An older cluster of apartments in Mountain View's North Whisman neighborhood will be torn down to build an equivalent number of new rowhouses, a decision the owner blames on the city's rent control law. On Tuesday night, the City Council unanimously approved plans to redevelop the Moffett Manor Apartments, replacing the 56 existing rentals with 58 for-sale homes.
Playing to the council's sympathies at the June 12 meeting, John Hickey of SummerHill Housing Group promised that the new rowhouses would be priced to be affordable for the so-called "missing middle" -- that is, working professionals who normally can't afford home ownership in the area.
In earlier plans sent to the city, he indicated the prices would range as low as $680,000 for a one-bedroom and up to $1.1 million for a three-bedroom home. On Tuesday, he amended that promise slightly, saying the homes would be priced "substantially less than $1.6 million to $1.7 million."
"The key here is our units will be smaller but still very livable and efficient," Hickey said. "The current owner has done a very good job maintaining the site, but the simple fact is these buildings are reaching the end of their lifespan."
Apartments at Moffett Manor were generally considered to be affordable by Mountain View standards, ranging from around $1,850 to $2,400 a month. In 2016 Grant Huberty, the owner of Moffett Manor apartments, had warned he would sell his apartments for redevelopment if the city enacted rent control.
In an email to the Voice, Huberty said the housing at Moffett Manor would have needed to be rebuilt in any event. The apartments were showing their age and they didn't meet current seismic standards or utility demands. It was a choice of upgrading old apartments or building new homes, he said.
"The current rental housing climate in Mountain View had an impact on our decision to not undertake these extensive and expensive renovations," Huberty said. "Whether completely remodeled to today's safety standards or simply redeveloped, the existing tenants would be displaced in either scenario."
A total of 12 tenants from Moffett Manor have applied so far for the city's relocation assistance program, Hickey said. Each qualified tenant will be provided the equivalent of three months of rent and help finding a new apartment in the area.
Some residents made a last-ditch effort to preserve the apartments, describing it as their only housing option in the area.
"For me and my neighbors, this is the only way we're going to be able to remain in Mountain View," said Andre Pena, an IT employee at Apple. "A small net gain of housing for such a disruptive project doesn't seem reasonable."
Mayor Lenny Siegel acknowledged that allowing the redevelopment to go forward would mean the loss of "naturally affordable housing" in Mountain View. But approving it was still the right decision, seeing as how it complied with the city's zoning and other requirements, he said, pointing to hundreds of new apartments being built around town.
"I feel obligated to support this project," he said. "But I urge the developer to think about building housing in the future on sites where there isn't any housing."
As part of the project, SummerHill is expected to pay affordable housing in-lieu fees equivalent to 3 percent of the home sales. Planning staff expect the city to receive around $1.67 million.
The project was unanimously approved by the council in a 6-0 vote. Councilman Ken Rosenberg recused himself due to a potential financial conflict.
Comments
Monta Loma
on Jun 14, 2018 at 2:23 pm
on Jun 14, 2018 at 2:23 pm
Not so sure this is a direct result of rent control or the absolutely insane housing market. The owner stands to make a mint by selling row houses instead of renting out. I really can't blame the owner--why should he plod along when there's a ton of money to be made. But it is indicative of a major problem in MV.
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Waverly Park
on Jun 14, 2018 at 2:56 pm
Registered user
on Jun 14, 2018 at 2:56 pm
Rent control fall out. It won't be the last. Another 56 replaced renters. Are the affordable housing in lieu fees enough to build affordable housing? Probably not:
Web Link
Willowgate
on Jun 14, 2018 at 3:01 pm
on Jun 14, 2018 at 3:01 pm
Finally, our city council approves a project to increase home ownership, after years of rubber-stamping yet more rental housing projects. I'm happy to see this. I've often said in these comments that you need ownership to have a real community.
Mr Hickey would make a mint either way, I think. If he built new apartments, they would be exempt from rent control.
I'm in that "missing middle" target market who would love to move my family out of my small condo unit into something larger like a 3-bedroom rowhouse, and I'm not interested in renting. I'm looking forward to this new development.
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Whisman Station
on Jun 14, 2018 at 3:53 pm
Registered user
on Jun 14, 2018 at 3:53 pm
@Alex M . . . you're assuming Costa-Hawkins isn't repealed in November. In which case (repealed) ALL apartments no matter when built, also condos and single family homes would become subject to rent control in Mountain View, along with the elimination of Vacancy Decontrol which then requires that a new tenant be offered the same rent as a vacating tenant, now matter how absurdly below market that rent may be. Can you say, "death knell to MV rental housing?"
Vote NO on the proposition in November repealing Costa-Hawkins (Prop # not yet assigned). Repealing the statewide statute would be a disaster for (more) affordable housing in the Bay Area since no new housing would be built and protected tenants at absurdly low rents would be loath to move--creating an ever increasing housing shortage.
This problem isn't going to go away with a simple November vote. It is a decades-long process where, absent pro-developer incentives, there will be no new housing units built with the repeal of Costa-Hawkins.
Chime in Businessman! Successful Businessman has laid out the simple truth of the matter. Go ahead, quote your sources, express your opinions and try to convince any rational being that destroying an economic incentive to invest in Mountain View housing is a good thing for the community.
Willowgate
on Jun 14, 2018 at 4:05 pm
on Jun 14, 2018 at 4:05 pm
@The Successful Businessman - the alarmist doom-n-gloom you predict isn't a certainty by a long shot.
I'll vote "no" on the repeal. However, IF Costa-Hawkins is repealed, cities would still have to pass new legislation before the repeal would have any effect. That goes for Mountain View also. Some cities might expand rent control as you describe, although I suspect that having it apply to all property including private homes won't fly, especially if challenged in court. Other cities might leave their current laws as they are.
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Waverly Park
on Jun 14, 2018 at 5:44 pm
Registered user
on Jun 14, 2018 at 5:44 pm
There are far too many aged, decaying, and obsolete rental housing units in Mountain View that must be destroyed and replaced. Rent control ironically has made this replacement an imperative for owners so they can realize the true value of their obsolete apartments --- land and not buildings. Economists call rent control's consequences "Negative Unintended Consequences." The citizens of Mountain View would best benefit if all of these decaying apartments were replaced by medium or low density Owner Occupied Housing --- i.e., town houses or single family homes. Mountain View should realize just what Palo Alto and Los Altos already realize. Owner occupied brings economic sensibility and stability to cities. Rental housing brings only transient occupants who only give a damn about their pocket books and not about the future of Mountain View. If they don't have a committed investment in their housing, then why should they live and VOTE here??? I really don't give a damn about what rent control advocates think. They're social and economic idiots.
Cuernavaca
on Jun 14, 2018 at 6:32 pm
on Jun 14, 2018 at 6:32 pm
Renters are far more concerned about the future of Mountain View than you are. [Portion removed due to disrespectful comment or offensive language]
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Another Mountain View Neighborhood
on Jun 14, 2018 at 6:47 pm
Registered user
on Jun 14, 2018 at 6:47 pm
In response to the Successful Businessman:
I will not argue against significantly wise information. THat would be an expression of foolishness.
However I still promote the repeal of Costa Hawkins because it will put significant improvement of bargaining power of customers in the rental property business.
Having a statutory insurance policy regarding gamblers in the rental housing industry is simply wrong, it is against of the concept of "moral hazard". That's it. Costa Hawkins is a means of making the customers insure the losses of poor business decisions.
The Crossings
on Jun 14, 2018 at 8:55 pm
on Jun 14, 2018 at 8:55 pm
No problem here, in fact, you can continue tearing down California Street to Del Medio Ave. Enough apartments in these locations all supposedly from the booming 50's-70's Moffett Field demand. Just trash now.
North Whisman
on Jun 14, 2018 at 11:26 pm
on Jun 14, 2018 at 11:26 pm
If anyone thinks Measure V had no effect on this, you are incorrect. That neighborhood was built together as the Cloverdale tract and an HOA with CC&Rs technically existed well into last year, they could only develop the Moffett Manor site in the way the article describes, if the other property owners part of the HOA agreed to dissolve it, specifically a simple majority of 14 of 26. I can tell you we jumped at the chance to assist Mr. Huberty and cast our vote in his favor, we tipped the scale toward development of that whole swath of land containing affordable apartments and were thrilled at least one of us 26 was able to escape the horrors of rent control and others will surely follow. What do you think will happen across the street from Moffett Manor geniuses? How you do you like them apples Juliet Brodie and Tenants Coalition? So much losing, mind your own business next time instead of taking from others.
Old Mountain View
on Jun 15, 2018 at 2:12 am
on Jun 15, 2018 at 2:12 am
Nice, Mr. Huberty and MV City Council. Way to put 50 families on the street. Way to put money before the futures of decent, contributing community members. The city council is weak, without heart, and led around by their noses, by the fattest pockets. You disgust me. Skip off into your promising future, Mr. Hubert, with that new wad of multi-millions. Try to sleep well.
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Whisman Station
on Jun 15, 2018 at 11:54 am
Registered user
on Jun 15, 2018 at 11:54 am
@227 . . . Nice try with the slam against Mr. Huberty. For the past 50+ years his family has provided under-market housing for Mountain View when no one involved in this discussion lived here, including council members. Where were you 50 years ago?
So far, as was pointed out in the public hearing before the council, only 12 of the 56 households have thus far qualified for any relocation assistance since household income for most exceeds the median for Santa Clara County. The most vulnerable tenants have already relocated to affordable housing in the area. The majority of households are from other countries, earn well over the county's AMI, send money home and will not be living on the street. They continue to live at the property until the bulldozers show up, and gladly bank the additional $2-3K/month they'd be paying elsewhere.
North Whisman
on Jun 15, 2018 at 12:14 pm
on Jun 15, 2018 at 12:14 pm
The Successful Businessman is spot on, all of the 26 parcels in the Cloverdale tract provided affordable housing since the late 1950's/early 1960's.
Measure V has accelerated its demise as a quality, affordable neighborhood for people relocating to the area.
It was my experience that even with rents of $1,000 for a 2 BR as recently as 2009/2010, my existing tenants voluntarily moved out for other opportunities during the recession. We never served a 60 day notice or issued an increase more than 10% in a year. The tremendous unintended consequences we are seeing now are a direct result of trying to regulate a market that needs to be free.
The tenants that moved out voluntarily were replaced with new entrants to the community who are vital to the growth of the local economy, many of these early career persons with high levels of education, so this neighborhood was providing affordable housing for the lifeblood of the area's future. Sad that is no longer the case due to this unnatural intervention.
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Old Mountain View
on Jun 15, 2018 at 3:44 pm
Registered user
on Jun 15, 2018 at 3:44 pm
Mr.Huberty is only doing what many others will do as I did last year, sold an investment for tear down of the most affordable housing in Mountain View. This is a business and not a charity to the very ones that slapped him in the face when they voted in Measure V.
There is no emotion here, just business sense and the proponents and advocates of measure V assured their own demise. It's just business and now Mr. Huberty can continue on his journey of investing his money in the free market. I think we can all agree this is the prudent thing to do.
The mistake made by measure V was that the writers or lawyers of this measure and the angry get even tenants didn't take into account the dirt value of these properties.
In the past years when rent control was enacted, Landlords didn't have many options but today when an acre of land in Mountain View that is zoned multifamily sells for 10 million, that's not only an option but an incentive. I saw it that way when I sold to a developer!
These hungry city officials are going to rubber stamp these projects because it is going to fill the city coffers with 10 times the property taxes they recieved on rundown tenements.
So, let the bulldozers begin and I think my next business move will be the leasing of such equipment in Mountain View. What the heck, the miners of the gold rush didn't get rich...it was the merchant that sold him dry socks that made a killing!!!
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Whisman Station
on Jun 15, 2018 at 6:30 pm
Registered user
on Jun 15, 2018 at 6:30 pm
Bless you Howard and Cloverdale Tract. Exactly my sentiments. Measure V was written by Juliet Brodie's law students at Stanford. It is purposely riddled with vagueness and conflicting and dubious language. Stanford would love nothing more than to see everything around their campus under rent control, a la Columbia in Manhattan, NY! Affordable housing for students they don't have to provide!
So let the lawsuits begin! And they have. Juliet Brodie and her team of lackeys gladly appear pro bono on behalf of any tenant while struggling landlords petition before the RHC Hearing Officer, hoping for nothing more than a guaranteed fair rate of return. Measure V is an abomination, and Mountain View will suffer the dire consequences if this onerous dumpster fire City Charter is not repealed or at least revised by the citizens in November.
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Rengstorff Park
on Jun 15, 2018 at 7:58 pm
Registered user
on Jun 15, 2018 at 7:58 pm
In this case all the city council had to do to help affordable housing was to reject this proposal. No, you can't bulldoze rent controlled apartments to build million-dollar row houses. It's that simple. The fact they voted 6-0 in favor shows where they stand -- with developers, against residents, against affordable housing.
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Whisman Station
on Jun 15, 2018 at 8:07 pm
Registered user
on Jun 15, 2018 at 8:07 pm
[Post removed due to disrespectful comment or offensive language]
Old Mountain View
on Jun 16, 2018 at 5:14 am
on Jun 16, 2018 at 5:14 am
@Successful Businessman
You and your pseudo-facts, ignorance, racism, and classism are much of what is wrong with this discussion/battle of Who Deserves to Live in Mountain View. Your response to @Juan says a lot about your character. It was disgusting.
In the end, he who finishes with the most toys (i.e. biggest bank account), will not be the winner. He just thinks he will.
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Another Mountain View Neighborhood
on Jun 16, 2018 at 6:02 am
Registered user
on Jun 16, 2018 at 6:02 am
Hello everyone:
It appears to be now official.
The Costa Hawkins Repeal initiative is now on the ballot seen here
Web Link
So if these homes turn out to be rented, they will likely be subject to rent control, since the latest polls seriously indicate that Costa Hawkins repeal will succeed. And the City Citizens in Mountain View WILL get CSFRA extended to the units or homes currently blocked by the Costa Hawkins law.
I wonder if the project will in fact move forward at this time. Many projects like this are given local approval, but then are cancelled by the developer after the approval.
It just appears that the statewide initiative is about to throw a lot of uncertainty in this situation.
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Old Mountain View
on Jun 16, 2018 at 7:52 am
Registered user
on Jun 16, 2018 at 7:52 am
Businessman,
You better hope this property is redeveloped if Costa Hawkins is repealed because it, like so many other properties like it will turn into slums of neglected apartments nobody wants to own.
You can't have your cake and eat it too...can you?
Oh, and Juan, The fact they voted 6-0 in favor shows where they stand with developers, against residents, against affordable housing and with the mighty BUCK!
You got it, Econ 101!!!
The city council will always vote to redevelop a $60,000/year property tax paying parcel into a $300,000/year tax paying parcel.
Hallelujah, At least someone in this Liberal dessert called, "Mountain View" has their head on straight!
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Whisman Station
on Jun 16, 2018 at 7:56 am
Registered user
on Jun 16, 2018 at 7:56 am
@The Business Man . . . Costa-Hawkins came into play partly because the multifamily building business was facing a crisis in CA cities where rent control was enacted. I was there and know this first hand. No investor in their right mind was building apartments knowing they could only increase rents at the rate of inflation, along with the requirement that a new tenant had to be offered a vacant apartment at the same rate as the previous tenant--vacancy-control. It was becoming a statewide problem wherever rent control was enacted, thus the legislature in Sacramento to save the building industry and protect investors.
If a similar law was in place curbing share prices on Wall Street do you suppose there would be capital for corporations to evolve, expand, hire more workers, etc? Buy a stock and never see it increase in value beyond the rate of inflation. How long do you think Wall Street would keep its doors open? The same can be said for other "necessities of life" like food. Do the same price controls in the food industry and everyone would have to grow their own meals in the backyard. Absent a profit motive, investment in capital intensive markets would simply disappear.
The unintended consequences of a Costa-Hawkins repeal are very simple. Multifamily housing projects where rent control exists will come to a screeching halt. The added fear of other communities adopting rent control measures will also curtail further investment as the invested dollar will simply stagnate in a rent controlled property. Add to that the threat of the above mentioned vacancy-control and this state will see major layoffs in the construction industry and planning departments wherever rent control exists.
Repeal of Costa-Hawkins won't have a major impact on condo and SFR construction since those homes are typically purchased by an owner-occupied party. Condos will take the bigger hit since they are often turned into rental property.
The MV city council approved property on Walker Drive will go ahead. Summerhill Homes has already spent who knows how many hundreds of thousand of dollars getting to this point in the process. The city wants more homeowners and this project will help them accomplish that goal at the lower end of the market--where zero options currently exist.
At the end of the day, we can take up this discussion again in a year's time to see how history is simply repeating itself one generation later.
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Rengstorff Park
on Jun 16, 2018 at 8:17 am
Registered user
on Jun 16, 2018 at 8:17 am
Recall that a developer made a similar proposal in Palo Alto recently -- bulldoze the affordable housing at Buena Vista and evict long-time residents in order to build unaffordable housing for the rich. The Palo Alto City Council stood up for residents, through developer huffing and puffing, years of lawsuits, still Palo Alto said NO. In the end, the developer made $40 million selling the place to the government and residents got to stay. Win-win for everyone, all it took was the courage to say NO.
Why isn't the Mountain View City Council willing to stand up and support affordable housing like Palo Alto did?
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Another Mountain View Neighborhood
on Jun 16, 2018 at 9:40 am
Registered user
on Jun 16, 2018 at 9:40 am
In response to The Successful Businessman you said:
“@The Business Man . . . Costa-Hawkins came into play partly because the multifamily building business was facing a crisis in CA cities where rent control was enacted. I was there and know this first hand. No investor in their right mind was building apartments knowing they could only increase rents at the rate of inflation, along with the requirement that a new tenant had to be offered a vacant apartment at the same rate as the previous tenant--vacancy-control. It was becoming a statewide problem wherever rent control was enacted, thus the legislature in Sacramento to save the building industry and protect investors.”
And:
“The unintended consequences of a Costa-Hawkins repeal are very simple. Multifamily housing projects where rent control exists will come to a screeching halt. The added fear of other communities adopting rent control measures will also curtail further investment as the invested dollar will simply stagnate in a rent controlled property. Add to that the threat of the above mentioned vacancy-control and this state will see major layoffs in the construction industry and planning departments wherever rent control exists.
Repeal of Costa-Hawkins won't have a major impact on condo and SFR construction since those homes are typically purchased by an owner-occupied party. Condos will take the bigger hit since they are often turned into rental property.”
The fact is after 20+ years the “Costa Hawkins” economics “experiment” or “promise” was an epic failure. Government statistics indicated that only 20% of the additional units for those who moved into the state of CA were built. And don’t put the blame on the local governments, if the private landlords, investors, real estate, or developers proposed projects that met the needs of the community, they will be given permission.
You simply threaten the communities that you will freeze building. It appears that has already happened. So as Donald Trump said to get elected: “What have we got to lose?” The fact is Costa Hawkins is an epic failure and saying it helped the state of California, has been demonstrated as a false promise and a failed experiment of economics. You said:
“If a similar law was in place curbing share prices on Wall Street do you suppose there would be capital for corporations to evolve, expand, hire more workers, etc? …”
Buying stock is simply a gamble and is not relevant in regards to this topic and market. The “Housing” market is treated completely differently by the U.S., the State of California, The County of Santa Clara, and the City of Mountain View, given it is critical for any other economic activity. Stocks are NOT CRITICAL period. They are only floating currency transactions nothing more. You said:
“Buy a stock and never see it increase in value beyond the rate of inflation. How long do you think Wall Street would keep its doors open? The same can be said for other "necessities of life" like food. Do the same price controls in the food industry and everyone would have to grow their own meals in the backyard. Absent a profit motive, investment in capital intensive markets would simply disappear.”
In fact there are many Federal and State food price controls that are active today, they are “Farm Subsidies” and “Production Controls”. You should be more aware of them. You said:
“The MV city council approved property on Walker Drive will go ahead. Summerhill Homes has already spent who knows how many hundreds of thousand of dollars getting to this point in the process. The city wants more homeowners and this project will help them accomplish that goal at the lower end of the market--where zero options currently exist.”
That was their choice to do. It will also be their choice to cancel the project. That is the cost of business, they are not entitled to get that money back, and they have to earn it.
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Whisman Station
on Jun 16, 2018 at 9:50 am
Registered user
on Jun 16, 2018 at 9:50 am
@Juan . . . I guess you didn't really ready the article. Whether this Mt. View property is redeveloped for home ownership or kept as an apartment complex, everyone would have to be displaced according to the owner. The buildings are in serious need of code upgrades and safety measures to be sustainable in the long term. Figure on $40-50K/unit and that's several million dollars. Then that investment has to amortized over many years according to the rules imposed by the Rental Housing Committee--assuming a hearing officer would even grant an upward adjustment after enduring the onerous process of filing the request. I can see why the owner or any future owner would opt to redevelop the land into homes that can be owned by middle-class professional working nearby.
In the Buena Vista story, we're talking about a mobile home park. Chalk and cheese difference. Moreover redeveloping the property would have displaced over 400 people with absolutely nowhere to go. To my knowledge the Mt. View apartments in question are, for the most part, occupied by IT professionals making $125-$150K a year. There are plenty of new cars in the carports. While moving is a pain, they aren't going to be ousted from the city or resort to living on the street.
There might be some apartment buildings around town for the Santa Clara Housing Authority to step in and spend another $40M but I don't think those Moffett Manor apartments would be a good candidate.
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Cuesta Park
on Jun 16, 2018 at 11:48 am
Registered user
on Jun 16, 2018 at 11:48 am
Ah, @The Successful Businessman must run a very simple business. "The simple truth"? As @The Business Man knows, economics, community morality and doing well by doing good are never, ever "simple".
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Rex Manor
on Jun 17, 2018 at 5:59 pm
Registered user
on Jun 17, 2018 at 5:59 pm
In November 2016, there were over 14000 units subject to rent control. 50 units being converted is hardly a sign of anything. This is just normal turnover - older buildings are renovated, remodeled and demolished. Same as in 2017, 2016, 2015, ....