At its first meeting, Mountain View's new Rental Housing Committee dipped its toes into a torrent of controversy surrounding the city's push to control local apartment rents. The three-hour meeting on Monday, May 8, remained largely polite and procedural, but it set the stage for plenty of difficult decisions to come.
The intense interest in the new committee among landlord- and tenant-advocates alike was clear from the standing room-only crowd packed into a city hall conference room. While no major policy decisions were on the agenda, stakeholders attended to see newly appointed committee members interact for the first time, and perhaps gain some insight into how future hot-button issues would play out.
The only debate of the night was over who should be chairperson and lead the meetings. Committee member Vanessa Honey nominated former Councilman Tom Means, praising his experience in policy-making. But other speakers were quick to remind that Means had publicly opposed the Measure V rent control initiative in last year's election. Committee member Emily Ramos nominated her colleague, Evan Ortiz, pointing out he had close knowledge of the measure and spoke Spanish. But critics pointed out Ortiz had campaigned to pass the rent control measure. Neither of them could secure a majority; both were criticized for being too partisan to fairly take on a leadership role.
What could have been a quick vote instead became the Rental Housing Committee's first argument.
"I didn't foresee this as being such a big issue," admitted committee member Matt Grunewald. "But I do see how perception is important. If we're trying to be unbaised, then the choices of Ortiz and Means might not be good."
Instead the chair position went to Vanessa Honey, whose background as both a renter and property manager seemed to satisfy almost everyone. She was approved 4-1 for the position, lacking only Ortiz's support. Ortiz was approved for the vice-chair position, a role that serves as a replacement for when the chairperson is absent.
The rest of the meeting mostly focused on planning ahead for the big decisions to come. After a quick tutorial on the basics of the Community Stabilization and Fair Rent Act, the members approved a schedule for the crucial issues awaiting them, such as hiring an enforcement team, defining what a "fair rate of return" should be for apartment owners and setting the allowable increase for next year's rents.
Many landlords used the public meeting to air their grievances with the new rent control policies.
"There's going to be a point where we can't afford to pay our bills because Mountain View is balancing this on the backs of us," said Elizabeth Lindsay, owner of 300 apartment units in the city. "I've been doing this for 30 years, and now I won't be able to maintain a pride of ownership like I have in the past."
Many of her colleagues focused their complaints on the rollback mandate, which took effect this month and requires all qualifying apartment tenants to have their rents revert to what they were paying in October 2015. A few property managers described it as a logistical nightmare trying to rewind their rates to two years ago.
Landlord refuses to honor rent rollback
Prior to the meeting, some landlords announced they would not to follow the new law as an act of civil disobedience. Zell Associates of San Jose, which manages more than 190 apartments in Mountain View, notified just under half of its tenants that they would face eviction if they didn't pay the full rent, and returned payments from anyone who tried to pay the 2015 rates. Owner Jeff Zell explained in the letter to tenants he was "willfully choosing" not to comply with the rollback.
Reached by email, Zell said his company had little choice but to resist, saying he risked losing $67,000 annually in rent as well as about $1 million in property value.
"We decided to take a stand because Measure V sets a dangerous precedent -- people voting benefits for themselves at the direct expense of others," he wrote. "What's to stop the next vote from rolling back rents to 1995 or even 1975?"
Speaking to the Voice, tenants at Zell properties say they were told by staff at the Law Foundation of Silicon Valley that their best option was to pay the higher rent for now. Attorneys warned that if tenants refused to pay the full amount, they would likely wind up in unlawful detainer court facing eviction proceedings.
Last week, the Law Foundation of Silicon Valley sent a cease-and-desist letter to Zell Associates warning they need to immediately comply with the new law. Law Foundation attorney Nadia Aziz said that tenants would be eligible to recoup three times their damages from any willful violation of Measure V.
"That you disagree with the public policy choice that the people of Mountain View made by voting to enact (rent control) does not insulate you from liability," she wrote. "If you continue to refuse to comply, we will consider legal action against you."
Zell acknowledged that he was in danger of facing penalties from the new rental housing committee. But he expressed confidence that the rent control law would eventually be found unconstitutional in court.
But the legal challenges against Mountain View's rent control program appear to have fizzled after all the plaintiffs dropped out. The California Apartment Association, which filed a lawsuit seeking to overturn Mountain View's rent control law, announced over the weekend that it was dropping its legal action after a judge refused to grant a restraining order preventing Measure V's enactment while the case made its way through the courts. Earlier this week, a group of landlords who intervened in the case also filed for a dismissal.
Correction: An earlier version of this story incorrectly stated the Rental Housing Committee member that nominated Tom Means for chairperson.