News

Palo Alto to consider requiring more relocation help for evicted tenants

New emergency measure sparked by eviction of President Hotel tenants

As President Hotel tenants brace for displacement, Palo Alto is looking to pass an emergency law that would require a landlord to pay up to $17,000 for relocation to a tenant facing no-fault evictions.

The proposed ordinance would apply to apartment buildings with 50 or more units, including the 75-unit President Hotel building at 488 University Ave. The building's the new owner, Adventurous Journeys Capital Partners (AJ Capital), had proposed converting the apartment building back into a hotel and informed the residents of the building that they have until Nov. 12 to vacate their apartments.

The City Council is set to consider and likely pass the new law this Monday, Aug. 27.

The law would tie relocation assistance to the size of the unit being vacated, with payments ranging from $7,000 for studios and $9,000 for one-bedroom units to $13,000 for two-bedroom units and $17,000 for units with three or more bedrooms. In each case, the payment represents triple the market rate for each unit type, according to a new report from the office of City Attorney Molly Stump. This reflects the "high start-up costs of a new tenancy, in addition to the cost of moving and potential lost wages," the report states.

In cases where the landlord is evicting a tenant from a below-market-rate unit, an additional $3,000 payment would be required.

One half of the payment would have to be made at the time the notice of eviction is given, while the other half would be paid when the units are vacated, under the proposed ordinance.

If approved, the emergency law would provide some additional assistance for the tenants -- who were offered $3,000 in relocation payments by AJ Capital -- while stopping short of the type of broader protections many have lobbied for, which would prevent the building's conversion altogether. City planners had determined in July that the conversion would violate a zoning code provision pertaining to "grandfathered" buildings (those that were constructed before the zoning code provision was adopted and that do not comply with code) that prevents a renovated building from switching to a different use. AJ Capital has disputed the city's determination and has not backed away from the eviction process.

Earlier this week, City Attorney Molly Stump cautioned the council that the city's authority to limit conversions of apartment buildings is limited by the federal and state constitutions, as well as by state law, most notably the Ellis Act. The property owner has a legal right under the Ellis Act to exit the rental business.

"We need to be realistic about what the City Council can reasonably consider and lawfully enact next week," Stump told the council on Aug. 20.

Another option that the council will consider on Monday is an emergency ordinance that both establishes the new levels of relocation assistance and requires just cause for eviction. That proposed ordinance spells out nine circumstances in which a tenant can be evicted. These include the withdrawal of rental units from the rental market, as allowed by the Ellis Act, and performance of work on the building that would render the unit uninhabitable.

The report notes that the new emergency ordinances would not have any bearing on AJ Capital's ability to pursue its redevelopment plan or to evict tenants, some of whom urged the council last week to adopt a measure that would prevent -- or at least delay -- their displacement. President Hotel resident Michelle Kraus asked the council to consider a law limiting evictions to "just cause" and delaying the evictions if a new property owner does not have a plan for a new building.

Resident Iqbal Serang noted that while the ordinance was spurred by the President Hotel situation, its implications will be far broader, given that an estimated 44 percent of Palo Alto residents are renters.

"It's affecting a lot of people," Serang said. "Rental is a major issue in the city, and all across the Bay Area."

In addition to considering the emergency ordinance on Monday, the council plans to discuss broader efforts to protect and assist local renters in September, City Manager James Keene said this week.

The council also briefly considered last year a proposal from council members Tom DuBois, Karen Holman and Lydia Kou, for a new rent-stabilization ordinance. That proposal fizzled, however, with the other six council members voting against exploring such measures.

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Comments

31 people like this
Posted by Landowners rights
a resident of Old Palo Alto
on Aug 24, 2018 at 10:40 am

Adding additional costs for owners to rent their spaces will surely help the rental market grow!

Let’s see...so, as a landowner, I now have the incentive to charge more rent to recoup the additional cost I’ll pay for evicition. Good bye below market rates! Also, if I were considering renting my place, it no longer looks as attractive.

I’m sure AJ’s lawyers are preparing a brief as we speak. “So we bought the place under rule set A, served 5 month eviction notices, residents accepted the $3k, and now we have rule set B where we owe 5-7x more?”




12 people like this
Posted by commonsense
a resident of Professorville
on Aug 24, 2018 at 10:49 am

commonsense is a registered user.

The city should save some money and pay the tenants the $17,000 each. The cost of the certain lawsuit the developer will file will cost much, much more.


10 people like this
Posted by stephen levy
a resident of University South
on Aug 24, 2018 at 11:45 am

stephen levy is a registered user.

I support the proposed policy, which is more in line with relocation assistance in other cities cited in the staff report. I also favor clear fair notice requirements.
On the other hand I do not think the owner is doing anything illegal with regard to the actual eviction, though another heartbreaking example of not allowing more and more affordable housing options for all.

I support the conditions that allowed the lower rents, moderately tall buildings, more density and reduced parking requirements in areas like downtown.


43 people like this
Posted by Landowners rights
a resident of Old Palo Alto
on Aug 24, 2018 at 11:59 am

@steven levy — unfortunately, this measure would only serve to increase rents, not lower them. The rental problem that Iqbal references in the article is a supply & demand issue, not a subsidy issue.

In general, I have issues with reactionary policy making. If eviction subsidies were commonplace throughout the peninsula (as you reference), why did the city council only act now? Policy making that panders to the loudest, squeakiest wheel is dangerous.


4 people like this
Posted by PA Renter
a resident of University South
on Aug 24, 2018 at 2:24 pm

The pay-out should be based on one's tenure.

1 year or less = under $3K

$17K-$20K for longer-term renters (10+ years).

Maybe $3K & upwards for those who have been residents for over a year or more.


No more landlord gouging of rents and unwarranted displacements.


3 people like this
Posted by Annette
a resident of College Terrace
on Aug 24, 2018 at 4:17 pm

Annette is a registered user.

One side of the coin may be "not allowing more and more affordable housing options for all" but the flip side of that coin is the development doctrine that nurtured the problem in the first place. With each approval of new office space, demand for non-existent housing increased. And now we see and hear the sadness of evictions in a city that has precious few options for those forced to vacate their home. And of course cries for more housing which is more development which, unfortunately, is something we aren't well positioned to absorb b/c we will be hard pressed to sustain it.

Someone somewhere along the line floated the idea of converting some office space to residential. Given various realities, that struck me as a realistic and practical approach worthy of Planning consideration. Maybe one of the candidates will comment on this.

One thing's for sure: the right answers are not likely to come from those who promoted the development doctrine that got us into this mess.


58 people like this
Posted by Cry me a river
a resident of Downtown North
on Aug 24, 2018 at 11:55 pm

What, did they think they could live there forever? It's basic economics. Incentivize landowners to build more, not invest less in housing.


6 people like this
Posted by Thad
a resident of East Palo Alto
on Aug 25, 2018 at 9:17 am

If $3000+ a month for a studio isn't enough incentive for landlords to build more housing, then what is?

What more incentive is possible? Tax breaks? Giving away land or buildings for free? Landlords don't seem to be suffering at all right now, in fact they seem to be profiting more than ever. It feels like naked greed at this point.

The problem isn't of incentive, its of local city governments refusing to densify.


13 people like this
Posted by R. Davis
a resident of Crescent Park
on Aug 25, 2018 at 9:47 am

QUOTE: If $3000+ a month for a studio isn't enough incentive for landlords to build more housing, then what is?

Landlords don't seem to be suffering at all right now, in fact they seem to be profiting more than ever. It feels like naked greed at this point.


Apparently so, as increasing the availability of housing options in Palo Alto won't necessarily equate to lower rents.

Given the current demand & 'market-value' of PA rental units, the new landlords will simply charge the same high rents.

So all it really amounts to is more of the same.





11 people like this
Posted by Another Giveaway
a resident of Another Palo Alto neighborhood
on Aug 25, 2018 at 11:25 am

Kick the can down the road with an unenforceable law. Let the public tire of the issue and forget. Developer sues and is let off hook. Palo Alto taxpayers end up paying the relocation compensation.

Palo Alto politics as usual. Developers profit... residents pay.


14 people like this
Posted by peninsula resident
a resident of another community
on Aug 25, 2018 at 11:50 am

Thad, a resident of East Palo Alto, wrote:
"incentive for landlords to build more housing"

Ugh...landlords don't build housing. BUILDERS build housing.

Oy vey...


18 people like this
Posted by peninsul resident
a resident of another community
on Aug 25, 2018 at 12:07 pm

[Portion removed.]

"From 2007 to 2017, only 24.7 housing permits were filed for every 100 new residents in California — much lower than the U.S. average of 43.1 permits."

(source: Web Link )

Adding more housing and improving the reach of public transportation are where this mis-directed energy needs to go. Those of you who are proponents of rent suppression only believe in suppressing rent FOR YOU, and you couldn't possibly care less about anyone else; your approach leaves thousands searching for Bay Area housing THAT ISN'T available because you'd rather create haves-and-have-nots than support government policy that improves access to high-paying jobs for everyone, not just those that hit the rent-control-lottery.

[Portion removed.]



123 people like this
Posted by Zhaing
a resident of another community
on Aug 25, 2018 at 3:23 pm

I own a 4 bedroom house in Sunnyvale and rent rooms to students, tech workers and elderly people.

They pay rent or get evicted. Deadbeats unwelcome and no bonus for leaving.

Just 30 Day notice.




185 people like this
Posted by OK
a resident of Barron Park
on Aug 26, 2018 at 2:22 pm

>>>Deadbeats unwelcome and no bonus for leaving.

You mean to say you don't give your tenants $3K upon vacating the premises?


135 people like this
Posted by peninsula resident
a resident of another community
on Aug 27, 2018 at 9:22 am

OK, a resident of Barron Park, wrote:
"You mean to say you don't give your tenants $3K upon vacating the premises?"

I believe that is what Zhaing is saying. And that's the way it should be; it's preposterous for owners to have to pay someone to return something an owner owns. There is a fundamental lack of understanding on what a 'lease' is and what it conveys to a tenant.

That said, I will say that in a tight rental market, 30 days is a tight window for finding a new residence, so on that score I'd support changes that require owners/landlords to provide earlier notice to vacate at the conclusion of a lease, but only in cases where there wasn't a violation of the lease agreement.

By the way, some local governments require 60 days notice for tenants that have occupied the same residence for multiple years, and I support that being the standard throughout the state.


11 people like this
Posted by Annette
a resident of College Terrace
on Aug 27, 2018 at 10:06 am

Annette is a registered user.

Responding to Thad and others who promote building more housing. While we sorely need the housing, densification is not an answer in and of itself. Just as there is a formula for jobs:housing balance there must be formulas that dictate how much of each element of infrastructure is needed to support a built environment and population of (whatever) size. We ignored the jobs:housing formula and look where that got us. If we do the same with regard to water, utilities, sewage, landfill, roads, transportation, schools, hospitals, retail, etc. we will compound existing problems and create new ones. If there is to be densification I think it should come only after we have addressed the deficits and built a foundation for growth. To do otherwise is irresponsible and, ultimately, destructive.

Some people support a "build now/fix later" approach. Some even get elected doing so. But that is short-term thinking that leads to long-term problems. I'd like to see us focus on what we need to build (infrastructure) so that we can then focus on what we want to build (housing).


2 people like this
Posted by notice
a resident of Charleston Meadows
on Aug 27, 2018 at 10:13 am

FYI CA landlords need to provide 60 days' notice for tenants who have resided in a unit for over 1 year. The proposed new regulations only applies to buildings with >50 residents, so it will not affect small landlords.


Like this comment
Posted by Reduce Homelessness in PA
a resident of Community Center
on Aug 27, 2018 at 3:22 pm

Unless Palo Alto rents prices go down, we will have more dilapidated RVs lining the streets. Look at Mountain View.

In their own way, the landlords are responsible for this proliferation of RVs.


36 people like this
Posted by Peninsula resident
a resident of another community
on Aug 27, 2018 at 4:09 pm

"landlords are responsible for this proliferation of RVs."

Wrong.

The RVs exist primary because there physically isn't enough housing.

California has had the lowest to second-lowest vacancy rates in the entire country this decade.

(Source: Web Link)

If all rents were dropped to $1/month, 2 things would happen:

* Other prospective tenants would offer $2/month, others $3/month, etc, pricing out the $1/month offers.

* Since there are more people remaining than rental units remaining, you'd have an increase in RVs.

I agree with Annette's post, where she makes the point that infrastructure improvement & expansion needs to be coupled with housing. But let's be clear that those 2 things are what need to happen to resolve the housing crunch; pining for rent suppression doesn't resolve the core problem.


Like this comment
Posted by RVs & Landlords
a resident of Embarcadero Oaks/Leland
on Aug 27, 2018 at 9:44 pm

@Reduce PA Homelessness & @Peninsula resident...you two are saying the same thing.

>>Unless Palo Alto rents prices go down, we will have more dilapidated RVs lining the streets. Look at Mountain View.

>>In their own way, the landlords are responsible for this proliferation of RVs.


>>>Wrong

>>>If all rents were dropped to $1/month, 2 things would happen:

>>>* Other prospective tenants would offer $2/month, others $3/month, etc, pricing out the $1/month offers.

>>>* Since there are more people remaining than rental units remaining, you'd have an increase in RVs.


Chances are the landlords would opt for the extra $3.00 thus creating the need for additional RVs.

You guys are too much.*LOL*


Like this comment
Posted by Pro Cyclist
a resident of College Terrace
on Aug 27, 2018 at 11:16 pm

I am all for this.
Yay for the CC for standing up for the little guy.


42 people like this
Posted by peninsula resident
a resident of another community
on Aug 28, 2018 at 3:44 pm

RVs & Landlords wrote:
"You guys are too much.*LOL*"

Even if all rentals were at $1/month, you'd still have the same problem: as I previously proved (and you conveniently missed) there are more potential tenants than rental units available.

Again, California has had the lowest to second-lowest vacancy rates in the entire country this decade, and the consequences of that fact are obvious:

(Source: Web Link)

You can't have tenants for rental units that aren't available!

Even people with basic math skills can understand the math driving this housing shortage: demand > supply.

Even people with basic understanding of human behavior knows what's really going on here: you people want taxpayer+property-owner-subsidized housing FOR YOU, with the INTENTIONAL goal of excluding outsiders from living in your precious community.

There's a word for that kind of belief...

discrimination: the unjust or prejudicial treatment of different categories of people or things.

You want to discriminate against new members of the bay area. I understand why, but at least own it.


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