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For the second time, a city-appointed hearing officer is rejecting a request for series of rent increases on dozens of tenants at the Del Medio Manor apartments.
In her decision issued earlier this month, city hearing officer Jil Dalesandro cited a sweeping lack of evidence to support the rent increases, alleging the landlord’s bookkeeping in support of the petition was so flawed that it amounted to “hearsay” and was impossible to verify.
Located at 141 Del Medio Ave., the apartment property has become a closely watched test case for the city’s rent control program, particularly its complicated process for granting landlords special additional rent increases if they meet certain criteria.
Del Medio Manor owner Elizabeth Lindsay originally filed her petition more than a year ago, seeking permission to raise rents on about two-thirds of the 105 apartment units owned by her family. Initially, she sought rent increases ranging from $125 to $900 extra a month. She later lowered that request to $100 to $500 a month on about half of her units.
A coalition of tenants organized to protest the increases, and attorneys with the Community Legal Services of East Palo Alto took up their cause.
Under the city’s rent control program, rents are normally allowed to increase by only the cost of inflation except in special circumstances. Those cases require landlords to prove that the routine costs of running their properties are lowering their profit margins.
In a hearing held in May, both Lindsay and her tenants presented their cases before Dalesandro in a meeting designed to resemble a court hearing. In her decision, Dalesandro rejected nearly all the claims made by Lindsay and her partners, saying they relied on faulty accounting and inflated expenses.
In August, Lindsay appealed the case to the city’s Rental Housing Committee, which appeared to be more sympathetic to her complaints. The committee decided to bounce the decision back to Dalesandro, urging her to modify her ruling or provide more evidence to back up her decision. Ever since then, the case has been in a holding pattern as all sides waited to hear from Dalesandro.
In her new decision, Dalesandro doubled down, lambasting the Del Medio owners for failing to provide evidence to back up their claims. Listed expenses that they cited to justify higher rents, such as repaving a parking lot or elevator maintenance, were not supported by any financial records they provided, she wrote.
Lindsay did provide hundreds of pages of her own typewritten summaries of her expenses, but she did not provide any of the original documentation, such as checks or invoices to back up her claims, Dalesandro wrote. She also disputed how the landlord calculated their management expenses, pointing out that about 20 percent of the property’s revenues were being listed under this expense. The city’s rent control policies allow only 6 percent to go toward management fees.
The Del Medio apartment owners have until next week to appeal the decision.
While the new decision is a victory for tenants, it also reinforces a frequent complaint made by critics that the rent control program’s petition process is too slow and burdensome for landlords to use. In her public comments, Lindsay has complained that her rent increases sought for 2016 weren’t processed for a decision until late 2018. City housing officials have been working on a simplified petition for landlords to use.
I’m guessing in not too long we’ll see a Voice article on Del Medio being torn down for a new construction
This is how the seeds for slums are planted. Slums are cheap, I lived in a few in the Bronx long ago, so they have their place, but you can’t assume that rent control means that you’ll have what you have today for a lower price.
It would seem that with the new, higher minimum wage, tenants could afford to pay more rent. Locking landlords into older rates based upon the economics of the time seems unfair as their costs – taxes, compliance, maintenance, etc.- go up too. It has apparently taken two years to get to this ruling.
Rent control is always going to be problematic to administer. Excesses, delays, and imbalances are always part of the mix. And before we soak up all our time and attention with managing the solution, I wish we’d stop and consider the fundamental problem. How could a community drift so far from a balanced housing / office mix? I’ll offer a naive explanation: the City council has been able to treat each development project (housing or office space) separately without keeping the two pools closely yoked. Any approval of another million square feet of office space should have been linked to 5,000 additional housing spaces. Maybe we should stop the problem at the source before we invest so much in an imperfect “solution”. That is, first close the barn door, and then chase after the horses.
What a terrible process. The only incentive is to turn this into a slum or knock it down. Everyone loses! While rent control may work in the short term it is a disaster in the long term.
Come on people… You all know she is trying to hike up the rent for profit. If she really had increased expenses, she would be able to produce invoices. The woman owns hundreds of apartments, she doesn’t need an extra $900 per apartment.
$3000 to rent a one bedroom in Mountain View, this is too much. Completely insane. Don’t make the problem worse by defending this owner of hundreds of apartments, or propose to replace them with 1 family houses. Who would buy a house where this apartment complex is situated anyway…
You said,
” You all know she is trying to hike up the rent for profit. If she really had increased expenses, she would be able to produce invoices.”
Everyone can agree that the driveway wash re-done at the property. The tenants alleged that the driveway did not need to be re-done and there fore, under Measure V it is not a repair but an improvement and can not be calculated as a business expenses and used to show the hearing officer what expenses the owner has.
How can you provide paperwork to show that you needed to re-do the driveway?
You have a bill and your check, but they want other documents to say, from who?, that yes-it is needed to be re done.
Also, Under Measure V, you are only allowed a 6% management fee to be calculated as a business expense. Problem is management company’s charge 10%.
This whole Measure V is so unfair, this is a blight on the city of Mountain View. Until this came to our city, everyone was treated equally and fairly, but these outside activist groups wrote Measure V to totally screw the landlords.
So unfair!
I do not agree Del Medio apartments are “slums”. Rent control was initiated as the
result of landlords doubling rents and demanding rent increases that were not lawful. These residents have been in the area for some time and deserve a stable home. Landlords have been able to cover expenses for an extended time and should not require this degree of increase. The comments that have been offered here are being written by individuals that do not understand the need for an affordable home. There are many new developments in this area that offer housing to those who have solid, strong income. There are no new developments that offer apartments at an affordable level of income for those who are less fortunate. Everyone deserves an affordable home
Why isn’t anyone pointing out that the reason she was denied has all to do with an inability to substantiate expenses??? Shouldn’t an apartment building with 105 units, that’s pressing for needed rent increases, be able to come up with legitimate audited financials, even just the one time, to substantiate their claims? Irresponsible, not how you run a mid-size business, does not deserve to be rewarded with favorable treatment.
I see a lot of “good to tear down old dumps and build owner housing to increase the housing stock”.
In principle this would be nice, but it’s short-sighted bordering on arrogant.
What person who started renting in Mountain View 20 years ago, and has seen their rent multiply by five times has had their income also increase by five in order to have stashed away enough money to throw down on how much this new owner-housing will cost?
It’s silly.
The allegation that more owner-housing is better for the community assumes that the community who rents can afford to buy those things.
Good luck with that.
Oh, and employees of big tech are renters too. Especially the younger ones.
Her records are sloppy or maybe artificial that’s an issue. Also only 6% of expenses can go towards fees. That’s on her. Look at the bureaucracy we’ve now created ! This isn’t going to make landlords shrug their shoulders and do nothing like the rent control proponents would like …
If it’s not worth the hassle and the return isn’t there it will be torn down and sold for $10s of millions to make some owner occupied homes. Less houses for middle income families, that’s what you’ll get.
You can’t make it cheap to live here by price fixing
This is great, now she will sell the land developers to put in nice and expensive condominiums. Increasing the value to the community and lower the number of renters. We want as few Renters as possible, it’s much better for community.
Don’t think rent control was put in place to think about the people. It was put in place to incentivize the selling of of apartments, so developers continue to line the city Councils pockets. It’s not like they were all bought by developers in their campaigns And never said no to a single project. Cram them all in! Don’t worry about pollution crime traffic we don’t care, we don’t live here.
I’ve never seen a city that hates its citizen so much. And everything they do is to give everything away to transients and criminals and make Criminals out of its citizens
Howard, “You people have no idea what del medios expenses look like every month.” From the proceedings, it sounds like Ms Lindsay doesn’t either! At least that’s the most charitable interpretation of her being unable to substantiate any expenses…
Dear Santa
For Christmas, I would like to ask that The Business Man and Steve Nelson stop commenting on MV Voice articles so we can have peace, clarity, and tranquility in Mountain View.
Elizabeth Lindsay could sell the land, evict the tenants, tear the dump down, build some really nice owner-occupied housing and make a ton of money in the process. Even MV will make lots of money on the new, MUCH higher property taxes. It also would have improved housing stock, a long-term benefit to the community.
Rock street, Del Medio or 10 other apartment buildings in Mountain View its the same problem the voters caused with measure V. You want more affordable housing? You encourage it not discourage it.
During the gold rush only the merchants got rich selling goods to the gold diggers. I think I’ll go into business in Mountain View renting bulldozers for a living.
Lets get some things straight here:
The hearing officer has more than 20 years experisnce in real estate law.
The officer has adjudicated and mediated in this area for more than 5 years and is a professional unbiased officer.
The hearing officer was trying not to disclose bad business practices in the first decision because of the detremental impact on any future investors in Lindsey properties.
BUT the RHC demanded complete documentation and disclosure.
The fact is that this company took advantage of it being a “private” corporation to withold any information that would discourage any investment or borrowing they recieve to stay in business.
If they were a “public” corporation, they would be required to submit reports to the SEC for the public use.
The pra ctices described in the decision written in this story indicates that they do not comply with proper general accepted accounting practices and thus rely on continual increases in rent to stay in business and borrowing.
I wonder if the RHC will dare to attempt to socialize the losses of this group with the enhanced sufficent production of evidence to substantiate the hearing officers decision. If they do, it will very likely end up in court.
I love how tenants claim to understand Building expenses. Maybe if they paid $8,000.00 to replace 1 water heater they’d get the idea. You people have no idea what del medios expenses look like every month..it’s almost comical to listen to the renters that think they know what their talking about.
In response to Howard you said:
“I love how tenants claim to understand Building expenses. Maybe if they paid $8,000.00 to replace 1 water heater they’d get the idea. You people have no idea what del medios expenses look like every month..it’s almost comical to listen to the renters that think they know what their talking about.”
As I stated earlier, the hearing officer is an expert. The report indicates that the property owner simply did not provide authentic evidence to warrant a favorable decision.
In response to mike rose you said:
“Regardless of bookkeeping.
The Vega adjustment (which the owner applied for)
Is a court mandated adjustment of base rents to a level for a comparable unit at the time of rent control inception.”
YES but it has to be based on COMPARABLE units in the CITY. The hearing officer did that analysis. The hearing officer found a lack of evidence to support the landlords increase in rent and you’re your argument. That’s all. You said:
“The owner clearly demonstrated that the exact same unit in this complex was renting at substantially higher market rent ( at that time)”
That is NOT ENOUGH because it has to be a COMPARABLE unit regarding the CITY as a whole, NOT just one property or just one building of a property. You are misleading the public very badly. You said:
“RHC recognized this standard at their meeting.”
NO THEY DID NOT. IN FACT THEY AGREE THAT COMPARABLE UNITS OF COMPARABLE AMENITIES AND FUNCTIONS ARE CRITICAL FACTORS IN DECIDING WHETHER VEGA ADJUSTMENTS ARE WARRANTED. YOU DO SEEM TO UNDERSTAND THAT. You said:
“The hearing officer chose to ignore it.”
THE HEARING OFFICER DID NOT IGNORE ANYTHING. THE HEARING OFFICE DOCUMENTED THE EVIDENCE TO SUPPORT THE DECISION AND ESTABLISHED PROOF OF THE LACK OF EVIDENCE TO OVERCOME THE PERPONDERENCE OF PROOF. WHY ARE YOU TRYING TO MISLEAD THE READERS? You said:
“It will be interesting.
If they go to court I think based on the precedent rulings the tenants activists will lose.”
AS LONG AS THE REGULATIONS ARE IN CONCERT WITH VEGA, YOU WILL NEED TO TAKE INTO ACCOUNT NOT JUST ANY UNITS IN YOUR PROPERTY, BUT THE CITY AS A WHOLE. IF YOUR RENT CONTROLLED UNIT IS $900 LOWER IN RENT THAN ANTOTHER IN YOUR BUILDING, THAT IS NOT ENOUGH TO JUSTIFY A RENT INCREASE. ESPECIALLY IF THERE ARE OTHER UNITS COMPARABLE IN THE CITY THAT CHARGE THE SAME RENT THE RENT CONTROL ESTABLISHED. THUS THE VEGA IS NOT APPLICABLE TO YOUR UNIT. THAT IS WHAT THE REGULATIONS AND THE LAW SAYS.
Dear Robyn:
I would like to point out that making $15/hour does not mean someone can afford the rents charged in Mountain View, in this complex or any other with similar rates. If one does the math, $15/hr times 40 hours = $600 per week, or $2400 per month. Many folks earning the minimum wage work 2 or 3 jobs, and work more than 40 hours per week. Still, for such a person, the rents are beyond their reach. Around the corner from my rented duplex, there are some lovely townhouses. Two years ago the parking on our side street became very crowded. I’ve talked to the young men who park in the stretch in front of my house; they are all tech workers, and had to double their roommates because they could not afford the rent increases. I am not a fan of rent control, but the prices are out of control.
Debra,
There are many that can’t afford to live in Los Altos and they commute.
It’s all relative and everyone has to live somewhere they can afford and probably commutes somewhere else to make more money.
Oh Howard, your deleted comment showed how you really feel. I like that you’re persistent, though.
Grumpy Minority,
I said,”There are many that can’t afford to live in Los Altos and they commute.
It’s all relative and everyone has to live somewhere they can afford and probably commutes somewhere else to make more money.”
In my previous statement I said,”Maybe they should live in Stockton.”
Is there something not true about my statement that you would like to correct?
Wouldn’t it be better for traffic if the people working in Los Altos could afford to live in Los Altos? For any worker in any city to live in the city they work?
In response to Howard (Joshua):
Simply put, the Del Medio case was a very bad petition from the start.
Lindsey Properties is not managed professionally, it is a “family” run private business. THere is no transperency regarding their practices.
If one would read their general ledgers, I would suspect that the sources of any profit are provided by leveraging debt. Accounting does allow that. But if the practices of the business exposes such actions, the likelihood of any investors or financial leveraging shrink.
This is the historical practice of many businesses. THe current stock market and the fed reserve increase in interest is going to shut that off.
This will result in a lot of businesses either stopping the practice, or their cost of borrowing will increase significantly. Thus their “long-term” life will be shortened.
This is a critical time for these organisations to remedy the lack of good business practices.
It appears that there will be no more action regarding this petition. Why?
I noticed that Lindsay Properties does not appear to own the property anymore.
If you go to apartments.com and look up this property address and try to go to the property owners website, it appears to be removed from the internet. The address on Apartments.com is (http://lindsaycompanies.com/)
If you continue some research you will find it is now owned by another group if you look at this website (https://www.calsonprop.com/property/del-medio-manor/)
It appears that the “Lindsay” company is out of business.
Any indication of an appeal from Elizabeth Lindsay?