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Emergency rent freeze possible in East Palo Alto

Original post made on Jan 3, 2008

Large rent increases issued to hundreds of tenants by Page Mill Properties have East Palo Alto's City Council considering an emergency ordinance to freeze current apartment rents in the city.

Read the full story here Web Link posted Wednesday, January 2, 2008, 4:24 PM

Comments (11)

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Posted by YAY!
a resident of East Palo Alto
on Jan 3, 2008 at 1:36 pm

This is great news. This issue is complicated and needs time to be sorted out so that what happens happens LEGALLY. I love it when the "little man" sticks it to "The Man" and that's exactly what happened when the low income residents of EPA banded together and demanded that their legal rights be sorted out and honored.

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Posted by R Wray
a resident of Palo Verde
on Jan 3, 2008 at 3:52 pm

Rent control is immoral. It violates property rights.
Also, it's been shown many places that it doesn't work. There's no incentive to maintain rent controlled properties, and there's no incentives to develop new rentals. Slums and shortages are the result.

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Posted by Walter_E_Wallis
a resident of Midtown
on Jan 3, 2008 at 4:22 pm

The only effective rent control is a 10% vacancy rate. Idiots who call for arbitrary rent freezes are the real slum makers.

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Posted by YAY!
a resident of East Palo Alto
on Jan 3, 2008 at 5:00 pm

Neither of the other commenters ow the facts of this situation, so as is often the case, are responding off the cuff. Who knows what the vacancy rate is for Page Mill Properties owned units? It's not relevant in a situation re illegal rent increases. Rent control, like anything, has it's pros and cons. Page Mill Properties have arrogantly assumed they're the the PROS when it comes to CONning us residents. They assumed wrong.

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Posted by qq
a resident of Barron Park
on Jan 3, 2008 at 8:14 pm

With the continued fall in the US dollar as well as the amazing increase in commodity prices ($100 barrel oil, $850/oz gold), a fixed 3.2% rate increase just doesn't seem realistic.

This is the same kind of fixed future that got the middle class in trouble with Alternative Minimum Tax, AMT.

The rate increase should be tied to some inflationary index as well as an index of local rental price fluctuation. Of course the danger in indexing is that often businesses have no trouble raising prices when the index ticks up, but are loathe to decrease prices when the index ticks down. I saw apartments sit empty in Palo Alto for years because the landlord would not budge on the price. They had gotten $2100/m in 2000 and were not gonna take anything less!

Best of luck to our neighbors in EPA, esp to those of you on a fixed income. If the landlord gets there way, perhaps EPA will slowly become a boutique city like SF. Web Link


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Posted by Reality Check
a resident of Duveneck/St. Francis
on Jan 3, 2008 at 11:18 pm

Wray: "There's no incentive to maintain rent controlled properties, and there's no incentives to develop new rentals. "

You mean like Page Mill Properties current record *without* rent control?

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Posted by Walter_E_Wallis
a resident of Midtown
on Jan 4, 2008 at 1:55 am

My "Off the cuff" comment is based on my knowledge of the ultimate consequence of rent control all over the world all over history. When you steal soneone else's money you live better for a while, but long term people avoid exposing themselves to you. Look at what disregarding property rights got EPA - 20 years a vacant lot where Littleman's used to be, a trip across the freeway for any significant shopping, now unemployment for the folks who used to work for Romic. Time for EPA to grow up. Perhaps Pete McCloskey WAS right - EPA is not ready for self rule.

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Posted by landlord
a resident of Charleston Meadows
on Jan 4, 2008 at 8:50 am

In general and for most investors, Walter is right. But for very long term investors (corporations? family dynasties?), rent control may not hurt the investor. Why?

In an area with rent control, landlords jack up rates to just above market when a renter leaves, because they know they can't keep up with the market during the residence of a tenant. They can't go too far above market, because they won't find renters. But all the landlords do the same thing, so market rates for empty residences have a built-in upward pressure. If the local economy is good, vacancy rates can go very low, allowing landlords to ask very high rents. Such an environment is brutal for new renters looking for a home.

Rent control doesn't really keep rents down in an area over the long term. But it does encourage stability among tenants, which is a good thing if the tenants are good. In theory, it should encourage tenants to pay their rent on time. But it also encourages them to stay when they would otherwise move. Bad for a lot of reasons, including global warming?

There are rent control laws which don't allow or encourage proper maintenance; those create a whole set of problems and any kind of landlord would need a very keen instinct or inside information to come out ahead investing areas with those type of laws. I've never seen rent control laws that don't allow market rate rent when a tenant leaves.

(I heard that at one time and maybe still Berkeley allows a tenant to return to a residence within five years of leaving at their previous rent. Surely this does not motivate a landlord to improve properties in the hope of getting higher rent).

I myself have never invested in housing in an area with rent control. Too scary.

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Posted by Walter_E_Wallis
a resident of Midtown
on Jan 4, 2008 at 10:17 am

Obviously investers will try to do what is needed to protect their investment. Something you will see almost only in rent controlled cities is abandoned property.

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Posted by Well Said
a resident of East Palo Alto
on Jan 5, 2008 at 12:22 pm

Agree completely.

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Posted by epaman
a resident of East Palo Alto
on Jan 6, 2008 at 12:35 am

it might not be good for the investors , but the property company knew what they were getting into , when they bought 5 complexes , almost 3 city blocks of property. remember the old saying buyer beware.

you can not raise the rent on tenants with leases and that is what they did , my lease does not expire for 9 months , and and like a boom from above , i am slapped with a 325.00 addition to my rent.

all of you out there that think that the property owner is doing a fair thing , well than you have never rented a day in your life , and you have a silver spoon. well the rest of us have jobs that pay between 1500 and 2000 a month with a rent of 1350 or more. with the inclusion of utilities and food and car and insurance , most of us have less then 100 dollars to use for transportation to and from work . so if you think what they are doing is right then come down to the next meeting , and see the non functional city government where the mayor lets the counsel members walk all over her . ha ha

any way if you have not experienced the effect of choosing over food or rent then you could not understand our plight , don't even try to because you can't.

let me come to your house and say , ha I bought the land your house is on , let me raise your property tax by 37.8% a month and see if you don't become a little bit perturbed , and start to think , gosh what the hell happened to the world when , you get money hungry people that don't care about anything but the almighty dollar , when they have more then most city's do.

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