Adopting the ordinance would follow in the footsteps of San Francisco and Berkeley, which imposed a mandatory retrofit program more than five years ago. Oakland was the latest Bay Area city to join in, approving a seismic retrofit ordinance in December.
A survey last year found that 488 buildings in Mountain View appear to have a soft story design and pose a risk to tenants living in 5,123 housing units — roughly 16 percent of the city's entire housing stock. Potentially dangerous buildings range from small, one- and two-unit buildings to to multi-family complexes with as many as 184 homes. The area bounded by Shoreline Boulevard, Showers Drive, Central Expressway and El Camino Real represents the most densely packed region of identified soft story buildings, accounting for roughly half of the units.
Rather than have individual landlords hire a consultant to formally assess whether each building is truly in need of retrofit work, council members agreed at the June 4 study session to spend $150,000 in city funds on a structural engineering firm to identify the properties. Similar to other cities, the plan is to retrofit buildings in phases, with the largest apartment buildings going first.
Though subject to change, council members generally agreed that buildings with 12 or more units — accounting for more than three-fifths of the vulnerable homes — should go first, followed by buildings with between five and 11 units. The goal is to have all buildings retrofitted over the course of six years, according to a city staff report.
That timeline seems ambitious, said Brian Avery, an apartment owner in Mountain View. He said he's currently in his 12th month of trying to get a permit from the city for a bike storage room, and pushing hundreds of permits for retrofit work through the city's already busy departments in a short period of time is going to be a challenge.
"For you to put up two years for us to get our permit ... it's going to be tough for your different departments to respond," Avery said.
Michael Pierce, president of Prodesse Property Group, said the compressed timeline is going to drive up the costs for retrofit work, which city staff are estimating could cost from $6,000 to $20,000 per unit or $25,000 to $100,000 per building. Many property owners are going to have difficulty paying for those required upgrades, Pierce said, particularly those relying on rental property income for their retirement.
Adding to the complexity, it's unclear if and how landlords can seek to recover the costs of the retrofit upgrades by raising rents. Under Mountain View's rent control law, landlords can seek rent adjustments above the maximum increase allowed under the Community Stabilization and Fair Rent Act (CSFRA), but only through a lengthy process that demonstrates that the property owner is not receiving a fair rate of return on the property.
A streamlined process to pass certain capital improvement costs onto tenants is not provided under CSFRA, though the city's Rental Housing Committee could consider creating such a petition process.
Joshua Howard of the California Apartment Association told council members that many of these soft-story buildings are old and expensive to maintain, and that the costs of a retrofit program — if too great — are going to force property owners out of the rental market. There needs to be some way to recoup those costs from the tenants, and not over a lengthy period.
"When you're going to ask someone who is barely getting a 3% revenue increase to take on a six-figure project with very little guarantee to get the expense paid back over a relatively short period of time is rather burdensome," he said.
Mountain View resident Joan MacDonald said she is seeking the opposite — a lengthy cost recovery period so rents wouldn't go up "sky high." If property owners are going to amortize the costs over a long period of time, so too should the costs be stretched out for tenants, she said.
The council may consider creating a streamlined petition process for landlords to raise rents above and beyond what's allowed under CSFRA through a ballot initiative that amends the rent control law. CSFRA is an amendment to the city charter, meaning any changes must be made at the ballot box.
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