abused or made to leave."
She said she is particularly concerned about tenants who have children enrolled in Palo Alto schools and whose lives could become destabilized by evictions.
Palo Alto isn't the only city wrestling with the issue. The Menlo Park City Council approved on Tuesday night on an urgency ordinance that would make the provisions of AB 1482 apply immediately. That proposal was similarly prompted by reports from tenants about no-fault evictions.
Los Angeles last month passed an emergency moratorium on evictions until Dec. 31. That law, like the one Palo Alto is considering, is intended to serve as a stop-gap measure until the state law takes effect.