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City looks to expand relocation assistance for renters

Original post made on Jan 29, 2022

Seeking to strengthen tenant protections, Palo Alto is preparing to expand on Monday a policy that requires landlords to pay relocation assistance to renters who are facing eviction.

Read the full story here Web Link posted Friday, January 28, 2022, 4:42 PM

Comments (6)

Posted by James
a resident of Midtown
on Jan 29, 2022 at 9:44 am

James is a registered user.

What the proposal will do is to not only force landlords to raise average rent to cover the overhead, but also make it much, much harder for less privileged people and families to rent.

Landlords will be forced to pay much closer attention to credit history and any perceived risk of rental dispute, because the risk and cost of contract breach is so much higher. The result is that minorities, those less educated, single parents, undocumented families, and so on, will have a much tougher time to obtain housing in Palo Alto.

If the council's hidden intention is to attract only software engineers, doctors, professors, and other "high-quality" people and families as renters in Palo Alto, and weed out "undesirables", then this is perhaps a very good policy.


Posted by KJ
a resident of Charleston Meadows
on Jan 29, 2022 at 10:23 am

KJ is a registered user.

The claim that these relocation fees would raise rents is total bull. These fees ONLY apply if the landlord kicks the tenant out in the middle of the lease. But there are NO fees if the landlord simply waits until the end of the year.

Being evicted in the middle of your lease is incredibly financially stressful, especially for low-income people. You not only have to find a new apartment, you have to come up with the first/last month's rent for the new apartment.

If a tenant breaks the lease, the landlord will take them to court for the remaining rent. This relocation assistance gives tenants a little protection if the landlord breaks the lease without cause. But the playing field is still not level!


Posted by James
a resident of Midtown
on Jan 29, 2022 at 11:10 am

James is a registered user.

KJ, how can a landlord kick out a tenant in the middle of a lease, unless the tenant breaches the contract, such as not paying the rent?

Now you want landlord to pay extra, in addition to not getting the rent. This is an extra cost the landlord will have to consider when deciding the rent, and extra risk factor when the landlord screens applicants. The new proposal will make it even harder for low income people to find affordable housing, because of perceived risk and the associated cost.


Posted by WhatAboutme
a resident of Midtown
on Jan 31, 2022 at 10:49 am

WhatAboutme is a registered user.

James,

You have many good points, I think Social Medial is skewed toward anti-capitalism - yet so many think or believe that a property owner "Must be a millionaire, it's so unfair to me and you!"

If a landlord unlawfully breaks a lease, of course there would be repercussions -- social media has so many people saying 'how unfair, NIMBY's, RICH landlords", if you sign a least to rent, pay your rent. People are expecting handouts everywhere.


Posted by rsmithjr
a resident of Duveneck/St. Francis
on Jan 31, 2022 at 2:18 pm

rsmithjr is a registered user.

Can someone confirm for me that renters who have failed to keep the terms of their lease (e.g,, paying their rent) will not be able to get relocation benefits when they are evicted. I don't see this important point mentioned here.


Posted by James
a resident of Midtown
on Jan 31, 2022 at 2:30 pm

James is a registered user.

WhatAboutme, thanks for your comment.

In any business there are two factors to consider: transaction price and counter-party risk. With a fixed transaction price one always choose the counter-party with the lowest risk of loss. In reality landlord is a little bit more flexible because the risk is uncertain. Let's say the rent is $1000, applicant A has a default probability, i.e. the probability not paying rent, of 0.1. The potential loss is $100. If applicant B has a default probability of 0.2, the potential loss is $200.

The difference is $100, which in many cases is within or close to the range of so-called "confidence interval". So landlord may accept tenant with higher risk, but may be in much dire need of housing, out of goodwill or other subjective factors.

However the proposal will add $X to the risk of loss, where $X is significantly large, and will negate any goodwill the landlord may have towards higher risk applicants. Therefore low income and other disadvantaged applicants will find it harder to obtain affordable housing.


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