Guest Commentary

Proposed City Law Threatens Housing and Renters

January 27, 2019 – From the Palo Alto Neighborhoods Committee on Development, Zoning, and Enforcement (PANCODZE)

All Palo Altans should urge the Planning and Transportation Commission to reject a controversial staff proposal that would make it easier for Downtown residences such as the President Hotel Apartments at 488 University to become hotels or offices.  Scheduled for discussion this Wednesday, January 30, the staff proposal would create a new waiver process that vastly favors owners and developers of Downtown buildings over tenants.

Under the proposed waiver process, City staff could cast aside or “adjust” existing laws that require oversized Downtown buildings, such as the six-floor President Hotel, to retain the same mix of uses they have at present.   So while the rule, known as the Grandfathered Facility Law, currently protecting the residences would remain in place, owners and developers would need only to “assert” in writing that it conflicts with some state or federal law.  Staff would then need only to find that the “assertion has merit” and could then immediately grant the waiver.

The proposed process does not require that tenants of the buildings, the press, or the public at large be notified when a waiver is being sought.  No public hearing will necessarily occur and no written legal opinion from the City Attorney citing relevant case law for public review would necessarily be issued. Although the waiver could in theory be appealed to the City Council, tenants and others may not even know a waiver has been granted until after the appeal deadline expires.  Renters might instead find out only once their leases expire and be too late to appeal.

Palo Alto requires a much more open process for other waivers. For example, the law that buildings cannot convert existing ground floor retail and similar uses into offices requires that an exemption request be accompanied by financial data and be approved by the City Council at a public hearing.  Such exemptions might only affect thousands of dollars of rental income a year, yet the waiver enabling the President Hotel residences to become a hotel might be worth tens of millions of dollars. So why shouldn’t the waivers be decided by the City Council too, in full public view?

And why is a waiver process even needed for the law protecting Downtown residences? The staff report for Wednesday’s meeting states a waiver would be granted when the law preserving residences would lead to “a violation of state or federal law (i.e.; Ellis Act).”  But preserving residences is legal and cities have long had the right to do so. Most of Palo Alto is already zoned to allow only residential and similar uses such as day-care facilities. Federal law allows cities to further restrict what is in buildings as long as some viable economic use remains.  Residential property in Palo Alto is surely viable, given that it often sells for over $2,000 a square foot. 

Staff has repeatedly cited the state’s Ellis Act to justify the need for a waiver process, as in the quote above.  Yet that law explicitly states the opposite of what staff claims, namely that it does not bar cities from controlling how properties are used.  The Ellis Act merely allows owners to cease renting out residences and instead have those become owner-occupied or company-owned housing if cities so allow.  If the Ellis Act actually required cities to allow residential buildings to convert to some other use contrary to local laws, apartment complexes in Palo Alto and all over the state would have long ago turned into office buildings. 

So why are senior City staff actually asking for the waiver process for this law and not for the hundreds of others in our municipal code?   Despite staff’s insistence that they are not favoring AJ Capital, the Chicago-based purchaser of the President Hotel, the waiver proposal seems crafted to allow AJ Capital to sidestep many City laws and replace the existing housing in the building with a hotel.

We urgently need to retain housing in Palo Alto.  We do not want tenants evicted and forced to find new places to live.  And we do not want staff to grant waivers worth perhaps tens of millions of dollars to developers when there’s no legal necessity and outside of public view.  Please email the Planning and Transportation Commission at Planning.Commission@CityofPaloAlto.org to urge them in your own words to reject the waiver process proposed by staff.  And please attend the Commission meeting if possible at 6 pm on Wednesday night at City Hall (250 Hamilton).  

Links:

Planning Commission Agenda for January 30, 2019 Meeting: https://www.cityofpaloalto.org/civicax/filebank/documents/68695

Staff Report on the Proposed Change in the Law https://www.cityofpaloalto.org/civicax/filebank/documents/68694

Palo Alto Weekly December 7, 2018 Editorial Critical of Changing Laws to Help AJ Capital https://www.paloaltoonline.com/news/2018/12/07/editorial-a-stealth-agenda

Palo Alto Weekly Story on the December 10, 2018 City Council Action on the Waiver https://www.paloaltoonline.com/news/2018/12/11/proposed-law-would-prevent-president-hotel-conversion

Minutes of the December 10, 2018 City Council Meeting https://www.cityofpaloalto.org/civicax/filebank/blobdload.aspx?t=52082.73&BlobID=68210

Palo Alto Weekly January 25, 2019 Update on the President Hotel

https://www.paloaltoonline.com/news/2019/01/25/nonprofit-tries-to-get-reprieve-for-president-hotel-tenants

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Submitted by Adobe Meadows resident: Tell the Palo Alto City Council to support strengthened Renter Protection

Tonight at 7:15pm (or so), the Palo Alto City Council will consider a colleagues memo from Councilmembers DuBois, Holman, and Kou to strengthen renter protection for Palo Alto residents.  See http://www.cityofpaloalto.org/civicax/filebank/documents/59776

The Rental Housing Problem

Rental housing cost in Palo Alto and the region has exploded in recent years as the pace of job growth has tripled compared to the rate of housing growth. Housing that is being built is predominantly high-end along with small amounts of subsidized, low-income housing. The needs of moderate-income workers and families have been ignored, undermining our social and economic balance. Vital members of our community, teachers, nurses, police, firefighters, utility workers, shopkeepers, social workers and others are all being driven away.

Although big growth in the tech economy has been a boon to many, it has caused negative disruptions to our region including a huge growth in housing demand that has harmed affordability with many long-term renters being driven out or forced to pay more than they can afford. Since 2011, the average rent in Palo Alto has increased 50% while the county median income has grown at less than1/10 that rate. Palo Alto needs to provide renters with the sort of reasonable protections already provided by Mountain View and San Jose.

By the council acting on this problem through a city ordinance, Palo Alto avoids the likelihood of a more restrictive and less balanced citizen initiative like in Mountain View which cannot not be modified except through a future vote of the electorate.

Renter Protection Goals

  • Support retention of a healthy, diverse community and local economy;
  • Moderate the rate of rent increases;
  • Provide protections from unjust evictions that are fair to both renters and landlords;
  • Continue topromote construction of new multi-unit rental developments.

Recommendations

  • An annual percentage cap on rent increases for multi-unit residences built before 1995, thereby continuing to encourage new housing construction.
  • Protections against tenant terminations without just cause while protecting the fair rights of property owners.
  • A city council ordinance rather than a voter initiative that will allow needed adjustments over time.

Here’s what you can do

  • Write to the Palo Alto City Council today at city.council@cityofpaloalto.org requesting they support the Colleagues Memo (agenda item 13).  Please write in your own words, and you may use the talking points above.
  • Come speak to the City Council tonight.  Arrive by 7:15pm.  Fill out a comment card requesting to speak to agenda item 13.  You will have two or maybe three minutes to speak.  It is best to prepare your remarks in advance, either word-for-word or in outline or note form.  You can make a short statement, simply to say something like, “I support the goals of recommendations of the colleagues memo.  Thank you.”

Jobs/housing: Tell Council your thoughts on office growth – September 5, 2017

On September 5, City Council will define its vision for future limits on the pace of growth for office and research and development (R&D) square footage in Palo Alto.

In this first step toward developing a permanent annual limit on office/R&D development, Council will direct staff regarding the following details of a possible ordinance:

  1. Boundaries of the areas that should be subject to an annual cap;
  2. The quantitative limit – should it be 50,000 sf or something different;
  3. Whether unused annual allocations should be “rolled over” to raise the cap in subsequent years;
  4. Whether current exemptions to the limit should be continued or modified; and
  5. How projects should be reviewed – competitive, first-come first-serve, or some other process.

Many Palo Altans see managing the pace of jobs growth as a vital piece of the puzzle to address our jobs/housing imbalance, while others worry that constraints on a strong office market will impair Palo Alto’s economic vitality.

Tell City Council where you stand on office growth limits. Speak up at City Council on September 5 at 6pm (City Hall) or send an email to the full Council at city.council@cityofpaloalto.org.