As battle resumes over rent control, City Council punts decision | November 12, 2021 | Palo Alto Weekly | Palo Alto Online |

Palo Alto Weekly

News - November 12, 2021

As battle resumes over rent control, City Council punts decision

Tenants and landlords offer clashing views on rent caps, eviction protections

by Gennady Sheyner

Palo Alto's heated debate over renter protections reignited on Monday, as the City Council prepared to consider a menu of measures to aid local tenants, including expanding eviction protections and capping rent increases.

Dozens of speakers, some supporting the new measures and others opposing them, made their case to the council, which had split over the topic of rent stabilization in 2018 before opting not to institute any new protections. Now, a somewhat reconstituted council is preparing to revisit the issue.

Christian Beauvoir, a member of the nascent group Palo Alto Renters Association, suggested that many renters could use the help. Despite misconceptions that Palo Alto renters are primarily wealthy tech workers, the city is full of people struggling to stay in their homes. It doesn't take long, he claimed, to find a renter who has lived in Palo Alto for decades and who is facing harassment from a landlord who knows that replacing the tenant could fetch thousands more in rent per month.

"This story is not unique," Beauvoir said. "People are being pushed out of their housing in Palo Alto with no place to go and they're very vulnerable without the protections we're talking about here today."

Julie Beer, who rents an apartment close to California Avenue, fears becoming one of these people. While her landlord has refrained from sharply raising rents, Beer said she is worried that the building will be sold and she will face eviction or a sharp rent increase.

"If our building gets sold, what happens to us?" Beer asked. "I'm worried about having to leave."

The topic of rent stabilization has divided the council in the past, with Mayor Tom DuBois and council member Lydia Kou supporting an earlier effort in 2017 to institute tenant protections and council members Greg Tanaka and Eric Filseth voting against them. The following year, the council majority agreed to take another look at enhancing tenant protections and once again refrained from exploring a cap on rent increases. This time, Filseth joined DuBois and Kou in supporting the evaluation of the policy, though his support wasn't enough to overcome opposition from the council majority.

Proponents of additional rental assistance are hoping for better luck this time around. On Monday, they appealed to the council to conduct a comprehensive survey of rental properties and expand eviction protections to single-family homes and other housing types that are currently not covered by the Assembly Bill 1482. The state law also caps annual rent increases at 5% plus inflation, though this cap — much like the eviction restriction — does not apply to homes built within the past 15 years or to tenants who have lived in their rented properties for less than a year. The local law would change that.

The council didn't take any action on Monday and limited the discussion to a presentation and public comments. With the hearing extending past midnight, council members agreed to defer their own discussion to a later date.

In crafting its recommendations, city staff pointed to the heavy burden that many local renters experience as a result of high housing costs. About 27% of the city's renter households earn less than $50,000. About 75% of them are classified as "cost burdened" when it comes to housing, which means that they spend more than 30% of their gross income on rent.

According to the American Community Survey, Palo Alto has 11,764 rental units. These make up 46% of the city's housing stock.

The city's plan to assist renters has already been vetted by the Planning and Transportation Commission and the Human Relations Commission, with both panels recommending that the city conduct a survey of rental properties before advancing with the other policies.

Both advisory boards supported some of the recommendations on staff's menu, including increasing relocation assistance for displaced tenants and adopting a "fair chance" law that limits a landlord's ability to discriminate against a tenant based on the latter's criminal record. They diverged, however, on the topic of rent caps. While the Human Relations Commission supported expanding AB 1482's protections to housing types that aren't covered by the state law, the Planning and Transportation Commission voted against instituting a local rent cap.

Many local property owners similarly object to the latest proposal for tenant protections. In the days before the Monday meeting, the council received a flurry of nearly identical letters signed by local residents and featuring language crafted by the California Apartment Association, a lobbying organization for rental property owners. The letters claim that property owners have faced their own challenges over the past 18 months and urged the council not to move ahead with any of the recommendations for rent protection policies.

"Debt has accumulated due to unpaid or late-paid rents," the letters stated. "The rent has actually decreased in many cases to help the renters stay. On the other side, the costs of building materials, labor, utilities and insurance for maintaining property have skyrocketed. Small housing providers are struggling very hard."

Some landlords also addressed the council on Monday to reiterate their concerns about the proposed policies. Eileen Kim, a property owner, was among them. Pointing to the protections already created by AB 1482, Kim suggested that supplementing them with local policies would cause more harm than good.

"If the city of Palo Alto further implements rent control policies, what starts out as good intention will actually have long-term deleterious effects for our beloved city instead of relieving the rental crisis, this quick and dirty Band-Aid solution that will actually worsen the housing situation," Kim said.

Anil Babbar, senior vice president for local public affairs at the California Apartment Association, also argued that the new state legislation makes the local law unnecessary.

"Every single policy proposal presented in the staff report will increase the cost of providing housing," Babbar said.

TALK ABOUT IT

What do you think of the proposals to change Palo Alto laws regarding housing rentals? Discuss the topic with others on Town Square, the community discussion forum at PaloAltoOnline.com/square.

Email Staff Writer Gennady Sheyner at [email protected]

Comments

Posted by Local Resident
a resident of Community Center
on Nov 9, 2021 at 11:21 am

Local Resident is a registered user.

I recently had renters apply who had a combined income of $1 million a year. That's about 10X what I make in income in a year. For retirees, rental income is a vital source of income. Do high paid tech workers they really need additional protections beyond what the state is providing when renting single family homes?


Posted by Citizen
a resident of College Terrace
on Nov 9, 2021 at 12:02 pm

Citizen is a registered user.

Rent control, or rent 'stabilization' is counterproductive. It leads to less affordable housing units over time as housing investors convert rentals to market rate condos sold in the marketplace (check Mt. View and SF). Rent control rewards only those lucky few living in an apartment complex that becomes rent controlled, or those few who get in. Everyone else is out of luck; existing renters and new entrants see their rent go up in response (check Stanford study on SF rent control). Landlords are also punished, though their expenses remain and continue to increase, unrelated to rent increase caps. Rent control disincentives housing investment. It incentivizes property owners to make sure that rent is at the highest rate possible so that in case there is incremental inflation over the cap they are as close to possible to market-rate. They cannot rent below market rate as they will be prevented by the government from bringing up their rental rate to market rate when it is called for.


Posted by peppered
a resident of Community Center
on Nov 9, 2021 at 4:00 pm

peppered is a registered user.

Rent control merely means that owners will not get a market return on their investment.
The ROI for income real estate in Palo Alto is significantly lower than many other Southbay cities.
Landlords would prefer to sell and buy elsewhere.
It's likely that owner-occupants not investors will pick up the property given the low ROI.
Which would result in fewer rentals being available.
Hard to beat the free market. Good luck!


Posted by Mondoman
a resident of Green Acres
on Nov 9, 2021 at 8:47 pm

Mondoman is a registered user.

Other problems with the City's proposals are that they lead to corruption and a loss of transparency. Those who control access to rent-controlled apartments often demand bribes/kickbacks from renters. Putting more restrictions on landlords' ability to research renters just means that units will be rented by word of mouth to avoid such restrictions, or listed with super-high minimum income and credit score requirements.


Posted by Citizen
a resident of College Terrace
on Nov 10, 2021 at 6:52 am

Citizen is a registered user.

Can't use criminal history when deciding whether to rent to someone? Who wants to rent to a felon?


Posted by Lik
a resident of St. Claire Gardens
on Nov 13, 2021 at 10:07 am

Lik is a registered user.

Regarding limiting landlords’ ability to ask applicants’ criminal history, most landlords would not want to rent to people with a criminal background, esp duplex owners occupying one unit, single family house owner with ADU. Most tenants would not want to live with neighboring tenants with a criminal background. Whoever (city council members) would enact this ordinance, please rent your spare room/ADU to a criminal and provide this renting as evidence.


Posted by Lik
a resident of St. Claire Gardens
on Nov 13, 2021 at 10:10 am

Lik is a registered user.

[Post removed; successive comments from the same poster are not permitted.]


Posted by @The Voice of Palo Alto
a resident of another community
on Nov 14, 2021 at 8:17 pm

@The Voice of Palo Alto is a registered user.

Those who speak against rent control need to stop being hypocritical when bringing up free market principles.

In a free market, both supply and demand are unrestricted. If the city restricts housing growth (which it does), then it has already altered the free market in favor of landowners by limiting supply.

Either regulate both (housing growth and rental prices), or deregulate both.


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