News

Once again, Council OKs razing rentals for new rowhouses

Montecito Avenue project to displace residents and result in fewer housing units

Aside from the one developer in the room, nobody in the City Council Chambers seemed pleased with a proposal to raze 34 cheap-to-rent apartments in order to build a smaller number of million-dollar rowhouses.

But once again, City Council members insisted their hands were tied, saying they had no choice but to approve an unpopular project that marked a setback for the city's housing goals. It was the second time in recent months that city leaders felt compelled to sign off on a redevelopment project, even though it would displace dozens of families, destroy low-cost apartments and result in less housing than before.

Reluctantly but unanimously, the City Council at its March 26 meeting approved a 33-unit rowhouse development at 1950 Montecito Ave., describing it as the kind of project that should be restricted in the future. Everyone agreed that the Montecito Avenue project followed the letter of Mountain View's zoning and building codes, although many in attendance argued that it violated the spirit of the city's housing vision.

"I can't vote no on the project when it's fully compliant and when we're the ones responsible for setting the rules and regulations in the first place," said Councilman Lucas Ramirez. "We have to identify a policy solution to mitigate this impact."

Like a slow-moving train wreck, a number of housing projects to redevelop older apartments occupied by low-income families are arriving before the City Council, leaving no time to hit the brakes. These projects have been in the city's review pipeline for more than a year, but city officials have failed to address the disconnect between the policies on the books and their stated ideals for keeping Mountain View a diverse community.

What's local journalism worth to you?

Support Mountain View Online for as little as $5/month.

Learn more

Since last summer, local resident Jacqueline Cashen has been regularly warning city officials that these projects were imminent, urging them to take action. Next week, a project at the 59-unit apartment complex where she lives will go before the council seeking permission to replace the rentals with 54 rowhouses.

"Mountain View calls itself a sanctuary city, but to whom does that apply? Mountain View calls itself a human rights city, but to whom does that apply?" Cashen said. "Approving these projects will continue to drive out everyone but the wealthy."

It is an unpleasant dilemma that is becoming all too familiar. In December, council members grudgingly approved plans at 2005 Rock St. to demolish 20 affordable apartments and build 15 rowhouses, which are expected to sell for $1.3 million apiece. At the time, council members said they had little alternative in the matter, and they focused their discussion on trying to secure an aid package for the displaced residents.

It was pretty much the same situation at the Tuesday meeting on the Montecito Avenue project. A long line of residents, neighbors and housing advocates urged the City Council to staunch the loss of affordable housing. Elected leaders expressed their sympathies, but said they couldn't do much.

"Cities can't move that fast. Give us the benefit of the doubt that we're trying to solve this. It's a complex problems and it's going to take a while," said Councilman John McAlister. "After a number of these redevelopments, we're seeing the flaws and ways we can improve."

Stay informed

Get daily headlines sent straight to your inbox.

Sign up

By Mountain View's standards, the Montecito apartments were relatively affordable, costing an average of about $2,800 a month for a two-bedroom unit. Several tenants said they could not find housing at similar prices anywhere in the surrounding cities. About one-third of the households are expected to qualify for some kind of relocation payment.

In his brief presentation, Josh Vrotsos of Dividend Homes emphasized that his project was fully compliant with city zoning requirements. He described the redevelopment as a direct result of the city's 2016 rent control law.

Like past discussions, the council tried to push the developer to do more for displaced residents, but they didn't have much leverage to make demands. Councilwoman Ellen Kamei asked for Dividend Homes to provide more families with relocation benefits and other assistance. Vrotos did not commit to any additional aid, although he agreed to make it easier for tenants to access their relocation payment earlier.

Approving the project was described as the best outcome for a lousy situation. Rejecting the project would mean the property owner could move forward with evicting all the tenants, forcing them to leave without any relocation benefits, said Councilman Chris Clark.

"It's not a great set of solutions, but unfortunately we need to fundamentally change the rules so we're not in this situation moving forward," he said.

For all the talk of the city's hands being tied, tenant advocates have asserted that city leaders do have the power to deny such projects. During the December discussion on the 2005 Rock St. project, attorneys with nonprofit Community Law Services of East Palo Alto urged the council to reject the development on the grounds that it would harm the public welfare and the city housing goals. California courts have long upheld the power of cities to reject projects, especially when a denial is in the public interest, they argued.

City officials say the better solution is to change city policy. Since last year, City Council members have mentioned bringing forward a new housing ordinance that would restrict developments that cause a loss of housing. But this idea has not been pursued with any sense of urgency. This policy is currently included as one potential item in the city's goal-setting list for the upcoming fiscal year.

In all likelihood, the Montecito Avenue apartments will be vacant by the time the council begins looking at any policy update. The tenants of all 33 units are expected to leave by the end of August, according to the developer.

Craving a new voice in Peninsula dining?

Sign up for the Peninsula Foodist newsletter.

Sign up now

Follow MV-Voice.com and the Mountain View Voice on Twitter @mvvoice and Facebook for breaking news, local events, photos, videos and more.

Once again, Council OKs razing rentals for new rowhouses

Montecito Avenue project to displace residents and result in fewer housing units

by / Mountain View Voice

Uploaded: Thu, Mar 28, 2019, 12:30 pm

Aside from the one developer in the room, nobody in the City Council Chambers seemed pleased with a proposal to raze 34 cheap-to-rent apartments in order to build a smaller number of million-dollar rowhouses.

But once again, City Council members insisted their hands were tied, saying they had no choice but to approve an unpopular project that marked a setback for the city's housing goals. It was the second time in recent months that city leaders felt compelled to sign off on a redevelopment project, even though it would displace dozens of families, destroy low-cost apartments and result in less housing than before.

Reluctantly but unanimously, the City Council at its March 26 meeting approved a 33-unit rowhouse development at 1950 Montecito Ave., describing it as the kind of project that should be restricted in the future. Everyone agreed that the Montecito Avenue project followed the letter of Mountain View's zoning and building codes, although many in attendance argued that it violated the spirit of the city's housing vision.

"I can't vote no on the project when it's fully compliant and when we're the ones responsible for setting the rules and regulations in the first place," said Councilman Lucas Ramirez. "We have to identify a policy solution to mitigate this impact."

Like a slow-moving train wreck, a number of housing projects to redevelop older apartments occupied by low-income families are arriving before the City Council, leaving no time to hit the brakes. These projects have been in the city's review pipeline for more than a year, but city officials have failed to address the disconnect between the policies on the books and their stated ideals for keeping Mountain View a diverse community.

Since last summer, local resident Jacqueline Cashen has been regularly warning city officials that these projects were imminent, urging them to take action. Next week, a project at the 59-unit apartment complex where she lives will go before the council seeking permission to replace the rentals with 54 rowhouses.

"Mountain View calls itself a sanctuary city, but to whom does that apply? Mountain View calls itself a human rights city, but to whom does that apply?" Cashen said. "Approving these projects will continue to drive out everyone but the wealthy."

It is an unpleasant dilemma that is becoming all too familiar. In December, council members grudgingly approved plans at 2005 Rock St. to demolish 20 affordable apartments and build 15 rowhouses, which are expected to sell for $1.3 million apiece. At the time, council members said they had little alternative in the matter, and they focused their discussion on trying to secure an aid package for the displaced residents.

It was pretty much the same situation at the Tuesday meeting on the Montecito Avenue project. A long line of residents, neighbors and housing advocates urged the City Council to staunch the loss of affordable housing. Elected leaders expressed their sympathies, but said they couldn't do much.

"Cities can't move that fast. Give us the benefit of the doubt that we're trying to solve this. It's a complex problems and it's going to take a while," said Councilman John McAlister. "After a number of these redevelopments, we're seeing the flaws and ways we can improve."

By Mountain View's standards, the Montecito apartments were relatively affordable, costing an average of about $2,800 a month for a two-bedroom unit. Several tenants said they could not find housing at similar prices anywhere in the surrounding cities. About one-third of the households are expected to qualify for some kind of relocation payment.

In his brief presentation, Josh Vrotsos of Dividend Homes emphasized that his project was fully compliant with city zoning requirements. He described the redevelopment as a direct result of the city's 2016 rent control law.

Like past discussions, the council tried to push the developer to do more for displaced residents, but they didn't have much leverage to make demands. Councilwoman Ellen Kamei asked for Dividend Homes to provide more families with relocation benefits and other assistance. Vrotos did not commit to any additional aid, although he agreed to make it easier for tenants to access their relocation payment earlier.

Approving the project was described as the best outcome for a lousy situation. Rejecting the project would mean the property owner could move forward with evicting all the tenants, forcing them to leave without any relocation benefits, said Councilman Chris Clark.

"It's not a great set of solutions, but unfortunately we need to fundamentally change the rules so we're not in this situation moving forward," he said.

For all the talk of the city's hands being tied, tenant advocates have asserted that city leaders do have the power to deny such projects. During the December discussion on the 2005 Rock St. project, attorneys with nonprofit Community Law Services of East Palo Alto urged the council to reject the development on the grounds that it would harm the public welfare and the city housing goals. California courts have long upheld the power of cities to reject projects, especially when a denial is in the public interest, they argued.

City officials say the better solution is to change city policy. Since last year, City Council members have mentioned bringing forward a new housing ordinance that would restrict developments that cause a loss of housing. But this idea has not been pursued with any sense of urgency. This policy is currently included as one potential item in the city's goal-setting list for the upcoming fiscal year.

In all likelihood, the Montecito Avenue apartments will be vacant by the time the council begins looking at any policy update. The tenants of all 33 units are expected to leave by the end of August, according to the developer.

Comments

Robyn
another community
on Mar 28, 2019 at 2:16 pm
Robyn, another community
on Mar 28, 2019 at 2:16 pm
13 people like this

A lack of respect for the current residents is evident.
This was a display of very weak leadership.


Told You So
Blossom Valley
on Mar 28, 2019 at 2:32 pm
Told You So, Blossom Valley
on Mar 28, 2019 at 2:32 pm
94 people like this

[Post removed due to same poster using multiple names]


Bored M
Cuesta Park
on Mar 28, 2019 at 2:34 pm
Bored M, Cuesta Park
on Mar 28, 2019 at 2:34 pm
87 people like this

[Post removed due to same poster using multiple names]


I build and I own
another community
on Mar 28, 2019 at 2:38 pm
I build and I own, another community
on Mar 28, 2019 at 2:38 pm
81 people like this

[Post removed due to same poster using multiple names]


MV Renter
Shoreline West
on Mar 28, 2019 at 3:03 pm
MV Renter, Shoreline West
on Mar 28, 2019 at 3:03 pm
38 people like this

I can't begin to explain my sympathy for the residents at 1950 Montecito Avenue. As it is, they are already next to a razed lot.

I was displaced from 333 North Rengstorff Avenue last year. I never quite understood how a redevelopment proposal was rejected in 2012, but greenlit for 2018. As I understood it, it was a still a net loss of residences; to say nothing about affordability.

I managed to stay in Mountain View, which has been my home for 26 years. But I have a third of the space for the same money. It's taken a real sacrifice to hang in there.

I don't know what the solutions are. There really isn't a "bad guy" here.

I mean, I suppose one could nitpick proposals to death, on the grounds of displacement of heritage trees, or buying current residents time by scrutinizing building plans so closely that it drags the process out (death by red tape). But those don't really solve anything, and are not necessarily fair to the developer who, cutthroat or not, is obeying the rules and acting in good faith.

I don't have the vision to pretend to see where the path we're on leads to. Only that it appears we will be an affluent city in the end. I'm not judging it; but maybe we should just come to terms with it. The City Council can develop and apply a vision of how the city could/should look, but they're a new council dealing with a trend that has been underway for at least seven years now. Inertia being what it is, it takes some doing to slow down that big a train. If indeed it should be done at all. There are always multiple sides to a situation. One must prioritize.

All I know is that being angry about it doesn't do any good. And I just went through this. In fact, I'm still going through it; continuing to downsize and make trips to Goodwill with things I no longer have room for. I don't have counterspace for a microwave anymore, even.

But... that's what "doing what it takes" is at this point.

I hope it all works out for the current residents, somehow. I have to. I hoped the same thing for myself. And at current prices and rates and trends, I may yet again; sooner than I might imagine.

But I hope I'm wrong.


Interested
Martens-Carmelita
on Mar 28, 2019 at 3:49 pm
Interested, Martens-Carmelita
on Mar 28, 2019 at 3:49 pm
123 people like this

The voters wouldn't listen to the warnings made about rent control - and this is the result. If rent control isn't overturned, no developer or individual will build rentals here - everything will be "for purchase" condos.

I've read the articles that have been published before rent control was enacted - Mark Noack and the Voice urging voters to pass this because 'Wow... it would keep their rents low!!" The history of rent control and the damage it does nation-wide was clearly available to the public, but I guess MV voters thought they would be an exception to the rule? This is why the majority of states in our nation prohibit rent control.

There was no consideration of the owners (most of whom in Mountain View were individuals, not large developers). When the owners find their expenses going up for everything, but they are limited in what they can charge to recoup these expenses, the solution is to sell and get out. Commercial developers have the funds to buy these apartment buildings - and you can bet they won't be building rentals in a rent controlled city.

I attended some of the Council Meetings concerning rent control, and met some of the families and individuals who owned apartment buildings in MV. The majority of them had kept rents low, and were worried about raising rents to cover increasing expenses, and having to jump through the hoop of a Rent Control Board. Some building owners had the building as their retirement income, and rent control could make their future very unstable.

I know this is very stressful for the families who will now have to leave - but this redevelopment was predictable and unavoidable in a rent controlled city. The Council has to follow the regulations on file - even if their emotions are elsewhere.

I wish the voters had been told the truth. I wish the Voice had not been so obviously biased. I wish the current renters wouldn't have to move. Wishes get us no where.


writing is on the wall
Another Mountain View Neighborhood
on Mar 28, 2019 at 4:07 pm
writing is on the wall, Another Mountain View Neighborhood
on Mar 28, 2019 at 4:07 pm
68 people like this

@Mtn View renter

That was a very lovely letter. You are a remarkable person.
Thank you!

PS. I have lived as a renter most of my life in rent control cities and I have seen first hand how it effects properties and renters, it is a bad idea.


Rodger
Sylvan Park
on Mar 28, 2019 at 4:48 pm
Rodger, Sylvan Park
on Mar 28, 2019 at 4:48 pm
12 people like this

Let’s go for grocery, repairs, and salary control and see if this works better than rent control


LOL
Bailey Park
on Mar 28, 2019 at 5:09 pm
LOL, Bailey Park
on Mar 28, 2019 at 5:09 pm
17 people like this

[Post removed due to user being banned for trolling/violating terms of use]


Humble observer
Old Mountain View
on Mar 28, 2019 at 5:24 pm
Humble observer, Old Mountain View
on Mar 28, 2019 at 5:24 pm
95 people like this

Yes, echoing many comments above: This is what you get with rent control. It's hardly a secret, there's plenty of past history and many people who've experienced it and will testify.

Like "writing" a few comments before mine, I also have been a renter most of my life, including in two rent-controlled cities earlier. This is what happens -- and other related, predictable side effects. People already renting vote for rent control (telling themselves the only serious objection to it could come from "greedy" landlords), and then revel in their artificially capped rents. Until their situation changes, and they have to compete for a new place to rent, from a now-shrunken rental stock (and MUCH diminished vacancy rate), and more people competing with them to get into controlled units. Only then do they understand the real economics that they ignored or brushed aside with rhetoric when they voted.


Christopher Chiang
Registered user
North Bayshore
on Mar 28, 2019 at 7:42 pm
Christopher Chiang, North Bayshore
Registered user
on Mar 28, 2019 at 7:42 pm
8 people like this

A mile from Google X and Caltrain and and a 2 miles from Google HQ, density would have worked well here. I hope the city considers redoing future parking and density restrictions, so there is a market solution that generates more housing, not less. The city could even offer workshops to help developers see what innovative options are they're overlooking. The city's hands may be tied on this property, but they have so many ways to go forward.


Resident
Gemello
on Mar 28, 2019 at 9:27 pm
Resident, Gemello
on Mar 28, 2019 at 9:27 pm
62 people like this

Measure V is the cause; it targeted (could not touch properties built after 1997) older apartments. The older housing is owned by mom/pop operations. Once the value of the rental started dropping and realizing they would never be able to recoup the cost of repairs the answer was to sell to developers.

1/2 brained ideas can have bad side affects. The bigger question I have is why did the City of Mountain View allow so much growth that pushed out alot of good long time residents?


The Business Man
Registered user
Another Mountain View Neighborhood
on Mar 29, 2019 at 7:34 am
The Business Man, Another Mountain View Neighborhood
Registered user
on Mar 29, 2019 at 7:34 am
2 people like this

Simply put:

This demonstrates how corrupt the City Council has become. It has never wanted to provide adequate housing to the City to increase property values by market manipulation.

This demonstrates that the State laws must be strengthened so that the Cities cannot avoid providing a balance of affordable and luxury housing.

The City cannot claim they are even improving the lack of housing that exists in the City of Mountain View.

By the way, why the City is replacing apartments with houses, CSFRA requires tenants the right to a new apartment after being built in replacement of their current one at the rent controlled price.

This is the corruption occuring. The city is going to systemically remove all apartments from Mountain View unless the state laws will require them to replace the units with LIKE housing.

This is the law I would propose to the State Legislature. Given that the housing crisis makes it perfectly legal and constitutional under the California Supreme Court.


Humble observer
Old Mountain View
on Mar 29, 2019 at 8:59 am
Humble observer, Old Mountain View
on Mar 29, 2019 at 8:59 am
28 people like this

Stop feeding the troll!

Most of you have enough experience on this website to know that "LOL" is a long-banned outlaw poster here, (a) subject to instant deletion once the editors bother to get around to it, and (b) posting mainly to bait other people -- who ought to know better than gratify that trolling with responses. The one thing trolls can't stand is to be ignored, so that's what they need. More: Web Link

The "LOL" comments will be gone from this page soon enough (and probably also some of those who took the bait and responded), another reason not to bother.


GREEDY LANDLORDS
Registered user
Old Mountain View
on Mar 30, 2019 at 8:38 am
GREEDY LANDLORDS, Old Mountain View
Registered user
on Mar 30, 2019 at 8:38 am
5 people like this

The Mountain View Council has been rubber-stamping redevelopment projects of naturally affordable housing long before rent control was ever put on a ballot for Mountain View voters. Rent control was a triage strategy to stop the skyrocketing rents in MV for multi-unit rental buildings built before 1995 (that limit is thanks to the Republican era Costa Hawkins Act). And rental costs in Mountain View are the 2nd highest in the ENTIRE COUNTRY behind San Francisco so rent control really has been just a bandaid on the gaping wound of this housing crisis and severe gentrification process that is absolutely by design. The MV City Council knew exactly what they were doing when they approved vast amounts of office space for Google without any housing-jobs balance being part of the deal. Just as planned, housing values have skyrocketed and property taxes have increased because of new buyers as well as redevelopment of naturally affordable housing into ownership properties. None of this is an accident - the Mountain View City Council (and the Councils of surrounding cities) created this housing crisis so the city could rake in the money and provide the gentrification process that Google and other tech firms want for this city and for all of Sillycon Valley so they can keep creating a Brotopia playground for techies, VCs, and their lawyers. And most aging homeowners just keep quiet and don’t really care about gentrification because their property values are what truly matter to them the most.

This predatory capitalist culture teaches people to put the value of money over the value of relationships and a diverse community and the MV Council has policies in place to specifically support that culture. And for all of those white homeowners in MV who claim to have worked so hard for their properties, its quite convenient for you all to just ignore the long history of federal and state policies that have been enacted since the Homestead Act in 1862 which ensured white Americans would have every opportunity to be home and land owners and black and brown Americans would not. Did you really work hard for what you have or are you just really benefitting from white privilege and white supremacy policies? History shows the latter to be the real truth no matter how much you want to wish upon the dream of meritocracy.

What we are witnessing now in Mountain View is what happens to a city when human greed is the order of the day. Thanks to rent control we have had our first exploration into the accounting books of a landlord. Del Medio Manor owner Elizabeth Lindsay was the first to have a petition to increase rents challenged by her own tenants and brought before a hearing officer who rejected nearly all the claims made by Lindsay and her partners, saying they relied on faulty accounting and inflated expenses. The hearing officer actually said that the landlord's bookkeeping in support of the petition was so flawed that it amounted to "hearsay" and was impossible to verify. I was there for the hearing and watching Lindsay trying to justify her husband’s different hourly salaries as evidence was just one example of how incredibly faulty the accounting was. And lets remember that the RHC also supported the hearing officers decision and said the landlord did not provide sufficient evidence to justify rent increases on a property that earned just under $1.3 million in profit in 2017. Yes, this landlord was petitioning to increase rents on a property that earned over $1 million in profits in 2017!

Here is a comment posted by William Hitchens on Dec 20, 2018 at 2:37 pm under a MV Voice article entitled “Rent increases denied again for Del Medio apartments” which really lays out the attitude of landlords and investors who own rent-controlled properties in MV (and most of whom don’t actually live in MV): “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.” Its all about greed for these landlords and MV is a hot real estate market regardless of rent control being in place so landlords are selling their properties because you never know when the real estate market bubble is going to pop. And Hitchens even explicitly explains why the Council is of course in favor of redevelopment of affordable housing – it brings in more money to the city. So this is why John McAlister and Margaret Abe-Koga make the case for gentrification and greedy landlords every time there is a redevelopment project of affordable housing before them for a vote. And instead of just admitting to being in favor of gentrification by design, they keep using rent control which was voted in by the people of Mountain View as a scapegoat.

People of Mountain View if you care about diversity in your city, we are going to have to fight for it because right now we have a hostile City Council who is gentrifying this city on purpose. Chris Clark is the only City Councilmember right now telling us the truth – the policies have to change in order to stop this gentrification process and start to solve this housing crisis. We need the Council to take action on a No Net Loss of Affordable Housing policy immediately and if they don’t we need to keep calling them out on not supporting their own first current Major Goal in the City Council Major Goals Work Plan which is to “Promote Strategies to Protect Vulnerable Populations and Preserve the Socioeconomic and Cultural Diversity of the Community.”


The Business Man
Registered user
Another Mountain View Neighborhood
on Mar 31, 2019 at 9:40 am
The Business Man, Another Mountain View Neighborhood
Registered user
on Mar 31, 2019 at 9:40 am
Like this comment

The current strategy is going to backfire.

The real estate market is in the middle of a significant value correction if you read the report posted there:

Web Link

On top of that, the new tax laws that govern the tax deductions for home owners is radically being cut. found here:

Web Link

Homeowners with larger mortgages and home equity loans should pay special attention to the new tax code

The Tax Cuts and Jobs Act (TCJA) trimmed two important tax breaks for homeowners and left another big one completely untouched. That sounds pretty simple, but it’s a fairly complicated story when you consider real-world situations. So I’ll present the story in two bite-sized installments. Here’s Part 1.

New limit on deductions for state and local taxes, including real property taxes

Under prior law (before the TCJA), you could claim an itemized deduction for an unlimited amount of personal (non-business) state and local income and property taxes on Schedule A of Form 1040. So if you had a big property tax bill, you could deduct the whole thing if you itemized. Individuals with big personal state and local income tax bills could fully deduct those too on Schedule A, if they itemized. Finally, you had the option of deducting personal state and local general sales taxes on Schedule A instead of state and local income taxes (beneficial if you owe little or nothing for state and local income taxes).

For 2018-2025, the TCJA changes the deal by limiting itemized deductions for personal state and local property taxes and personal state and local income taxes (or sales taxes if you choose that option) to a combined total of only $10,000 ($5,000 if you use married filing separate status). Personal foreign real property taxes can no longer be deducted at all, so no more deductions for property taxes on that place in Cabo.

These TCJA changes unfavorably affect individuals who pay high property taxes because they live in a high-property-tax jurisdiction, own an expensive home (resulting in a hefty property tax bill), or own both a primary residence and one or more vacation homes (resulting in a bigger property tax bill due to owning several properties). Individuals in these categories can now deduct a maximum $10,000 of personal state and local property taxes — even if they deduct nothing for personal state and local income taxes or general sales taxes.”
The Bottom Line

The new TCJA limits on deducting property taxes will affect many homeowners. The new limits on deducting home mortgage interest may not affect as many, but homeowners with larger mortgages and home equity loans must take heed. I’ll cover the new rules for home mortgage interest in my next column. So please stay tuned.”

The fact is that the “current values” that these projects “believe” they will get are likely to not pan out. In fact it may reverse the entire implementation and leave nothing but an empty space if the buildings are demolished before some unbreakable commitment to build is not established.

If the city does not act to acquire such an agreement, the project CANNOT move forward because it will be a NETLOSS of housing.

The City should be aware of this, if it isn’t they are just fooling themselves.


Greg Nelson
Registered user
Monta Loma
on Apr 2, 2019 at 12:30 pm
Greg Nelson, Monta Loma
Registered user
on Apr 2, 2019 at 12:30 pm
Like this comment

This is a sad commentary on our current ELECTED city council - "our hands are tied" . You are elected to legislate and enact city policy - so change whatever policy you lament is tying your hands. You are not flunkies in a police state or festering in a CIA secret prison being waterboarded daily - you all were freely elected and we the free voters placed you in this position - DO YOUR JOB AND CHANGE THESE POLICIES IMMEDIATELY!

I agree TO A POINT with posters above re rent control - but only as to the allowable annual rent increase, 3.6% I believe. IMO it should be 6% to allow owners a reasonable return on their investment. Where I disagree is their wholesale denial of any benefits of rent control. They always refer to cities where rent control has been a disaster, yet never identify these cities. Only one I know of is NYC. I would welcome a response identifying other rent control "disaster" cities, so that I can then research those situations. Everything I read on the Internet is true, right?

I currently reside at 2309 Rock Street (for 20 years). Rent increases have always been reasonable - 5% annually in a well maintained small complex. Across the street at 2310 Rock the City Council will hear TONIGHT a request to demolish 59 reasonable rent units with 55 townhouses - that is purchasable in the $2M range. Will they cry 'our hands are tied' and approve??? Highly likely!
BTW this proposal also calls to "remove" (ie, cut down) 35 Heritage Trees. Why do we have a Heritage Tree ordinance in Mountain View, when the planning commission routinely approves their destruction?
Enough for today.
Cheers


Darin
Registered user
Another Mountain View Neighborhood
on Apr 2, 2019 at 3:23 pm
Darin, Another Mountain View Neighborhood
Registered user
on Apr 2, 2019 at 3:23 pm
32 people like this

@GREEDY LANDLORDS

This may be hard to believe, but most property owners do not become landlords for relationships or for community. It's a financial decision, intended to produce a profitable return on their investment.

Is $1.3 million per year sufficient return? That depends on the value of the investment. For a $52 million investment, that's an annual return of 2.5%. You could put that in a CD and get a better return with a lot less risk.

If you want property owners to continue being landlords, then being a landlord has to remain a viable financial decision. They aren't doing it just to provide homes for their tenants.


The Business Man
Registered user
Another Mountain View Neighborhood
on Apr 2, 2019 at 4:23 pm
The Business Man, Another Mountain View Neighborhood
Registered user
on Apr 2, 2019 at 4:23 pm
Like this comment

But if you look at the news from CNBC titled “Manhattan real estate sales fall for sixth straight quarter — longest losing streak in 30 years”

The story states:

Manhattan real estate had its worst first quarter since the financial crisis, capping the longest losing streak for sales in over 30 years, according to a new report.

Total sales fell 3 percent in the first quarter, according to the report by Douglas Elliman and Miller Samuel. That marked the sixth straight quarter of declines, which is the longest downturn in the three decades that the appraisal and research firm has been keeping data.

THE DROP STEMS FROM AN OVERSUPPLY OF HIGH-END APARTMENTS, a lack of foreign buyers AND THE NEW FEDERAL TAX LAW THAT HAS HIT REAL ESTATE IN HIGH-TAX STATES. A new “mansion tax” approved by New York state legislators over the weekend will layer another tax on the sale of multimillion-dollar homes and add further pressure to a market already under stress, according to real estate experts.

The pain is being felt at all levels. While the entry-level market in New York, below $1 million, had been holding up for most of the past year and a half, IT HAS STARTED TO SUFFER AS THE TROUBLE AT THE TOP CASCADES DOWN.

“It’s like a layer cake,” said Jonathan Miller, CEO of Miller Samuel. “WHEN YOU HAVE SOFTENING AT THE TOP, IT STARTS TO MELT INTO THE NEXT LAYER AND THE NEXT LAYER AFTER THAT, BECAUSE THOSE BUYERS FURTHER DOWN HAVE TO COMPETE ON PRICE.”

Prices in Manhattan continue to remain soft. While the average sale price got a big boost from hedge fun billionaire Ken Griffin’s $238 million condo purchase, hitting $2.1 million, the median sales price in Manhattan declined slightly, to just over $1 million. Griffin’s purchase was part of a more than $700 million spending spree the CEO and founder of Citadel has been on in recent years, as he’s scooped up homes in Chicago, Miami and London.

SELLERS WHO STILL HAVE UNREALISTIC PRICE EXPECTATIONS ARE THE BIGGEST BARRIERS TO SALES, BROKERS SAY. That has led to more listings piling up and sitting on the market for longer periods. There is now a nine-month supply of homes on the market, with inventory up 9 percent. THE GLUT IN NEW DEVELOPMENT IS EVEN WORSE: THE SUPPLY OF NEWLY BUILT CONDOS JUMPED 56 PERCENT OVER LAST YEAR, TO A 19-MONTH SUPPLY.

Does this sound like the situation we are going to have in Mountain View?

Does the story describe the same problem we have in the Bay Area?

Does the fact that people can work in places like Virginia, Maryland, Massachusetts, Texas, and Florida and get paid only 10-15% less but the cost of living is as much as 40% lower? Are the jobs in the Valley that unique? The answers are pretty obvious.

And the fact is that even I now work as a traveling expert for the government. But, I am in a position to be able to keep my place in Mountain View and afford the cost of travel because as a contractor, I subtract those costs from my earnings.

Thus I will get a large Tax Refund due to itemized costs as a contractor.

The fact is the area is about to see a significant reduction in property values, and it has already started.

Thus the projects that the City has estimated its returns are going to come up short. In fact, the buildings mught get demolished, and left as a vacant lot.


Jim Neal
Registered user
Old Mountain View
on Apr 2, 2019 at 11:16 pm
Jim Neal, Old Mountain View
Registered user
on Apr 2, 2019 at 11:16 pm
27 people like this

As everyone knows, I was adamantly opposed to rent control for this very reason, even though at the time I was a renter in Mountain View. I tried to warn people that once rent control was enacted, it would lead to the sale of rental properties and that they would be redeveloped into for sale homes, condos, office space or used for some other purpose.


People are not stupid. If they own property, they aren't simply going to be content to lose money or be put into a position where their property will be foreclosed on. Property owners are not charities, they are businesses like any other and have invested their money in the hopes of making a profit.

Some people seem to think that they rents that property owners collect is all profit, which is simply not true! The owners have to pay at a minimum PITI ( Principle, Interest, Taxes and Insurance ). On top of that they also need to pay for repairs, upgrades, legal fees, and many other incidental costs. As a new homeowner myself, I am coming to realize just how expensive it is to own property.


The City Council can try to change the rules to rig the game all they want, but I warn them against trying to do so because in my experience, it will only make a bad problem worse. Not only that, but there is something fundamentally unfair about telling people what they can and can't do with their own property. Cities, States, and the Feds are getting more and more restrictive about what people or companies can do in and with properties that they own. While some regulations and restrictions are necessary, too many will have a deleterious effect and result in fewer people being willing to build or keep the very properties that those of us who are low to medium income need.


The only way that this problem will be resolved is for the residents to vote to repeal the rent control ordinance, the city council to stop allowing NEW offices to be built, and to build more affordable housing ( within reasonable limits ).


I have stated on many occasions that Mountain View is on the verge of becoming Manhattan, unaffordable to all but the most wealthy. However, one person commented that the Bay Area can expect to see a drop in property values, which may be true, but Mountain View will be the exception because there are too many VERY LARGE companies already in the city that will keep expanding and bringing in more and more people. They are building new offices at breakneck speed and that alone would drive demand through the roof. Also, as the pool of rentals shrinks, the remaining rentals will become more and more expensive, rent control or not, as people will no longer be able to afford the prices of the goods and services they need and are forced to move.


Manhattan has perhaps thousands of buildings over 5 stories tall and does not have employers that are expanding at breakneck speed; therefore it would make sense that they might see increasing vacancies in the near future. Even if Mountain View were to build hundreds of high rises, it would still not do a single thing to affect rents as the VERY LARGE Companies there would only see it as a way to bring in even more people. Unless the city is willing and able to limit the expansion of these companies, which in my opinion it has shown absolutely no inclination to do, expect the problem to get much worse.


I left Mountain View because I could no longer afford to live there, but also because I knew that it had reached the point of no return. Mountain View is now the New Manhattan.


Jim Neal

Modesto, Ca

(Formerly Old Mountain View)


The Business Man
Registered user
Another Mountain View Neighborhood
on Apr 3, 2019 at 8:31 am
The Business Man, Another Mountain View Neighborhood
Registered user
on Apr 3, 2019 at 8:31 am
Like this comment

Jim Neal,

Simply put. Rent Control has nothing to do with gthe upcoming reduction of proerty values.

We simply had all the recent property purchasers made the same mistake that occured during 2005-2007 resulting in overinflated values and real estat, financers, and appraisers getting rich off of poor judgement.


Jim Neal
Registered user
Old Mountain View
on Apr 3, 2019 at 8:56 am
Jim Neal, Old Mountain View
Registered user
on Apr 3, 2019 at 8:56 am
2 people like this

@TheBusinessMan - I did not mean to infer that Rent Control has anything to do with dropping property values. As a matter of fact, my view is that if anything, it would have the opposite effect, at least in the short term as owners sell money losing or break even rentals to developers or other private parties to be redeveloped into non-rental units. Thanks for giving me the opportunity to clarify my comments. I always find yours very informative even if occasionally we have different conclusions.



Jim Neal

Modesto, Ca

(Formerly Old Mountain View)


Harry Devlin
Registered user
Monta Loma
on Apr 3, 2019 at 10:36 am
Harry Devlin, Monta Loma
Registered user
on Apr 3, 2019 at 10:36 am
7 people like this

We will see this repeated at many older apartment complexes where the property owner is unable to attain a sufficient level of return. It's not rocket science. Conversion of naturally affordable rental units into for-sale units is one of the side-effects of rent control. On the plus side, it creates more ownership opportunities. On the minus side it leads to displacement and gentrification.


Harry Devlin
Registered user
Monta Loma
on Apr 3, 2019 at 10:51 am
Harry Devlin, Monta Loma
Registered user
on Apr 3, 2019 at 10:51 am
3 people like this

As everyone knows, rent control's side effect is conversion to for-sale housing. It always has been this way in California. You see it most in places like San Francisco with Ellis Act conversions.

Conversions to for-sale housing a) increases property tax revenue to the city, b) creates more opportunities for home ownership, c) allows the owner of an apartment complex to exit the rental business which has become a bad investment due to the inability to achieve a fair rate of return, d) displaces existing low-income tenants.

There is a temporary benefit when rent-control is enacted because there is a delay between the time it is imposed and the time that property owners decide that they no longer want to be in the subsidized housing business.

What should be done is some sort of a tax on rental to for-sale conversions that helps fund income-qualified below-market-rate housing. That way the benefit of subsidized housing goes to those with actual need, and the city captures some of the profit made by the seller.


Harry Devlin
Registered user
Monta Loma
on Apr 3, 2019 at 10:57 am
Harry Devlin, Monta Loma
Registered user
on Apr 3, 2019 at 10:57 am
1 person likes this

Rent control drives up property values. We've seen this over and over again. The number of rent-controlled units falls as owners exit the rental business. The rentals are converted to for-sale units. As the number of rent-controlled rental units falls, rents at non-rent controlled units go up because of increased demand. The for-sale units are market-rate units, often high-end because there's no point in building low-end for sale housing when the land is the primary cost.

When rent-control is imposed there's a short-term benefit to occupants of rent-controlled units because it takes a while for property owners to realize that they'd be better off exiting the subsidized housing business and converting their property to for-sale units.

In short, history shows that rent control ends up causing displacement and gentrification. If as a society we want to subsidize housing for low-income people, and I think we should do that, it will have to be done by the government.


The Successful Businessman
Registered user
Whisman Station
on Apr 3, 2019 at 11:54 am
The Successful Businessman, Whisman Station
Registered user
on Apr 3, 2019 at 11:54 am
8 people like this

The problem in Mt. View is not a shortage of housing, it's an overabundance of people.

One of Mt. View's housing goals cited in the General Plan is a greater percentage of home ownership. That comes by redeveloping these economically obsolete apartment complexes into row houses for sale. Home ownership brings with it COMMUNITY STABILIZATION. I'm all for fewer people, the result of fewer units replacing functionally and economically obsolete class C apartment housing.

Measure V's fatal flaw is the language requiring any replacement apartments built on a redeveloped multifamily site to be offered to the displaced tenant at their prior rental rate. Juliet Brodie and her gaggle of incompetent East Palo Alto Stanford law students are to blame for that language. No developer in their right mind is going to build replacement apartments where a prior complex once stood. Given the current efforts underway in Sacramento to further erode the property rights of landlords, it's only a matter of time before Mt. View will be ramshackle apartments, RVs and million dollar row houses.

Way to go Mt. View. You will be studied by public policy wonks for years to come.

Get rid of the jobs, get rid of the people. Problem solved.


Harry Devlin
Registered user
Monta Loma
on Apr 3, 2019 at 3:29 pm
Harry Devlin, Monta Loma
Registered user
on Apr 3, 2019 at 3:29 pm
1 person likes this

@The Successful Businessman

If Mountain view's goal is greater home ownership and fewer rental units, then rent control is one excellent way to achieve that goal.

At some point they've got to decide to move from individual property owners providing subsidized rental housing via rent control, and move to government subsidized, income-qualified, rental housing.

One of the biggest problems with rent control is that it isn't income qualified, so you have people that can afford market rent living in owner-subsidized rental housing, while those that can't afford market rent can't move in because rents reset to market with tenant changes. With BMR housing, the occupants have to qualify for the subsidized housing and re-qualify periodically.


Harry Devlin
Registered user
Monta Loma
on Apr 3, 2019 at 3:33 pm
Harry Devlin, Monta Loma
Registered user
on Apr 3, 2019 at 3:33 pm
4 people like this

@The Successful Businessman
"
Measure V's fatal flaw is the language requiring any replacement apartments built on a redeveloped multifamily site to be offered to the displaced tenant at their prior rental rate."

It's not a flaw. It achieves the goal of Mountain View's General Plan for more owner-occupied housing. Obviously no property owner is going to rebuild rental housing with this clause.

Rent control laws have always had the effect of benefiting the few, at the expense of the many. Average rents go up as rent-controlled units are removed from the market and new developments, not subjected to rent control are built, with the former rent-controlled units turned into ownership housing.


Don't miss out on the discussion!
Sign up to be notified of new comments on this topic.

Sorry, but further commenting on this topic has been closed.