HomeMy WebLinkAbout2000-12-18 City Council Summary Minutes (2) Adjourned Meeting of December 11, 2000, To December 18, 2000
1. Vice Mayor Eakins and Council Members Burch, Kleinberg, and Ojakian re Emergency Mobile Home Rent Stabilization for Buena Vista Mobile Home Park.................................. 225
ADJOURNMENT: The meeting adjourned at 8:05 p.m............... 240
12/18/00 91-224
The City Council of the City of Palo Alto met on this date in the Council Chambers at 6:10 p.m. PRESENT: Beecham, Burch, Eakins, Fazzino, Kleinberg, Kniss, Lytle, Mossar, Ojakian UNFINISHED BUSINESS 1. Vice Mayor Eakins and Council Members Burch, Kleinberg, and Ojakian re Emergency Mobile Home Rent Stabilization for Buena Vista Mobile Home Park City Attorney Ariel Calonne said the Council still had speaker cards from its December 11, 2000, meeting as well as more cards from the current meeting. A letter from Nancy Powell, the attorney representing the Buena Vista Mobile Home Park (the Park), was included at the Council’s places. The letter included a proposal for some suspension of rent increases at the Park. Mayor Kniss announced the Council would continue its discussion begun on December 11, 2000, regarding a rent increase at the Park. Jeannette Donnelly, 3980 El Camino Real, spoke as a retired schoolteacher and as a resident at the Park about rents in local mobile home parks, which were less than the Park’s proposed increase. Bobby Munoz, 3980 El Camino Real #51, supported city assistance to stop unfair, unjust rent increases at the Park. Many would not survive such a rent increase and could end up living on the streets or in their cars. Eve Agiewich, 3427 Janice Way, spoke about the lack of affordable housing in Palo Alto. The City of San Jose’s mobile home park ordinance provided for a reasonable rate of return for park owners while giving residents stability and protection. She urged the Council to protect its residents. Council Member Mossar said one of the possibilities was to use the City’s criteria for utility residential rate assistance, asking whether it was typical for tenants to provide qualifying information to a landlord. Ms. Agiewich saw in San Jose, where the tenant proved that they were eligible for the special utility rate without providing actual income information. Council Member Mossar clarified the qualification was through the City of San Jose’s program and San Jose certified the individual was eligible. Ms. Agiewich said the tenant could also show their bills. The part
12/18/00 91-225
of the Park owner’s “offer” that was disturbing was that it was not really a suspension of the rent increase or freezing of the rent, but simply created a debt for the people who would accumulate debt on the unpaid portion. Ellen Gold, Buena Vista Mobile Home Park resident, had used a small savings to purchase what she thought was protected, low-income housing stock as referred to in the City’s Comprehensive Plan, since she was somewhat disabled and could not work full time. Her rent was increased every January and she had not been offered a lease in compliance with City guidelines. The Council was asked to impose a temporary freeze on rent increases and to form a committee composed of residents, City staff, Council, and the landlord to devise a plan for future rent stabilization. Winter Dellenbach, 859 LaPara, (457 Kingsley, residence), resident of Barron Park and employee of Midpeninsula Citizens for Fair Housing (MCFH), spoke concerning the amenities found at other mobile home parks, and the unreliability of the current owner of the Park. Andrew Pierce, 363 Ely, spoke concerning the Park, which differed greatly from the rest of Palo Alto. The owners of mobile homes in the Park were at risk of losing property rights if the Council did not take action. If the mobiles were sold, the Park owner would not grant leases to the new owners. If rents increased, the value of the mobiles decreased. Many cities in California had ordinances to regulate the economic relationship between mobile home park owners and mobile home owners because of the unusual situations. Jim Forthoffer, Buena Vista Mobile Home Park, spoke regarding how unnecessary the Park owner’s 20 to 24 percent rent increase was to the park residents. Jorj Tilson, Executive Director of Manufactured Housing Educational Trust (MHET) of Santa Clara County, 950 South Bascom Avenue #1113, San Jose, said MHET was similar to the Tri-County Apartment Association (TCAA). The Council was urged to consider seriously the offer made on behalf of the owners of the Park. The offer was the start of a workable relationship to solve the immediate economic needs of extreme hardship cases and the overall condition of residents, whether or not residents were entitled to rent forgiveness. The property owners had the right to recover reasonable costs of doing business. Council Member Beecham asked Ms. Tilson to define “rent forgiveness.” Ms. Tilson thought the Council should take the time to discuss the Park owner’s offer with their attorney, Ms. Powell, in order to understand what the offer could mean. Perhaps “forgiveness” was the wrong term to use.
12/18/00 91-226
Council Member Ojakian asked which geographical area Ms. Tilson’s organization served. Ms. Tilson said MHET served Santa Clara County (the County), the principal member of which was San Jose, but included the cities of Sunnyvale, Mountain View, Campbell, Milpitas, and other cities because of the larger number of mobile home parks. Council Member Ojakian asked how many of the cities enacted the state mobile home law. Ms. Tilson stated most of the cities had such a law. Council Member Ojakian clarified the ordinance was not innocuous but was fairly common. Ms. Tilson said the cities had differences and similarities, which differed from month-to-month rent control. Council Member Ojakian thought it sounded like all the other jurisdictions in the County had such an ordinance. Ms. Tilson said having such an ordinance was very rational for cities. Council Member Ojakian asked how many other mobile home parks in the County offered “rent forgiveness,” or some rent relief or break. Ms. Tilson said San Jose had strict rent control for almost 20 years, with the strictest form within the past seven years. The cities of Sunnyvale and Mountain View had no rent control. The City of Campbell required mediation, but only one mobile home park was left. The City of Milpitas had four mobile home parks with a rent control ordinance. The cities of Gilroy and Morgan Hill had policies but a small number of parks. Mayor Kniss asked whether the rent control ordinances referred to by Ms. Tilson specifically addressed mobile home parks or the cities in general. Ms. Tilson said the ordinances specifically addressed mobile home parks and could be referred to as rent stabilization but was price control for monthly rental costs. Mayor Kniss asked whether Ms. Tilson meant price control with some type of predictable criteria. Ms. Tilson said yes. The behavior of communities elsewhere should be considered if the cities more closely matched to Palo Alto. San Jose’s ordinance was intolerable for investors because it was
12/18/00 91-227
extremely restrictive and disallowed reasonable, flexible business decisions. Council Member Burch asked about the average rent increases over the past three or four years. Ms. Tilson said San Jose required all mobile home parks to increase rents uniformly throughout the city, which was key to the rent ordinance, such as a floor of 3 percent and ceiling of 7 percent. In other communities, there were no restrictions. Rent surveys were not conducted because of the potential for restraint of trade. She Relying on anecdotal information, she thought rent increases in Sunnyvale and Mountain View were typically 4 to 7 percent. Council Member Burch asked whether 25 percent rent increases were unusual in Ms. Tilson’s experience. Ms. Tilson said such a large increase would be based on tremendous increases in expenses. Typically, large rent increases evoked some kind of negotiations and, depending on the jurisdiction, interposition by a public agency to reconcile the differences. Council Member Beecham asked about Ms. Tilson’s comment that the San Jose program was intolerable for investors. Ms. Tilson said the situation was intolerable because it was based on and made no deviation from the most rigid form of rent control. There was literally no ability to pass through interest costs to refinance a park and no ability to pass through the cost of purchasing a park. Increases could not be given to new residents, since the selling resident sold the right to occupy the space at the same rate in the year to the new purchaser. The only opportunity to change the rent was if there was a successful unlawful detainer or if someone literally moved the mobile off the slot and moved away. The system of price control was extremely rigid. The amount was uniform throughout the park and throughout the city, regardless of the nature or amenities in the mobile home park. The only deviation was through a required hearing. If the park owner wanted to increase rents greater than the citywide prescribed amount per year, an application had to be made to the City of San Jose for a hearing. During the 12 years the NOI process was in place, approximately 10 to 12 actual rent hearings were held about mobile home parks. Bob Moss, 4010 Orme Street, agreed with Ms. Dellenbach’s characterization of the Park owners as untrustworthy. Palo Alto’s condominium conversion ordinance placed a cap on rent for seniors and rent could not increase by more than 5 percent per year. Support was voiced for rent control on the Park as quickly as possible as a way to maintain affordable housing in Palo Alto. Council Member Lytle asked that speakers refrain from voicing
12/18/00 91-228
negative comments about anyone’s personal characteristics. Mayor Kniss agreed. Kate Hill, 884 Los Robles, supported her neighbors living at the Park, especially families with young children, which were an integral part of the community. Jeff Rensch, 741 Chimalus Drive, spoke about the need for low income housing in Palo Alto. Larry P. Jensen, Board Member of Interfaith Hospitality Network (IHN), 300 41st Avenue, San Mateo, said his organization concentrated on helping economically fragile families with regard to housing. He said social and economic diversity was important within an affluent community. The Council should consider the most beneficial use of City land. Current renters should be able to rely on City regulations and past landlord practices, which should be consistent with the fair return to the landlord. The stability and security of a significant number of productive yet economically fragile citizens of Palo Alto was critical. Bruce Stanton, Esq., representing residents of the Park, 1530 The Alameda, Suite 115, San Jose, said he wrote mobile home park ordinances throughout California. There was a need to remember that mobile home park residents were homeowners in a symbiotic relationship. Mobile home rent stabilization should not be considered an impediment to citywide development. No jurisdiction would endorse an offer such as the Park owner made, principally because it was not rent forgiveness but rent deferral. He urged the Council to take immediate action. Council Member Mossar asked whether Mr. Stanton was familiar with The City of San Jose’s rent control program. Mr. Stanton said yes. Council Member Mossar asked how San Jose’s program worked. Mr. Stanton strongly disagreed with a prior speaker’s assessment that San Jose’s program was a “miserable situation.” San Jose had 84 mobile home parks, of which only one park per year went in for a hearing, presumably because the other parks were receiving a fair return. Hearings usually resulted because of a split decision. Twenty jurisdictions throughout the State used the “maintenance of net operating income formula,” a formula approved by the courts and the best formula to have. Ordinances that caused trouble were ordinances that included a list of factors and gave hearing officers discretion and room to decide which of the factors should be given more weight. Rose Rocha, 3980 El Camino Real, spoke about the need to protect
12/18/00 91-229
families with limited incomes or the disabled who live in the Park. The greatest concern was for seniors who lived on a fixed income. She urged the Council to take action to protect families and help them remain in their homes. Ann Marquart, Director, Project Sentinel, 430 Sherman Avenue, spoke about the need for mediation between residents and the Park owners because there were issues beyond the rent increase. Mayor Kniss said a number of issues appeared in the newspaper regarding taxes on the Park, so she had asked Mr. Ginsborg to address the Council. David Ginsborg, Office of the Assessor, Santa Clara County, said in 1999, the assessed value of the properties in question containing both the new Blockbuster Video and a portion of the mobile home park increased in value by $716,434, or an increase of $7,000 in taxes. Approximately $625,000 of the assessed value was due to the new construction resulting from the removal of the market and addition of the Blockbuster Video. In 1999, a 50 percent transfer occurred on all four properties where the Jissers had an interest. One of the four properties had a gas station, one the Blockbuster Video, and the other two the Park. Upon enrolling the transfer, which his office would handle no later than May 2001, a determination would be made for a new assessed value on the existing partial owner, as well as a new assessed value for the new partial owner. One existing owner and one new owner would come into the partnership. The Park owners requested that a portion of the property occupied by the retail space receive a new parcel. With the new parcel, the property owner had interest in a total of five properties. A new tax bill would be issued in May, but to date the tax was only reflective of the new improvements from Blockbuster Video. Council Member Kleinberg asked about the new assessed value the Tax Assessor would come out with in May based on the factors and criteria. Mr. Ginsborg said of the five parcels, three involved the mobile home park. All five parcels had a partial new owner. Half of the old owner remained at the Proposition 13 protected value and the new owner would see half of the new value. Council Member Burch asked whether the same rule applied if the new owner was the wife of the old owner. Mr. Ginsborg said his office was treating the purchase as a new owner, therefore, a new assessed value would be made on 50 percent of the new owner’s property. His office would evaluate the ownership to change the title and make appraisals to arrive at a value.
12/18/00 91-230
Mayor Kniss said regardless of who the property was sold to, the property would be reassessed. Mr. Ginsborg said the laws differed for residential properties; commercial properties required an assessment even if the property was sold to children. Council Member Ojakian said commercial property had changed within his own family and, because it went from blood kin to blood kin, there was no change in the tax. It was an important point to clarify at some point. Mr. Ginsborg said his office would clarify the point no later than May as part of the normal process. A number of things were going on within the Park, such as a change in ownership, changes in the parcel, and the question of values, all of which required a number of actions in his office. Council Member Ojakian asked whether the five parcels were worth $4 million. Mr. Ginsborg said the current roll was for four parcels, one of which would be divided into two. Council Member Mossar asked which parcel was being divided. Council Member Ojakian clarified Council Member Mossar’s question as to whether the parcel to be divided was part of the Blockbuster Video section. Mr. Ginsborg said the parcel at the intersection of Los Robles and El Camino Real would be divided. The front section on which Blockbuster Video sat would be one parcel and the land behind the store would be part of the mobile home park. Council Member Ojakian asked whether the $4 million assessed value was the result of combining all the parcels together. Mr. Ginsborg said his assessed value was based on three of the four parcels. Council Member Ojakian asked whether the three parcels were just the mobile home park parcels. Mr. Ginsborg said yes. Council Member Ojakian asked about the value of the three parcels. Mr. Ginsborg said the three parcels making up the mobile home park were valued at $5.2 million, not including the fourth parcel on which the gas station sat.
12/18/00 91-231
Council Member Ojakian asked whether half of the $5.2 million would remain at the current assessed value because it was not changing hands. Mr. Ginsborg said some of the land would decline because it was being pushed into the retail section. Council Member Ojakian clarified the other $2.6 million would be reevaluated at the current rate. Mr. Ginsborg said yes. Council Member Ojakian asked whether Mr. Ginsborg knew what kind of tax increase the Park might see. Mr. Ginsborg was not sure. Council Member Ojakian asked whether it was possible to see an estimate or “first pass” on the increase. Mr. Ginsborg said the amount would not be reliable for the purpose of property taxes. His office went through the process so when it gave a number it was something defendable, fair, and accurate. Council Member Ojakian said testimony was heard that the Park taxes would increase by 50 percent, asking how that figure could be calculated. Since the bill was coming through Mr. Ginsborg’s office and he was unable to provide an accurate estimate at the current time, probably no one else in the room could do so either. Mr. Ginsborg said there was a legal process through which his office had to go to calculate taxes. Council Member Ojakian clarified no one could give an actual number at the current meeting. Mr. Ginsborg said his office would have an accurate number in May. Mayor Kniss announced that the public testimony was closed. MOTION: Vice Mayor Eakins moved, seconded Kleinberg, to direct the City Attorney to develop an emergency mobile home rent stabilization ordinance to prevent immediate negative effects on the residents. A short-term rent freeze would maintain the status quo for the park residents until such time as the City can prepare a local implementing ordinance to take full advantage of the state park closure law (including relocation assistance). The City would also have the opportunity to study land use issues related to the park and its immediate neighborhood in order to make sure that the current zoning and plan designations are consistent with all of the policy aspects of the Comprehensive Plan.
12/18/00 91-232
Vice Mayor Eakins said the testimony and information the Council received during the current meeting revealed the complexity of the issue. Additional work was going to be necessary. The City Attorney would need to draw up ordinances for Council approval. Mayor Kniss said if the motion was approved and enacted before the first of the year, it would be necessary to return in an emergency meeting the following evening at 6:00 p.m., without which the ordinance could not move forward. Mr. Calonne was asked how many members of the Council were necessary to pass the ordinance. City Attorney Ariel Calonne said an urgency action required a four-fifths vote of the Council Members present. A regular ordinance required an absolute vote of five. Putting the two numbers together, six members would need to be present, five voting in support, to enact an emergency ordinance. Mayor Kniss asked how many Council Members would be present. City Clerk Donna Rogers had received confirmation that six Council Members would be present at the meeting the following evening. Council Member Mossar asked for clarification about direction to the City Attorney to prepare ordinances. Vice Mayor Eakins asked the City Attorney to explain. Mr. Calonne understood the Council would consider a short-term rent freeze if the motion was successful. Direction was unnecessary regarding the definition of short-term. The other aspect was a land use study and a park closure law, for which staff would report back to the Council over the next few weeks. Ms. Tilson indicated the closure ordinances were relatively standard. Two of the three tasks involved ordinances, specifically the short-term rent freeze and the closure ordinance. The third task, which might or might not result in an ordinance, involved examining land use issues to determine whether further action would be recommended. Mayor Kniss asked for a definition of “short-term.” Mr. Calonne said short term could be defined as 60 to 90 days. Council Member Beecham suggested the term last until May 2001, since by May the City would have received more definitive information on the tax situation. Mr. Calonne said the Council could make a decision about the length of time the following evening, but stated that a May deadline would not be a problem. Council Member Fazzino asked how the possibility of a negotiated settlement could be incorporated into the set of items the City
12/18/00 91-233
Attorney would return with the following evening. Mr. Calonne said the Council could ask staff to pursue a negotiated contract. The calming effect of a short-term rent freeze, however, might be helpful. One of the areas staff would want to pursue, while seeking input from the City Manager and Director of Planning and Community Environment, was in longer-term preservation strategies. The Council had not suggested the Park owner bear the entire burden of the housing market, so it was a logical part of the mix. Council Member Fazzino asked whether Mr. Calonne would want the issue of long-term preservation strategies included in the action at the current meeting, if the Council wanted to pursue it as an alternative. Mr. Calonne said yes, either at the current meeting or the following evening. Council Member Fazzino wanted the possibility of a negotiated settlement incorporated as part of the motion. Mayor Kniss asked whether the short-term rent freeze could be avoided if the Park owners came to the City before the following evening with an agreement not to raise rents until May. Mr. Calonne said the Council would not have to pass a rent-freeze ordinance if the Park owners agreed not to raise rents until May; however, there was no harm in moving forward with legislative action. The action was relatively standard without significant legal risk based on what the Council had heard. The letter received from the Park representative with the concept of repaying deferred rent was a difficult one from which to work, as it involved not forgiveness of rent but deferral. Mayor Kniss asked for clarification of Mr. Calonne’s comment that the move was not difficult to make. Mr. Calonne said many of the 107 jurisdictions in California mentioned by Mr. Stanton with mobile home rent control were preceded by a short-term rent freeze. There was sufficient material from which staff could work; however, given the City’s interest in retaining the Park, it was important to work positively with the owners to seek longer-term strategies. Mayor Kniss thought the City had not done anything in the past. Mr. Calonne said Mr. Moss was correct in that the condominium conversion ordinance was similar to rent control and referred to just cause eviction, if it ever became law. The condominium conversion ordinance contained the beginnings of rent control, but in a very limited circumstance.
12/18/00 91-234
Council Member Mossar thanked Mr. Calonne for the work product descriptions. However, she did not understand the goal of the exercise, which she thought was to preserve affordable housing. The Park represented affordable housing for an important sector of the community. For 90 days, the City would have a short-term rent freeze, which clearly preserved affordability, but she did not understand what happened after 90 days. The Park closure law, which made it difficult for property owners to close mobile home parks, did nothing to keep rents affordable. Mr. Calonne said Council Member Mossar understood the difficulty of the ultimate action the Council might take. I was important to maintain the status quo so the Council would not have to act hastily on a long-term solution. State law referred to mitigation foreclosure, recognizing the dual ownership concept. Some of the closure ordinances included a modified form of rent monitoring or rent control where increases more than a certain amount were subjected to a fact-finding process. The clear behavior modification effect was that park owners had incentive to keep increases below the threshold. The Council was asking the right questions, but these were questions he could not answer at the current meeting. They would not need immediate responses if the Council was comfortable with the short-term maintenance of status quo. INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER to make clear that the intent of the motion was the preservation of affordable housing and that any work product that came forward to the Council for future consideration kept that goal in mind. Vice Mayor Eakins agreed to the change, saying the statement was contained in paragraph two of the Colleagues Memorandum dated 12/7/00. Council Member Lytle thanked the Vice Mayor and Council Members who brought the issue to the Council’s attention and noted all of the fine work that was done. Although there was no potential legal harm in taking the action contained in the motion, there was some potential public relations and political harm in doing so: the item was agendized without notifying the property owner; only one week was given for entering into discussions with the property owner; the decision would affect the property owner’s income and livelihood and plans for the future; an offer was presented by the attorney of the property owner that had not been discussed; and the Council was rushing to judgment by adopting an emergency measure affecting the property owner. She was uncomfortable rushing into something without due process. Many situations in the community involved low-income apartment dwellers and people similar to residents of the Park. Although she wanted the City to be able to do all it could to help people in such situations, the Council
12/18/00 91-235
should not rush into making decisions in the heat of a situation that might possibly be resolved through negotiations with property owners. Many times, more could be accomplished through incentives than through the “club” of regulation. Some situations resulted in the conversion of property from a mobile home park to an allowable use by taking such drastic action and causing alienation with property owners. She would not want that to happen with the Park owners or others in the community. She preferred seeing the owners come forward with a solution to the problem before the following evening. INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER that: 1) the Mayor shall establish a special committee representing the City, the Buena Vista Mobile Home Park owner, the Park resident owners, and such other community representatives (such as the Human Relations Commission) as the Mayor may choose in his/her discretion, to work together with the assistance of Project Sentinel Mediation Service if requested by any party, to arrive at a negotiated agreement covering rents at the Buena Vista Mobile Home Park which would ensure affordable rents for the mobile home owners maintaining its affordability for low income residents, while also ensuring a fair return on investment for the Buena Vista Mobile Home Park owner; 2) any negotiated agreement shall be brought back to the Council as soon as possible, but no later than a date in May 2001 to be determined; and 3) if no mediated agreement in writing was received by the City by the determined date, the City Council shall review such other courses of action as may be recommended by the City Attorney, including rent subsidies, as may be necessary to stabilize rents and preserve affordable housing in the Park. Vice Mayor Eakins asked whether the addition to the motion ruled out an agreement by the owners to a rent formula. Council Member Kleinberg said no. The prior motion included that contingency. A negotiated settlement was part of the additional language. Vice Mayor Eakins thought the negotiated settlement involved rent only. Council Member Kleinberg said yes. Mayor Kniss asked if the Park owners were willing to come to an agreement before the meeting the following evening. Council Member Kleinberg asked what the nature of the agreement would be. Mayor Kniss said a rent freeze. The reason for the Council meeting was that the Park owners threatened to increase rents as of January 1, 2001. If the Park owners agreed not to increase rents as of
12/18/00 91-236
January 1, 2001, she asked whether the issue would be removed. Council Member Kleinberg said no. Economic tension remained between the Park owner facing potential increases in assessments or maintenance. Mayor Kniss said the Council was acting in emergency capacity regarding the rent increase on January 1, 2001, but the Council Members also were interested in considering long-term rent control. Council Member Kleinberg would not use the term “control,” but long-term rent stabilization. Mayor Kniss clarified the Council was considering rent stabilization for one particular parcel in the City. Council Member Kleinberg agreed the action was directed at mobile home parks in the City. Council Member Beecham said if the Council received new information in the form of a negotiated agreement, the Council could always change its direction the following evening. The preference was for a negotiated agreement rather than an emergency ordinance by the Council. Council Member Burch said Council Member Lytle raised the point about the offer made by the Park owners that had not been discussed. He would never approve or vote for one of the stipulations contained in the offer, specifically the deferred payment. He understood if there was a $100 per month increase which was deferred every month, a unit worth $5,000 would not be worth anything in just over four years. He would not vote for anything with deferred payments accumulating to the owner. Council Member Kleinberg thanked Council Member Lytle for raising the points. She understood that the increased costs associated with the potential reassessment would not be imposed until after an assessment in May 2001 and were not retroactive. Mr. Ginsborg said at the time of assessment, no later than May, the Park owner would receive a notice of assessment, supplemental assessment, and a subsequent a tax bill. Council Member Kleinberg asked whether the taxes would be retroactive to January 1, 2001. Mr. Ginsborg said yes. Mr. Calonne agreed. The Council needed to keep in mind the distinction between long-term rent control and a short-term rent freeze. Maintenance of net operating income formulas, to an extent that discouraged investment, did so because it would not allow the
12/18/00 91-237
Park owner to pass along the cost of the investments, such as new mortgages and new taxes. There was a distinction to be drawn between a short-term rent freeze, which would not stop the Park owner from recovering costs going back to the retroactive assessment date, versus a longer term rent freeze formula which in some cities, prevented such increased costs from being passed along to tenants. Council Member Fazzino supported the motion but had the same concerns Council Member Lytle expressed. Although he supported the motion to move the process forward, it was absolutely essential for the Council to encourage a negotiated settlement. At the very least, consideration should be given to any alternative short of rent control or mandates, which would be a bad precedent. He was committed to preserving such affordable housing in the community, recognizing the very real and serious impact the rent increases could have on people who could least afford to pay it. Everyone was in a better position if the final result of the effort was a voluntary effort on the part of the Park owner to address the needs of people who would be significantly impacted by increased rents with a negotiated settlement. The motion moved the process along. He preferred that the Park owner make a commitment not to raise rents until January 8, 2001 or January 15, 2001. He was troubled by a Park owner’s planning to increase rates right around the holidays. The Council could address the issues in a much more rational and relaxed basis once the holidays were over, and achieve a solution on a voluntary, mediated basis. Mayor Kniss agreed. The goal was not rent control. Council Member Ojakian asked whether a situation ever arose in which property tax increases were excused because of the nature of the property, for example, if some evidence showed that the mobile home park in some way provided a social benefit to the community by the fact that it provided low income properties and property taxes were forgiven. Mr. Ginsborg was unaware of a similar situation. Property tax laws existed for senior citizens and veterans as individual residents, but he was unaware of exceptions given to owners of multiple resident properties. Council Member Ojakian asked whether an exception process or way of appealing existed. Mr. Ginsborg was not aware of any process. Questions arose regarding assessed values and new values. The new value was as of the date of the change of ownership. Another issue raised was the question of transfer of ownership. The transfer of the Park appeared to have gone from an individual with a different last name, so it did not appear to be a family member. The property transfer unit would examine the issue to clarify the transfer.
12/18/00 91-238
Council Member Ojakian supported the motion. The closure ordinance was probably not unusual and was a common piece of legislation. The same applied to land use designations. He would be concerned about the affect it would have on the City’s consolidated plan submitted to the federal government as part of the Community Development Block Grant (CDBG) process or any other submissions the City made on properties in Palo Alto where property was designated as providing low-income housing. In terms of the emergency ordinance, generally speaking, he was adverse to rent control. The circumstance with the Park was special, so he was willing to consider it slightly differently in terms of short-term, but he was unsure about long-term. His preference was the same as Council Member Fazzino and others that it would be in the best interest of everyone if a negotiated settlement could be achieved by both sets of property owners. Council Member Mossar reiterated the importance of preserving affordable housing in the community, which should be the primary purpose of the Council’s action. Either some form of rent control could be implemented in the long-term or the issue could be treated with a temporary freeze to buy time, but in the same way the Sheridan Apartments were treated. She needed her colleagues to affirm the necessity of preserving affordable housing and retaining the Park as an affordable resource for the community. The intention was to use the short-term freeze to buy time; however, any number of tools would be considered over time, from rent stabilization and exploration of sources of federal and state money to the outright purchase of the property. Mayor Kniss agreed with Council Member Mossar. The motion was only buying the City a short period of time. Council Member Lytle would not support the motion. The message the Council sent out was one that would be heard by other property owners. She was concerned that full respect was not given to the Park owners through the process. The disenfranchisement of that person could give the City a reputation about how it treated people. Her concern was that it led to people not trusting the Council. She was also concerned that they would take the easy way out and not retain the low income properties, but simply pull out and redevelop. Even if the City had a relocation ordinance in place for the Park, the property owner could relocate the residents out of Palo Alto, and the City would lose the diversity. She hoped the Jissers would somehow understand about the settlement offer. Council Member Kleinberg agreed with her colleagues Council Members Ojakian and Mossar. The motion was not a rent control measure but a “buying time” measure. The Council had to do two things well: 1) protect property rights; and 2) protect the health and well being of City residents. The issue involved two sets of property owners for which respect was needed. If the City was going to have a
12/18/00 91-239
reputation, she preferred it be one that protected its citizens’ health and well-being without shying away from the hard moments of decision making and judgment when people were in desperate need. She had hoped that by the present evening, the Council would have had some kind of settlement. The Park owners had been asked to bring something to the Council by 6:00 p.m. Her understanding was that there was an offer by Project Sentinel for mediation and that the Park owner had declined the offer. She encouraged the Park owner to use the time given to all parties, in good faith, to negotiate a settlement. The Council could not be clearer about its desire for all the parties to come to a voluntary negotiated settlement. The City needed to come down on the side of preserving and protecting the lives and the property of the residents. Mayor Kniss was troubled by the “slippery slope” the City went down whenever it discussed rent control. The City Attorney was being asked to develop an emergency ordinance for a short-term rent freeze and return the following evening. MOTION PASSED 8-1, Lytle “no.” MOTION: Council Member Kleinberg moved, seconded by Burch to adjourn the Adjourned Regular Meeting of December 18, 2000, to 6:00 p.m. on Tuesday, December 19, 2000. MOTION PASSED: 6-3, Beecham, Lytle, Mossar absent. ADJOURNMENT: The meeting adjourned at 8:05 p.m.
12/18/00 91-240