A lot of the data was already forecast so there should have been nothing new and revealing/surprising from the article. And a lot of the council members comments were from anecdotal information. With our current situation, and seemingly no direction to alter it, we will just struggle with the issue until it gets resolved, or doesn't.

And what of protections for the property owner, and their inherent right and expectation to be able to charge a rental fee that the market allows. Local government should have serious limitations on how far they can infringe and regulate what a private property owner can charge for rent. Eviction without just cause, absolutely. Limiting how much a property owner may profit from their investment, a serious overreach in my opinion.

The property owner made the investment, incurs the liability, and is responsible for property taxes, maintenance, and every other financial expense. They should not be subject to local government restrictions otherwise, specifically on rental fees. It is not the private property owner's responsibility to provide affordable housing. If the local government wants to get into the affordable housing business, then provide those resources and deal with it at a civic level.

so why aren't the council proposing restrictions on rental increases for retail leases? same reasoning applies.

The affordability problem CANNOT be addressed unless people are willing to look at the demand side - too many workers flooding into too small a soace. Our ability to absorb every company that wants a Palo Alto address is not infinite. Facebook moved to grow, but not every company is.

One can ask, if workers can't afford the housing, why shouldn't companies raise wages and pay more equitably, why should residents (many of whom don't make that much themselves) pay for what the companies won't? In addition, why should residents then also pay for the problems, overuse of infrastructure, safety problems and everything else, caused by corporate overcrowding?

We must begin by looking at the fact that when we essentially create infinite demand by allowing companies to crowd more and more workers here, it is not possible to get ahead of demand. The only way for housing to be naturally more affordable is if there are restrictions on how large comanies can grow in town. Companies moving some of the job excess to where the jobs are needed is the only way to support affordable housing. It will even make it easier to create subsidized housing because all this demand drives up all housing related costs.

There is no way to get ahead of demand by building here, we have maxed out the infrastructure. One car breaks down and an entire area is gridlocked for half a day. This has gotten to the point that it's unsafe. It hurts productivity, the environment, health, livability. Have people learned nothing from the Santa Rosa URBAN fire? From Houston flooding? The big developers have no conscience and zero concern about your safety.

Fixing the affordability problem is a creating balance in civic life here again problem:
1) We must address the demand problem and stop privatizing demand and socializing paying for the consequences - the US is a vast nation with many beautiful places to take companies that need that kind of growth. We restrict the size of grocery stores in Palo Alto, we must start restricting the size of companies here, make it safe for startups and families again
2) We must add a business tax for non-retail businesses
3) We probably should recall the councilmembers who misled the public in their contribution disclosures, and formally protest the comp plan to the state on all allowable grounds - the giveaway to developers only puts upward pressure on costs. 4) Rather than just publicly subsidizing low-paid workers through public housing, which is like putting a finger in a dam, we should, as Los Altos has done and on the Stanford model, find a way for the city to purchase the major retail areas, and if our city won't, find a way to create something like the Los Altis Community Fndn, and come up with a fair process for businesses to occupy the spaces.

The way real estate works here, it is just plain painful and unfathomably expensive when you buy - that has been the case for decades I have been here - but if you buy and keep, then the balance sheet stabilizes. If we the public buy up the retail areas or large areas as a City, and and create a reasonable process for businesses to basically get BMR rental rates, we may be able to restore diversity in retail again. Equally importantly, the low rental rates could come with a high minimum wage stipulation which businesses could then afford because of the lower, stable retail space rents. The City, having made the investment once, could continue to derive a greater and greater benefit over time without it increasing costs to the City, unlike in the case where the public pays for the consequences only through paying for the housing (which, let's face it, cannot truly solve the affordability problem for the vast majority who need it). Why not provide a better way for workers to be paid equitably in a way that costs the City far less? People with traditionally lower wage jobs could then afford to stay here, and even buy rather than just rent (which, let's face it, is always a treadmill without rent control in high demand areas).

The unnecessary overcrowding of workers must be solved or addressing affordability will simply be impossible and the deceptive co-opting of that issue by developers will only cause more and more problems; the companies just want the public to subsidize their company town takeovers with developers laughing all the way to the bank (and to certain city councilmembers).

So help me, if we in South Palo Alto have to deal with being Kniss's NIMBY dumping ground much longer, I'm personally going to move to secede. We will take all of Palo Alto to Oregon plus Cal Ave as our downtown. I haven't been able to use anything I'm paying fir on the north side of town for years because if traffic anyway.

So the plan is to implement rent control, fight with airbnb, and protecting existing homes... Um WHAT ABOUT MORE HOUSING? This looks like a cynical 2018-election ploy. The no-growthers are trying to freeze Palo Alto in place. And the weekly is abetting them.

One obvious way to keep rents under control is to limit the 4:1 jobs growth vs housing growth trajectory but you won't see the Gang of 5 doing anything to stop the upwards pressure on housing costs by restraining office growth or trying to limit Stanford's new aggressive growth plans that they laughably claim will have no impact on traffic or parking! (See details in the next post)

Housing "affordability" is just a a song they sing when they're trying to push through ADUs or a few BMR units to justify high-density under-parked complexes that encroach on our neighborhoods.

Stanford's proposed growth plans:

"2,275,000 net new square feet of academic and academic support facilities;

3,150 net new housing units/beds (550 units would be available for faculty, staff, postdoctoral scholars, and medical residents); and

Stanford University proposes that the 2018 General Use Permit include an option to allow Stanford to construct a 2,000-space parking supply reserve, subject to Planning Commission review and approval, if any one of the following conditions apply:
1) Stanford is achieving its No Net New Commute Trip goal;
2) such parking would not result in a substantial increase in peak-hour commute trips"

And if you believe there won't be any new Commute Trips or parking problems, then please rush to approve this!

Clearly some of the CC members never took Econ101.

[Post removed.]

Some pretty entertaining comments here. Good luck to you all!

How about enforcing the laws banning short-term (<30 days) rentals (aka Airbnb)? This would help increase the number of available (long-term) rental units available.

Lack of affordable housing is not just Palo Alto problem, but entire Bay Area. We need better public transport, connected Bart, high speed trains like in Japan that can connect more affordable areas like Stockton, Tracy, Gilroy to Bay Area.

Who is doing the architecture in this town now? KooKoo the Clown?
Look at these block buildings with ten different colors stacked on top of each other, Looks like a Deranged clown stacked them together.
Awful Just Awful..

Lack of basic economic understanding should really disqualify people from serving on governing bodies (or voting for initiatives) that feel entitled to make these kind of unilateral price control attempts. If something is scarce due to supply / demand imbalance, you can't make it cheaper by making it more expensive and less desirable for suppliers to enter the market with additional supply. Rent control always does a number of things ... very few of which are positive:
* increase the longterm supply shortfall, causing market-rate prices to increase faster over the long run than they otherwise would (unless you never move for many many years .. when you move or if you are new to the area you are screwed. You are subsidizing the other renters who stay in place till they die)
* drive out small landlords ... replaced by corporations which are "people" minus the morals and can afford lawyers and lobbyists to work around the regulations
* degrade quality of rental stock ... no one wants to invest / maintain property if putting money into it can't generate a reasonable return on investment. Taxes , fees , costs go up ridiculously fast in this area.
* create perverse incentives for landlords... under rent control the normal desire for stability is turned on its head...you DONT want long term tenants because such tenants acquire more rights than the property owner.
* your building older than 1995? ... have a developer "work with" the city council and replace it with something newer (maybe an office building?) not subject to the controls
* create the need for more and more ridiculous laws to try to plug holes as property owners attempt to subvert what is rightly seen as an unfair grab of private property rights and pushing a government objective (enabling further growth) onto a small subset of private citizens.

It's hard to keep a straight face when listening to the city council. Of course rents have gone up because of a supply shortage. Rent increases are a price signal. The biggest study of course is the Buena Vista trailer park. A future source of many economics papers, political papers: a total boondoggle. I predicted what would happen in 2000 (online). Now: The San Jose Property Rights Initiative Google Granicus. Rent control must go in California it's impeding the supply of rentals and a parasite to communities. How is this happening in poor California: online, the convention.
George Drysale initiator and educator.

Please, please, please while they're at it, can city lawmakers consider noise control issues for those among the 44% in Palo Alto living in apartments? Today's stereo systems are much too powerful to contain noise coming from other apartments. Cheap construction with little to no sound insulation is an issue, too. There is no way to control the sound and vibration if you're in a neighboring apartment. On the other hand, there are very small speakers on the market with good sound quality that connect to devices such as iPods. Such smaller systems, which are portable and can be moved from room to room, could provide a happy medium for renter. And, of course, there are headphones.

We need better, stricter laws in Palo Alto to protect acoustic space.

We need to encourage larger companies like Palantir to graduate out of Downtown Palo Alto and into Downtown Redwood City or better yet Downtown San Jose.

Downtown San Jose has an abundance of zoned area of very high density 20+ story residential/corporate towers, zoning for night life and a dense network of light rail track just waiting to be used. It also has future rail connections for BART, Caltrain and High Speed Rail.

We need to share the wealth in jobs with the rest of the Bay Area.

This whole thing is SO wearisome. If we are speaking about economics, then things that are desirable usually cost more. Palo Alto is desirable. Atherton is desirable. Of course, the big difference is that there are no tech companies in Atherton. Talking about affordable is a joke to me. The only thing that's going to make Palo Alto affordable is a big downturn, like the one that happened in 1982, when I bought my house. Interest rates were exorbitant, and houses were sitting on the market. I was able to offer much less than the asking price and 3 years later would never have been able to buy the same house.

I support renter protections with regard to fair notice and eviction protections.

I am skeptical that rent control are the most effective way to solve the housing affordability challenges.

Here are some questions for staff to answer

1) How many units would the ordinance apply to if it only applies to large complexes built before 1995 and excludes rentals of homes? Is this a large share of Palo Alto renters. It will certainly decrease over time as all the new units such as those approved on the Compadres site do not qualify for rent control.

2) here is an interesting one. If higher property assessments on commercial property including large apartment complexes are approved )for example the so-called Make It Fair initiative), owners be able to pass these along as they may be very large in the first year? How will rent control ordinances handle a situation like this?

3) I do recognize that many renters have seen very large increases recently but a) the ordinance will not bring down these costs and b) I read that current rent increases are much more moderate as supply is coming on line.

I am happy to have the community discuss these issues but hope that it will include a lot of factual information gathered by staff and others.

Stephen Levy - UCLA study says that hoping for cost decreases from likely added supply is a bad bet. Web Link

Many rental units are former single family homes that are being serially rented to young families whose children attend PAUSD schools. The landlord, who charges outrageous rents, is protected by Prop 13 and so the schools are not well funded for all of the children the landlord puts though them.

We have a BIG problem. It is Prop 13. I think that all rental properties should be reassessed EVERY time a landlord raises rent (because the rent that a landlord can get for property determines the property's value). If landlords had to pay taxes on those increases, the schools would be in better shape.

Right now, the landlords are screwing all of us--not just their tenants. They laugh all the way to the bank.

The same should apply to commercial rent in downtown. I have owned a small business downtown for many years and all of a sudden our landlord raised our rent over 30% last year. This is the single biggest reason why we are seeing so many small businesses disappear from downtown. It’s really sad to see what’s going on.

Let's make a deal.

Landlords should not be able to raise rent if the banks agree to provide mortgage relief and the government agrees to not raise taxes.

As has been acknowledged before even by Mr. Levy, the economic evidence for rent controls is dismal. Historically, it reduces supply and deters property owners from performing maintenance or making upgrades. It is a pathway to crime and run down block houses.

Of course, we all know the real motivation for this effort. If current landlords are driven out because owning a rental property is no longer a good investment it clears the road for, you guessed it, more development.

No wonder the city council has suddenly taken an interest.

Sweet deal - single family homes are exempt from all rent control and rent stabilization ordinances due to state law, going back about 22 years, except for just cause for eviction laws. This same law also can't fix prices when a tenant moves out. Vacancy decontrol law states that rents can be raised to market value after a tenant vacated the unit. It's only when a new tenant moves in can the rent be stabilized. Many landlords do very well under rent control and enjoy sizable profits.

As I plan to sell my house in a couple of years when my kids are out of high school all I care about is demand for housing. I want more jobs, more development more traffic making Palo Alto houses more attractive. 'More ! More ! $$$$

“... the recent departure of , a former Planning and Transportation commissioner who made national headlines when she resigned and blamed the city's housing policies for making it impossible for her and her husband to afford a Palo Alto home.”


Ah yes, that person. Who famously argued that as a lawyer-engineer couple she was too impoverished to live in Palo Alto, then spent $1.6 million to buy a three-bedroom house in Santa Cruz, where she could have an actual single-family house instead of a condo, after telling everybody else that Palo Alto has too many single-family houses and people should all live in condos. [Portion removed.]

If rent control is to protect the of the world, no thanks.

Resident - why would you think rent control would've protected her?

Unfortunately studies show... Ricardo's Law of Rents is true. So rent control may not be the ideal way to get at the root of the issue (rents being too high).

And this doesn't solve the issue of scarcity which leads to higher rent prices.

As well.. in places like College Terrace, where grandfathered in multi family properties only have R1 zoning instead of R2 zoning means that when someone rebuilds a new home... the issue of scarcity will be exacerbated instead of relieved as a multifamily building will disappear and a single family home will pop up.

Someone should definitely look at the zoning laws and perhaps consider rezoning areas where multifamily units currently stand... to be rezoned to R2 or RMD. This would help with scarcity.

@College Terrace resident,
No amount if building will ever make Palo Alto cheap, unless Palo Alto becomes so unpleasant no one wants to live here. The proximity to Stanford and location in Silicon Valley means global demand. We can, however, make Palo Alto attainable after the usual sacrifices again, if we deal with the overcrowding if workers here. It just isn't necessary or healthy or even safe.

Stanford: please find a cool place to build a satellite campus, maybe for some cool new college like Olin College West would be. Then maybe some companies will move, and there will be more room for spinoffs in both places, and more possibilities for affordable housing in the new location.

Sorry, the perils of typing on a device. Of course, I meant:

We can, however, make Palo Alto attainable after the usual sacrifices again, if we deal with the overcrowding of workers here. It just isn't necessary or healthy or even safe to continue to pack in more workers and companies here.

It's actually not even true that things woukd get cheap if no one lived here. Hong Kong became a big business park, so everyone lives in Kowloon, which also has never become affordable despite smaller and smaller living spaces. The drumbeat of building more is just a Trojan Horse for developers who really don't care about the larger consequences.

Mable's thinking heads in the right direction.

The housing "crisis" has at its heart the assumption that growth of all kinds is necessary and good. More businesses beget more employees who demand more housing. I fail to see how major growth in any of these areas benefits anyone other than developers who seek profits by packing more of everything into a geographically limited area.

Social science is politically incorrect. California is the most politically correct state in the union. That's why California's government is a joke. By destroying the incentive to develop rentals via rent controls rentals are in short supply and rents escalate. Cheap rentals can be had by multi-storied buildings. The market is remarkable. Young college graduates are leaving Silicon Valley because of high rents and awful congestion. You can get around town faster on a pogo stick than by driving an automobile. I will clean the Augean stables via the San Jose Property Rights Initiative Granicus Google. All of California's population growth in the last 50 years has been due to immigration. Immigrants have been mostly tax eaters. Now in order to offend everyone: the interest rate deduction on mortgages will eventually be eliminated. The initiator George Drysdale

Controlling rents to provide lower housing costs is futile and will result in fewer apartments and even higher rents.

Recent Mountain View rent controlled Landlords are selling their apartments and or redeveloping them into single family home development, retail, office, startup, etc. spaces which results in fewer apartments available.

Free market forces will work best. Companies will hire and Workers will want to take jobs in other locations with lower housing costs.

Why are we not putting limits on what all property can be rented/sold for? Let's put a cap on what single family homes can sell for and see how fast property values fall and rental rates will fall with them.

/marc

In case anyone thinks that BMR apartments are other than temporary, they might realize that the rents do increase, many consistently 5% a year. Don't know if there is any max.