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Fwd: Note on Menlo Park Tenant Relocation Assistance Program

From: domainremoved <Madhumita>
Date: Tue, 26 Feb 2019 12:59:26 -0800


---------- Forwarded message ---------
From: Madhumita Das <madhumitadas_at_(domainremoved)
Date: Mon, Feb 25, 2019 at 3:42 PM
Subject: Note on Menlo Park Tenant Relocation Assistance Program
To: <cjcurtin_at_(domainremoved)

Mr Curtin, Ms. Robinson, and Ms. Coffman,

As Menlo Park residents and homeowners as well as real estate rental
property owners (not in Menlo Park), we have been following the discussion
about the Tenant Relocation Assistance Ordinance. We have seen similar
efforts in Mountain View, San Jose, Hayward, and most recently, in Redwood
City (which Ms. Coffman may recall!), as many different manifestations of
the same basic desire by the public agencies to create options for tenants
to continue to want to stay in their current locations to be able to
sustain their livelihoods and remain an integral part of the local society,
culture and economy.

These are indeed noble goals that we support completely in principle.
However, we feel that the way that the City of Menlo Park is proposing to
go about it assumes that it is beneficial to both the tenants and landlords
if the city created additional barriers for individual, private (versus
commercial) property owners, who could be elderly and long-time
resident/landlords to earn a decent rent to support themselves and to
continue to allow the tenants to stay indefinitely (or pay them the
required relocation).

The underlying assumption is a 'zero-sum' proposition - tenants gain at the
landlord's expense. The reality and the microeconomics of this will not
work out in favor of the well-intentioned but poorly conceived measures.
Ultimately, a landlord always has the option to permanently remove the
rental stock from the market, which is what I see to be the long-term
outcome of the policy as it is being proposed. At that point, all that will
be left in Menlo Park will be expensive rental units that not one of the
intended beneficiaries can afford.

After browsing through a number of the emails, I notice that much has been
said about the pros and cons of this. So, I will only offer a few salient
points of my suggestions, on the constructive side.

I use, as a reference, the sensible and pragmatic measures that the Cities
of Hayward and Redwood City have enacted, which I am sure you are very
familiar with. These allow sufficient leeway particularly for aging, older,
owner-occupied rental dwellings in the 1-4 unit range, to ensure there is
some middle ground.

1) Any owner-occupied properties or properties that can be bought as owner
occupied (1-4 units) should not be under relocation assistance. For
example, the homeowner may have relocated due to work away from Menlo Park
just before retirement and wants to return home to resume staying in their
home but cannot afford to pay the relocation to tenants staying there.

2) Tenant relocation assistance creates perverse incentives for the unruly
tenants to harass and extort the landlord on site, to collect the
relocation allowance. In many cases, these types of situations are very
difficult to prove (just watch the movie Pacific Heights with Michael
Keaton and Andy Garcia, what the tenants are capable of), but can make the
landlord's life miserable to unbearable. Therefore, owner-occupied
1-4-units properties should be off limit for any kind of a measure. If the
landlord wants back in, the tenant needs to vacate - no allowance.

3) The rent escalation is happening because of a demand/supply imbalance
primarily due to the Facebook campus taking out many low-rent properties
from the housing stock on the East Side of Menlo Park. It is therefore our
suggestion that the City of Menlo Park should work with the high-tech
companies residing in Menlo Park (similar effort is underway in San
Francisco, and another similar effort in San Jose failed vis-a-vis Google
because San Jose wanted Google too badly to locate around downtown) to use
that fund to add affordable houses like San Francisco just approved. So,
tie the effect with the cause to ensure the business planners at high-tech
companies are also factoring in the impact their location is having on the
local infrastructure including housing. Could the City of Menlo Park make
available publicly the proposal it has made to Facebook and others to help
with this?

4) Adding relocation assistance as a requirement for the leases will cause
the rents to stagnate and therefore reduce the desirability of rental real
estate for investors, reducing property prices in general. People who
worked hard all their life and want to retire to a cheaper place by selling
a house in Menlo Park will suffer financial loss.

5) If retirees need to stay in a hospital for a long time, they can rent
their house to pay the bills. Now after discharge, they will be forced to
pay relocation money to tenants who may earn much more than the retired
elderly owners.

I think a good strategy would be to follow Hayward and Redwood City
templates around safeguarding tenant interests while not forgetting that
without the inexpensive rentals made available by the landlord, there is
nothing to rent.

Thank you,

Received on Tue Feb 26 2019 - 12:55:39 PST

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