Please visit www.epa-tenants.org for more information on Page Mill Properties and its East Palo Alto apartment portfolio

Disturbing but also maybe, ultimately, uplifting for tenants. We have to wait and see. I hope these carpetbaggers are done!!!

Could this explain their eagerness to raise rents? Were they in over their financial heads? Could money problems been the root of all their other problems? Let's wait and see what turns up.

In the meantime, steps should be taken not to let the situation deteriorate for the tenants. From the description of that pool, things have been permitted to deteriorate for lack of maintainance, and I am worried about unhealthy situations arising. It sounds like the city may need to step in and contract out the maintainance of the apartments and grounds, with an eye for sending the bill to PMP, backed by a lein on the properties.

I would also comment that there is no excuse here for the tenants to stop paying their rents, they are still obligated to do that.

You know, JustMe, PMP raised rents before they did a lot of work on places - after they had secured hindresds of millions of dollars, as is typical of this type of land grab. I think their exhorbitant legal bills in addition to the tanking of the economy is behind this, but primarily the latter. No excuse for illegal rent hikes. They weren't trying to recoup their losses, they were trying to fatten their wallets.

No one answers at their mian number in downtown PA, either - who knows why.

Have you read up on this on the epa-tenants.org website? If not, you may find it very intriguing...

2 words, mosquito abatement!

Is a rent strike in the immediate future for these properties?

MY CARPETS ARE OLD AS THE BUILDING I BEEN SENDING IN REQUESTS FOR ABOUT 2 1/2 YEARS AND STILL NOTHING! I PAINTED MY OWN APARTMENT. AND DONE MY OWN REPAIRS! I PAY $1450.00 EVERY MONTH. THESE GUYS HAD IT COMING!

I am not at all sympathetic to PMP's rent hikes. However, from the renter's point of view, if they signed a lease on an apartment that came with a pool, that pool needs to be maintained. the apaerments need to be maintained by the landlord, per agreement. If PMP just stops all maintainance of those properties, the renters suffer, and I cannot abide by that. As long as the renters fulfill their part of the rental agreements, the promises made to them in those same agreements need to be kept. I am worried that they are not. That would be where someone needs to step in and take over the apartment maintainance, rent collection, paying the garbage collection bills, etc.

First, I doubt seriously that Page Mill Properties is carrying garbage into the buildings and scattering it through the corridors, and I doubt that they are breaking their windows as company policy. Cabrini-Green was an example of the problems inherent in management of multi unit apartments. Perhaps the denied rent increase was to correct the deficiencies noted. Money that could have gone to workers went to lawyers. Page Mill was trying to make a profit? Well, duh, it would have been illegal for them not to try.
Here's a deal for all the softhearted - gather together, buy the properties, pledging your own assets for collateral, and operate it in a humane manner for a few years, then get back to me.

I have never seen the Ron Davis or his others out there until now. Security Gaurds always handled everything here it was like the police were afraid to come. Davis said it was lowest crime in the city, not because of him or police but because of pagemil and security. [Portion removed by Palo Alto Online staff.]

I lived in the Woodland Park Apts 25 years ago. Theft and gun shots abounded in the area. My own apartment greeted me with an open door and a broken window, and much missing stuff..one day.

I re-prioritized my life, and got out as soon as I could. It was cheaper than anyplace else, yes, but I valued my life!

Folks, if you want better, ya gotta pay for better...it is the way it is. If you want less, you pay for less.

Uh..Mr. or Ms. YES "I hope those carpetbaggers are gone" sentiments may be premature. You may be begging for their return if they go bankrupt, and can't pay any bills..and there is nobody willing to take on the problems and buy the properties since there is no way to actually make it worth it since there is rent-control and unrealistic renters. everyone has to learn some lessons in life, and a couple of them are, we get what we pay for and we reap what we sow.

good luck with that.

It doesn't sound like anyone posting knows what's really going on, except Lund and Hmmm. Page Mill are a bunch of crooks and their scheme has finally hit the skids. We have to wait and see what happens as this all shakes out.

Uh, clearly, you have no idea what you're writing about, been there. I know my rights and I know Page Mill are engaged in criminal acts. So perhaps they will reap what they sow, as they should.

Your patronizing attitude doesn't demonstrate any real knowledge of the goings-on. We deserve justice and that is what we are working towards. Page Mill has a lot to answer to - besides their tenants and the City of East Palo Alto and its relevant agencies, they have to answer to their investors. I'd love to hear those conversations.

Page Mill to investors - cut your losses.

Um..you have the right to life, liberty and the pursuit of happiness. You have the right to keep living, the right to vote, move freely anywhere you wish, find a legal way to make advance your self and your family, earn a living, and spend it as you wish. The job of government is to defend your rights, under which holding up contractual agreements between 2 parties falls ( with the assumption that your "right to pursue happiness" involves contractual relationships for work, property, etc). Clearly, if you believe PMP broke a contract with you, then you stand on belief and go to court, which you did. The court ruled, this time, in your favor, after PMP won last time..However, what is the point if you have driven them into bankruptcy and they are now too broke to replace the carpets etc, and nobody else is willing to buy the properties because of the lack of profit in it for them?

Or are you expecting a taxpayer bail out?

I have been on both sides of this issue..details aren't important, but I have been kicked out of an apartment from "eminent domain" and, later in life after a lot of work and risk-investing, I have been in the shoes of PMP ( in principle, not in amount of money involved).

Your entitlement attitude may feel good, and trumps my patronizing one, so maybe you win!! I am sure that will feel good as your apartments crumble from not having anyone willing to buy the properties and PMP goes under. Maybe you will be able to find a better deal elsewhere. Still free to move to wherever you wish.

I knew an elderly disabled couple that lived in the Woodland apts a few years ago because that's all they could afford in this area. They had been residents of Palo Alto for 40 years and had to move to a less expensive area. When I visited, I could hardly believe the shoddy upkeep of the place and lack of maintenance and communication on the part of the landlord. It was clear even then that PMP was a kind of slum lord.

A follow-up: We were able to help this couple move out and find a better place to live, but many people living there clearly did not have the resources to move. To say, "You're free to move wherever you wish" to people who are poor and/or disabled or elderly is not helpful.

No tenant has driven PMP into bankruptcy. Their mismanagement of their loans and investments, coupled with the economy and stratospheric legal bills has caused their problems. They chose to run with the big dogs by buying this portfolio. They clearly don't have the wherewithal to manage their way out of a paper bag, much less 1800 units.

I AM entitled, as many on the westside area, to justice. We are pursuing that through various means and working diligently to achieve that. Being entitled to justice often includes still having to work for it. PMP are thieves and thugs in suits driving expensive vehicles. It doesn't make them any less corrupt. They chose to play a high stakes game and seem to be losing. Many of us refuse to dragged down with them, as we did nothing to invite this into our lives. Many are taking steps to not be dragged down.

Those who cannot help themselves deserve our help, absolutely. That is up to each individual, each of us, to help how s/he can. I am glad you were able to help them move out and to a better place.

My comments are directed to the vast majority of people who CAN help themselves, and choose not to. I know. I lived there, and I lived in subsidized housing on the other side of the bay, with a, literally, flea market out my front door. I knew the people who lived around me, and I saw the attitude. For right or for wrong, I learned more about the underbelly of humanity than I wished I knew.

BTW, PMP purchased the property in 2007. I am sure they sincerely regret it. I am sure it will be very difficult to find anyone else willing to take the tremendous risk of buying it, until this silly rent control mentality stops. Walk around apartments in Rent controlled SF and Berk and you wont' find much difference from EPA.

To Been There -
My heart goes out to you. Being forced to live in these wretched conditions, and here are all these awful people from Palo Alto who think that you can just move some place more decent. Palo Altans don't understand how coercive it is paying below market rents. One becomes so used to not having rents track inflation that one gets used to using all of one's income for consumption and no longer pursues a career track that would be required to pay rent somewhere else. So one is painfully stuck where one is. Now that you're economically tied to being there there is no longer any financial incentive for the landlord to maintain the place to keep the tenants, as there is in places spoiled by the absence of rent control (e.g. Palo Alto), so you have to use government resources to force them to do so.

Good luck with your lawsuits in pursuit of justice.

The tenants of these properties will suffer because PMP didn't have a long term plan to run these apartments.

I know property owners who live in a house adjacent to PMP property. They were approached multiple times by people with multiple false fronts trying to purchase their property. A little research identified the buyer as PMP (not a little old lady trying to by the house next door for her family--one front story they used).

Someone visited the PMP offices in PA and saw a map with my friends house circled--the only property on the block not owned by PMP. They were hoping to buy everything and then sell the property after getting rid of all of those people who's "crime" in many cases was being poor.

My guess is that the original PMP plan was to sell before the balloon payment came due. You have to have some play well in advance if you have a $50M payment coming due.

Unfortunately the tenants who fought for their rights to stay in some of the only affordable housing on the peninsula may not suffer further abuse as PMP walks away from their mismanaged investment.

The management at PMP seems to have been able to completely separate their game of monopoly from the lives of the people they have hurt. How many families lives are hanging in the balance?

And to think that PMP had to gall to claim that EPA wasn't doing it's part to serve this community. Unfortunately EPA has to manage to a budget, something PMP clearly didn't think about.

The tenants suffer really nailed it. I know that the property owners who haven't sold to Page Mill have been strongly pressured to do so, ongoingly.

It's weird, but typical that the Palo Alto comments on this thread want to constantly blame the tenants for what the property owner has done, which is abandon their properties - which is illegal - and now pay what they owe the bank. Whatever a person's perspective is on the tenants of of Page Mill that they think they know, but they don't - the point remains that the landlord has abandoned the property and broke yet another law.

At this point, I say that Palo Alto deserves to have such a dirtbag company in its midst, since they most of you stubbornly refuse to believe what Page Mill is doing. You've bought into the con, and you are paying for it, at the least with the investigation into former Lt. Tim Morgan of your police department. [Portion removed by Palo Alto Online staff.]

I highly doubt that PMP suddenly ran out of money. I think they honestly believed that they could profitably operate the properties. Now that the courts have made it clear that they won't be able to make their revenue track inflation they're no longer interested in holding on to the property.

One can argue about principles until the cows come home, but I've never met anyone who supported rent control who would actually consider spending his own money buying rental property - it always seems to be someone else's responsibility.

With the real estate bust city governments in rent controlled areas are going to have to cope with abandoned properties. Just because you managed to get a law passed protecting some entitlement does not necessarily make that entitlement sustainable.

I know a woman who would like to travel after retiring from working as a VA nurse / NP for 40 years. Unfortunately, there is a good chance that the dollar's purchasing power will collapse in the next ten years if US trading partners diversify away from the dollar in to other currencies or commodities. The fact that she is "entitled" to it after all these years of work matters little if the economics don't hold up.

Get a clue - educate yourselves as to the issues.

It was early August when the landlord missed their 50$ payment to the bank, and that is just one loan. They are speculators, not property managers. This is a predatory equity scheme using the money from CalPERS plus bank loans. It is complicated, but of course that makes it easier to lie, obfuscate, cheat and attempt to cover up mismanagement and criminal activity. Page Mill Properties knew they were gobbling up properties in a rent controlled area and they have been bullying and lying, spying and cheating, suing and bullpuckeying their way through it all.

For those with short attention spans, read the following:
Web Link

For those of you with a longer attention span, this website has valid info:
Web Link

[Portion removed by Palo Alto Online staff.]

"Now that the courts have made it clear that they won't be able to make their revenue track inflation they're no longer interested in holding on to the property." Translates to "They can't raise rents so they don't want to keep the property".

Why do you think this happened concomitantly with the ruling? Is it really just a cosmic coincidence? They thought they could make money, but they can't. I'll be more convinced of their dire straits when they file for Chapter 11.

They never planned on making a profit with rental properties. They wanted to flip it. If they were interested in hanging onto the portfolio as rental property, they knew well beforehand that a portfolio of the size they were interested in was subject to rent control, so of course they knew chances were slim of making a profit unless they did something other than become residential property managers.

The ruling on Sept. 1 has nothing to do with Page Mill abandoning the properties. The ruling effects less than 100 units, all duplexes and fourplexes. Many tenants have been paying the rent increases, which have been collected for 18 months.

Who knows how much money they have? Maybe they're broke, maybe not. They planned the abandonment well before the ruling and there is evidence of that, but that's beside the point.

I don't think it's a cosmic coincidence at all. I think their predatory equity scheme is unraveling, and in true speculator fashion, a number of things are happening closely together, which is indicative of a lot of bad mojo afoot.

Speculator, investor, gambler, angel, slumlord, greedy, predatory, *****...
Korzybski was wrong - for all practical purposes the map IS the territory.
For 5000 years rent control has been tried, and has resulted in driving investors out of the housing business. Whether it is the sophisticated below market requirement of Palo Alto or the naked confiscation of EPA, controls take the fun out of land-lording. PMP thought they had a plan; they didn't. Paul, pick up the properties at a fire sale price and show us compassionate landlording.

I must admit that I did not realize that the ruling only applied to a subset of the properties. In which case it is possible that the ruling and the abandonment aren't directly related. However, I'm still more inclined to believe that they now see that the political and legal strategies that they relied on to make EPA a profitable investment are not going to succeed and so they're going to just cut their losses.

I know some folks who had a building in SF who were being sued by a tenant in the building that was a professional litigant - the building was more trouble than it was worth so they abandoned it. The tenant only got a tiny sum from the insurance company afterwards, but they were just happy to be rid of the albatross. Abandoning an investment doesn't necessarily mean you can't pay, it can also just mean that you've realized that its time to cut your losses.


The strategies described in the second link are common enough, but if they're doing this with a 10 year window to "flip", why are they having financial problems now? Their holdings aren't effected by the downturn. The "I can't pay any more" doesn't hold water unless they're relying on revenue from commercial properties in their portfolio outside of EPA to support their "predatory equity".


Based on the "trash in the hallways" and "urine in the elevator" it sounds like some of the property may be higher maintenance than they anticipated due to the nature of the clientele.

I'd be willing to make an even-money bet that the statements made by Page Mill Property management to the press over the past week or two will prove to be wishful thinking (false).

The tenants now face two choices 1) withhold rent, stay in your apartments with your doors locked and let anarchy reign, or 2) withhold rent, form maintenance and 24-hour security groups to keep where you live clean and safe for your family and your neighbors' families. If option #2 is chosen, keep accurate records of time and expenditures so you have some chance to be reimbursed when new owners hire new management a couple of months (plan on 6-10) from now.

To the people who are blaming rent control: Do you think that PMP didn't know about these laws before they purchased? The lawyers working for PMP worked hard to try to find ever loophole they could to avoid the laws. And they thought it might work because they were paying much more money in legal fees that the city could ever afford.

I own rental property in the community. I knew the rules when I purchased. I created a budget which allows for rent which is affordable while giving me money to cover my maintenance costs. On many occasions I wanted to buy more property when something caught my eye. But a quick financial review said that the risk was too high: this is business, something PMP needs to learn.

It's not a surprise that a city which is financially strapped is going to have some laws on the books which aren't perfectly written: they city can't afford to hire those lawyers with offices in Whiskey Gulch.

Which raises a point: EPA is having trouble but they did manage to start the redevelopment in Whiskey Gulch which enabled PMP to try create their west of bayshore scheme. I strongly doubt PMP would have even tried if the city of EPA hadn't started the long path to improvement with the redevelopment work they did. And let's not forget that this was after protracted legal battles with members of the PA and MP community who were worried about the negative impacts of this development.

PMP had a flawed business plan which assumed they could take advantage of the improvements started by EPA while at the same time thumbing their nose at the city and it's residents. They failed.

I think most of the people on this forum are aware that PMP fully understood the regulatory politics of EPA going in. What they mean by "rent control did it", is that the economics makes this sort of behavior inevitable. The only way to sustainably operate (i.e. be self-funding) in an environment with strong rent controls without government assistance are by slumlording and gentrification. Berkeley had Reddy Realty (my girlfriend at the time once commented that she wouldn't house a pet rat in one of their properties), SF has CitiApartments, and EPA has PMP. Since Costa Hawkins, Berkeley is no longer dominated by slumlords - most landlords now only rent to unattached students who they know will move in a year or two. SF City Attorneys and the company's own over-leveraging are undermining CitiApartments - but if they collapse they'll just be replaced by a company even more corrupt and vicious with better ties to the political establishment. PMP is either experiencing serious setbacks or has decided that EPA is no longer an interesting sandbox to play in.

In the absence of a real estate bubble, a rent-controlled property that has been tenant occupied for any length of time is worth less than the land value. And with rents increasing at a rate below inflation it isn't possible to maintain the property long term. When the building is sold, the only people willing to buy are those who optimistically believe that they can increase its "value" what you call "predatory realty" and most of us simply call development. The only way to make it a profitable endeavor is to engage in the kind of vicious tactics that we've seen with PMP.

The fact of the matter is that rent control as practiced in many California cities is not "rent stabilization" but "rent abatement" so any large-scale property acquisitions in these areas is going to be contingent actions of questionable legality.

[Post removed by Palo Alto Online staff.]

Clearly people posting here, such as the person who's girlfriend talked about a pet rat, are demonstrating they really don't know what a predatory equity scheme is or how it operates.

Rent control is not the problem here; the speculators are. WE do not want THEM in OUR community, acting as if they have the RIGHT to -

-Remove part of the city
-To evict hundreds of people without just cause
-Abandon their legal responsibilities
-Bribe local nonprofits for pitiable small amounts of money, then sulk when they are told no
-Spy on tenants
-Lie about tenants in depositions
-Harass and threaten rent-paying tenants who have done nothing wrong

We do want rent control- OUR Community wants rent control. We don't care what your community wants for us when all it comprises is opinions based on erroneous information. We are in charge of our community, not Page Mill Properties. They have only their greed, lies and bad management to impose upon us. We do not accept that and we will never accept it.

While it is clear that Page Mill has been a poor management company in this case, will a new company be able to improve this situation for the long term? It is really disturbing that tenants or their guests include people who urinate in elevators or set off fire alarms. It is clear that residents need a clean and safe home to live, for which they are paying, but nobody can fix this situation if people choose to behave in this destructive, primitive manner.

What PMP is doing isn't illegal in Palo Alto.

I have a hard time believing that Palo Alto city politics is more corrupt than East Palo Alto politics. We do have the good fortune of having multiple papers now that aggressively try to hold the city accountable, something that SF largely and EPA completely lack as far as I am aware. So you're now able to read about it. The fact that you don't read about it doesn't mean it doesn't exist - it could just mean that it isn't getting coverage. I don't know anything about EPA's city politics (it doesn't get any coverage here), but I know first-hand that in SF things go on that make Argentinians blush but they get no coverage. The reporters at the Chron are largely beholden to the establishment for getting the juicy stories. If you're too critical of the government bureaucrats odds are you'll be left out in the cold and reporters that do play nice will get all the juicy stories days before you do.

Its unfortunate that you're not getting the sympathy that you think you deserve. The problems you have are largely a fallout of policies which (mostly) don't exist in Palo Alto, thus the readers are unable to relate to your plight.

If you want rent control and doesn't want to be subject to market forces then the *community* needs to buy the property and operate it otherwise you're just trying to defy gravity.

You can complain all you want, but so long as you expect private owners to provide you with acceptable housing at below cost you're never going to get anywhere. I'm willing to bet that in 10 years you'll be having the same problems. San Francisco has been complaining of a "housing shortage" (self induced) for 30 years.

Three points that nobody has seemed to catch:

1. Page Mill didn't invest responsibly in East Palo Alto because they were largely using other people's money. Though their website looks fancy and all, they really were largely a front for CalPERS. But Page Mill didn't care about CalPERs retireees money any more than the people in EPA, they just wanted to spin the roulette for high stakes. They lost, but the money wasn't theirs. CalPERS and Wells, and probably US and CA taxpayers are holding the bag. These private equity guys need more regulation.

2. Good markets are regulated in some way, bad ones have none. If you cheat someone in a well-run market place, it won't be worth it; you'll get caught, and pay a penalty, and their money will be returned. If the regulations allow you to know what you are buying, it makes transactions smoother, reduces costs, and stabilizes the market. This is precisely what rent stabilization does. There is vacancy decontrol in East Palo Alto, as there is in all California cities. That means that the landlord and the tenant agree on a price in the open market, and then the landlord gets CPI housing adjustments above that. This has the incredible virtue of allowing tenants to know that their rent is going to be what it is, with housing inflation adjustments moving forward. This is very mild rent control, amounting to little more than an equalization of prices for each tenant, and restricting abusive rent increases. Landlords can still evict, and they can still set the prices they rent units at, and they have an incentive to improve their units.


3. Learn some history. Stop applying thirty year old attacks on rent control to the EPA situation. Truth is, there are units in EPA that fetch near-Palo Alto prices. But they are nice ones, that the landlord has invested money into, and which are not overcrowded or subject to bad managers.

The Rent Stabilization program furthermore allows landlords to raise rents if they make improvements while you are living in a unit. I know, as I had a friend for whom this happened in EPA. For the tenant, rent stabilization has real advantages, as you can plan your life around your rent being relatively stable. Responsible landlords actually receive benefits as well, if they are investing with a longer time horizon and seek to improve their properties. Some landlords have a history of doing this in East Palo Alto and others not. But one has to recognize that EPA as a City has come a long way under its Rent Stabilization Program, and the program has generally been well-run. The difficulty of East Palo Alto was largely due to the lack of investment in the 1950s, 60s, 70 and 80s, and that had to do with the lingering effects of racism. Institutionalized racism in lending has diminished in the last 15 years, and East Palo Alto has improved greatly as a consequence. Until, that is, Page Mill came along.


Now, please, before you post some dumb OMG rent control, OMG poor people, OMG OMG OMG it's East Palo Alto, please learn to stick to the facts. I am sick of the strange mentality, reflected in many newspaper articles, that makes everyone in East Palo Alto out to be "entitlement children." That is such nonsense. I live here and see hard-working people all around me.

We are simply a people who want the laws, as written, to be enforced, and for bullies not to prosper. We are hard working people who sometimes are frustrated in living in relative poverty amid vast wealth of the peninsula. But we are not animals, and we are not stupid, and we remember it when ignorant people say we are.

We just want to not have every johnny-come-lately with a pile of money borrowed from somewhere or another to destroy people's lives because they think property values are going up-up-up. That has happened many times in East Palo Alto in the last thirty years, and each time it is like a hurricane has hit. But bottom line: speculation is a fact of modern urban life, and East Palo Alto has done a lot to put some limits on it and turn things toward the better. Please don't apply some uninformed attitude that imagines that everyone in the world can for all their lives be a property owner, or that being a landlord gives one an absolute right to not supply basic services. That's crazy, and it shouldn't play in anywhere.

Page Mill--not rent control, not East Palo Alto--was the problem here, end of story.

Yes, Page Mill was the one behaving badly. But who is it going to be next time?

Why are villains like PMP only a problem in places like EPA, SF, and Berkeley? The worst I've seen in the (non-EPA) south bay is Prometheus which plays games with people's deposits, a far cry from the borderline criminal behavior of PMP.

The point of calling PMP is to let them know you don't support their illegal tactics and despicable business practices. One of the results which effect PA residents are the internal affairs investigations into someone who spied illegally on a tenant while working as an unlicensed private investigator at the behest of PMP. Lt. Tim Morgan joins the dubious ranks of Frank Benaderet, Luis Verbera and Fred Porras (in recent history). PA residents deserve a better bang for their buck.

I vote for Betty's #2 solution with the further suggestion the tenants form an association to buy the property out of default, possibly with some stimulus grants, and put maintenance out to bid.
It can take years to settle blame but you need shelter now. Stop beating a dead horse, but perhaps learn from it, but be careful next time you vote money out of someone elses' pocket into yours.

The late Martin Garfinkle and I used to brainstorm the ideal minimum solution residential community. No multi story, no public passages except streets and sidewalks, 10' wall at property lines and zero lot line clearance.
This would take about the same space as a mobile home park, but would have enhanced privacy and more permanent structure with appreciation rather than depreciation.

I have come to learn that when I now see the term "predatory" in reference to anything financial, that it is a term to somehow make victims out of people who had and have the free will to choose, or not choose, a contract.

"Predatory lending" turned out to be used only when people didn't want to live up to their side of a deal in a mortgage, and now I see the term "predatory equity", which, without reading anything else, tells me it is trying to infer that somehow an investor does not have the right in this country to make a profit off of increasing property values.

Give it up. Stop the victim mentality. If "you" don't want "them" in your community, then band together, and buy, manage and live in your own properties. Turn the apartment into a shared condominium type building, or shared tenancy building. If "you" don't want "them" owning where you live...move! We are not yet the United Soviet States of Amerika, so you are still free to pursue your own happiness, and not wait for the gov't to decide where and how you live...you don't have to apply for a permit ( yet ) to move someplace. You don't have to take (yet) whatever job and living arrangement the gov't deigns to bestow upon you!

It seems the victim mentality has gotten worse since I lived there, or maybe it is just that the internet allows more of us to air our voices and the ones I see are the more unusual...don't know.

ahem. "predatory lending" here refers in fact to a landlord who has tenants who signed contracts relying on the idea that the landlord would follow the law, and the landlord didn't follow the law. How is that communism again? How is that the "victim mentality"?

If you entered into an agreement to buy a car and it involves free maintenance for three years, and then it is not supplied, I bet you would sue. Same thing applies here: the landlord was supposed to follow the rules of rent control, and they didn't. They were supposed to provide services that weren't provided. Just as if the car dealer said "well, I can't make a profit if I follow the law, so I'll dump your oil in the river and not do the maintenance I promised," so here the landlord literally is not doing what was agreed upon and what the tenants relied upon in making their decision.

And you compare this to welfare or communism. The answer to every violation of law by the powerful to the weaker can't seriously be "move along or shut up." We are a country of laws. Stop using your "big government" rhetoric to apply to basic reliance theory within contract law. This system is regulated, like many systems that provide services. No right is absolute.

But, contract, whatch gonna advise tenants to do today? What if they win another suit against the landlords and landlord goes bust? I don't know if there is a compromise in the future, this rhetoric may poison the spring.

Wouldn't it be lovely to know the actual names of the people who actually are involved in PMP? Their tactics remind me of NYC landlords (we had less kind names for them in NY) who had all sorts of unsavory methods of driving out existing tenants in order to raise rents and/or avoid rent control/stabilization laws. If their schemes failed, they were quite happen to abandon their properties and turn neighborhoods into slums (just think of the Bronx). Who said such things couldn't happen here?

Judy, EPA residents and city officials are all too aware of the PMP names of individuals! If you are interested:

CEO David Taran

COO Russell Schaadt

"Color Consultant" Dana Cappiello

Jim Shore, General Counsel

Jennifer Moore, Asset Manager

The media also refers to different spokespeople. Their main office is downtown PA.

Web Link

The above link has accurate info that outlines what predatory equity is (which, contrary to what many of these uninformed posters believe, has nothing to do w/us having a "victim" mentality). You may find the site interesting. Thank you for your good post.

Unless you still have a valid lease (i.e. you moved in within the last year) your argument doesn't apply. The whole point of rent control is to incrementally nullify the landlord tenant contract (New York at one point considered eliminating leases entirely). In non-rent-controlled jurisdictions in California the landlord can recover the property without any costly legal process with 60 days notice. In rent controlled jurisdictions the landlord can *never* recover the property without resorting to costly litigation. The tenant on the other hand can still leave at any time. As a practical matter "just cause" evictions seldom succeed except in the case of violent criminals, the jury is after all peopled with tenants. When I was at Berkeley it was accepted that if you had noisy neighbors you either changed your sleep schedule or you moved out, the landlord could not be expected to win for noise violations.

As for "its the law" ... that is little more than circular reasoning, it translates to the "my special interest group got it passed so its good". Once upon a time certain groups had to go to different schools and drink from different water fountains because of their ethnicity. Today, there are laws that permit "sneak and peek" searches of your home and warrantless monitoring of your phone calls. The fact that something is a law justifies nothing.

Posters on this forum keep throwing the term "predatory realty" around as if it were some new, never-before-seen, horrific concept unique to East Palo Alto. The fact is - it is not new. Abusive landlords are part and parcel of rent control.

In any event, in so far as your goal is to rid your community of PMP, you have won. They're either voluntarily or involuntarily defaulting on their loans. This means that in short course they will no longer have any authority over or responsibility for the property. If your concern is truly for the welfare of the community you should focus on having the property be taken over by an entity that can sustainably manage the property in the way that you see fit. Bear in mind that this will almost certainly have to come in the form of higher taxes, otherwise you're trying to get something for nothing - fun while it lasts but ... If you continue to focus on lawsuits, seeking justice in the form of extracting money from PMP, one can only conclude that this is just another shakedown for the benefit of some of the hundreds of underemployed tenant attorneys in SF. In the current economic environment you'll at best get a pittance at a cost of millions of dollars in court costs to the taxpayer.

What is the formula for annual rent increases in EPA?

In SF its 60% of CPI. In practice CPI grossly understates inflation, so the owner's costs go up at more than twice the rate of rents. Most years property taxes go up faster than rents.

Not sure why Walter Wallis is so concerned about today for PMP tenants. If what the PMP spokesman said was true (late Fri of a long weekend), then an interim agreement has been worked out and people are still housed.

Tenant rights advocates, tenants, city and county officials are taking an active role in dealing with the situation. This situation isn't occurring in a vacuum.

Dear Curious: EPA allows 100% of CPI each year above rents. Property taxes are pretty flat in EPA, certainly slower than inflation. Prop 13 of course fixes the state values at purchase price, so the purchaser certainly has a chance to make this a part of their calculation.

As for Contract Schmontact, I don't really understand your point. My point above was simply that the East Palo Alto housing market is regulated, but landlords are able to set the price that they offer properties at. They can also raise the rents by filing a ($50) petition before the Board. Most of these petitions are approved.

Your argument seems to be that rent control requires abuse. Just the opposite is true. It prevents abuse unless the landlords roll the dice and come up lucky and find an zealot judge who believes the kind of myths you are spreading. Vacancy decontrol + rent stabilization allows landlords to know exactly what they are getting into when they sign the lease and prevents an adhesive (one-sided) contract situation where the landlord can simply increase the rent at any time, knowing that the tenant cannot move easily and that it is costly to do so. If you have ever been a renter, I'm sure you can sympathize with the wretched situation of the landlord unilaterally raising rents above market based on the idea that the cost of moving is a barrier for the renter in negotiating back to market. Such situations are more acute when the tenant has limited means, or has perhaps lost their job, and is not eligible to get a new apartment so very easily. Then you can bleed the patient and make them pay double for stitches. This is the kind of situation that Page Mill was capitalizing in East Palo Alto. The law forbids this, but Page MIll just thought they could run up costs against tenants and the city so high that they City would betray its own law and the tenants and just let Page Mill do whatever it wanted. It was a high-stakes, vicious game, and Page Mill has only themselves to blame for losing it. I only wish they hadn't injured so many people's lives in the process.

As for your argument about contract having no meaning, I beg to differ. State law extends the original lease under rent stabilization, and the terms of that lease are binding in every respect except the setting of rents. Or I should say, including the setting of rents, with the provisio that the municipal ordinance overrides any attempt to raise beyond the CPI increases. This is totally fair, and does not justify abusive landlords, bad management, or the denial of services. In entering into and staying under the contract, the tenants in fact relied upon the fact that landlords would play by the rules. Page Mill systematically violated this good faith reliance on laws they were well aware of. The purpose of the rent board is to provide a low cost way of settling these kind of disputes, without relying upon expensive litigation. Page Mill simply intentionally ran up costs because they were big, and figured if they could break the system or the city they could set the rules. That's not lawful good faith administration of contract. Page Mill was the cynical one here, and they were the law breaker here.

Now to your attempt to compare rent control with laws violating privacy of person, the mail, or communications media, or (ugh) to apartheid/jim crow laws I don't know what to say other than its just an illegitimate comparison, and, I have to say a vile one. Certainly individual civil rights have to take precedent over property rights in a humane society. Nobody is "confiscating" any property in EPA, they are simply regulating the market. If you think such regulation is bad on economic terms, fine, but please don't make ridiculous comparisons to racist laws. It just makes you look stupid.

The economics of rent control are, by the way, a complex topic, but there are many recent economic studies that show that moderate regimes like the one in EPA actually support community reinvestment. True, they don't encourage wild speculation and scenarios where people can get wildly rich off of property value increases, but there are plenty of zoning and historic preservation laws, code regulations and tax incentives that place similar limits. Most anti-rent control arguments are base not upon fact, but on the old days of city mandated rent levels. Such arguments do not apply here. The biggest drag on the sheer property value of these units is not rent control, but the fact that the properties are zoned and constructed as rentals and that the city has limited resources for schools and other public services. But those issues are complex and historical, and therefore not subject to the anti-rent-control Reason Magazine junk. We don't live in the wild west anymore; regulation is part of every market. Get over it.

And though I am, for the sake of argument, willing to acknowledge the language of rent control being a "special interest group" law in that it protects the rights of tenants in one-sided situations, I think you have to acknowledge that there are plenty of landlord-sponsored laws in california housing law, and it is much more of a balanced situation in EPA than you suggest.

The real conditions for abuse in East Palo Alto were mentioned by "Reality" above. Page MIll was not a real landlord, but was using other people's money recklessly, and without an eye to actually providing services, but to using all available means to getting this land clear of all civic and state regulation. When you are trying to drive everybody from a place (and it looks like Page MIll drove away 30% of its tenants) you probably are not a very good landlord. So the property should and will be revalued for someone who will manage these units as a landlord, rather than as a speculator using someone else's dough. But to turn that into an argument that rent control creates bad landlords is just silly.

What I do agree with is your statement that the property should "be taken over by an entity that can sustainably manage the property" in a responsible way. I don't see why that involves higher taxes, however. The only entity runnig up taxes was Page Mill, which filed some 25 suits against the city and hundreds against tenants, abusing the court system. How would a responsible and decent landlord drive up taxes? I don't get it.

Words, words,words. Just look at what places look like, ie the results, in rent-controlled areas to see what the reality is.

Heh heh, it reminds me of communism apologists "if only they'd done things differently, and people had worked harder, and the government hadn't been so corrupt it would have worked"

I'm not actually opposed to true rent "stabilization". In Switzerland rents can't be raised faster than the national interest rate which means it essentially tracks inflation plus some risk factor (the Swiss don't blow bubbles by keeping interest rates artificially low like Americans). As practiced in the US it tends to be little more than a stealth taking with the system ultimately favoring the most abusive tenants - in SF I frequently saw cases where hard-working tenants were neglected because the landlords had to be so mindful of their deadweight drug addicts who knew how to brilliantly work the system and had all their free time to devote to building networks to initiate lawsuits.

I don't think 100% of CPI is adequate to actually track inflation given the extent to which the US tries to fudge the numbers to hide real inflation levels. However, that is the fault the federal government, not EPA. Note that through much of the bubble years where costs went through the roof CPI was never more than 2%.

Given the incredible litigiousness and predatory tenant behavior (yes I know landlords are predatory, but many actually saved and sacrificed and worked hard to buy the property - the only sacrifices I see tenants making is going to protests), rather than focusing on defending rent control, you should point out that the kind of abuses that you see with PMP have occurred often without rent control through various "redevelopment" efforts.

Folks: It is all about simple economics. The properties are financed through commercial loans. If the incoming rent does not cover the expenses over the long term with maintenance staff, security, etc, then the property will default. The prevention to raise rents seems have been the catalyst here in PMP potentially deciding to leave the failing business.Rental property is not meant to a charitable and profitless business. City of East Palo Alto fails to understand this point.Good luck on your last land owner. Could be a hundred times worse. Grass is always greener.

Try owning rent controlled property some time it might open your eyes.

Most of the people abandoning properties were not the PMP no-money down Wall Street bridge loan types, they were middle class folks who were trying to make an investment. Rent controlled cities (NY, SF, Berkeley) tend to accumulate a lot of "housing code" enforcement types. I've never heard of it happening on the west coast, but in New York city inspectors would aggressively seek to drive owners out of business so they could later pick the property up at fire sale prices. At one point New York property was being abandoned at the same rate it was being built. This all ends up being very costly, in 2002 NYC spent 2 billion dollars on costs tied to rent control.

Price stabilization can be made to work and has elsewhere. However, in the US tenants' greed is no less than that of landlords' and so the system inevitably becomes a quagmire.

What he is talking about. PMP will likely to be found guilty of mismanagement of funds, if their investors demand an audit. This is in no way the fault of the renters or rent control. It is the fault of the greedy mismanagement by PMP plus the current economic downturn.

Rent control is one of many concepts that supports the concept of hoping to get more than one actually pays for.another big platform to be discussed by Pres Obama is healthcare. Everyone wants a steak for the cost of a hamburger. Folks, living in the midpeninsula is unfortunately expensive.You want it more afforable move to a less expensive area. Mom and Dad Econ 1A.

The Littleman site isn't in a vacuum, either - Prime lot in the middle of town and not even the locals are willing to take a chance on the business climate there.
East Palo Alto is a classic example of liberalism's failure in the marketplace. I have the fascination of watching the slow motion train wreck that has seen a community with the best climate in the area dependent on subsidies and the charity [?] of surrounding communities educating their children.

little "j" joe..well said! "everyone wants a steak at the cost of a hamburger"..I love it.

Instead, force everyone to pay for a steak, pay the government to manage it, and get a gristle sandwich.

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Responding to blindness with invective isn't likely to convince anyone.

I've rented from many landlords, some good and some bad. PMP is definitely worse than any I've ever had and it is genuinely unfair to blame regulations for their behavior. I hope to always be treated reasonably by my landlords as I don't intend to ever own property in the US again - I perceive the banking system as being simply too corrupt - I'll let others play the lottery with the financial system.

Oddly enough, I've also owned property in San Francisco and seen how it can corrupt society. It encourages bad behavior on the part of tenants and aggressive discrimination by landlords, and only the most legally savvy predatory landlords can survive. Legally savvy tenants who have only worked a few weeks of their lives thrive on SSI and a steady stream of lawsuits against their owners. And when the owners don't settle with tenants' attorneys the *civil* attorneys get the DA's office involved. The SFDA has a dedicated unit called, quite aptly, "Special Operations Unit", which in part prosecutes bad checks and public corruption, but also devotes millions of *taxpayer* dollars a year to helping tenants with their lawsuits. At the same time the DA's office doesn't prosecute any of the myriad kind disability fraud which are prevalent in some parts of town - collecting welfare on multiple SSNs isn't considered noteworthy.


At least 10% of the units in SF are held vacant because the owners simply don't want to deal with tenants any more. Vacant properties fetch more money than tenant occupied - its a truly sick market where paying customers are treated as a liability as opposed to an asset.

If the posters stopped talking about "oh no they tried to raise rents!" and focused simply on the abusive mismanagement of the property - *and* were able to give some indication than an ordinary landlord could cover costs and make a reasonable return on investment, we could easily conclude that PMP is a bunch of abusive jerks that deserves to be shutdown and its investors deserve to lose money for not watching their money more closely.

So far every post I've ever seen from EPA (not just the PMP articles) assumes that the tenant is good and the landlord is bad. Whereas Palo Alto posters tend to be a bit more balanced. This behavior defines "classism", just from the other direction - this hardly makes it any more noble.

I can't evaluate how onerous the EPA ordinances are from here. For your sake I hope that PMP is an unfortunate aberration, but just as a man who repeatedly divorces, instead of blaming his ex-wives should look in the mirror - if this is a recurring phenomenon you'll want to re-visit your regulations.

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I don't know of a single case where the readers of a news article are going to know the full story. So what you're effectively saying is that all commentators are stupid because they're merely using their own personal experiences and biases. Perhaps this is true, but I've never seen this stop an EPA poster from reaching negative conclusions about landlords in cases outside of EPA of which they have zero knowledge.

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My previous landlord performed very little maintenance before he sold to PMP. He bought a fourplex at a low price and didn't do anything to improve the units except for one person who had some extreme issues that had to take legal action to get any assistance with - before this landlord I am writing about bought the properties. This landlord had many issues w/his subcontractors because he paid them so poorly, and there was terrible follow through on the part of his staff. It took patience, kindness and continual communication to get the simplest things done. He did, of course, raise the rents very quickly without lifting a finger to do any maintenance. This is a fourplex where many tenants did their own maintenance whenever possible, just to make sure that things got done.

With regard to PMP, the flap is not that rents were raised, it's that they were raised illegally and so highly, in the majority of the cases. If you budget based on what the legal maximum allowable rent is when you move in, then you should be able to expect those increases. Of course a landlord should be able to cover costs, at the very least. But a landlord needs to go about their business legally, or else the resulting mess, such as with PMP, is to be expected. I do wonder if they had raised rents legally on all tenants, where they would stand financially. Maybe it's moot and much of the issue is due to the banking crisis. I feel a lot of empathy towards the mom and pop landlords, even the more lazy, ignorant ones, because they are normal folks. PMP is another story. I wouldn't be surprised if they have ripped off more than their tenants. It remains to be seen what they have really done to their investors, other portfolios and their employees.

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Side with PMP if you want, but that would be a small-minded move. Their office is in your town, and I truly wonder what other slimy things they have been up to outside of EPA. Aren't you concerned about the internal investigation into Lt. Morgan's off-duty job with Page Mill and his illegal actions? Are you concerned that PMP's loan with Wells Fargo, gone unpaid, can cause a truly lousy domino effect with results many others get stuck with? I do. I care beyond what happens in EPA, because predatory equity schemes involve hundreds of millions of dollars and effect many thousands of people, beyond the tenants.

I can move; I am lucky to have resources others here don't. But many of us who can move are staying to work through this issue, because it matters to us.

FWIW, my resentment towards some of you is based upon the ever increasing classism, elitist attitudes and bias I see every day. I am from Palo Alto, was educated there, and in my area, we have many Palo Alto and Stanford natives and students. My resentment is also the result of people on this thread who literally ignore what a company in your town has done and wants to continue doing and for a town that loves to claim its so progressive, what I see is truly a lack of progress in any real shape or form.

I have seen it before in Russian revolution - the have-nots always want to take away from the haves and divide between everyone and then run it to the groud.

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Even if I don't see it as being as evil as you I certainly don't side with PMP, but lumping all Palo Altans together like that is more than a little unfair and trivializing personal experiences relevant or not is rather condescending.

All of us have to get used to the fact that Palo Alto is much less intellectual than it was 20 years ago and much more deal-oriented. I'm not entirely happy with the changes myself, albeit for very different reasons.

I did study economics in college. Have you studied epa-tenants.org? Are you informed about these issues? I suspect not, but if I'm wrong, please let me know what you know and how you came to know it. Thank you!

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Lumping you all together? Wow, I sure think that is what posters in your town have done all along, for the most part, in the stories pertaining to PMP.

"Lumping you all together? Wow, I sure think that is what posters in your town have done all along, for the most part, in the stories pertaining to PMP."

Very true. But emulating the behavior you're criticizing doesn't get you very far.

Let me sum up PMP from where I sit:

1) gross mismanagement of finances
2) gross misconduct in property management
3) extensive violation of rent control ordinances
4) other offensive behavior (lawsuits, political maneuvering) which is an unfortunate fixture of American business today


For some posters #3 is the biggest deal. This will get you zero mileage, the ordinances don't exist in Palo Alto and we don't think they should exist period. If you want to discuss that talk about it in SF tenant forums.

#4 comes up periodically, but in many places the pro-tenant "non-profits" are on a perpetual shakedown crusade against the landlords. Its gross but its too common to take notice of.


#1 and #2 are what will gain you traction here, particularly when you focus on the fact that they're throwing taxpayer money down the drain.

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