After a 6-1 vote with Mayor John Inks opposed, city-hired ROEM Development Corporation is now nearly set to build 48 studios above a 1,600-square-foot retail space at the corner of Old Middlefield Way and Rengstorff Avenue. The building has been home to 12 low-income households — 48 people in total — as well as La Costena and La Bamba taquerias and two small retailers. Only one of the taquerias may return to the retail space in the new project.
"This is not fair," said Juan Media, a resident who will be displaced after living in the building for 30 years. "My four children was born right there. I don't want to move from there. All my kids went to Monta Loma, Crittenden, Los Altos, Mountain View High School. I have 16 year old boy — two more years" until he's an adult.
"There's a large number of women and children," said resident Don Bahl, speaking for the residents. "They said they considered themselves one big family. There's no way they are going to be able to pay the rent in the places they are going to."
The city is allocating nearly $1 million to relocate the families, including the cost difference between their old rents and new rents for 42 weeks. A city staff report said that tenants currently pay an average of $842, $1100 and $1,310 for one, two and three-bedroom units respectively. That's less than half the average market rates of $1,830, $2,299 and $2,900. The report says 15 children live in the building.
The rents of the 400-square foot studios to be built at 819 N. Rengstorff Avenue will range from $500 to $775 a month, aimed at people who make between $21,300 and $33,725 a year, or between 30 and 45 percent of the area median income. Three quarters of the existing tenants earn less than 50 percent of the area median income, according to a city staff report.
Council members have defended the project by saying it will replace a 1940s building that has long suffered from safety concerns and code violations.
Council divided over worker pay
Looking at the project's costs, Sean Hebard of Carpenters Local 405 said it appeared that ROEM was leaving little for construction worker pay.
"I'm assuming that ROEM, through their subcontractor, is saving 50 percent on wages," Hebard said.
To see how, he said he went to a ROEM project being built in Santa Clara and found that workers are receiving no regular wages or benefits.
"Drywall installers were being paid a little over $3 for a 4-by-8 sheet nailed in place," he said, while the subcontractor currently has its license suspended by the state.
After the union highlighted the issue, four of the council's seven members supported a "prevailing wage" for workers on the project. But City Manager Dan Rich said five votes were required to transfer the full $1.6 million from the city's ample housing funds to pay the higher wage. The motion failed, 4-3. The council eventually voted 6-1 to approve the project without prevailing wage, with Inks, a subsidized-housing critic, opposed.
"We should be paying the folks we employ a fair and livable wage," said council member Margaret Abe Koga, who raised the issue for a vote. "It comes down to values."
Council members Ronit Bryant and Jac Siegel agreed, while member Chris Clark said he was on the fence before voting in favor.
"If we are not insisting on decent wages being paid, there really is a complete disconnect," Bryant said. "There is no logic in, 'Let's build this as cheaply as possible.' The way to move forward is for people to paid wages to live in market-rate housing. We collect the money, we do have money."
Members Mike Kasperzak, Mayor John Inks and John McAlister were opposed to paying a prevailing wage. McAlister, a a business owner, did not comment as to why.
"Adding on a tenth of the cost at the last minute... I just can't support that," but Kasperzak said.
On Wednesday, after the meeting, Jonathan Emami, vice president of ROEM, addressed the carpenter union's comments.
"I know nothing about what subcontractors are paying their employees or what type of benefits, but I would think that what he said was false," Emami said.
As to the cost of prevailing wage contracts, he said, "It could be as little as 30 percent higher or could be as high as double. Prevailing wage is always substantially higher."
He noted that ROEM's affordable housing project under construction downtown on Franklin Street uses 20 to 25 percent union labor, even though council members declined to pay a prevailing wage on that project as well.