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HomeMy WebLinkAbout1980-07-14 City Council Summary MinutesaTY COUNCIL MINUTES July 14, 1980 Regular Meeting CITY Or- MLO ALTO Item Paz, Minutes of June 16, 1980 0 2 8 Oral Communications 0 2 8 Consent Calendar Home Weatherization Program 0 2 9 Resolution of Welcome to Oaxaca Students and Guests 0 2 9 Request of Mayor Henderson and Councilmember Fazzino re Loss of Food Stores in Downtown Palo Alto Area 0 3 0 Condominium Conversion Ordinance 0 3 1 Meeting of July 28 Cancelled 0 4 7 Adjournment to Executive Session 0 4 8 Final Adjournment 0 4 8 027 7/14/80 July 14, 1980 Regular Meeting The City Council of the City of Palo Alto met on this date at 7:40 p.m. in the Council Chambers, 250 Hamilton Avenue, Mayor Henderson presiding. PRESENT: Brenner (arrived at 8:15 p.m.), Eyerly, Fazzino, Fletcher, Henderson, Levy, Renzel, Sher, Witherspoon ABSENT: None SPECIAL MEETING - SESSION RE Mayor Henderson said that the Council had met at 6:00 p.m. this evening in a Special Meeting concerning Energy Planning, Phase II. EXECUTIVE SESSION Mayor Sher announced that at the end of this Council meeting, Council Correction See Pg. 132 8/25/80 would meet in an Executive Session regarding personnel matters. MINUTES OF JUNE 16, 1980 Councilmember Renzel asked that on page 705, second paragraph, that a phrase be inserted after the word "that" in the second sentence so that the sentence reads: "...she herself was somewhat disappointed that of the earlier range of options, the maximum number of units was being built, and the amount of open sfflce teas minimum." Councilmember Fa z ro requested that on page 701, only the first sentence of the fourth paragraph be retained and the following substituted for the deleted wording: "Councilnembers are frustrated because there is no obvious relocation alternative. The City should support the SCC's efforts to explore the needs for additional shopping facilities in the downtown area where there are so many seniors. It is hoped that the City staff and the Historic Resources Committee can assist Mr. ,Nljmeh in finding another site." Councilmember Fazzino asked that on page 703, tNe following hording be added to the fourth paragraph from the bottom: "...primarily bec;lse the situation in that area has not changed since the 1975 decision. Lot foot applications should at least have the support of the immediate neighbors. MOTION: Councilmember Fletcher moved, seconded by Fazzino, approval of the minutes of June 16, 1980, as corrected. The motion passed unanimously, Councilmember Brenner absent. Mayor Henderson said he would like to take this opportunity, on behalf of the entire Council, to commend Police Captain Frank Acosta, Sgt. Mike Meloy, Agent Brian Tierra, and Detectives Ron Schindler and Terry More for their assistance in the arrest of a suspect in the shooting of California Highway Patrol Officer Fred White. ORAL COMMUNICATIONS Robert Moss, 4010 Or , issued an invi.atinr to Arts in the Park Celebration which will be held Saturday and Sunday, 028 7/14/80 July 20 and 21 at Rinconada Park, Lucie Stern Center. He said the event is co -sponsored by CAPA and the City of Palo Alto and activities will begin at 10:00 a.m. and end at 5:00 p.m. 2. Melanie Viilafana, 164 Hamilton, stated she was a senior citizen with a teenage daughter and they were looking for a house to rent. She asked that if anyone knew of a rental unit for her, to please contact her. 3. Herb Borock, 3401 Ross Road, said there was an illegally parked Peninsula Charter Lines Bus outside City Hall. He suggested it be moved before it was cited by the Palo Alto police. CONSENT CALENDAR Referral None Action FEE WEATHER I sZAT I ON PROGRAM C3� INSULATTM affntektir 7 39 : 0 Staff rec ads that the Mayor be authorized to execute the contracts with the insulation contractors as ovtlined in the staff report (CMR:33S':0). AGREEMENT - THERMAL INSULATION All American Insulation Co. Coast Insulation Co, Energy Saving Insulation Co. MOTION: Councilmmber Fletcher moved, seconded by Fazzino, approval of the consent calendar. The motion passed unanimously, Council nber Brenner absent. RESOLUTION Of WELCOME TO S Mayor Henderson welcomed the students and visitors from the City of Oaxaca to the City of Palo Alto. He read the Resolution of Welcome and presented a copy of the Resolultion and a City of Palo Alto flag to each visitor. NOTION: Mayor Henderson introduced and moved for adoption, seconded by Fletcher, the following resolution: RESOLUTION NO. 5819 entitled "RESOLUTION OF THE COUNCIL OF THE CITY OF MMLO ALTO RECOGNIZING THE PRESENCE OF, AND WELCOMING TO THE CITY OF PALO ALTO OAXACA, OAXACA STUDENTS. AND GUESTS" The motion passed on a unanimous vote, Councilmember Brenner absent. NOTION Councilmember Fazzino moved, seconded by Renzel, that the request of Mlayor Henderson and Co oc I lraember Eaz z i no re Loss of Food Stores in Downtown Palo Alto Area, be moved forward on the agenda. The motion passed unanimously, Council ember Brenner absent. 029 7/14/80. REQUEST OF MAYOR HENDERSON AND t ILKElsiBtg 'AllI$C'"r LOgs OF AREA Mayor Henderson said he would like the staff to cooperate with the Senior Coordinating Council, who is conducting a study of food stores in Downtown Palo Alto, to review that study and to report back to the Council with their comments. Councilmember Fazziro said he thought it was becoming clear that ttere is a very serious problem. In the downtown area there is a high per- centage of senior citizens and the problem needs to be explored much more than it has been by the City and by the Senior Coordinating Council. The Council recognizes the goals of the Senior Coordinating Council and the Council's request of staff is to simply indicate the Council's support of that effort and to provide whatever City resources are within reason to push that study along toward resolution of the problem. the second concept is a below market rate type of program for food stores. A developer of ten units or more of housing has to provide some low -moderate income housing units. The Council would like to have staff explore the possibility of providing food markes in lieu of providing housing in the downtown area. _ 1 MOTION: Councilmember Fazzino moved, seconded by Henderson, that the food store situation in the downtown area, including consideration of subsidy programs by developers and by the downtown assessment district of mixed commercial/residential programs, be referred to staff for review. Councilmember Fletcher said she supported the ration; her only concern was that it was limited to food stores. She has also been concerned for some time about the gradual loss of retail stores in the downtown area and the concentration of office and financial institutes, which are the types of businesses that don't add vitality or services to the immediate residents. Plus they really impact the parking situation with all those employees concentrated in such a small area. As they went forward with the review of the Comprehensive Plan of the downtown area:, she hoped this would be considered. She noted that the Cities of Menlo Park, Los Altos, and San Francisco have the same concerns. There used to be two hardware stores downtown, now there are none. Councilmember E, erly said he also supported the motion. He thought the problem boiled down to basic economics in a lot of small holdings of land. There might be something the City can do as far as building regulations, such as joining parcels of property together. He suggested supporting more things within the context of the motion. Councilmember Fazzino had mentioned subsidy programs by developers and he wondered if staff shouldn't also explore some type of subsidy program, possibly parking, or some method perhaps by the Downtown Assessment District. There might be a way to come up with some parking allowances or some parcels of ground on which parking could be developed for mejor tenants. Mayor Henderson said the idea of the motion was for staff to study, and possibly recommend, other programs for the area. Although only one was initially mentioned in the motion, he -r uld be happy to have others included and become part of ttm motion. Councilmeeber Levy stated that he thought the motion was premature. The Senior Coordinating Council is studying this program and this problem. They were the appropriate ones to be studying it. The initial part of the recommendation was that the City join with the Seniors in their study, but he didn't think the City needed to join them; it might prejudice the study. He would like the seniors to do the study and see the outcome before the City takes action. The concept of a -type program for food stores, etc., strikes him as not the proper way to go about delivering 030 7/14/80 1 services to the residents of the downtown area. He would prefer to see the Senior Coordinating Council continue with their study, complete it, and have Council review it before any action is taken. Councilmember Renzel stated she would support the referral to staff. Her support was very general in nature, looking toward possible solutions to the problem. She said she had some concerns about substituting a commercial venture for what are now housing contributions. Commercial ventures can often take care of themselves more readily than housing can. Councilmember Fazzino said he could appreciate Councilmember Levy's concern that the City not work at odds with the Senior Coordinating Council. He thought the motion did the opposite. The conceal was to simply indicate the City's support for this venture, which implies the use of some basic City resources. The Seniors approached the City Manager a few weeks ago for such services as reproduction, and Mr. Zaner felt the Council needed to make a formal statement of support of this kind before allowing the use of City's resources. That is one of the reasons for the motion tonight. He agreed that the Senior Coordinating Council is doing an outstanding job and the City should be working with them rather than establishing a separate study. The motion passed on the following vote: AYES: Eyerly, Fazzino, Fletcher, Henderson, Renzel, Sher NOES: Levy. Witherspoon ABSENT: Brenner CONDOMINIUM CONVERSION ORDINANCE Ct. 3±O:0j Mayor Henderson said he wanted to see this item handled in such a manner that all Councilmembers would be eligible to participate in the overall subject of any possible amendment to the Condominium Conversion Ordinance. In other words, the specific Oak Creek proposal must somehow be disposed of separately. Originally, he planned to discuss the ordinance amendments first, without reference to the details of the Oak Creek proposal; then if any amendments were enacted, he would entertain motions to include or exclude Oak Creek. He has since decided they would probably have to go in reverse sequence. The subject of the ordinance came before the Council because of the spec i f i c Oak Creek proposal and notices of tonight's meeting have been distributed throughout the Oak Creek complex. If Council amends the ordinance, it would affect the Oak Creek proposal unless that complex is specifically excluded. Consequently, they had to determine initially, with Council - members Sher and Witherspoon abstaining, how they wanted to handle the Oak Creek situation. If Council should exclude Oak Creek somehow from the ordinance amendment, permanently or for a give period-, they could address the ordinefe itself with the full Council. Don Meynor, Sr. Assistant City Attorney, agreed. The Council will be con- sidering changes to the Condominium Conversion Ordinance and it is not dealing with a map conversion to convert Oak Creek apartments. The City Attorny's office has been asked .to prepare two possible amendments. One proposed amendment would delete the present acceptance provision in the City's ordinance which would allow a condominium conversion if two thirds of the tenants in lawful possession consent. The effect mold be that the only way there could be a condominium conversion in Palo Alto would be if the vacancy rate exceeded three percent. The other proposed amendment deals with leaving the two-thirds consent provision, but adding a penalty provision requirement, so that people who signed their names in favor of a condominium conversion would also state, under penalty of perjury, then intent to purchase the unit. The City of unta►in View has a similar prov i s i . Those are the two amendments that will speec i f i ca l l y be dealt with tonight. 031 7/14/80 Mr. Maynor continued stating that the City staff was also asked to look at other mitigating measures that might be possibly included in the condominium conversion ordinance to help mitigate the effect on displaced tenants. As far as the voting rules were concerned, the last time the Council discussed this issue, the City Attorney ruled that Councilmembers Sher and Witherspoon could not participate in the discussion because of the ongoing Oak Creek conversion and the fact that Stanford is the former employer of Councilmember Witherspoon and the employer of Councilmember Sher, and therefore they could not participate because of the conflict of interest. Stanford, as the underlying owner of the land of the Oak Creek apartments, would appear to have a material interest in the outcome of a successful conversion. With that in mind, the City Attorney's office ruled, and is again ruling tonight, that Councilmembers Sher and Witherspoon may participate if the Council decides that Oak Creek is exempted from any amendments made to the condominium conversion ordinance. Mr. Maynor said he had consulted with the Fair Political Practices Commission earlier today and they were in agreement with his ruling. In order to exempt Oak Creek Apartments from the ordinance, Council should create a class of parties so that people who are similarly situated as Oak Creek would also be given the same equal treatment. The Attorney's office has prepared one particular prevision in the ordinance which would allow such an exemption. He reminded them that if Councilmembers Sher and Witherspoon did not participate in the discussion regarding changes to the ordinance, any changes in the ordinance will nevertheless apply to Oak Creek in the absence of a specific exemption. Mayor Henderson added that if they did not specifically exempt Oak Creek from amendments to the ordinance, Councilmembers Sher and Witherspoon could not participate in passing those amendments, and then any amendments made by the Council would apply to Oak Creek. Mr. Maynor stated they had prepared wording for inclusion in the ordinance which would be a "grandfather" clause. If Council wished to include the councilmembers who have the conflict, this issue should be dealt with first. The language to be "grandfathered" in would read as follows: "...Condominium conversion project; for which an application is made prior to July 1, 1981, and which provides assurances that tenants will have the opportunity to remain in the converted dwelling either as owners or renters shall be exempt from the amendment's exceptions in PAMC 21.40.050, adopted on August 1980." In other words, Mr. Maynor said, what they were suggesting was that any owner of apartments would qualify for such an exemption provided they came in within the next year and provided that they have some assurances in their applications, or within their proposed proJect, that will make certain that renters as well as the owners will have opportunity to stay there. That is one possible approach for creating . an exemption clause. Mayor Henderson noted that he was a member of the Council that adopted the Condominium Conversion Ordinance. It started off with a 3% requirement psrIod Then s- majority , did dd the two-thirds v -•r- . r� .. _ - r z �G:;: c Y- did L -- add s�E..r. :s3FV -- ,.hi '�- vote N� - situation and - he -- knew it was their intention to require certain other steps, for example, that the people voting for such conversion would indeed be purchasing their units. He still felt strongly that way and intended to move in that direction later. He said he was in sympathy with the language proposed b f _Mr. i aynor . MOTIOM: Mayor Henderson moved, seconded by Fazzino, that the proposed clause be added as follows: *Condominium conversion projects for which an application is made prior to July 1, 1981, and which provides Assurances that tenants will have the opportunity to remain in the converted dwelling either as owners or renters shall be exempt from the amendment's exceptions in PARC 21.40.050, adopted August , 1980." S 1 Councilmember Renzel asked I r. Maynor ; if a six months period rather than a one year period would be valid. She was concerned, independent of the 032 7/14/80 Oak Creek matter, that the long period of time (one year) might invite a great many applications. Mr. Maynor stated his office was mostly concerned that there be a long enough period of time permitted out of fairness to both the Oak Creek proposal and other potentially affected parties. The conclusion was that a one-year period of time was fair. Councilmember Renzel asked if in order for the consent to apply, did the consent already have to have been given or was it only for the subdivision to have taken place that the consent had to be given by the tenant now. Mr. Maynor replied he was not sure what she meant. Councilmember Renzel noted that the current ordinance requires two-thirds consent. Did that consent have to be procurred prior to an application or could the applica- tion be made prior to the consent being given? Mr,. Maynor advised that at the time of application, the applicant must have two-thirds consent. Councilmember Renzi' noted that there was a time `actor involved and it was not just a simple matter of an application. Mr. Maynor replied that was correct and the reason why the Attorney's office thought it was important to have a reasonable time period. Councilmember Renzel asked if six months might be considered a fair time period. Mr. Maynor replied that he didn't know what all the considerations were; he thought there were people in the audience who might have some feelings about the appropriate time period. Mayor Henderson suggested dealing with the motion; then they could always amend it to some other time. Councilmembers Sher and Witherspoon disqualified themselves and Council - member Witherspoon left the Chambers. Mayor Henderson commented that he had cards that would take well over three hours. He noted that there has seldom been so much interest and input from people about a single item. The City Clerk, as of last week, had received 178 letters regarding this subject, 90 in favor and 88 opposed to the conversion. He asked people wishing to speak to consolidate their comments and avoid repetition. Anyone wishing to speak now would only be speaking to the motion on the floor, the vandfather clause. Joe Lewis, Oak Creek Apartments, stated that he had been a resident of Palo Alto for 28 years. He said there had been very detailed discussions at previous Council meetings. The issue was brought to the Council's attention after having reviewed the minutes of the meeting of May 14, 1974, because it was felt there should be some kind of amendment and be- cause Council felt that the ordinance as it was drafted in 1974 did not accurately reflect the legislative intent. A petition was circulated at Oak Creek which showed that two thirds of the people contacted opposed the conversion. After the results of the survey became known, Cornish and Carty made ae offer df a lifetime lease, which has improved as time goes on. Many are happy with . the lease that has been offered. Others still take the position that the City's ordinance is totally defective, even tfough esemee:emets it: may Kist, them wooey. They feel it is policy question for the City of Palo Alto to determine whether or not this ordinance is consistent with the policy as set forth in the housing element of the Comprehensive Plan. He agreed with everything in the staff report but the conclusion. He thought the 4ata would more easily have resulted in the opposite cotclusion. The staff report points out that in the housing element of the General Plan there were several goals and objectives to maintain a diversity of housing opportunities, a variety of housing types and sizes, and a mixture of ownership in rental housing and affordance of housing costs. The Oak Creek Apartments represent not 107E of the apartments, but 10% of the best. This is the top ten percent, There probably isn't another complex in the liey. Area which is on a par with it. The Comprehensive Plan says that Palo Alto has adopted an ordinance which restricts conversion. The original ordinance doesn't restrict conversion, it cream a loophole and the first to go through that loophole will be the top ten percent, the apartments that exist 033. 7/14/80 in Palo Alto. He quoted from a report of the State Office of Planning and Research which said that Palo Alto is a model community and that lame communities have imposed a moritorium on all conversions until vacancy rates have increased above a certain percent. At one of its meetings, one of the Councilmembers asked the staff the breakdown between rental and owner -occupied housing. At that time the number was given as about 14,000 owner -occupied and 13,000 rental. The current staff report states that there are 15,000 residences and 7,500 apartments. The figures given two months ago included houses that were rentee, and what the current report includes are apartments only, so there are approximately 7,500 apartments in Palo Alto and that would be a rate of 10%. If the figures of two months ago are correct, it would be 5%. Mayor Henderson called upon Scott Carey of Cornish and Carey and former Mayor. He asked that Mr. Carey give data from his side. He hoped that the other speakers would agree or disagree on one position or the other and not get into a repetition of all items. Scott T. Carey, Cornish & Carey, 180 University Avenue, said he saw two issues ---one the ordinance, which has been on the books since 1974 dealing with consent to conversion. In reliance on the very clear ordinance which has been on the books since 1974 dealing with consent to conversion, Cornish & Carey did a tot of things and he wanted to enumerate for the record. They have been in process under the consent ordinance since the fall of 1979; they have negotiated an option with the present owners; they are liable for option payments under that agreement; they have drafted and re- drafted a lifetime lease, a lease until the year 2052 for all tenants of Oak Creek; they have met with tenants° organizations to bring that lease up to their requirements; they have incurred attorney fees with respect to that documentation; they have priced the units and done computer runs on the economic analysis of part-rental/part-ownership as the consent ordinance really lends itself to; they have done computer runs on mortgage pants at various rates; they have analyzed the monthly assessment costs, the operating costs; negotiated with the current owners to continue the management and maintain the project; conducted building inspections; compared the plans and specifications with the community housing ordinance; met with the Inspectional Services Department and submitted those plans for review; they have obtained an opinion from the Department of veal Estate as to tether or not they can disclose prices; 36 meetings with the tenants have been held; tenant input has been obtained on rent, management, cost of living increases, and whether or not these documents should be recorded; an opinion letter has been received from the City Attorney's office with respect to the interpretation of the ordinance. In reliance on the Condominium Conversion consent ordinance, Cornish & Carey has done a lot of work. Mr. Carey continued, saying that he felt the Council would find that many of the tenants who initially had misgivings, no longer had them. The reason is simple. The iseues with respect to conversion are essentially threefold. __ One _ifs --it , the _loss_ of _ rental stock versus the creation of housing. With the average price of a house in Palo. Alto at $200,000, if they can bring home ownership to people at that cost or less, they are doing some good. The second issue is only called displacement -- he would call it a fiction --a fiction by reason of conversion. That is a sec i el issue the Council ought well to address. He thought the motion .. _ on the floor deals wits that. His firm has addressed it and nobody gets evicted. Not only do they not get evicted, but they remain on a lease that goes for many years with a very strict provision with respect to rental increases and with written assurances that the standards of manage- ment and maintenance will continue. The final issue is whether tenants received sufficient notice with respect to a proposed conversion. The tenants at Oak Creek are now in their fourth month of official notice. They will, prior to consenting, get the lifetime lease arld have time to read it. They will get an expected price for their apartment if they 034 ?/14/&10 wish to buy and that price will be below market prices. They will receive an estimate of dues and a breakdown of them and how they are calculated. They will get a mortgage rate, amount and payment. They will see a maintenance agreement and a management agreement plus all the things that cities throughout this state have addressed as social issue. He feels that every single one hes been met that any legislature has thought of to date. Mr. Carey said his final statement related to the motion on the floor. If it should pass, probably most of the people present tonight will go home and then the Council can deal with the overall question. If the motion calls for one year, and he knew some Count lmembers were concerned about that length of time-- but that is not an inordinately long period of time if a party is to proceed as Cornish & Carey has, namely with full disclosure and negotiation with tenants and with all the information needed on pricing, mortgage rates, lease documents, maintenance and management for review by the tenants before they cast their votes. If Council wished to shorten the period to nine months, Cornish & Carey would fell comfortable and perhaps the Attorney`s office would feel comfortable in separating out the conflict question from a sufficient period of time so as not to tie the two together. A shorter period of time might cause problems on both sides. Mr. Carey said he hoped that those who were supportive of the Oak Creek conversion and who wished to speak, would limit their remarks to three or four speakers and that Council in the course of debating the motion on the floor would reopen the hearing if Council does not come to a fairly rapid conclusion. Bob Metcalf, 1850 Willow, #29, stated that the business of selling his apartment was a private matter between the owners of Oak Creek and him. He believed all the rest of the people were intruding in a private matter. Ed Mintz, 1560 Willow, 0205, presented a petition signed by 350 residents of Oak Creek in favor of keeping the ordinance as it is. Some of the 88 persons who initially opposed the conversion changed their minds and signed the petition based on the latest information. Quido Marchatelli,°1850 Willow Road, #45, agreed with Mr. Mintz and particularly so because of the lifetime lease offer. He suggested that others look at the final package before making up their minds. Al Rooney, 1520 Willow Road, #401, came to the meeting to ask the Council to leave the ordinance the way it is. After hearing Mr. Carey's implication that his unit may be priced at $103,000 or lese, he was begging Council to leave it the way it is. The statements mode in opposition at previous meetings by Mr. Lewis or a representative of the Oak Creek Tenant Action Committee are not in any lay representative of any majority at Oak Creek. Cornish 4 ferey . #.s unique in condominium conversion. He saw the lifetime 1 s® conversion as a fans of voluntary root eontrel benefitting the tenants. Either of the proposed ordinance changes would effectively eliminate condominium conversions in Palo Alto, and certainly at Oak Creek. Carol Marshall, 1824 Oak Creek, #318, said the ordinance as is benefits people more than any other changes that have been put into play by Mr. Lewis and his minority group. Chuck Arnold, 1788 Oak Creek. #2150 said he was very much in favor of the proposal made by Mr. Carey and he would like to have the right to make a decision on his own. t'aul Kelly; 1812 Willow Road, #408, said he has been a resident of Palo Alto for eight years and he agreed with the previous speakers; he wanted the ordinance left as is. 0 3 5 7/14/80 Ken Dulaney, 1736 Oak Creek, #406, stated that the tenants at Oak Creek would like to remain there; if the Council does not allow the conversion, many may be forced to move because there would be a sale of the apartments and that sale would likely result in increased rents. Dick Howell, 1850 Willow, #251, said he has lived in Palo Alto since 1941 and he was pro -conversion. R. D. Sproull, 1850 Willow, #19, said that in all fairness to the tenants, they should take another vote on another provision, that is, no change at all, instead of just having the choice between condominium or lifetime lease. Cliff McCormick, 1520 Willow, #104, said he thoughtMr. Carey's proposals were very innovative. He urged staff and Council to favorably consider the many innovative ways of financing available to purchase their units, and ways for renters to continue their rentals, as well as the right to choose. Carl Oin, 1510 Oak Creek, #209, said he has lived at Oak Creek three years. He concurred with everything that has beep said. Fe felt the offer by the owners of a lifetime lease and possible purchase at a low price was probably the best offer tenants at Oak Creek would ever get. E. K. Gallagher, 1824 Oak Cree, #205, stated that the tenants are in a dilemma; it is difficult to make a decision without knowing the purchase price. Herman Miller, 1788 yak Creek, #407, was in favor of leaving the ordinance the way it is. Frank Lindstrom, 1812 Willow Road, #301, stated that his father once told him that what you don't have in your head you have to keep in yoer feet and the brain works best when it is like a parachute --when, it is open. Lorraine Grant, 1736 Oak Creek, #208, passed in the interest of time as she would like the Council to vote. John Casella, 1788 Oak Creek, said he wanted the ordinance left as it is. The following speakers said they would pass in the interest of time: Emeett Hession, James H. Stedman, Harold McFeeters, Sally Jarman, Mrs. Beatrice R. Steinoerger, Elizabeth Hartnett, key Roth, Amy R. McCormick, Dum1 Wymore. George Pontis, 1742 Willow Road, #409, said he was in favor of keeping the ordinance g as it is because it gives everyone the i freedom of choke. l __the present ordinaoce were x eded_ that two-thirds those to say S�Et� 6731 3`+A� of voting were required to state they would buy, many people might be reluctant to sign such a statement; that would tie them up in the future even though they intended to buy their units, Maria C. Schiele, 1736 Oak Creek,. said she concurred with the earlier statements made by Mr. Mintz: • Bob Moss, 4010 Orme, stated that not everyone in the audience nce was associated with Oak Creek and he for one was not. He had a fiber of cents to make about the condominium conversion ordinance in total. Oak Creek is not the only apartment dwelling in the City being considered for conversion. An apartment owner could move in renters, have then sign that they were in favor of a condominium conversion and then have the renters move out. That is what could happen if there is no fine statement of intent to buy. 036 7/14/80 What is to prevent a developer from going into an area where there are large numebrs of short term tenants and giving those people some induce- ment to sign the agreement to convert. Therefore, the two-thirds vote should be retained as a very minimum and there should be clear intent by the purchaser that he/she wants to live in those units permanently. He liked the suggestions made by staff to modify the ordinance. Mayor Henderson reminded Mr. Moss that they were only speaking about whether Oak Creek should be included in the change„ Mr. Moss said he would come back with his other recommendations. On this specific motion, there was a one-year grandfather clause and he would like to see that amended to no more than six months. Louis Fein, 1540 Oak Creek, said he was speaking to the entire subject because all of it has a relationship to the motion on the floor. His proposal will reflect why he thought the motion oa the floor should be rejected and what they should do later. He urged the Council to take the following proposed actions which he believed would serve the City and everyone well: 1) Vote to ban condominium conversions in Palo Alto as long as the rental vacancy rate is below 3%; 2) instruct the City staff to bring to the Council recommended condominium conversion ordinances having appropriate renter and buyer protection clauses and which are in line with the housing elements of the Comprehensive Plan and State and Federal laws; and 3) resolve to pass a new integrated set of condominium conversion ordinances by May 1981. After that time converters should apply for conversion in accordance with integrated ordinances. It would be expected that within fourteen months, a converter could gain approval from government agencies toconsurmato the conversion, sale and lease of converted apartments. He felt the dates were significant. The single most important factor affecting the City's decisions to date on conversions was the small rental vacancy rate. Mr. Fein continued by saying that housing balance between the number of rental and ownership units is not a determinent. Removing 750 Oak Creek units from the rental market -gill not materially affect the balance, that is the rental/owner balance, but it would keep the vacancy rate less than one percent. It is clear that a condominium conversion ban is indicated. Of course, under such a ban, the individual right of renters to consent to or deny condominium conversions is denied. He said it was neither the intent of the present ordinance's authors, nor the City Attorney who wrote the final text, that tenant consent to convert should not be accompanied by intent to buy. That is a technical mistake that should have been detected and corrected long ago; it should be corrected now. He edn't think the impact of such a proposal was great on Oak Creek. Those who exchange their consent for a lifetime lease, and those who exchange their consent by purchasing their unit won't consummate their deal until July 1982. He believed the Council should bap conversion now. Then under a new ordinance in May 1981, formulation could be determined by Council, staff, citizens, etc., and Oak Creek promoters could then apply for the conversion. A woman residing at Oak Creek stated that Mr. Fein did not represent her. The people there are happy, they like each other, and it is a good place to live. Marc Stone, 1766 Oak Creek, suggested a substitute motion that the Council appoint a committee to investigate the feasibility of the City of Palo Alto in running Oak Creek apartments and taking steps to purchase Oak Creek apartments, through its powers of eminent domain, and proceed to operate Oak Creek apartments, and at the same time stand ready to do likewise for other rental units which are threatened with conversion. The point of that would be to protect tho diminished supply of rental houses and to take into account the fears of the tenants that if the property is not converted, it will be sold to speculators who might increase rents. He thought those 037 7/14/80 fears were more apparent than real. A resolution, an act at this time, would tend to be a form of rent control, but rent control subject to a democratic process. The Council should adopt a resolution of that kind and set a time limit somewhat along the lines of Mr. Fein's remarks. In the interim there should be a ban on all conversions and allow a comae ttee to investigate this for six to eight months or even a year. Mayor Henderson read his motion again: That th' eondominium conversion ordinance be amended to add "A condominium conversion project for which an application is made prior to July 1, 1981, and which provides assurance that tenants will have the opportunity to remain in the con- verted dwelling, either as owners or renters, shall be exempt from the amendment to Section 21.40.050 of the Palo Alto Municipal Code." Mr. Maynor suggested a change after the word "renters," to add "for not less than (number of) years," or perhaps "the life of the condominium project." What they would be doing is telling the condominium owner what type of lease he would have to offer to the tenant eho would stay on, a lifetime, so many years, or perhaps for the life of the condominium project. For instance, in the Oak Creak situation, there is no fee interest in the lard so the life of the project would be the leasehold with Stanford. Councilmember Renzel remarked that speaking of a general class to be exempted from the ordinance, there are many properties that are not subject to leaseholds so that would not be a good measure for the class. They would then use something like the typical mortgage with a life of 40 years. Mr. Maynor stated that the clearest way was to just put in a number. Councilmember Brenner noted that where there is an apartment conversion and the condominium owners own 51% of the apartments, they have control of the homeowners association. If in this case, for example, two-thirds of the people have lifetime leases and one third of them prefer to buy their condominiums, how effective can the homeowners associations be. Roy Abrams, City Attorney, stated that typically the CW's will address that subject and require that the condominium converter have no more votes than he would have units under his control, He has a say as to how the units are upheld. He was not certain what requireaiehte the Department of Real Estate imposed on the condominium converter, but he did believe that there were requirements to establish budgets for maintenance and a sinking fund and reserve. . Councilmember r Brenner said the question was them if the main owner is rent!ng two thirds of the apartments, that owner/corporation would have. two thirds of the vote. seconded _ ---ANENOMENT: �i Vi a' Brenner acv , _ �= kw_ Renzel, to amend -_- the motion to read that the perm of time be six months (January 1, 1981 instead of July 1, 1981). Councilmember Fletcher spoke in favor of the /amendment. She had one concern that promoters of conversions b2 prevented from making applications pre- maturely and then asking for extensions. She would qualify that amendment to include a non -renewal of the Subdivision Nap application. Councilmember Renzel pointed out that in order to apply, the developer must already have coffee the two-thirds consent so there would be no need to request an extension. Mr. Abrams said that was correct. Me added that the provision in the Code does not address Councilmember Brenner's questions. He felt_. that Mr. C3rey could answer the question directly. 438 7/14/00 Mayor Henderson asked Mr. Carey to respond. Mr. Carey stated that rt was true that the rules of a condominium are subject to a 51% vote. If he owned 51%, for example, he could vote any way he wanted. That question was raised by the tenants of Oak Creek and in order to insure that certain standards would be maintained, some of the so-called rules and regulations and operations standards are going to be recorded in what Mr. Abrams referred to as the CC&R's. When they are recorded, they cannot be changed no matter what the vote; in other words, the continuation of maintenance, current management, amenities, pools, etc., will be recorded and not changeable. The renters do not pay association dues. Their rent cannot be increased beyond certain standards. Council ber Brenner asked if it was fair to assume that the homeowners association does not then have independent control over their condominiums. Mr. Carey replied that was correct. Councilmember Eyerly counted on the amendment. Since the on ;final request has to already be in, it would be foolish for the Council to shorten that time in that if an owner wants to convert to condominiums, he should have the opportunity to go through the steps that Cornish & Carey have gone through with Oak Creek. In a shortened period of time, there may not be time to do that. As far as the original owner or selling controlling the homeowners associations i e concerned, it doesn't appear to be practical in that two-thirds consent is required and there is presumeably going to be something in that area that they will be owners of the condominiums. So the worry about the original owner having 51% and ruling the association doesn't bear out. 1 Councilr ber Levy said it was his understanding that the renters are not being asked to vote on the question of a lifetime lease but rather the question of whether they are in favor of the apartments being converted to condominiums. The lifetime lease and its terms would have to be separated from the application or the vote taken. The question he had relates to enforceability of the lifetime lease. Mr. Maynor advised that once the lifetime lease is offered, there would be a contract, and if there is a breach of contract, the remedy would have to be sought by the tenant. Counci ear Levy said that regarding the motion they were voting on now Wmare is it being mendated that a lifetime lease accompany a condominium conversion, would the lifetime lease be specifically voted on by the tenants at the sane time they vote for the conversion? Mr. Raynor replied that was not the staff's intent. The intent was that in addition to the two-thirds requirement„ there would also be an opportunity for the tenants to have a lifetime lease. The City Attorney's office' only function would be to ascertain whether the lifetime lease was in fact offered. They would re- v i ew the document to make sure amt is being offered is what is required by the City's finance. There would be no vote upon the terms of the lease itself. Mayor arson noted that Inc i l has on the floor an amendment that would change the date free July 1 to January 1, 1981, and he was not ;swore of what the it is of that date They were referring to a specific project and he hid ao wo l ing attether that project could move on in that ttmefreme. No asked if there was any possibility the Oak Creek project could complete all the legal requirements in that time. me. Moor stated tiaat\Rr. Carey had indicated he desired nine moths; he had no opinion en hen aa4 h time was needed. Re added that the date would not be January 1, 1981, bet ;old actually be six rsonths from the effective date of the ordinate. 039 7/14/80 Councilmember Renzel said they were speaking of a class of possible condominium conversions but it is unlikely there will be any others of the same magnitude as Oak Creek, So the consent procedures possibly would not take so long in another kind of project. She said she thought it was important to bear in mind that they were speaking of a class of projects that might well include many smaller projects to which consent might be gotten rather quickly. It would give her a lot of concern to have a long time period if the Council really wanted to protect the City's housing stock. AMENDMENT PASSED: The amendment to change the period from one year to six months from the effective date of the ordinance passed on the following vote: AYES: Brenner, Fletcher, Henderson, Fazzino, Renzel NOES: Eyerly, Levy NOT PARTICIPATING: Sher, Witherspoon Mayor Henderson noted that the motion had passed and that it excluded from any changes the Council might make to the ordinance any conversion project that is signed within six months of the date of the ordinance going into effect. Councilmember Renzel said she thought the term 'lifetime a lease" needed to be defined, such as 30 years, which is typical of mortgage rates now. Mr. Carey stated that their leases were called lifetime leases, but there was a cutoff date. Their cutoff date is the year 2052. AMENDMENT: Mayor Henderson moved, seconded by Levy, to add a phrase after "either as owners or renters" to the effect that renters be given a 30 -year guaranteed tenancy lease. Councilmember Eyerly noted that the Attorney had not come up with a way to define it and it could be that it would vary with different projects, depending upon their mortgage time, and the age of the property at the time. If the time is changed to 30 years, it will give Cornish &.Carey the opportunity to renege on what they have_offere4 _He asked the City Attorney if he could define a "lifetime lease' that really relates to the individual property. He felt that the developer and the property owner have gone all out at Oak Creek to protect the l e who live there now. It bothered him to think that the it might : change the ordinance at this late hour after the developer has mode his offer. He, certainly would think that they would rent to grandfather in the Oak Creek Apartments in view of the amount of effort that hes been put in and the enthusiasm which has been generated by the majority of people who live there. Ho_ hoped that the wain motion Bald be supported. Mr. Abrams said he had she additional language re ' lifetime leases. He felt that it would be very difficult for Mr. Carey to back off from his offer of a cutoff date of 2052; der, recognizing that might happen, they could add the language 'for rot US$ then 30 years or suLh other longer period as is offered to tenants or forthe life of the project or 30 years, whichever is longer,* In this case, the life of the project would be the life of the structures elves Or the groundlease. He reminded Council that this was a provision that would only be in effect for six months. Council/Amber Manner said that like each of her colleagues, she has talked to Nr. Carey at great length, and it is Nr. Carey himself mho has con- vinced her that he amid work out a way to cwt every apartment building in Palo Alto unless the present ordinance isamended to delete acceptance. She said she would go along with the amendment so they could get to the main business of improving the ordinance. When Oak Creek apartments first opened, the Council was given a tour and they were told that this was Stanford's first move toward answering the housing problem. Stanford's first answer to the problem has cone a long way and not it is about to disappear. The present ordinance was passed in 1974 because of massive resistance to conversion by the elderly who lived at 101 Alma. There were many problems before that, but never before had there been an apart- ment split by conversion. It was 101 Alma which really brought the Council to the point they are now. AMENDMENT PASSED: The amendment to provide that tenants have the opportunity to remain in the converted dwellings either as owners or renters for the life of the condominium conversion projects or thirty years, whichever is longer, passed on a unanimous vote, Councilmembers Sher and Witherspoon not participating. MOTION PASSED: The main motion, as amended, passed on a unanimous vote, Councilmembers Sher and Witherspoon not participating. Mayor Henderson stated for the record that the Council, by this action, is not okaying the Oak Creek conversion. The Council recessed from 9:45 to 10:05 p.m. Mayor Henderson called the meeting to order. Mr. Maynor stated that at this stage of the process Council has passed a clause to be included in an ordinance which has yet to be adopted. Be- cuase the grandfather clause was passed, there are now two more members of the Council who can participate in the process. If for some reason Council is unable to adopt the substitutive provisions, the grandfather clause previously adopted will have no effect because it only applies to the yet to be adopted amendments. Mr. Abrams said that the grandfather clause was necessary to bring Council - members Sher and Witherspoon back for this discussion. The conversion of Oak Creek will proceed under the existing ordinance which requires two- thirds of the tenants consent so there will be no substantirl effect on Oak Creek. Councilor Fletcher noted that at the last meeting they discussed the intent of theordinance and by reviewing the minutes of 1974 discovered that the real intent of the ordinance was to preserve current rental housing stock. It was of prim, importance that the Council do this. The rental apartment stock is not increasing with thesmell exception where the City has been involved with the senior and berate income sub- sidized housing, but in the free market there is no new construction (there has -not been any. since 1972), and it ie of n* ime Importance_ that they preserve what they have. According to the Coompreha slve Plan, they must do so; Pollcy,8 says maintain at least the present number of multi family rental units. - It is important to keep about all the rental stock the City has. Ways have been found to get ?round the intent of the ordinance as it is presently written, as has been d aorastrated tonight in the Oak Creek situation. In the Mercury Mews, recently there was an article about a Mountain Vier landlord who evicted the tenants tensibly=-bes ause he wanted to tremens but o ith was apparently just a ruse so he wouldn't have to get the consent of the tenants. Nothing short of eliminating the two- thirds requirement will close all the loopholes for conversion and preserve the apartment rental stock the City hes. MOTICll: Councilmember F oetccher moved, seconded by Renzel to emend the condominium conversion ordinance by eliminating the boo -thirds tenancy consent requirement for conversion. C41 7114/00 Councilmember Renzel conditioned her second with the understanding that what Councilmember Fletcher meant was that the provision, which allows for exception if there is a two-thirds consent, was to be deleted and she was going to make it en cbsolute ban if there was less than a tree percent vacancy rate. Councilmember Fletcher said that was correct, that section of the ordinance pertaining to the 3% vacancy rate would remain unchanged, Councilumber Renzel concurred that they did need to preserve rental housing. The extraordinarily low vacancy rate in Palo Alto, less than 1%0 is very likely to get lower should any conversions take place in the next six months, and it was really a crisis situation for Palo Alto. She supported the motion. Councilmember Eyerly spoke against the motion. He had a problem when they tried to tie things up so tightly that the property owner had no outs or avenues of escape. Builders are not interested in getting into. hassles of the rental markets and the more the Council does this type of things the more it will work against them in the long run. It didn't seem fair to the property owner to take out this two-thirds exception when the margin is as low as 3%. it is never going to be below 3% in this area unless there are some real changes in the government and that is a long haul situation as to what new programs might possibly come from the -Federal level to the State. He didn't think they should put anything more on it, and at the same time they had another ordinance that would probably be moved after this one. They were piecemealing items into the ordinance that were already there, which has worked over a period of years fairly well. The staff has strongly recommended that if Council desires to make changes that it look at the whole ordinance and do it in a sensible way rather than by piecemeal. He was sympathetic to the amount of staff time and effort that would have to go into that, but he did feel that if there were to be any changes, they ought to look at the whole thing. He said he was definitely against the motion as it now stands. Lucy Tyler, MidPeninsula Citizens for Fair i$usingg said their 1,000 members had a concensus on these items. MPCFH urged the City Council to use the vacancy rate as a criterion for condominium conversion rather than the desires of two-thirds of the tenancy for conversion. There is nothing in the original ordinance to make the developer hold out the carrot of a lifetime lease. Putting the cap of 40% of the vacancy surplus on conversion would tap directly into the rental housing supply. The economic mix in Palo Alto is what makes it such a desirable place to live. In order to maintain the present balance of owner occupied/rental it is important to keep in mind that the occupied housing is in balance; it is also important to keep units for sale on the open market. Y Oecar Ehr1ch, 100 Ferns Avenue, stated that in his building there are 32 apartments, seven vacancies, and a. "ne vacancy" sign outside the building, lea two-thirds oft requirement could be easily circumvented if thee fill the vacancies with;st en dorm -care what they sign, they stay for a few months and leave. he said that people bought apartment buildings, they didn't bay condominiums. He asked for a definition of a lifetime lease. Could the rents be increased and if so, by what standard? Roy Abrams replied that there was no limitation on rent raises within the provision that wild guarantee a lifetime lease. It is hopefully directed toward a displacement factor, and would prohibit displacement as long as the market rent is what the landlord considered fair. It gave the present tenant of the conversion another a l ternati e and used some pressure dew landlord who wished to convert to arrange for a relationship on a lifetime lease in return for that person's consent. Mayor Henderson noted that , there was nothing -i n the ordinance, but wit they sere saying was that the developer must offer the tenant a lifetime lease, and if they don ' t offer the tint a satisfactory one, obviously the taunt weld vote ardent the comers**. 04 2 7/14100 Herb Rerock, 3401 Ross Road, said he had the same concerns as Mr. Ehrlich. The other alternative to Mr. Ehrlich if he doesn't want to give his consent for a lifetime lease is that he can be evicted and the landlord can get someone else who will give their consent. He asked what is grand - fathered in? The only example he is aware of is that there was a recent application for a conversion under the two-thirds consent provision for property at the end of Middlefield Road which didn't conform to the Comprehensive Plan because it is not a multi family dwelling. He asked if that was considered an application under this amendment? He did support Cuuncilmenber Fletcher's proposal; he thought that it was the best way to deal with the problem of conversion, given the lack of affordable housing in Palo Alto. He did trot agree that it would be difficult to prosecute those who falsely signed the consent statement, and noted that it was also a crime to persuade someone to commit an act of perjury. He, too, had some concerns about piecemealing the ordinance, but the only way to correct it is to amend it. Bob Moss, 4010 Ot-me, said that the concern about being forced to either buy a unit or move is very serious and a nationwide problem. There ought to be some obligation on the part of the people who vote for con- version to buy the unit, not Just take a longtime lease, but make a purchase in order to stay. There has to be a commitment. The acceptances signed should have an expiration date. Lifetime leases should definitely be offered; relocation payments should be required. It is not sufficient to say a person has a lifetime lease if the next month the landlord can turn around and double the rent. There should be an independent evaluation of the validity of the projected ownership costs, the rental rates and the maintenance fees. Frequently the cost of ownership is understated. The last suggestion was that only tenants with some measure of tenure should be allowed to vote on the conversion. The idea being to keep carpetbaggers from forcing their neighbors into a conversion. Councilmember Fazzino noted that he voted to preserve the original ordinance two months ago. Given the fact that there has been one conversion since the ordinoce was first adopted in 1974 and given the fact that the Planning Directors have stated that there have been no problems over the ordinance, he was not persuaded that any major change needed to be made in the approach itself. One of the major reasons for the oridnan a is the area of tenant protection; he still believed that was the major reason for development of the ordinance 4nd not to 3inply prohibit condtminium con- version-. We believed that it had worked well with respect to tenant protam ion. It is ironic that the specific Oak Creek proposal Was the *Wes for the 1960 Council consideration of the conversion law. The tenant protection proposed here goes far beyond that proposed in 1974. He was pleased with Mr. CA ' tproposals l eelases. ,. proposal with respect to 'lifetime► lea he was hopeful t not launch any additional major regarding the ordinance simply under the pressure of Oak Creek discussion. The staff has urged Council not to amt ordinances on a piecemeal basis and ti!i prefer to lass. tt hearm:-- _H- prefer zsces etaff itu4y the entire issue, including some of the issues raised by speakers tonight, and come back to Cam"` c1 l with' a wmprehens i ve study of *Akre the ordinance chats ' to be amended. With respect to the area of tenant protection, he thought that, in particular, he would support proposals to pay for tenants' . re- location costs, supervision by the City of condominium conversion elections to insure fairness and privacy of vote, and tightening the loophole with respect to the forced vacancies it apartment buildings, possibly a mintmum level of tenure, and a vacant unit be considered a "no. vote on conversion he was a little concerned about moving algid and adopting theproposals tonight. fie could not support Councilmemher Fletcher's prosal because he felt it is not the way to approachthe issue. Essentially, it prohibits conversions outright. The vacancy rate in this tone is not going to change mesh in the pct five years. He was supportive of the efforts to offer moderately priced units for sale to tents in the case of Oak' Creek Councilmember Fazzino said that in the five years since the adoption of the ordinance, the problem of purchasing has become as great a problem as the problem of retaining rental property. Council needed adequate time to address the entire issue to insure adequate tenant protection without moving ahead tonight. He opposed the motion on the floor. Vice Mayor Sher stated that he was a member of the Council at the time it adopted the present ordinance. He didn't believe it was accurate to say that the consent provision was put in in order to provide an option for the property oamers. It hes not designed to protect the property owner who wanted to convert. rather it was designed to give tenants who were renting an opportunity to buy their units if they wanted to, He rroeu l d like to preserve that option to buy provided that there are adequate protections for tenants who are the present occupants of the building. He thought there were some deficiencies in the present ordinance when it came to tenant protection. The staff memo talks about some of those things, as did Councitmember Fazzino. He was concerned about amending the ordinance to provide adequate tenant protect, to deal with this question of incentive, to deal with the question of eviction getting ready for a conversion, the question of whether a vacancy should count as a 4r0° vote, also the problem of weether before a "yes" vote could count the tenant would have to have a certain tenure in the apartment. It seemed to him that they needed to have the staff look at all those questions and how to deal with the question of tenant protection. He would like to reserve judgment on deletion of the two-thirds provision until he could see what the Attorney and staff could tell Council about ;,wring those problems. SUBSTITUTE MOTION: Vice Mayor Sher moved, seconded by Witherspoon, that the matter be continued and referred to staff to review those provisions relating to tenant protection under a proposed conversion by the two-thirds provision in the ordinance, and ask staff to report back to the Council on that matter with its recommendations within a two month period. Mayor Henderson noted that if this action is taken, it would nullify at lease for two months the action taken on Oak Creek or any others. Mr. Maynor stated that if the matter was continued, the grandfather clause adopted earlier would not go into effect unless the substitutive provision is adopted two months from now. What, in effect, they would be doing is extending the time period another month. Mr. Knox eayrent to comment on his assignment. Mayor thmeiersen asked Vice Mayor Sher,. if he would con- sider adopting the two-thirds provision with a purchase requirement this evening and then giving direction to look at other changes in the ordinance. He felt they needed to take some stag `might. Vice Mayor Sher said that the approach whereby in order to have a conversion two-thirds of the tenantg had to sign a statement under penalty of perjury that they rented to the conversioe did not appeal to - him. There are g et difficulties with that kind of affirmation and the district attcraeY does no. l i ke to prosecute those so called "white collar crimes" when they have a lot of other crimes on the agenda. There is also a tremendous potential for confusion of the people who are asked to deal with that kind of requirement. Nm wouldn't sent to do that under any circum- stances tonight or a year from now. tie wanted to make it clear that he was not rejecting the deletion of the tw-thirds requirement; he wanted to look at that later after the staff tells then whether the ordinance can be fine-tuned to provide adequate tenant protection in a situation where co emit o is being proposed. Mt recognized that what it will do is prevent the six xontbs' period, which came in the earlier !motion, from starting to rue until they take action two months from now, but he didn't think that will start the whole discussion over again tonight because that decision has been taken. 044 Mayor Henderson noted that there were wablings by others moving toward this same kind of thing. It will be harder for those to move by the date the Council set tonight, than it will be if it is delayed two months or possibly more. Councilmember Levy supported the alternative motion. The City has had an ordinance that has stood for six years and this is the first time, in connection with Oak Creek, that there has been a prospect of bringing this to a vote of the tenants; they still don't know how the tenants at Oak Creek are going to vote. Recently, the Council has taken a closer look at the ordinance and there are a number of suggestions made this evening. They would not lose much by taking another two -three months to. look at the ordinance in its totality and then discuss it again in its totality rather than on a piecemeal basis. He asked Mr. Knox if two months was enough time. Mr. Knox replied that it would not be adequate time. He didn't have any- one on the planning staff with background needed to work on the condominium conversion provision; it would take his time almost full-time, and the time of an attorney on the City Attorney's staff to get something back to the Council in two months. This kind of ordinance deserves careful thought. They need to not only fine-tune what is in place, but review what other communities are doing and what the case law is, what new legislation there is, and to make sure that when they put together a new ordinance, it is as up to date as the original one was when it was wr4 tte.n in 1974. Counclimember Levy asked Mr. Knox how much time was needed and how much the assignment would cost. Mr. Knox said he didn't know the cost, but he estimated it would take the better part of a year to update the ordinance. Mr. Zaner said he couldn't provide a precise figure either, but if Mr. Knox worked full-time for two months, plus the attorney and clerical assistance, they were probably talking about S51000 to $8,000. Councilmember Levy asked what they could expect in two months. Mr. Knox replied that the counts made about the two months study related to tenant protection measures; t#ley could expect some fine-tuning in those measures only. Councilmomber Levy ;aid he could support the substitute motion calling for the study of the tenant protection aspects. Councilmember Brenner said it would be her preference to first vote on the notion Councilaeaaber Fletcher put on the floor, which would have the effect of holding back on conversions until such time as the staff report could be done. If the motion passed, they could order a staff report. When the staff review comes back, the ordinance can be mended according to the findings'. In the interim, they would have some control over conversions. Councilmember Brenner proposed that they vote on the motion that includes the grandfather clause. That would probably preclude the problems that some members of the public are expressing --the fear of conversion of other apartments. It would stop the works there as long as there is not a 3% vacancy rate. That order would make sense to her. Mayor Henderson noted that they did not have the power to ignore the Motion before them. - Vice Payer Sher said he was going to vote agent Councilmember Fletcher`s motion, because he t --it was a mistake to take it out and think ,about putting it back in later. He minted to leave the two-thirds ce'45 7114/80` route available provided there are adequate protections. He thought they could get that answer in two months; he was ever willing to consider a moratorium on using the two-thirds route while they were wa?tin;, for the study; that could be built into his motion. He didn't want to vote against a motion to delete the two-thirds because two months from now he may be ready to delete it. Mr. Knox said that the question, as he understod it, was whether it was possible to have some kind of mora- torium six months or whatevarothat'eould prevent the utilizing of the two-thirds consent exception during the pendency of the staff study. Mr. Abrams stated that yes, the Council could do that. It would be understood that the exemption they passed before would continue to allow Oak Creek and other applicants to have that exemption. Vice Mayor Sher said that with the consent of his second he would build his last statement into the motion. His second did not consent. SUBSTITUTt MOTION WITHDRAWN: Vice Mayor Sher, with the consent of his second, withdrew the substitute motion. SUBSTITUTE MOTION: touncilmembee Renzel moved, seconded by Sher, that staff be directed to review those conditions relating to tenant protection and that a moratorium be placed on all conversions under two-thirds consent provision for six months, with exception to earlier action, grandfathering in Oak Creek. ORDINANCE OF THE COUNCIL OF THE CITY OF PALO ALTO AMENDING SECTION 21.40.050 (c) OF THE PALO ALTO MUNICIPAL CODE - APPLICATION FOR APPROVAL OF A TENTATIVE OR PRELIMINARY PARCEL MAP FOR A CONDOMINIUM CONVERSION PROJECT (1st reading) Mr. Abrams stated that the grandfathering clause would stand under either of the two proposals that Council is now considering. The motion that Councilmember Renzel is talking about would be a substitute motion for Councilmember F1eficher's motion, and the Council could vote 'upon that which includes moratorium, the grandfathering, for six months. Councilmember Levy asked if the motion was that there would be a moratorium on any ccnvnrsion for a period of six months with the exception of the earlier action that was taken this evening. Councilmember Renzel said that eras correct. Councilmember Levy noted that the action they took earlier allow con- versions to take place for the next six months. Ma. Abrams said that was true under certain conditions:. 1) if the developer obtained tom -third; o!eent and 2) that the developer offered a lifetime tease. Councilmember Levy said that essentially the action they took this evening precludes a moratorium.. Mr. Abrams said it did not. Councilmember Levy said that it made the moratorium subtly different. Mr. Abrams said that the only difference is that theme is'a requirement for a lifetime lease. If that proposal is made, they are outside of the moratorium., Council - member Levy said there is no moratorium on a ts-thirds conversion as long as a lifetime lease accompanies it. Mr. Abraas said that was correct. Councilmember.. Reazel was disappointed that they did not have five votes for CouncilCouncilmomber Fletcherr's motion. She thought they had a very serious prc lem as far as rentals ware concerned; there has been no new rental housing units built since1972. If, in fact, Oak Creek apartments convert, Palo Alto is going to lose 10% of the metal housing stock. There is a .07% vacancy rate now and it is going to go yet lower. Tt will never go 046 7/14fMa higher because they are not building any new rental housing units. Those people who would normalcy rent the stock are going to be forced into an already tight market. Five to eight percent is considered a normal vacancy rate, three percent is rack bottom mobility and Palo Alto is at .07%, which is rock, rock bottom and It weld go lower. She urged Council that when this matter comes back, they take effective action to prevent con- version so long as the vacancy rate is below 3%. They cannot afford to lose any more housing stock; it precludes the kind of mobility necessary for every industry in town. She said that out of necessity she will support the substitute motion, but she would urge them to take effective action when the matter comes back to Council. Councilmember Fletcher said she seconded Councilmember Renzel's comments. People who want to buy condominiums have the option to do so; condominiums are being constructed all over town. They are on the market. Prospective buyers have an option, where renters don't. Councilmember Levy said it wasn't true that no rental units are being constructed. 800 units are being built on Stanford campus and that will make it larger than Oak Creek. True, that is for student housing, but a lart part of the rental market in Palo Alto is students. Secondly, a comment was made that mobility is down to rock bottom and that 5-8% is normality. Five to eight percent is what somebody has said was normality. The only place where he know the vacancies are as high as 3% is in the City of Los Angeles; it's probably below that now. In most urban areas of California, the vacancies are in the 1% area. As a matter of fact, over the past five or six years rentals have increased in Palo alto to .the percentage of total housing because there is a lot of buying of single family homes and condominiums for converting to rental units. Mayor Henderson said he voted for this whole ordinance to begin with the 3%, then voted for the addition of this two-thirds vote for conversion because not only was he convinced the rental shortage in town was real, but because it did seem to enable people to purchase property at a relatively low cost. It enabled them to make an initial purchase and to move up the ownership ladder; it brought stability to families in that they were able to stay in Palo Alto. A permanent home brings stability to the community. He was open to hearing all the arguments. He would not have voted to eliminate the two-thirds concept and put the figure in. He would support Councilor Renzel's substitute motion. Councilor Renzel said her motion would incorporate the request for information on tint protection as mentioned by Councilmembers Sher and Fazzino. SUBSTITUTE NOTI0N: The substitute mction plus first reading of the ordinances, passed on the following vote: AYES: Brenner, Fazzino, Fletcher, Henderson Levy y Refuel, Sher NOES: Eyerly, Witherspoon ABSENT: Sono mums OF JULY 28 CANCELLED NOTION: Councitmember Renzel moved, seconded by Fazzino, that the Council meeting of July 28 be cancelled. The motion passed unanimously. • ADJOURNMENT TO EXECUTIVE SESSION The Council adjourned at 11:05 p.m., to an Executive Session re Personnel. FINAL ADJOURNMENT The Executive Session and the Council meeting of July 14 adjourned at 11:45 p.m. ATTEST: 048 7/14/80 APPROVE: 1 •