Seeking to bolster tenant protections, Palo Alto is preparing to expand a policy on Monday that requires landlords to pay relocation assistance to tenants facing eviction.
The new law would change a policy the city instituted in 2018, when new owners of the President Hotel began evicting residents of the 75-apartment building at 488 University Ave. in preparation for the transformation of the site into a boutique hotel. The 2018 law allows tenants to receive relocation assistance from their landlords, the amount of which varies by apartment type, from $7,000 for studios to $17,000 for apartments with three or more bedrooms.
This policy, however, only applies to apartment buildings with 50 or more residences, which represents approximately 2,256 units across the city, or 22% of the city’s rental stock.
The order that council will consider on Monday would expand the law so that it also applies to buildings that have between 10 and 49 units. This includes the 1,579 residences in buildings of 20 to 49 apartments and the 1,228 residences in projects of 10 to 19 units.
Together, those two categories make up about 24% of the city’s rental stock, according to Partnership for the Bay’s Future member Lauren Bigelow, who worked with the city to develop the new tenant policies.
The new law is a first step in a broader push on tenant protections that the council launched last year. In November, council members asked staff to explore a host of new policies, including ones that would institute a register of rental properties and limit the amount landlords can charge in security deposits. The most controversial policy, which the council agreed to explore by a 4-3 vote, called for the creation of an “anti-gouging policy” that would cap rent increases in buildings that are not covered by Assembly Bill 1482, the 2019 state law that caps rent increases at 5% plus the rate of inflation. AB 1482 excludes multi-unit buildings built within the last 15 years.
The resettlement assistance review received broad support from the council, with only council member Greg Tanaka dissenting.
The Planning and Transportation Commission also backed broader application of the Resettlement Assistance Act, with members voting 4-1 on Wednesday to recommend approval of the new policy. Commissioner Bart Hechtman was the only dissenter. He suggested landlords will factor the relocation policy into their rents, which could hurt the very tenants the city is trying to help.
“They’re going to be like, ‘How can I get this money? How can I put this money into this process so I can make the same profit tomorrow as I did today?’ The answer is, of course, they’re going to raise the rent.”
But Chairman Ed Lauing dismissed the argument that landlords will collectively raise rents because of the new law. A landlord who evicts tenants is already at risk of losing rent money, particularly if they do so because they want to make the property available to a family member or if they want to renovate it in order to then be able to charge even higher rent. Since the landlord decides what to do with the property, the city should focus on protecting tenants.
“All of these things are owner-driven,” Lauing said.
His colleagues agreed, with Keith Reckdahl suggesting the city explore going even further and including even smaller properties.
“I would be interested in moving that point from 10 to four, or maybe even lower,” Reckdahl said.
Not everyone was thrilled with the new program. Anil Babbar, a representative of the California Apartment Association, suggested the proposal comes at a “very irresponsible” time, when many small landlords are still struggling to collect rents from tenants who have stopped paying over the past year. pandemic.
“These financial problems will take many years to recover from the owners,” Babbar told the commission.
The new law tries to limit the impact on small owners by excluding properties with less than 10 units. Given the exclusion of these properties, the planning commissioners were convinced that the new policy would do more good than harm. Despite this, they lamented the relative lack of data on local rent levels. They agreed that the law, once passed, should be refined in the coming months to include a waiver process for landlords who can show they are financially burdened.
“If we’re going to err, we want to err on the tenant side,” Reckdahl said.