Measure D: In reshaping rent control, council members ask for community's trust | News | Mountain View Online |

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Measure D: In reshaping rent control, council members ask for community's trust

 
The difference in a $1,500 monthly rent is shown starting in 2001, the last time the local inflation rate, or CPI, hit 4%. Under CSFRA, the current rent control law, increases are tied to the local rate of inflation and must stay between 2-5%. Measure D changes the maximum rent increase allowed to a flat 4%. The total rent between 2001 and 2019 would be $536,005 under Measure D and $479,244 under CSFRA. NOTE: Due to a production error, an incorrect version of the graph that reversed the color blocks in the legend ran in the Feb. 14 print edition.

Rent control, one of Mountain View's most divisive issues, is back on the ballot March 3. For the first time since 2016, voters will have a chance to weigh in on the city's nascent renter protections and decide whether to accept a bevy of changes largely aimed at loosening rules imposed on landlords.

Proponents call Measure D a chance to "fix" rent control and find middle ground that tenant and landlord groups alike can learn to live with -- a cease-fire that could reunite a deeply divided community. The measure's backers say they believe that the city's Community Stabilization and Fair Rent Act (CSFRA) is here to stay, but changes must be made to soften the law to ensure its survival amid attacks by landlords.

Unification may be the goal, but there's scant evidence that the council-backed measure has brought with it any reconciliation: In the lead-up to Election Day, landlord groups have reluctantly lined up behind the measure, while tenant advocacy groups are staunchly opposed to Measure D.

Opponents of the measure call it a bad-faith effort on the part of the Mountain View City Council to weaken hard-fought renter protections, rewriting the law to allow for higher rent increases and subverting CSFRA's framework for passing capital costs on to tenants. Some of the council members supporting the measure had openly opposed rent control when it was passed by voters in 2016, raising questions about the intent behind Measure D.

Though Measure D appears to have brought back the same talking points over whether rent control fundamentally hurts or helps those at risk of displacement, city leaders say they've changed with the times. In a recent interview with the Voice, Mayor Margaret Abe-Koga insists that sentiments have shifted: Rent control is here to stay in Mountain View and across California, and the council is trying to fix CSFRA -- not sabotage it.

"I'm just asking voters to believe us in our sincerity that we're trying to make it work to the best of our ability," she said.

Necessary changes?

The core argument among supporters of Measure D is that Mountain View has done a diligent job launching its rent control law, but that the last three years haven't been easy. Portions of CSFRA are ambiguous or have gaps that must be cleaned up, said Abe-Koga, and because the law is baked into the city's charter, any changes must come before voters -- the council's hands are tied.

Many of the roughly three dozen edits proposed by Measure D are exactly that -- minor modifications to CSFRA that have few practical effects and no vocal opposition. But the measure goes much further than that, making big changes to the way landlords can raise rent and pass costs on to tenants.

Under the current law, annual rent increases are capped at the local rate of inflation, or the Consumer Price Index (CPI), which has floated between 3.4% and 3.6% since the law passed in 2016. The law also has limits in volatile years -- maximum rent increases can be at least 2% even when inflation is flat and can't exceed 5% when it skyrockets.

Measure D does away with this system entirely, instead allowing landlords to increase monthly rent on tenants by 4% each year regardless of CPI. Given the historic rate of inflation, the change would almost always amount to an increase over what CSFRA allows.

Councilman Chris Clark said the change amounts to a modest increase in the rent cap in exchange for the security of knowing that CSFRA will live on. That's because the council's campaign pitch hinges on the idea that rent control in Mountain View is perpetually under siege by landlords, backed by the powerful California Apartment Association (CAA), and could face complete elimination absent some kind of compromise this March.

A voter initiative launched by the CAA, slated to appear on the November ballot, would do just that. Despite proposing a number of smaller changes, an innocuous-sounding feature would basically kill rent control: In the event that the vacancy rate of rental units hits 3% or higher -- in a city where the vacancy rate hasn't dipped below 3% in over 13 years -- rent control protections become unenforceable.

Clark said if he was a renter, it would be worth stomaching an extra half-percent increase in rent knowing that rent control was "sustainable" in the long term and wouldn't face annihilation every few years.

"If this passes, we're going to have a path forward where the CSFRA lives on in perpetuity and we don't have to keep tweaking it, and someone won't try to repeal it every election cycle," Clark said.

Jose Gutierrez, a Mountain View Whisman School District school board member and a renter, said he and others can reliably budget for a 0.5% difference in annual rent, but not knowing the fate of rent control adds a level of unpredictability that makes families nervous.

"When families come to me as a school board member, their main concern is, 'We don't know what's going to happen in the future,'" Gutierrez said. "This is a fixed rate. The city is doing their best to try and have this (law) stay in place."

The California Apartment Association announced last month that it would be willing to withdraw its support from its own November ballot initiative in the event that Measure D passes, though it remains unclear if council members did any behind-the-scenes coordination with the lobbying group. Clark said he sees this as a chance to end the divisive politics and charged rhetoric over rent control for good.

"I really genuinely wanted to find a way to not have to deal with this anymore. Let's take our learning from the CSFRA, let's not go through what is effectively a repeal effort by the CAA in November," he said. "Let's just put this whole thing to bed."

Passing costs to tenants

The biggest change proposed under Measure D lies in the way landlords can pass the cost of upgrading rental properties on to tenants above and beyond the 4% annual rent increase cap. It would compel the city's Rental Housing Committee -- the body charged with implementing and overseeing rent control -- to create a special list of capital improvements that landlords can quickly and easily pass through the associated costs to tenants as "temporary rent increases."

Eligible projects include upgrades to comply with local health and safety code regulations -- including seismic upgrades -- environmental sustainability projects and anything that "significantly extends the useful life" of the property, which can be used to justify annual rent hikes of up to 10%.

CSFRA already allows for these so-called pass-through rent increases, but with the important caveat that landlords must prove the rent increase is required to ensure they get a fair rate of return on their property. No such rule exists for these special capital improvements under Measure D, making it easier to pass costs on to tenants without a compelling financial justification.

Joan MacDonald, a tenants' rights advocate opposed to the measure, said she feels the council has waged a dishonest campaign by pretending Measure D is required in order for property owners to catch up on seismic retrofit work. An estimated 488 buildings in the city have what's called a "soft story" design that is vulnerable to collapse in a major quake, but nothing is stopping landlords from making these upgrades and even passing costs on to tenants today -- so long as they can provide financial documents proving it cut into their profit margins.

"Under Measure D, the fair rate of return is wiped out entirely," she said. "Naturally landlords want to be able to pass through all of their costs. That is not the way managing apartment complexes has been in the past, this is brand new and would effectively price out hundreds of families and individuals."

Alex Nunez, a member of the Mountain View Tenants Coalition, worries Measure D will make it far easier for landlords to undertake pricey upgrades with the end goal of pushing out current residents. Many families can't survive multiple years of 10% rent increases without being priced out, he said, and once they're ousted, the rent jumps up on their now-vacant units to market rate.

Council members stood by the decision to include streamlined capital improvements. Clark said he would be reticent to require any capital projects, including seismic retrofits, if landlords had to get approval to recoup the costs. Abe-Koga said proving a fair rate of return is simply too onerous for property owners under CSFRA, particularly "mom and pop" owners who can't easily handle all of the paperwork required for showing a fair rate of return.

Mobile homes excluded

Perhaps the most contentious ambiguity in Mountain View's rent control law is whether mobile home owners, who rent space in one of Mountain View's six mobile home parks, should benefit from rent control.

Mobile homes are not explicitly mentioned in the city's rent control law, leaving it up to the Rental Housing Committee to decide whether they are covered. Despite being told by its own legal consultant that mobile home owners should benefit from the renter protections, the committee decided in 2018 to exclude mobile homes from CSFRA -- a decision that was challenged in court and ultimately upheld.

The decision reverberated among families living in the roughly 1,100 mobile homes across the city, many of whom are facing displacement and say they're struggling to keep up with what they describe as price-gouging rent increases. An estimated 85% of mobile home residents in the city are either seniors, disabled or veterans, according to the Mountain View Mobile Home Alliance, and many of them can't afford the rent hikes.

Though council members have expressed sympathy for the challenges facing mobile home residents, they opted in November to explicitly exclude them from the city's renter protections under Measure D. The measure would insert "Mobilehomes and spaces or lots for mobilehomes" among the list of properties expressly exempt from rent control.

Clark, in explaining his decision, said he sought the paradoxical approach of cutting mobile homes from CSFRA in order to give those residents rent control. By completely extricating it from Mountain View's rent control law, he said the council can now pursue its own, separate ordinance for mobile home rent stabilization. Mobile home ownership is different enough from apartment tenancy that it warrants its own ordinance, Clark said, governed by the City Council rather than the Rental Housing Committee.

He conceded it would have been simpler and more politically savvy to include mobile homes under CSFRA -- the Mountain View Mobile Home Alliance is opposed to Measure D as it's currently written -- but Clark said it would have been a bad idea in the long run. Mobile homes are an entirely different type of rental unit, governed by different state laws, and need special considerations.

"The deciding factor for me was really the interplay with state law and having the ability to craft something that was very specifically tailored to mobile homes and all of the nuances that state law has around that so it can withstand (legal) challenges," Clark said.

Chris Chiang, a former Mountain View Whisman school board member and Santiago Villa mobile home resident, signed the ballot argument in support of Measure D but has since rescinded his endorsement. Chiang told the Voice that he initially believed Clark's rationale that Measure D was a stepping stone to providing renter protections for mobile home residents, but that today the argument rings hollow.

CSFRA's coverage of "all rental units" not explicitly exempt from rent control should have included mobile homes from the start, Chiang said, pointing out that the city of Sacramento passed a similar law in 2019 that encompassed mobile homes without controversy. It's troubling to see something so simple in other cities turn into something so complicated in Mountain View, he said, and the City Council appears to be going out of its way to not protect a class of vulnerable residents.

"I believe the intentions of Measure D are good, but I can no longer be part of further complicating this issue," Chiang said. "If Measure D is so unclear on how it will protect mobile home residents, then I can no longer vouch for how it will actually protect any form of renter. I withdraw my support for Measure D."

New rules for the Rental Housing Committee

One of the most prominent aspects of Measure D is that it would amend Mountain View's rent control law to prevent Rental Housing Committee members from paying themselves a salary. It's the first set of words in the ballot question itself, and is featured in a recent mailer sent to residents by a landlord political action committee: "Measure D permanently prevents the un-elected Rental Housing Committee from paying themselves a salary."

The focus is unusual, however, given that the Rental Housing Committee members don't earn a salary and have never attempted to give themselves a salary. Members have never formally discussed the possibility of paying themselves a salary as compensation for serving on the committee.

When asked, Abe-Koga said the council shares a "tricky" relationship with the Rental Housing Committee, which is in many ways part of the city while still maintaining autonomy from political influence by council members. She said the salary constraint is part of a larger effort by Measure D to ensure the committee doesn't sap city funds, and its aim is "good governance and being financially responsible."

MacDonald described the focus as a strawman and a non-issue, and said it's not clear whether its origin stems from the California Apartment Association or the City Council.

"None of the members of the Rental Housing Committee anticipated ever being paid, there was never a question either in writing or during the interviews that brought this up at all," MacDonald said.

Other changes under Measure D would expressly allow the City Council to remove committee members for misconduct and would permit the council, if it's dissatisfied with the applicants for a vacant seat, to allow landlords who do not live in Mountain View to serve on the committee. Council members say it's because the applicant pool for seats that may be represented by landlords -- no more than two -- has been thin, and it has been challenging recruiting people to serve on the committee.

A question of trust

One of the hurdles that Measure D proponents have grappled to overcome in recent months is a question of credibility. Can council members who have previously opposed CSFRA or still fundamentally disagree with rent control as it's written be trusted to faithfully amend the law?

It's a question that both Abe-Koga and Clark conceded was a challenge, borne out of deep distrust and an "us versus them" mentality that has taken root since the local rent control debate began in 2016. Clark told the Voice that he would still vote against CSFRA if it came to a vote today, noting that it fails to offer a comprehensive solution to displacement, but he insists that he will respect the will of the voters.

"We see too often at the federal level people trying to undermine things that they don't agree with. It's our job to really make it work," Clark said. "(CSFRA) is the law, the voters spoke, our job isn't to try to run out and repeal it and impose our will. Our job is to bring the community together, or at least try, and decide what is in the long-term best interest of the community."

But tenant advocacy groups are unconvinced. Nunez of the Mountain View Tenants Coalition said CSFRA was the product of grassroots organizing by tenants, starting with informal meetings in the park among Latino residents sharing stories of huge rent increases and the challenge of trying to stay in Mountain View. It snowballed into civic engagement that brought the problem to the City Council in 2015, and when the council opted not to take strong action, led to the creation of CSFRA.

Nunez slammed the efforts by the sitting council and the California Apartment Association to undermine those efforts through an entirely different process: Huge campaign donations from big landlords like Prometheus Real Estate Group and Tod Spieker, all with an eye toward "spreading misinformation" to wipe out what was achieved in 2016, Nunez said.

"What you're looking at is the City Council people who did not want rent control then and do not want rent control now are saying, 'We know better than you,'" he said.

A frequent complaint among opponents of Measure D, including local tenant groups and the the Santa Clara County Democratic Party, is that the changes feel disingenuous and unnecessary. CSFRA appears to be benefiting renters and staving off the eye-popping 40% to 80% rent increases that used to surprise families in Mountain View, and the proposed changes by the council only serve to subvert those benefits.

Former Councilwoman Pat Showalter, who was against CSFRA when it came to voters in 2016, has come out against Measure D, arguing that rent control has been working, protecting vulnerable residents including those on Social Security or earning low wages. She said that while she understands the rationale behind the changes in Measure D, she worries that the new standard for capital improvements is far too lenient, and that the 4% rent cap -- while modest at first blush -- will really add up over time.

"The changes that are made with Measure D -- I just don't see them as adding value, quite the contrary. I think they reduce the protections," she said.

Information on the "Yes on D" campaign, including endorsements, can be found at voteyesond.com. The campaign against the measure, spearheaded by the Mountain View Housing Justice Coalition, has information on Measure D at mvhousingjustice.org.

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