Seeking to provide relief to local renters at a time of astronomical housing costs, Palo Alto is considering new restrictions on evictions as well as a cap on rent increases.
These initiatives are part of a menu of options that the City Council will debate on Monday, as it considers ways to support local renters, who make up about 45% of the city's population. Other components include increasing relocation assistance that landlords must offer to displaced tenants and adopting a "fair chance" ordinance that limits landlords' ability to ask about applicants' criminal history.
The city launched its current effort to expand renter protections three years ago, when four council members penned a memo urging their colleagues to address the issue of long-term renters being either forced out of the city or having to spend "inordinate amounts of their incomes on housing." Since 2011, the memo notes, the average monthly rent in Palo Alto has soared 50% while Santa Clara County's median income has risen less at one-tenth of that rate.
"These trends are clearly not sustainable," states the memo, which was submitted by Mayor Tom DuBois, council member Lydia Kou and former council members Karen Holman and Cory Wolbach.
These trends have only gotten worse. According to the city, average rent across all unit types went up by 5% since 2020 and currently stands at $3,648 across all unit types, including the 1,696 that are deed-restricted for affordable housing.
Altogether, Palo Alto has about 11,754 rental units, of which 3,723 are single-family homes and 2,576 are apartments in large complexes with 50 or more units, according to the American Community Survey. The balance is made up of duplexes, triplexes and fourplexes, which collectively account for 1,296 units, as well as in small- to medium-sized apartment buildings, which account for another 4,169 units.
While Palo Alto is famously affluent, survey data shows that about 41% of the city's renters have incomes below $75,000. Nearly three-quarters of renters in this category reported being "cost burdened," which means they spend more than 30% of their income on rent. Of those with incomes below $35,000, 89.2% reported being cost-burdened when it comes to housing.
For Leah Cowan, a local renter, the numbers hit close to home. During a recent Human Relations Commission discussion of renter protections, Cowen described her experiences in growing up in a below-market-rate unit at an apartment building near California Avenue. Her family, which moved to Palo Alto from San Jose, faced discrimination from the building's manager and from neighbors, she said.
"We lived under a different set of standards," Cowan told the Human Relations Commission during a February forum on renter protections. "We all know to never complain about any of the maintenance. If anything was broken. it was months before it was fixed at all."
In 2019, Cowan's mother received notice that her rent will soon be more than doubled. Cowan said she had to scramble to find assistance from state and county representatives and from the local nonprofit, LifeMoves. Ultimately, she was able to find a new apartment for her mother in her own building, Cowan said.
"There's so many families I think about that were not as lucky," Cowen said. "All the other families I grew up with and knew of when I visited my mom — the only Black and brown families in that entire apartment building — so many of them moved so far away."
But while the council widely acknowledges the high pressures that many local residents experience, members have struggled to reach a consensus on what to do about it. In 2017, the council debated and ultimately rejected a proposal to explore rent stabilization. The Monday discussion will give the current council a chance to revisit that decision.
Some believe the time has come to do just that. Angie Evans, a renter who last year helped launch the advocacy group Palo Alto Renters Association, urged the Planning and Transportation Commission in April to support rent caps. Low-income people and people of color experience harassment and unfair rent increases on a regular basis, she said. In most cases, these incidents go unreported.
"While it sometimes feels like renter's rights are less important in an exclusive city like Palo Alto, I want to remind us all that more expensive, segregated cities like Palo Alto require tenant protections too," Evans said.
California legislators tried to address the topic of renter displacement in 2019, when they approved Assembly Bill 1482, which limited rent increases in any given year to 5% plus inflation. But the bill, which became law in 2020, does not apply to renters whose units had been built within the last 15 years; who moved into their units less than a year ago; who live in single-family homes; and who live in a duplex where the other unit is owner-occupied. Several cities, including San Francisco, Mountain View and Berkeley, have adopted protections that exceed those in AB 1482. Palo Alto's planning staff recommend that the city consider following suit.
Not everyone, however, agrees about the next steps. During hearings earlier this year, both the Planning and Transportation Commission and Human Relations Commission recommended that the city expand some of the eviction protections to categories not covered by AB 1482, including newer apartment buildings. They disagreed, however, on the topic of rent caps, with the planning commission opposing any form of rent stabilization and the Human Relations Commission supporting expanding the anti-gouging provisions of AB 1482 to types of housing units that are not covered by the state law.
In August and September, as the Human Relations Commission discussed the topic of renter assistance, members acknowledged that even renters at the higher end of the socioeconomic ladder experience pressure when it comes to rising rents.
"I've heard it from people who rent for $6,000 a month, and they pay it, and two months later they get a letter in the mail and they want $8,000," the Rev. Kaloma Smith, who chairs the Human Relations Commission, said at an August hearing. "I can only imagine as you go down the socioeconomic scale, where you don't have lawyers and legal defense, how badly this happens."
Commissioner Adriana Eberle agreed and said she was "dismayed" by the planning commission's decision not to recommend the rent cap.
"I think that the reality is that in Palo Alto, they use these increases in rent to dislocate people and this is how you end up with people losing their homes all the time," Eberle said.
The planning commission was more skeptical about adopting rent stabilization beyond what's required by state law. Commissioner Michael Alcheck said the city should see how state law plays out before pursuing additional solutions. Chair Bart Hechtman noted that tenants who face the prospect of seeing their rents go up by more than 5% have the option of leasing in an older building that is subject to AB 1482's protections.
One issue on which the two commissions concurred is the need for more data. Both supported staff's recommendation that Palo Alto conduct a detailed survey of rental properties. While the city had a registry of rental properties since 2002, the list has not been updated in years and the Office of Human Services has not been reaching out to landlords to verify the information, according to a new report from the Department of Planning and Development Services.
The proposed survey would include information about rental rates, rent increases, evictions, unit sizes and length of current tenancy, according to the report.
"Ideally, the rental survey would impact both landlords and tenants positively," the report states. "The City can be an honest broker of data that is available to the tenants and landlords alike. Through this information, tenant and/or landlord groups can propose new policies and or improvements."
The two commissions also agreed to endorse staff proposals to cap the amount that a landlord can charge for a security deposit (this would be limited to 1.5 times rent) and to adopt a "fair chance" ordinance — a step that Berkeley, Oakland in San Francisco have already taken. City staff noted that because incarceration "disproportionately impacts members of the Black, Indigenous, People of Color (BIPOC) community, a fair chance ordinance could help address racial equity goals and renter protection goals."
The report from planning staff acknowledges that criminal history is a sensitive topic. Given that landlords and property managers tend to be risk averse, "removing access to this information may be seen to increase their risk."
"However, the assumption that past behavior can invariably predict future behavior can perpetuate discriminatory behavior," the report states.