Seeking to protect low-income renters from displacement, a divided Palo Alto City Council moved on Monday to craft new laws that would restrict evictions and prevent sharp rent increases.
The proposed ordinances, which will be crafted in the coming months before returning to the council for approval, are part of a larger suite of initiatives that the city is exploring to help renters, who make up about 46% of the city's population. Other policies that the council supported Monday include creating a survey of rental properties throughout the city, capping how much landlords can charge for security deposits and expanding relocation assistance for residents who have to move because their building is being demolished or undergoing major renovations. The relocation ordinance would only apply to buildings with 10 or more dwellings.
Despite some sharp disagreements on particular policies, the Monday discussion saw increasing consensus among council members on a topic that has divided them for years. Past efforts to even explore, much less adopt, limits on rent increases were rejected by the council in 2017 and 2018. While Mayor Tom DuBois and council member Lydia Kou had championed expanding renter protections, the council's majority has been reluctant to do so out of concern that the new laws would hurt landlords and discourage new residential construction.
While council member Greg Tanaka, who made that point in the past, voted against all of the policies on the table, this time he was in the minority. Most of the policies advanced with a 6-1 vote, with Tanaka dissenting. The policies relating to anti-gouging and eviction protection proved to be more contentious, with the council voting 4-3 to advance them, with council members Alison Cormack, Eric Filseth and Tanaka all dissenting.
One of the city's top priorities will be the launch of a renter survey, an annual register that will track all rental properties and include information such as rental rates, unit sizes, rent increase and evictions. Both the Planning and Transportation Commission and the Human Relations Commission had recommended that the city move ahead with the survey as a top priority when they reviewed the package of reforms earlier this year.
"There's a lot of work to be done there, but I agree that it's foundational and it will move our whole community from strong positions informed by personal experience and beliefs to a place where we'll be able to make better decisions," Cormack said of the proposed survey.
The council also agreed to advocate for a "right to counsel" policy at the county level in which tenants would be provided with legal assistance during evictions and to consider a "fair chance" ordinance that would restrict the landlord's ability to inquire about a prospective tenant's criminal record. In the coming months, the council's Policy and Services Committee will further evaluate a fair-chance policy, help craft the renter survey and work on the anti-gouging policy, which would then return to the council for approval.
Much like past efforts to boost renter protections, the council's current drive faces steep opposition from landlords, with hundreds emailing the council over the past month or speaking out in recent hearings to register their concerns. Many had argued that the new laws are unnecessary because of Assembly Bill 1482, a 2019 bill that caps rent increase at 5% plus the rate of inflation and that prohibits evictions without just cause. The legislation explicitly excludes, however, certain types of properties that the local law would cover: namely, multiunit buildings that were constructed within the past 15 years.
At the same time, Palo Alto's proposed ordinance would not apply to renters who live in duplexes where the other dwelling is not owner-occupied; to single-family homes that aren't owned by corporations; and to tenants that had occupied their dwellings for less than a year. These exceptions were included in the new proposal at the behest of Vice Mayor Pat Burt.
In developing its proposal, the council agreed that the new policies should focus primarily on low-income renters who are "cost burdened" when it comes to paying rent, which means that they spend more than 30% of the household's gross income on rent. The problem is particularly acute for those in lower income brackets, with about 73.4% of those making less than $75,000 in income considered rent-burdened, according to American Community Survey data.
A report from Planning and Development Services notes that a "significant percentage of Palo Alto lower-income households are rent-burdened."
"They are more likely to have to choose between paying rent over food or medical needs. When tenants consistently make these choices, the community suffers," the report states.
Some council members, most notably Tanaka and Filseth, suggested that making the law too broad would constitute an overreach by City Hall. Filseth noted that many renters in Palo Alto make more than $150,000 in annual income and don't need assistance from the city. The council, he suggested, should focus only on those who are at risk of displacement if they get hit with a steep rent increase or an eviction notice.
"I think most people in Palo Alto don't want City Hall to be an omnibus regulator of renting in Palo Alto, but I think they do want us to provide a safety net so that people who don't have options don't find themselves in really severe circumstances if we can possibly avoid it," Filseth said.
Council member Greer Stone argued for stronger renter-protection policies, including stricter limits on security deposits than his colleagues were willing to support. After some negotiation, the council agreed that its new policy on security deposits should apply only to unfurnished dwellings and that it should not exceed 150% of the monthly rent.
Stone, who is himself a renter, predicted that the task of protecting tenants from steep rent increases will only become more crucial in the months ahead.
"As we emerge from this pandemic, we're going to see … rents continue to go up and up and up," Stone said.
Stone strongly supported the effort to expand the criteria for tenants eligible for relocation assistance. Under current law, only tenants in buildings with 50 or more dwellings are eligible for relocation assistance. The new ordinance would apply the policy to all buildings with 10 or more dwellings, which would cover about 45% of the city's rental housing stock. Currently, the level of assistance ranges from $7,000 for studios to $17,000 for apartments with three or more bedrooms.
While the effort is aimed at helping tenants, the council also agreed that the city needs to do far more outreach to local landlords before the new policies are finalized. Many landlords had submitted letters to the council over the past months complaining about the city's failure to involve them in the process.
"It's clear these programs lack sufficient analysis and stakeholder engagement," realtor Nancy Kouchekey, a local property manager and real estate agent, wrote to the council. "It's unclear what defined problem the city of Palo Alto aims to solve. And, recognizing that more than half of the city's renters make over $100,000 per year, there is no guarantee that any of the policy recommendations would help those families most in need of housing assistance."
Others, however, suggested that the proposed reforms are urgently needed. Mohit Mookim, who has lived, worked and studied at Stanford University for the past seven years, urged the council to move ahead with expanding renter protections. The rental survey, he wrote, should be just the start of the city's effort.
"Even prior to the COVID-19 pandemic that increased the precarity of housing, the Bay Area suffered from a significant housing crisis with insufficient units, lack of access to affordable housing, looming evictions, and landlord harassment," Mookim wrote. "Especially after the end of renter protections like the eviction moratorium, we are hearing story after story of renters facing eviction and suffering under the overwhelming weight of high housing costs."