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Seeking to address the plight of low-income residents in a city with famously astronomical rents, Palo Alto is considering a wide range of new programs designed to protect and assist tenants facing displacement.
Some of these programs — including, most notably, rental stabilization — have been brought up in the past, only to fizzle in the face of political opposition. Others, including limits on security deposits that landlords can charge and a “fair chance” ordinance that prohibits discrimination based on criminal backgrounds, would be discussed for the first time.
The wide-ranging effort kicked off on Wednesday night, when the city’s Planning and Transportation Commission unanimously endorsed two new initiatives to support renters: establishing a survey program that would allow the city to track its inventory of rental properties and expanding renter relocation assistance, with a particular focus on the “cost-burdened” households — those that spend more than 30% of their income on rent.
The commission split over a third program: expanding protections for renters facing eviction beyond those already included in Assembly Bill 1482, the 2019 legislation that capped rent increases and, in many cases, prohibited property owners from terminating tenancies without just cause. By a 4-3 vote, with Chair Bart Hechtman, Vice Chair Giselle Roohparvar and Commissioner Michael Alcheck dissenting, the commission voted to recommend extending just-cause protections to properties that had been built within the past 15 years as well as to renters who moved into their residences less than a year ago. Both of these categories are currently exempt from the state bill.
Other ideas that are on the table and that the commission plans to debate in the coming months include enacting rent stabilization and providing tenants with a right to counsel when dealing with eviction. The commission plans to discuss these ideas in the coming months before they go to the City Council for review and approval.
The new push to strengthen tenant protection is, in some ways, a revival of a debate that has proceeded in fits and starts since 2017, when three members of the council — Tom DuBois, Lydia Kou and former council member Karen Holman first proposed in a memo that the city consider rent stabilization and other measures to help renters, who make up 45% of the city’s households. The proposals in the memo, which included a cap on rent increases, were ultimately rejected by the council majority, which strongly opposed any new policies that border on rent control. The most vocal opponents of the proposal were former council members Greg Scharff and Adrian Fine, who argued at one hearing that instituting rent stabilization would “reduce housing availability and decrease housing quality.”
The debate grew more heated in 2018, when the three council members — this time, with support from former council member Cory Wolbach — submitted a new memo with a more modest set of reforms, including better enforcement of the city’s requirement for one-year leases and evaluation of stronger renter-relocation assistance. While the council agreed to study these ideas, they once again rejected an attempt by DuBois and others to reintroduce the topic of rent stabilization for further study.
Now, with Scharff and Fine no longer on the council and DuBois’ political camp enjoying a council majority, the topic of rent protection is set to return to the council agenda. Even though the council agreed in 2018 not to even study rent stabilization, the idea is one of seven that had been identified by the city as worth considering.
Lauren Bigelow, a fellow with Partnership for the Bay who is leading Palo Alto’s effort, outlined on Wednesday the seven strategies that her group believes the city should pursue. In the coming months, she and the city’s planning staff plan to conduct more outreach about these policies to property owners and landlords before the topic is expected to return to the council in late summer.
Some of these policies, including rent stabilization and right to counsel, face high hurdles because of, respectively, political division and high costs. But the commission agreed on Wednesday that others could — and should — be enacted as soon as possible.
The proposed survey is at the top of the list. The commission agreed that creating a registry of rental properties — akin to ones already in place in cities such as Mountain View and East Palo Alto — is critical for gathering data before any new initiatives are enacted. The commission also agreed that the city should pay for the survey rather than funding it through a fee that would be assessed to each rental unit.
“The policies that we ultimately come up with in the city need to be narrowly tailored to address the problem,” Hechtman said. “They don’t need to be broadly tailored to make us feel good.”
Commissioner Ed Lauing called the topic of renter assistance “the most important issue for land use in Palo Alto” and noted that protecting renters is “essential to our community.” According to data provided by Bigelow, 27% of the city’s renter households earn less than $50,000 per year, which creates a significant challenge in a city where the average rent is close to $3,000 per month and where about 14% of rental units are deed-restricted as affordable housing.
And while the overall percentage of “cost-burdened” rental households is at 37%, the rate is higher than 70% in every category where the household income falls under $75,000.
“This is about housing affordability and socioeconomic diversity. This has got to be our top priority,” Lauing said.
The city already has a tenant relocation assistance program that requires property owners to provide between $7,000 (for studios) and $17,000 (for apartments with three or more bedrooms) in assistance to households facing eviction. The program, however, only applies to buildings with 50 or more apartments, which make up about 22% of the city’s rental stock. The proposal that the city is evaluating would expand the range of properties that would be subject to this requirement.
While most commissioners supported the goal of the proposed program, both Roohparvar and Alcheck raised concerns about the unintended consequences of enacting new renter protections. Both worried about situations in which a property owner wants to redevelop the property to create more units but is deterred from doing so by policies that make it cost prohibitive — or procedurally difficult — to vacate the property.
Alcheck said he is deeply concerned about the impacts of any programs that can “make the outlook for future housing development even more bleak.”
“But my hope is that we appreciate this notion that as a city we have failed to address a major problem in our community and as a state we failed to address this very same problem,” Alcheck said. “We’re not addressing housing development, we’re not addressing the homeless situation and — in that vacuum — we’re left with one tool that has lots of consequences.”
Hechtman agreed and suggested that as the city moves to expand its requirements for relocation assistance, it should focus on those with low incomes.
“We really need to be cautious when we lower that threshold because we’re talking about multifamily properties that could potentially redevelop with more units,” Hechtman said. “We need to think about, ‘Are we going to create disincentives for a property owner with five-unit buildings to tear it down and create a 10-unit building if we’re going to burden them with these kinds of costs?'”
Prodded by Hechtman and Alcheck, the commission agreed to focus its expanded relocation-assistance programs on households with low or moderate incomes, rather than basing it on the number of apartments at a given property. Commissioner Bryna Chang also pushed back against suggestions that the new policy will deter redevelopment. A property owner who is evicting tenants as part of a redevelopment project should be able to pay for eviction assistance from the proceeds they will likely net from the additional units, as well as from the higher rent that they would likely charge in the newly built property, she said.
“We want redevelopment and we don’t want to lose housing,” Chang said. “But if someone evicts everyone in order to redevelop, they probably will go denser, so it will pay for itself.
Good this squeaked through.
“The new push to strengthen tenant protection is, in some ways, a revival of a debate that has proceeded in fits and starts since 2017, when three members of the council — Tom DuBois, Lydia Kou and former council member Karen Holman first proposed in a memo that the city consider rent stabilization and other measures to help renters, who make up 45% of the city’s households. …. The most vocal opponents of the proposal were former council members Greg Scharff and Adrian Fine, who argued at one hearing that instituting rent stabilization would “reduce housing availability and decrease housing quality.”
And shame on pro-development boosters like Mr. Scharff, Adrian Fine and the 3 members of the PTC who opposed this measure and preferred relocation allowances!! so unaffordable development could continue apace!
My grandmother owned a 4 unit complex in Oakland, where she lived in one unit and rented the other 3 out. One of the tenants was very problematic – very loud, and often inviting friends over for lots of alcohol, parties, and probable drug use.
But because of Oakland’s rent control and tenant protection laws, there was absolutely nothing my grandmother could do, and it caused her enormous stress and unhappiness for over 5 years before the tenant finally moved out on his own. As all the other tenants eventually left, my grandmother never replaced them with new tenants because of that experience. In the end, she was content with 3 vacant apartments, thus removing 3 badly needed units from the housing stock.
Paul Krugman, a Nobel Prize Economist who is an ardent Democrat and writes for the NY Times,
had this to say
“The analysis of rent control is among the best-understood issues in all of economics, and — among economists, anyway — one of the least controversial. In 1992 a poll of the American Economic Association found 93 percent of its members agreeing that ”a ceiling on rents reduces the QUALITY and QUANTITY of housing.”
“Almost every freshman-level textbook contains a case study on rent control, using its known adverse side effects to illustrate the principles of supply and demand.
“Sky-high rents on uncontrolled apartments, because desperate renters have nowhere to go — and the absence of new apartment construction, despite those high rents, because landlords fear that controls will be extended.”
“Bitter relations between tenants and landlords, with an arms race between ever-more ingenious strategies to force tenants out and constantly proliferating regulations designed to block those strategies”
(end quotes from Paul Krugman)
https://www.nytimes.com/2000/06/07/opinion/reckonings-a-rent-affair.html
I lived for a while in Berkeley where there is active rent stabilization. It basically allows slumlords to thrive since they don’t care if the apartments are well maintained and look only at the bottom line. There are only two rational alternatives for high rents: allow construction of many more high rise units or accept that people are going to move to neighboring cities. Paradoxically, Austin that has no rent controls has far cheaper rents and better quality apartments than Berkeley, Oakland etc.
This is very good news. Alcheck just doesn’t disappoint, does he? He was in favor of bending the law for his own benefit regarding the garages at his spec houses, but hates any idea of help for Palo Alto renters.
I challenge anyone who is for rent control to explain to me what happens on a supply and demand graph once you cap your price variable. Fun fact: you can do the same thing in the opposite direction on minimum wage.
Price controls don’t work. Planned economies don’t work. This is basic stuff.
Might want to learn from the Germans.
https://www.bloomberg.com/opinion/articles/2021-03-02/berlin-s-rent-controls-are-proving-to-be-the-disaster-we-feared?utm_medium=social&utm_content=view&utm_source=twitter&utm_campaign=socialflow-organic&cmpid%3D=socialflow-twitter-view
Rent control is good for those folks who were lucky to be renting when enacted. Not so good for everyone else. If you really cared about the plight of renters, you wouldn’t be fixated on making it so complicated to build housing.
You can’t be a residentialist and care about renters. You’re being hypocritical.
Rents in Palo Alto should be fixed. Some recommendations…
(1) Up to $2K for a studio, (2) Up to $3K for a 2BR/1B apartment, and (3) Up to $4.5K for a house rental (depending on the neighborhood and bedroom + bathroom configurations).
Anything more is a blatant rip-off and the landlords should be prevented from charging exorbitant rents.
Greed is ugly.
I recall the CC meeting that became all about rent control even though the colleagues memo was for Staff to look at protections. Just to study to see what options existed. What a chaotic meeting. Ardent opponents of rent control reframed the agenda item and chambers filled with speakers. Some were from San Francisco and if memory serves, one woman drove from Davis or some similarly distant place for her chance to speak.
Since there are valid concerns about the unintended consequences of rent control, let’s hear from Alcheck et al (including former mayors Kniss, Scharff, and Fine) about the elephant in the room that they all ignored for years: incessant job creation that drives housing demand that deepens the hole we have been digging deliberately and enthusiastically for at least a decade now. If the real life consequences of the development binge promoted by those who constantly pushed approval of commercial development weren’t as devastating as they are for the housing insecure and the homeless, the policies that got us into this mess would be laughable.
Is there a way to claw back some of the latitude that commercial developers were granted and get them to mitigate the commercial growth with some housing?
Landlords have a right to seek a reasonable ROI.
If a tenant cannot handle the rent, move on.
Here are some other ideas: subsidize outlandish HOA fees, abolish requiring a prospective tenant to have three months of pay stubs upfront, proof of monthly income 3 times the amount of monthly rent and proof of enough cash in the bank to cover three months of rent. Though renter rights say it’s against fair housing law to deny Federally backed S8 vouchers PA property owners/landlords jack up the rent to far above AMI, which reduces acceptance of the voucher to zilch — unless one can get in at Alta (10 year minimum wait) , or Mid-Pen housing. What’s the problem ? Prejudice, stigma, greed prohibits equitable fair housing rents and therefore choice. Families — yes poor ones — still need a yard to practice ballet or ball (just as much as everyone else who have money has), a place to practice an instrument, paint a painting enough storage for clean towels, vacuums, linens, jackets, small/repair utility tools, camping equipment, holiday decor, safe covered bile lock up, EV charging stations and maybe to store a few cherished pictures and letters from grandparents and other relatives. It’s absurd that poor people get squished into small ECR corridors, have no parking, no outdoor space, bike lock up or enough square footage to grow and thrive like single family home owners … Invest in our residents and we’ll invest in our community like the PTA, volunteer for Little League or the classroom and more .
“incessant job creation that drives housing demand that deepens the hole we have been digging deliberately and enthusiastically for at least a decade now”
What is the Palo Alto CC and Planning Commission going to do about the job creation outside of Palo Alto? Any “jobs created” in Palo Alto were dwarfed by job creation in other parts of the Bay Area. BTW, Google is in MV, Facebook in MP and Apple in Cupertino.
What is this magical bubble that people think we have that development in Palo Alto is somehow causing this housing crisis within Palo Alto? Have you guys heard of, um, cars? Caltrain?
Such a provincial view on things.
What is the Palo Alto CC going to do? They can stop requiring office space in new ‘mixed use” developments where the square footage for offices always manages to be more than that for housing. They can finally honor the office caps that the voters demanded when we signed the ballot initiative years ago.
Also, Google is not just in Mountain View; they’re expanding in Palo Alto and elsewhere! Read up on how their development in San Jose with 20,000 jobs to each housing unit with very few of those BMR is displacing entire neighborhoods, local businesses and possibly forcing out major athletic teams like the Sharks because they’ve taken away their parking!
@MeToo – thank you for pointing out that the issue is not exclusive to Palo Alto. It’s easy to focus mainly on one’s own city, where one lives and votes. Unfortunately, the problem is of such a magnitude that thinking “provincially” might at least help move us in the right direction here. For solutions beyond here, one thing we can do is be careful about who we send to Sacramento. Despite the rhetoric, the pending housing legislation that Weiner et al are pushing will actually make things worse; it is deceptive. And heartbreaking.
How can you help the unhoused if there is no place without a short wait list to go to?
RVs seem like a good solution to them. Yet we yell about them.
I’ve been hearing about the jobs/housing imbalance sice Robert Debs was on the council in 1968. (We moved here in 1963.)
My caregiver/assistant is a formerly unhoused person. She’s terrific! I don’t have a spare bedroom, but she is willing to sleep in my garage.
We need more sharing! I’m in favor of more of us building tiny homes and granny units if we have the space.
Construction costs, they say, mean only luxury apartments can be built. How can we encourage and even subsidize community service agencies to acquire land and build?
If memory serves, the rent for many Alta (Palo Alto Housing Corporation) residents went UP recently while the rent around the area went down due to COVID-19 vacancies.
Q: Why?
A: Because they could.
The law currently allows rent to go up for existing tenants a certain amount per year. COVID vacancies around the Bay Area saw rents drop because of excessive vacancies. The same was not true for the “affordable housing” in Palo Alto. The owners or operators took advantage of laws that permit increases contrary to market rate trends. Even a 5-10% increase is significant — especially when the per capita income in the Bay Area dropped significantly.
At the same time, the owners of properties do have a legal right to do this. It’s a housing market that really doesn’t need more regulation UNLESS you’re referring to participatory “affordable housing” programs for which the property owners benefit.
One of the flaws of the state-level COVID reaction bills was the inability to consider this. I am opposed to “rent moratoriums” that target and hurt landlords. At the same time, there were legislative steps that could have been taken in “affordable housing” programs to help both the renter and the landlord — while restricting the ability of the “affordable housing” landlords to raise rent during the pandemic.
Instead of giving stimulus or aid money directly to needy residents, it could have come in the form of rent assistance programs during the 13+ months (and counting) of pandemic.
Isn’t “rent stabilization” just another attempt to rename and repeat a horribly failed political policy called “rent control”? To paraphrase Shakespeare, “A disaster by any other name is still a disaster”. As for the word “Progressive”, after FDR (I think) “Progressive” was changed to “Liberal” to shed the negative public opinion of “Progressives”. And now after the failure of “Liberal” policies, particularly those of Lyndon Johnson, Carter and Obama, the alt-Left has gone back to calling themselves “Progressives”. This is true irony, because it is just history repeating its previous disasters.
To paraphrase Burke (you know Burke, right?): Those who don’t study history are doomed to repeat [its mistakes]. Take off your blinders.
Lest anyone think I’m some kind of subhuman tRUMPite, I am NOT. I’m a very highly educated Moderate Independent who thinks that both political extremes in the USA are highly destructive to the USA, to its economy, to its Rule of Law, and ultimately to All Of Us. I think we need to revise a political nomination process to achieve Cenerist governments of true compromise, and not just a bunch of ignorant, idealistic, angry slash-and-burn morons dominating both the Republican and Democratic “parties”.
The snobbery and ignorance in these comments about rent stabilization in California is unsurprising. The more things change, the more Palo Alto remains the same.