Menlo Park ordinance in works to make landlords assist displaced renters

Kirsten Keith recently accepted campaign contributions of $500 from California Apartment Association PAC and $1000 from Tod Spieker, one of the largest apartment owners on the Peninsula.

Yes, all our council members have accepted those same contributions and they have still voted for ordinances to protect tenants. Do your homework.

This sounds great for renters, but it seems to assume that all landlords are evil & greedy? If, for instance, a landlord has been renting for many years below market, and due to circumstance needs to raise the rent to market, why does the landlord punitively bear the responsibility to maintain below market rent (or pay a significant penalty like several months of rent credit) at an operating loss? There are lots of quad-plexes owned as retirement investments, and the owners depend on the income- I know several personally. Granted, housing expenses are a serious issue for everyone in our overpriced neighborhoods, but why is it ethical to add more burden to the landlord? This proposed legislation is not a fair solution to the problem.

So everybody does it? That’s really the excuse you want to go with?

Not an excuse, just a lesson about integrity. You can review their voting record on tenant protections and look back to see those same contributions. Our elected officials have more integrity than you give them credit for. Keith has also accepted contributions from public figures publicly supporting rent control reform, do your homework.

This is just ridiculed. Why should a landlord be singled out for a problem that they had no responsibility for creating? Most smaller landlord struggle to buy a rental unit, or a small multi unit apartment building. They probably experienced many years of negative cash flow (in this area) until their rent structure finally started to pay off. This is a business like any others and it’s as important for a landlord to make a profit as any other business. They are not responsible for the boom in employment or the high cost of property in this area. Why would any loanlord want to build more units and help cure the shortage of housing units if they have this burden while only realizing a 4-5% return if they are lucky. Maybe if they are charging significantly over market they should have restrictions but if they are only charging the market rates it makes no sense. Maybe the city and counties should bear the burden since those are the ones who permitted the rapid out of control growth and at the same time increase building cost so much that it’s nearly impossible to build any housing and rent it out and realize a decent profit.

Robert, are you unaware that most landlords are multi millionaires who only care about the almighty dollar and have absolutely no compassion for our fellow citizens who struggle with rent payments.
Landlords are at the very center of the housing problem because of their greed. Down with landlord, I say !!!! Let the cities take over all rental units, only they can cure this problem in a fair and honest way.

I’m a Menlo Park Housing Commissioner, but I am writing as myself. I’m a resident of Menlo Park, and my day-job is as a philanthropist and activist for social justice. My family foundation has a local focus on the communities of East Palo Alto, North Fair Oaks, and our very own Belle Haven neighborhood in Menlo Park.

The primary objective of the Menlo Park Housing Commission’s proposed Tenant Relocation Assistance ordinance is to prevent homelessness.

I believe we can create a policy that supports tenants’ health and well-being by protecting them from homelessness, without causing hardship to conscientious landlords (which I believe includes most landlords – especially those who both rent and live our community).

Tenant relocation assistance prevents homeless by providing the tenant with the financial means to quickly find housing at market rate rents while they look for a more permanent, affordable, solution. Three months’ rent at market rate is the minimum assistance that can accomplish the objective: first and last months’ rent, plus a security deposit.

Landlords need never pay tenant relocation in the regular course of business.

• Landlords who raise rents by no more than an amount defined by the Terner Center for Housing Innovation at UC Berkeley as “rent-gouging” do not have to pay relocation assistance, even if the rent increase causes their tenants to leave.

• Landlords who evict tenants for failure to pay rent, failure to abide by the terms of the rental agreement, or who cause a nuisance do not have to pay relocation assistance.

• Landlords who need to move back into their rental home (perhaps because of their own financial challenges) do not have to pay relocation assistance. (I hope that in this situation we can provide assistance to the tenants through a city grant to a local non-profit for this purpose, but that remains to be discussed and determined.)

• Homeowners who rent an accessory dwelling unit or a room in their home are never required to pay relocation assistance.

According to the San Mateo County Eviction Report, 17.6% of San Mateo County tenants who defended evictions in court in 2014 were homeless in Spring of 2015. The average age of a homeless person in the United States is nine years old. In our county and city, 70% of families experiencing eviction include children, and 63% are female-headed households; Black and Latino families disproportionately experience eviction. And nearly half of evictions included in a 2016 San Mateo County Eviction Report were “no-fault” evictions.

We can and must do something to prevent our neighbors from experiencing the trauma of homelessness. No one – especially a child – should be without a home. This policy is a small step towards that goal. I hope my community will support it.

Karen:

So what you're saying in a nut shell is that landlords should not have control over their own properties.

A landlord can charge market rate. Is that too expensive for some people? Yes. Is it the landlord's responsibility to keep their rent below market? NO. That's what a FREE market is all about. We aren't socialists. We're capitalists. If you want to see what happens in a socialist system, look at the old USSR.

You want landlords to keep their properties up or improve them? Then don't artificially control rents. If I were a landlord, the last thing I would be doing is putting money back into the property to improve it if I couldn't charge rents to cover said improvements. I'd put money in it to maintain it, not improve it. If I IMPROVE my property I can easily justify higher rents, it's more difficult, but not impossible if I don't.

If you want to tell landlords how to manage their properties, I suggest you buy said properties. Then you can rent them at any price you want to and you can go broke trying to provide housing at below market rates. Because the cost of providing that housing isn't cheap, nor is the cost of maintaining or improving it.

You ever seen section 8 housing and the problems associated with it? I have. Go buy some and knock yourself out.

The rental market is already distorted by Prop 13. It's not a free market, and the costs are disproportionately being born by those who can least afford them.

Web Link

Incidentally, here's a great article (written by a Menlo Park homeowner!) about how framing Prop 13 in terms of cost/benefit to homeowners probably misses the point:

Web Link

Government should stay out of the Real Estate Business.

I support an ordinance like this. We are definitely in a housing crisis, and I know many people who have been in this situation. , and it is hard to come up with enough money to move quickly. Karen Grove is absolutely right that homelessness is the Bay Area is driven by rent increases that go beyond what tenants can pay. Even for moderate income tenants, it can be hard to come up with enough money quickly.

This is not rent control. Three months rent after 36 months residency is a burden on landlords, but it's not a punitive one - and it only kicks in for rent increases over 7-8%.

It's fair to try to get the details right - what's the right residency requirement? why is it important to include single-family households? But the policy is reasonable and the burden on landlords is reasonable.

Also, everyone would prefer that we didn't need an ordinance like this. Everyone would prefer that rent in this area was reasonable and stayed reasonable.

If we want that, we need to make it *much* easier for people to build housing in Menlo Park. Until 2016, Menlo Park hadn't permitted a new apartment building since 1974, and if you look at the architecture, it shows. We've made some progress on this front with the Greenheart and Stanford projects, but we have a lot of opportunities to do more in the downtown and along El Camino. We have a lot of room for nice buildings that would help us do our part to address the housing crisis - and provide a place to live for both employees and customers of our downtown shops and restaurants.

The assumption is that Landlords are responsible for the housing crisis, either that or that they should somehow be willing to sacrifice in order to reduce this problem. Yes, prop 13 gives a few landlords an advantage but that is far from being the bulk of the housing stock. The major reason for the housing crisis is the shortage of housing which is caused more by zoneing regulations than anything.
Many developers are willing to build more housing but zoning regulations prevent development that can be cost effective. Everyone complains about the shortage of housing but at the same time they do not want development near where they live and certainly not if the development exceeds their idea of what height limmimts should be. Public opposition to development plus the extreamly high cost of obtaining approvals and permits, and current construction cost makes many projects financially impossible. At the same time cities continue to allow explosive growth which places a higher and higher demand on the current housing stock.
Any smaller landlord would be reluctant to expand their housing stock if they faced leak action if they evicicted a troublesome tenant. For just cause and then, after cleaning up a unit, decided to increase its rent closer to the current market price.
Please pick on the real guilty parties, the city planners and the citizens who fight every potential development on the basis that it is too close to their home and might disturb their quiet life style, all the while making money off the rapid uncontrolled growth taking place locally.

Yes, zoning is the primary culprit. Prop 13 has limited effect on building new housing.

Ask yourself this. Would Menlo Park residents be ok if Stanford decided to triple the number of housing units planned for Middle Plaza? Santa Clara County is pressuring them to add more housing as they expand the campus. What if Greenheart decided to triple the number of apartments planned at Station 1300?

These developers would be happy to build higher and dense. One of their three biggest costs is land acquisition. You don't need to buy more land to build higher and denser.

There is a ton of housing demand, even with high construction prices. This demand likely will never be satiated because of....

...the NIMBY.

The NIMBY says Menlo Park is a suburb, not an urban area. They say the buildings are too tall. There is not enough parking. And when there is enough parking, there will be too much traffic. They throw up objection after objection. They fight tooth and nail. They even initiate a citizen election measure on occasion.

Time is money. So the developer builds less housing than the market demands to get the project done so that it can still make a profit.

If you really support more housing, then you should support state senator Scott Wiener and his efforts to give developers the right to build dense housing near transit.

Web Link


"The country's parliament on Wednesday passed a law banning foreigners from buying into most parts of its residential property market as the government seeks to cool red-hot house prices.

The Overseas Investment Amendment Bill will prevent overseas investors from purchasing existing properties in New Zealand, but they will still be able to buy into new apartment complexes and certain other parts of the housing market.

New Zealand Prime Minister Jacinda Ardern campaigned on a promise to clamp down on foreign buyers, blaming them for soaring prices that have left many New Zealanders unable to enter the property market.

"If you've got the right to live in New Zealand permanently, you've got the right to buy here," Trade Minister David Parker said during a final debate on the bill Wednesday. "We believe it's the birthright of New Zealanders to buy homes in New Zealand," he added.

Public policy firm Demographia regularly ranks Auckland, New Zealand's biggest city, as one of the world's least affordable places to buy a home.

House prices have almost doubled over the past decade, according to central bank data, and are up more than 5% so far this year. Home ownership rates among New Zealanders have also been falling in recent years.
But government data suggests that foreign buyers actually only make up a small part of the country's housing market. According to the latest official statistics, purchasers who don't hold New Zealand citizenship or residency make up less than 3% of total transactions.


Buyers of New Zealand property include billionaire investor Peter Thiel.
Most foreign buyers in New Zealand don't state where they're from, official data shows, but the majority of those who do are from China.

New Zealand has also proved to be a popular retreat for the rich and famous. Billionaire investor Peter Thiel and disgraced former NBC host Matt Lauer both own properties in the country.
Related: New Zealand is going to start taxing tourists

Analysts say it's still unclear how much difference the new law will make.
"We simply do not know how it will affect the market," Dominick Stephens, chief economist at the New Zealand division of banking group Westpac, said in a note to clients Wednesday. House prices could stop rising before the end of the year or even begin falling, he predicted.

Nearby Australia has also tried to slow runaway house prices with measures including a similar ban on foreign investors buying existing properties. Prices in the country have been falling since the end of last year.
The new law in New Zealand doesn't apply to Australian and Singaporean buyers because of existing arrangements between the countries. It still needs to receive royal assent, which is a formality, before it comes into force.

CNNMoney (Hong Kong)
First published August 15, 2018: 2:52 AM ET
Personal Finance

         
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It's about time Menlo did something, but I'm not holding my breath. Menlo has some lousy landlords and the City simply hasn't cared enough in the past to do anything to protect tenants.

I went to Grant Elementary in Richmond. My divorced mom, I and my half-brother RENTED in Richmond. We were briefly even on food stamps. We were so poor that when the rent was raised on our apartment in Richmond -- next to the drug-infested Nicol Park -- we couldn't afford RICHMOND, so we had to leave.

That's right, we couldn't afford RICHMOND. You know what we did? We F----NG moved, that's what we did. And when we were so poor we couldn't afford the Bay Area, you know what we did? We F----NG moved out of the Bay Area, that's what we did. I went to nondescript elementary schools, a nondescript middle school and a nondescript high school. I then moved back to the Bay Area and went to a nondescript CSU. I then rented a 8x10 bedroom room for years and worked my butt off putting in 60++ hour weeks to pay off college, then saved up for a condo for several more years. I kept working my butt off and now I own a home in Atherton and have a wife and kids. I am arguably more successful than all of my dozens of cousins, aunts and uncles, many of which went to prestigious high schools (Miramonte for example) and colleges (Cal and Stanford, for example).

That all said, I am sympathetic to the plight of renters in the area, and I have work colleagues and close friends that I fear every day will conclude its financially infeasible for them to stay. In the long-term, current rental rates will be damaging to our local economy, and it's in everyone's best interest...including landlords, of which I am one...to support denser housing.



However, I'm appalled at the ignorance shown in almanacnews and other blogging/comment sections. Landlords are not the primary source of the problem here, and turning them into villains is counterproductive, and rent control is flat-out unamerican and I hope someday is rendered unconstitutional. Instead we should focus on the primary causes of high rental rates, which are:

1: construction economics in the area encourage office buildings. Even a casual look at our skyline bears this out. Local governments are fully empowered to modify the economics to encourage more housing and less office space, but they have historically failed to do so.

2: Zoning rules need to be modified to encourage denser and taller housing, but shouldn't be defacto thrown out outright. There is definitely a large middle ground that has yet to be explored simply because the conversation on this is dominated by the far left and far right nutjobs.

3: our public transportation is atrocious, and unlikely to get better simply because the MTC doesn't give a crap about the peninsula: The vast majority of funding from Regional Measures 1, 2 and 3 go to San Jose, San Francisco and Bart (a significant amount for grade separation, which the powers-that-be claim is financially feasible everywhere EXCEPT here).

#3, IMHO, is particularly important because implementing good regional public transit is the way most other major metropolitan areas address the issues we have: namely road congestion and housing cost. It allows people to compete for high-paying jobs while living in lower-cost areas, thereby lowering demand in high-demand locations, lowering the costs for EVERYONE.

This and similar rent control measures are badly misguided and will hurt those they are trying to help, as well as many others. Economic ignorance is to blame, and there's certainly no lack of that, especially in California.

As a former renter and current homeowner, I fully support the proposed ordinance.

While landlords are not the only source of this multi-faceted problem, they are unable or unwilling to be part of the solution.

There is too much evidence of rent-gouging, and seniors evicted, to continue to allow the current state. Seniors can't just move away, and are on fixed incomes. This ordinance still allows for substantial rent increases, just not in the order of 800-1500 increases per month, which is the gouging.

If landlords could self-police, this wouldn't be needed. Few industries have shown any capability of self-regulating, therefore the government is required to step in.

The situation is long past crisis levels. It needs addressed urgently.