As Palo Alto prepares to adopt a rental registry to track vacancies, rent hikes and property turnover, one type of development will likely be initially excluded from the tally: single-family homes.
That, at least, is the proposal from the Department of Planning and Community Development that the City Council will consider on Nov. 27. City planners are suggesting rolling out the registry in phases, with the first phase only including buildings with three or more residential units. While this is intended to ease the administrative load and staffing needs as the registry is getting launched, it will also exclude the roughly 30% of the city's rental stock that is comprised of single-family homes, duplexes and accessory dwelling units.
Under the proposal, landlords with fewer than three units will be exempt for the first two years of the program as the city works out any glitches from the first phase and acquires the needed staffing to manage the registry, which aims to keep track of the city's approximately 11,400 rental units. About 70% of the rental housing stock is owned by about 300 property owners, according to a new report from the planning department. The other 30% includes nearly 3,400 single-family homes, accessory dwelling units, junior accessory dwelling units and duplexes.
The proposal to set up a registry has been contentious, with some local property owners arguing that the program would be burdensome, costly and unnecessary. But housing advocates, planning commissioners and the City Council had all agreed that implementing the registry should be the city's top priority when it comes to supporting tenants and a necessary stepping stone to implementing further policies relating to renters.
"We need to have this information," Vice Mayor Greer Stone, who serves on the council's Housing Ad Hoc Committee, said during an Aug. 31 discussion on the registry. "We don't know what we don't know. I'm excited to finally have this rental registry."
The registry program has been broadly supported by local and regional pro-housing groups, including the Palo Alto Renters Association and SV@Home. The council also heard during recent public hearings from local tenants urging the city to adopt the program.
Peter Herreshoff, a retired Gunn High mathematics teacher, is among those who believe the city should do more to support renters. Herreshoff said he has been spending more than 50% of his income on rent and has been a model tenant for the pas 25 years. Even so, he was informed earlier this year that he will have to vacate the accessory dwelling unit by the end of the year so that the property can be prepared for a sale.
Herrehoff said he hopes he can remain in the Palo Alto community but is very uncertain about finding a place to live in the city. He urged the city to extend the ordinance to single-family homes and to create a rent control board to oversee rental housing.
"I support the establishment of rent registry but only as a first step, so it might help stabilize the situation of people like myself," Herreshoff said.
Mary Wheeler, a local renter with two school-age children, also spoke in favor of the program. Her family has been forced to move four times in the past decade, she said. She described the registry as a "small and basic first step to understanding the landscape here and making good policy decisions."
"Like many people here who rent, we're never going to be in a position in the short-term to be owners in this town but we'd love to stay here because we have many friends and love the people here and the community," Wheeler said.
Not everyone shares this view. During the public hearing, several property owners expressed their reservations about the new program. Sue Allen, whose property is located near Mitchell Park, said she and other landlords are unhappy about having to file more paperwork with the city and to be "charged for the privilege of doing so." She suggested that the program won't benefit anyone.
"It doesn't gain the city anything except for more bureaucracy," Allen said.
Anil Babar, spokesman for the California Apartment Association, also spoke out against the registry, which he said creates privacy concerns for property owners. Even though the city plans to anonymize the data and only release it in aggregate, Babar noted that the city may be forced to release registry records if it receives a Public Records Act request. He also suggested that the program would be costly to implement, both for the city and for property owners.
"It just (adds) more burden to property owners and it adds more cost to housing," he said.
Palo Alto's rental registry has been under development since November 2021, when the City Council directed staff to craft the program. If the council approves the staff proposal, it would launch in September 2024. Initially, it would require a dedicated staff position and a consultant. Once fully rolled out, it would require two staff positions to keep the program going, the report states.
The city hopes to ultimately have the program pay for itself. Once implemented, the annual fee to register would be about $40 per unit, according to the new report.
As part of the program, property owners and managers would have to list the number of rental units in their buildings, the status of tenancy for each unit, reasons for vacancy (if applicable), rent amounts, rental amenities and other information. A sample registration form that the city released this week consists of four pages of questions.
In addition to the annual registration, landlords will also have to notify the city within 10 days if they send an eviction notice or a notice to quit to a renter (there is no fee associated with this update).
Under the staff proposal, all landowners – including ones with fewer than three units – will be required to fill out the registration forms in year three of the program. According to the new report, limiting the registry to larger multi-family housing in the initial phase reflects the "business nature of multi-family rental housing where landlords and property managers are more familiar with a rental regulatory environment and are likely better equipped to navigate the online registry program."
"Homeowners on the other hand may have only one or two units that they rent but it may not be a primary source of income and additional local regulatory procedures may be perceived as burdensome," the report states. "Ironing out any technical challenges with this new system before opening it up to a large number of homeowners may help avoid future frustration, reduce the need for administrative support for the program and better position the city for more successful data collection."
City planners are also proposing to waive fees for landlords and property owners in the first year and only begin to collect them in the second. Similarly, single-family homeowners would see their fees waived in the third year of the program, when they begin reporting their properties. By year four, all registrants would be required to pay.
Council member Ed Lauing, who also serves on the Housing Ad Hoc Committee, suggested at the August review that the city should do what it can to make sure the new program is easy to use for all participants.
"I'm hoping we will have the narrative that this is good for everyone eventually: the landlords, the residents and, obviously, the council so that we can create some policy decisions," Lauing said. "And I don't want send out the other message that we're doing everything possible to make it hard to get renters in or put buildings up. Any way we can streamline that, I think we should."