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.