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Candidates challenged on 'rent stabilization'

Original post made on Oct 20, 2014

All nine candidates for Mountain View City Council were put on the spot last week during a candidate forum held by church leaders who want the City Council to pass a "rent stabilization" ordinance to put an end to the dramatic rent increases that are forcing many out of Mountain View.

Read the full story here Web Link posted Monday, October 20, 2014, 11:18 AM

Comments (31)

Posted by Common sense
a resident of Old Mountain View
on Oct 20, 2014 at 1:36 pm

Advocates like those quoted (and possibly Daniel DeBolt too) focus on the plight of renters, and the advantages to them of rent control systems, but to the exclusion of discussing the real-world downsides and backlashes that are inseparably among consequences of trying in this way to artificially change a price without addressing the factors that brought it about (supply and demand). I've never been a landlord, but I've lived through the actual (not theoretical) effects of rent control in two cities. What I posted last month on a related story still holds:
Rent control is something that appeals mightily to that small part of the economically naïve public that thinks it will benefit personally. They are willfully blind to its downsides.

You have a situation where a particular commodity (residential rental space) is expensive because it is WORTH a lot -- people are willing to pay the high prices. If you artificially reduce those prices, then even more people are willing to pay them, consequently an exacerbated shortage develops. Vacancies vanish utterly; newcomers seeking rentals are simply shafted. Owners of older rental property (since any construction newer than 1995 is exempted from any local rent control, by state law) first are incentivized to jack their rents way up in anticipation of the control -- newly imposing today's peak rents even on longtime renters whose landlords have not been raising them as fast as the market price, and keeping those peak rents even if there's another rent-market bust -- as happened after the dot-com boom. Otherwise, owners whose income actually becomes limited by the rent control are incentivized BY IT to take units off the market and use them for something else. That's why the number of housing units that would be covered by rent control will steadily decline, even as demand is high.

I've been through this, as a renter, in a couple of towns. I thought it was a good idea when first proposed. It was a disaster in practice -- it does nothing about the CAUSES of rent increase (limited supply and high demand), on the contrary it makes them worse. A few lucky people benefit. The rest of the population, most especially newcomers, finds the door to Mountain-View residency slammed in its face. Think what that will do for our existing traffic problems...

Posted by Greg Coladonato
a resident of Slater
on Oct 20, 2014 at 2:28 pm

Greg Coladonato is a registered user.

In reference to Ken Rosenberg's point:

"I don't think the candidates should be the only people up here," said candidate Ken Rosenberg. "Landlords should be up here answering why they are choosing to increase rent too much."

Another group that I think it would be interesting to hear from are the families who have recently moved to Mountain View and pay today's market rents. What drove them to pay "too much" to live here in Mountain View? What's their story, what are their values? I can't recollect ever reading about this side of the situation in this paper.

Dear Mr. DeBolt, do you have a way to locate and interview recent arrivals who rent? I would like to hear their stories, and I guess others would find them interesting as well.

Posted by Sparty
a resident of another community
on Oct 20, 2014 at 2:29 pm

Sparty is a registered user.

Sounds like an ambush.

Also sounds like a lot of people who are somehow still unaware that there are hundreds of thousands of people commuting in cars, buses, trains, and even on bikes...every single day.

Posted by reader
a resident of Waverly Park
on Oct 20, 2014 at 2:32 pm

"Otherwise, owners whose income actually becomes limited by the rent control are incentivized BY IT to take units off the market and use them for something else."

apartment owners/managers would stop renting some of their units?

where online can I read more about this?

Posted by Jerry
a resident of North Whisman
on Oct 20, 2014 at 2:34 pm

While I can feel for the plight of renters exposed to capricious increases, we also have to realize the limits of the power of City Councils. They cannot just change market dynamics by decree. Every time we (i.e., humans) try to manipulate a large, complex, organic system, we are as likely to make things worse as we are to make them better. Earlier posts have noted the kinds of distortions likely under rent controls.

The poor behavior in this scenario is not the current crop of Council members or candidates. The poor behavior we're ignoring is the City Council of 2000 that refused to look ahead and take appropriate action. The best thing this year's Council can do is plan ahead for 2025. Asking them to fix things this year is just magical thinking.

Posted by And make it rain too!
a resident of Bailey Park
on Oct 20, 2014 at 2:48 pm

I'd like to only pay 400K for a single family home in MV. Where's that pointed question to the candidates? It was not asked because it would be silly to do so, yet they still asked the rent control, question.

Someone clearly does not understand things and thinks there is some simple answer to the question: How can we afford to live here?"
The same question has been asked for decades. This is NOT a new situation. We are simply re-visiting a cyclical reality in MV. In the 90's I went thought this myself as a renter in MV.

Posted by oldabelincoiln
a resident of Blossom Valley
on Oct 20, 2014 at 4:24 pm

I've owned a home in MV since 1991, but I lived in Cambridge, Mass before that as a renter for many years.

At that time Cambridge had a strong rent control ordinance that included control of evictions and condo conversions. Disputes were settled by an arbitration board. Condo conversion was legal but limited to the current occupant of the apartment, who had to have lived in the apartment for at least 5 years before being eligible to buy. Landlords were required to be able to show what they had spent on maintenance in the event of a dispute about maintenance. New construction was exempted, I believe, but perhaps 80% of the apartment stock was quite old and in general need of repair. Under this particular ordinance, repairs generally got done after landlords learned that the arbitration board took their duties seriously. There were no reports that I heard of landlords removing apartments from the market, as they could not legally sell them. There was no vacancy decontrol, another important feature. Rent increases were allowed annually based on a set city-wide % or proof of excessive necessary expenses.

Rent control does work if the ordinance is written well and has enforcement teeth, and the voters continue to support it. A weak ordinance like the ones I've heard of as current in California rarely work well. The Cambridge ordinance was written by thoughtful, everyday people with legal assistance, and stood up to many legal challenges while I lived there.

The MV council candidates should be ashamed of their waffling stances on this very tough, very important issue. I see another moribund council in the making...

Posted by Sparty
a resident of another community
on Oct 20, 2014 at 5:08 pm

Sparty is a registered user.

"apartment owners/managers would stop renting some of their units?

where online can I read more about this?"

you can find it in any high school economics class

Posted by MVHone
a resident of Old Mountain View
on Oct 20, 2014 at 6:16 pm

I am an MV native and own a small rental in Mountain View I bought in my 20's. I struggled to buy it. I worried every month I wouldn't be able to pay the mortgage, but somehow I managed. To me it was my investment for my future security.
When I left the area and moved to a more affordable part of the Bay Area I rented it for about half of what the monthly payment cost me. I paid the difference out of my pocket for many years. I never raised the rent on any tenant and most stayed 3 - 4 years each.
This most recent turnover I spent over $25,000 and lost months of rent remodeling the place with new bathroom and kitchen. And finally after all these years the rent finally covers the mortgage and I may recoup that remodel investment in 5 years time.
Just giving another perspective. I'm a landlord. I'm not wealthy by any stretch of the imagination. I don't live in mountain view, my home town that I love, because I can't afford to. It was not without sacrifice that came to own this property and it will never make me rich. One day when the rent prices are falling and vacancies are up like I've lived through before is the city going to bail me out and help me keep my property income and maintain it for me too? I won't hold my breath. I took the risk, I sacraficed, it's my small window to reap a little benefit by having tenants who are better off than I will ever be.
I live where I can afford to live.

Posted by Doug
a resident of Monta Loma
on Oct 20, 2014 at 9:13 pm

No One said that rents would lock in place or be reduced.

It is sad to see the council candidates not advocating for a large portion of the Mountain View community. Infrastructure is another weak spot for City Council.

Posted by Pat
a resident of Old Mountain View
on Oct 21, 2014 at 7:40 am

The Mountain View City Council are useless, self serving home owners.

Posted by mambo jambo
a resident of Cuernavaca
on Oct 21, 2014 at 9:44 am

The rent control question is from these liberal socialists who are also religious leaders and that is a warning sign in our democracy when religion injects into politics/election. I am in support only if the legal immigrants and citizens raised this issue. And we all know the religious leaders are bringing up this isseu on behalf of the illegal immigrants who are law breakers. I don't like the high rents because I have been a renter for the last 22 years and I may have to move out of this area if this gets even more expensive than what it is now.

Posted by Christopher Chiang
a resident of North Bayshore
on Oct 21, 2014 at 10:09 am

Comparing us to other cities in other states isn't useful given in CA, we passed the Ellis Act which allows landlords to evict tenants to sell their property, see what's happening in SF: Web Link

What the Ellis Act does to rent control is that it reduces supply of rentals, especially low price rentals.

That doesn't mean the city can't play some role to provide the half of the city some protections. The city could require landowners to report their percentage rent increases (not their rent prices), then the city could publish the track records of each rental (like a Yelp, even better: open API the data so private sites like Zillow/Trulia could feed off the data) to bridge the information gap for renters. The city could also require a specific period of time of notice that landowners must give a renter before increasing rent beyond a certain percent.

Those are just a few out of the box innovations city council candidates can consider in improving the free market by empowering everyone, without incentivizing units being take off the market.

Lastly, candidates could strongly consider non-car based micro rentals in North Bayshore, in-lieu of more commercial development (not on open space), such a targeted dense development would have enough of a punch to cool the market.

Posted by reader
a resident of Waverly Park
on Oct 21, 2014 at 12:37 pm

@Sparty: "you can find it in any high school economics class"

Mr Sparty, I asked a sincere question in hopes of learning more about rent stabilization, and you gave me a snotty sarcastic reply.

I did take economics in high school 40 years ago and even if it came up I wouldn't be able to remember that far back.

So again I will ask, where might I learn more about apartment owners pulling units off the market?

Posted by Stop the Trolls
a resident of Cuernavaca
on Oct 21, 2014 at 12:52 pm

@mambo jambo: Take your meds. Your paranoia is completely out of control.

Posted by For Reader
a resident of Blossom Valley
on Oct 21, 2014 at 1:24 pm

Here you go...

Web Link

Posted by Common sense
a resident of Old Mountain View
on Oct 21, 2014 at 1:53 pm

"oldabelincoiln" wrote "Rent control does work if the ordinance is written well..."

Cambridge Mass., during full force of its rent control, was one of the towns I experienced as a renter -- and no, rent control didn't "work" there, except to a lucky minority who happened to be longterm renters (as "oldabelincoiln" claims to've been), either already, or after managing to to "get into" the vacancies, which became so rare compared to other rental markets even in nearby towns.

That's what I meant earlier here: _perception_ of these schemes varies sharply with the renter's individual circumstances. It's characteristic of beneficiaries of rent control to play up its benefits (benefitting themselves), but be blind to its side effects (mostly affecting other people in the rental market). The advocacy coming from SF shows precisely this myopia.

Cambridge, and Berkeley, are towns that grew up around universities, and exist as they do now because of them. Historically, these towns included lots of lower-end rental property that turned over steadily, as students arrived and moved on. Under rent control, which left prices low but vacancies nonexistent, many of the traditional renters found the door slammed in their face, and had to search farther afield. In Berkeley, one notable side effect over the 1980s was students commuting from farther away, exacerbating already-inadequate parking and contributing to a wave of new neighborhood parking restrictions. At the same time, new classes of more upscale renters, such as yuppies employed in SF, had incentive to grab, or bribe their way into, the scarce rental vacancies. They could afford big bribes: their longterm tenancies recouped the expense soon in rent savings (Berkeley rents were vindictively kept from rising anywhere near inflation rate, and fell far below what the market would pay). At the same time, those new renters didn't move on, like students. Result: far more people shopping for FAR fewer vacancies, and much of Berkeley's traditional student population forced out and farther away.

All of which would be routinely denied or brushed aside by the lucky beneficiaries who didn't experience these downsides, and who said things like "without rent control, I couldn't afford to live in Berkeley!" as if that were an objective argument for a broad-brush policy that harms many other people and exacerbates, rather than addressing, both factors (supply and demand) that caused rents to rise before rent control.

As Mencken said, for every complex problem, there's a solution that's simple, neat, and wrong.

Posted by m2grs
a resident of another community
on Oct 21, 2014 at 2:33 pm

For those who wants rent control, why don't you move to East Palo Alto?

1. The rent is cheaper.
2. There *is* rent control.
3. Very good location. Commute is fantastic.

Why not???

Because EPA is an example why rent control does not work. The neighborhood will be infested with low-quality properties. Low-quality properties leads to all sorts problems: bad schools, crimes, environmental blights, etc. Business leave. Retail shops leave. It is self-destruction.

And, chances are you cannot grab a rent-controlled apartment. Long-term renters won't let you in. There is no supply.

Posted by LoveYourDNA
a resident of Old Mountain View
on Oct 21, 2014 at 3:51 pm

The supply and demand argument is just an excuse for those who want to be greedy. Full stop. Doesn't matter if it's during a natural disaster where people gouge prices for water, etc., or rents. Greed will be our ultimate undoing.

Posted by oldabelincoln
a resident of Blossom Valley
on Oct 21, 2014 at 5:46 pm

I'm surprised by the posters who seem to think that rent control doesn't work because it protects existing tenants at the expense of would-be tenants and shrivels the size of the market, making vacancies non-existent.

I lived in Cambridge, Mass., as a renter from 1960 until 1989. Rent control was voted in sometime in the mid 70s. I moved within Cambridge about 5 times during the 29 years that I lived there. Before rent control, vaciencies were hard to find. After rent control, vacancies were still hard to find, but no harder than before.

The tenants living in Cambridge at the time, and probably today, were fairly mobile, coming for college or work, and eventually moving on to some other part of the country as their situation changed. They were not intending to live in Cambridge forever, and by and large, they didn't.

I have no idea why Berkeley has a different story to tell as i've never lived there, but do recall that however attractive the jobs here may be, no one stays with the same employer forever, and there will always be people coming and going thanks to changes in their lives. They certainly came and went in Cambridge, with or without rent control. Life hapens to all of us, and, yes, some people will live in a rent controlled apartment forever - but look at your own lives - surely you have had reason to move and probably will do so again in the future. There are always vacancies but where the demand is high, there won't be many whether there is rent control or not.

The purpose of rent control is to allow people who already live in ia high demand area to keep their homes. If that makes it harder for people who want to move into that high demand area, that certainly can happen - but of course, it happens without rent control, too.

Posted by Linda Curtis
a resident of Cuesta Park
on Oct 21, 2014 at 6:45 pm

Rent control or stabilization laws would discourage the building of new housing in MV because those that do that do it for a profit.

Another result would be for rents to soar like crazy just before the new rules go into effect. Duh.

Posted by NoRentControl
a resident of Old Mountain View
on Oct 21, 2014 at 7:35 pm

We need to solve our housing crisis overnight. Since rent control will take years to have a positive impact, we should not do it.

The comments above about possible negative impacts is also very worrying. Unless we can come up with a solution that will:

1) Completely solve all of our affordable housing problems overnight.
2) Have absolutely no negative effects to anybody on the planet.

We should just do nothing. Or, build up a whole bunch of housing next to the environmentally sensitive wildlife area on E. Bayshore. That's a great idea!

Also, I'm very worried for the greedy landlords who would have to leech less off their tenants. They might be forced to be less wealthy. No to rent control!

Posted by m2grs
a resident of another community
on Oct 21, 2014 at 8:23 pm

Q: Why do you want rent control?
A: Because it is no longer affordable for me

Q: Is there any other place cheaper to rent?
A: Yes.

Q: So why not move there?
A: Because jobs are here. I want to be closer to jobs. Traffic is bad.

Q: Who are these people sitting in traffic? Don't they come here to work, but live in cheaper places? If they can do it, why not you?
A: Because...

Q: Are you saying all the jobs that you can do are in Mountain View?
A: No.

Q: What is the apartment occupancy rate in Mountain View?
A: Maybe 95%? 98%?

Q: Will rent-control magically increase the occupancy rate to 200%, so more people can get what they want?
A: Are you crazy?...

Posted by Cuesta Renter
a resident of Cuesta Park
on Oct 22, 2014 at 4:25 pm

Don't search for perfection. Council could help the current situation by simply passing law limiting rent increases to 10% each year.

That is hugely high, so has no affect most years. But in crisis years like 2013 and 2014 where rents going up like crazy, it provides at least a little safety blanket.

The other thing would be to require 120 days notice of any rent increase. that gives renter more time to get ready to move in case rent increase is too high. Again, should not hurt landlords as simple for them to make decisions earlier.

Ballot measures won't work due to landlords spending. If Council does the 2 simple things above, it has very little impact on landlords but provides a baseline of protection to the most vulnerable.

Posted by Doug
a resident of Monta Loma
on Oct 24, 2014 at 7:41 am

I agree with Cuesta Renter. A small change would help renters. The 10% limit per year could be implemented. It could have provisions for large scale improvements where the landlord would get a waiver if they make substantial improvements to the rental property. The 120 day notice would work for most landlords as well.

Posted by Don't Become Berkeley
a resident of Shoreline West
on Oct 24, 2014 at 10:08 pm

I was in Berkeley in 1970's. It was a very vibrant city, with Telegraph Ave, and Shattuck Ave, and beautiful University Ave., all full of small shops and pedestrians.

10 years after rent control, the city is full of poorly maintained properties, pot holes on streets, little new investments in infrastructures. Student had to beg for vacant apartments, while some smart working professionals lived in Berkeley while commuting to San Francisco. In the same apartment rents would differ by 100%.

Property owners could not find buyers, and they had to repair a building with the hard earned saving and repaid with a amortization schedule - after getting approval from Rent Control Board.

Rent control board become the new dictator, and funded by the property owners.
Ridiculousness of rent control is obvious when you try to apply the same regulation on all city properties, you may find Mountain View become East Palo Alto!

Posted by Christopher Chiang
a resident of North Bayshore
on Oct 30, 2014 at 4:23 pm

The Metro/San Jose Inside just published their story on MV rent: Web Link

I find myself more and more troubled by the lack of attention increasing housing costs gets in this election.

When the Peninsula Interfaith Action asked the candidates if the city council should “direct staff to research creation of a Mountain View rent stabilization ordinance, consistent with California state law.” Only Greg Unangst marked “strongly agree,” while Lisa Matichak and Pat Showalter marked “strongly disagree.” The other seven candidates checked “undecided/other.”

I very open with my reservations of rent control, and I would be equally worried if someone was totally for rent control, but the "strong" opposition to even studying all possibilities on the greatest problem facing our city's residents is troubling.

People keep saying that homeowners feel like the silent majority, this election, as have past elections will show that renters are the true silent majority in terms of political power and negative impact as a result of our city's growth.

60% of the city rents, but many are too busy working or too removed culturally to advocate for themselves, perhaps it's not a surprise some candidates don't even have rising housing cost as a one of their self identified priorities.

Posted by Robert
a resident of another community
on Oct 30, 2014 at 5:30 pm

>I find myself more and more troubled by the lack of attention increasing housing costs gets in this election.

Are you serious? Half the candidates are running on "no new development" platforms, I have trouble believing anyone running for public office is that oblivious about what kind of effect that will have... keep in mind though, priced out of the area = no longer a constituent

Posted by Council Watcher
a resident of Old Mountain View
on Oct 30, 2014 at 6:23 pm

Christopher - The unhappy truth is that the amount of new housing desired by even the most outspoken advocates of high density (Siegel's slate and you also, I think) would not bring housing prices down. The pressure is too great. All that would happen really, is that the apartment developer/owners would create a fat revenue stream, into the distant future.

Developers just want to build "luxury" units, to skim the cream off the top of those nice tech salaries. "Affordable" units? There wouldn't be many. Just an upscale mess.

A few decades ago, when I purchased my home, Mountain View was a downscale place, with a pretty grubby Castro street. I wanted to live in Palo Alto, but even in those years, I was priced out of PA. I bought in MV because I thought it had a future, and because it was all we could afford. We struggled for years to make the payments. Decades later and several refi's later, I'm in good shape. To those who want to do the same today, I'd say look for a good neighborhood in San Jose - that's the equivalent situation.

Renters too need a city that is not gridlocked, and schools that are not overcrowded. Don't take the developers' bait this election, and don't fall for false promises.

Posted by Christopher Chiang
a resident of North Bayshore
on Oct 30, 2014 at 6:36 pm

It's a problem that help for renters is boxed into just two controversial issues, more housing or rent control. Which means that outside those two issues, it gets ignored.

Such an important issue should involve more vigorous discussion of many solutions on many fronts other than just those two.

What about requiring landowners to give an increasing larger time period of notice corresponding to the increase in rent requested, so renters can plan their response.

What about more staffing by the city (paid by developer fees) to mediate and prevent conflicts between renters and landlowners? Some apartment blocks have the population density of established MV neighborhood associations, but lack the civic organization or related public funds to investing in their social capital.

What about requiring landowners to report to the city their annual percentage rent increases (not the dollar amount), which can then be relayed to online rental search sites (open data API), helping balance the information asymmetry in the rental market.

Many landowners are local, it's very different when the percent they increase rent is public for all to see, none of this gets in the way of their property rights, but it sure does impact their civic image.

Posted by Jim Neal
a resident of Old Mountain View
on Oct 30, 2014 at 11:14 pm

Jim Neal is a registered user.

Actually, I also marked "Strongly Disagree" for the question about rent control which was question 5.

I have lived in San Francisco (which has rent control ) on three different occasions and it is still one of the most expensive places in the United States to live. As has been mentioned previously, and as I stated during the forum, rent control only helps a small number of people that plan on living in the same place for a very long time. Any time that you move, you are subject to paying market rate rent.

Adding more housing will help, but my view is that the housing must be compatible with the area where it is being built. For example, I would not put a 4 story massive complex in an area that has only single story homes.

Also, for the forseeable future, we will not be able to build enough housing in order to completely meet demand because Mountain View is only about 12 square miles, so the best strategy is to build as much neighborhood compatible housing as we can, while strictly limiting the addition of new offices to help slow the rent increases.

The city needs to actively seek out and approve housing projects that will add more affordable housing, rental and ownership, to the mix.

As a renter, I too am feeling the squeeze from double digit percentage annual rent increases, not to mention the recent double digit percentage increases in food prices! These factors are making it increasingly difficult for those of us that are middle and low income earners to make it from month to month, but by taking a holistic approach to solving the problem, I believe that over time, we can preserve Mountain View as a place where everyone can afford to live.

Jim Neal
Candidate, Mountain View City Council
Web Link ( Campaign Website )

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