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Editorial: No on measures R and Q
October 07, 2016, 05:00 AM Editorial

Voters of two core Peninsula cities — San Mateo and Burlingame — will be facing a choice on two ballot measures that seek to introduce rent control, just cause eviction and other tenant protection measures through creating a rent board, the members of which will be named by the city councils. The measures would also charge rental property owners an annual fee to run the commission with a specific membership depending on the city and all that will entail through its life span.

For many facing escalating rents, these measures are necessary to ensure the socioeconomic diversity of the area. Opponents, however, see the measures are far-reaching and potentially troublesome for a number of different reasons.

So what should voters do? The short answer is to vote no on both Measure Q in San Mateo and Measure R in Burlingame. The flaws of the measures outweigh the benefits.

It makes sense for any tenant facing a rent increase of $200, $400, $600 or even higher with no change to their rental unit and likely stagnating wages to support rent control measures. It makes sense for any tenant worried about their building selling and being evicted for no reason so that the units within can be renovated and rented out at a higher rate to support just cause eviction measures. It makes sense for any Peninsula resident concerned about the socioeconomic diversity of this area to contemplate such measures. But there is a matter of a problem at hand and the appropriate solution. The measures are not the appropriate solution to the problem at hand.

While we do not support these two rent control measures, we feel deeply for the pain and instability rising rents and evictions have on our community. It is one of this county’s saddest stories. And make no mistake, the groups that organized these efforts are not going away. This is an issue with which we will all contend for years to come and though there are flaws in these two measures, they are a result of a series of unfortunate events that indicate the so-called prosperity of this region does not come without a significant cost to our very nature and character.

While the factors in our current situation are many, we are at the confluence. It is unfair for one segment of the population (in the case of rent control, rental property owners) to bear the brunt of myriad streams of factors beyond their individual control. On the other hand, it is also unfair for the people who rent for whatever reason to also bear the entire brunt, which is proving to be the case. Years and months of discussion has led us here without a true solution — merely a choice between status quo and stringent measures that limit flexibility and are problematic to untie if the situation changes. But that doesn’t have to be the case if we are mindful of each other’s situation and willing to listen and engage respectfully through our current channels of government.

So how did we get here? Many point to the sheer volume of new jobs in the area as the primary driver for escalating rents, but it goes deeper than that. First of all, low interest rates set at the federal level means there is less safe investment in traditional mechanisms like U.S. Treasury bonds rooted in the economic policies set both during and after the Great Recession. That means there is more money flowing into the stock market and into venture capital, which means there are more new companies financed without having to make an immediate profit. Low interest rates also makes real estate more appealing since it is cheaper to borrow money. Additionally, there are more workers coming into this area from around the country and the world who let others know there is potential here for not only jobs, but investments.

In addition to that, federal funding for HOME funding and Community Development Block Grants has essentially dried up, meaning that housing projects and programs that benefited from that federal assistance were no longer available. The dissolution of redevelopment agencies at the state level also removed an essential tool for creation of affordable housing projects and programs. Zoning and neighborhood concerns about growing traffic and congestion also meant that office building construction was more palatable and easily penciled than housing developments. Thus the jobs/housing imbalance.

As the problem grew, city and county officials were slow to react since the economy moves in cycles and there was constant talk of a short-term correction or even a bursting bubble in the conditions that led to this imbalance. While business moves quickly, particularly tech businesses, government tends to move a few years behind the curve. In fact, some housing and larger transit-oriented developments envisioned during the dot-com boom are just now moving to construction — but to be fair, that is also because of the larger economic cycles.

In response, there has been a dramatic call to action by many local elected officials and, for the most part, they are now strongly on point when it comes to moving to solutions. For those facing dramatic rent increases or evictions, in some part fueled by greed or property owners pushing market rates higher and higher for the sole reason that they simply can, this is too little, too late. However, this burgeoning movement comes through the planning process outlined in our local governance with full vetting by the community, elected officials and city staff to ensure it is the right move for the community at this time. It also comes on the heels of decades of interest in creating affordable housing opportunities where and when possible, just not to the level of the current need for the reasons outlined above.

In San Mateo, where voters will decide on Measure Q, there has been significant movement to establishing tenant protection measures with a city task force and several public meetings. Mayor Joe Goethals has introduced an ordinance that would provide tenant relocation assistance if rent goes up more than 10 percent annually. This proposal has yet to be fully discussed because of the ballot measure and that is unfortunate because there was a possibility it could have moved forward already to provide some immediate relief. The proposal came out of the city’s task force on this issue and there is opportunity for additional discussion of ways to address concern without a wide swath of new rules the ballot measure describes. Goethals’ proposal was still controversial as some rental property owners don’t like any restrictions or rules, but a discussion, while heated, can forge an immediate solution. However, the discussion at the city level was not quick enough for the measure’s proposal, and they sought to get it on the ballot when they saw the first opportunity for discussion go sideways. This is not wrong, just unfortunate. Proponents of the measure have boots-on-the-ground evidence of the hardships many tenants are facing and are seeking immediate remedies. Unfortunately, there are too many unknowns in Measure Q and while a little wiggle room in language can be seen as good for some in public policy, it’s the vague nature of the language that has people scared by the envisioned worst-case scenario. It would be better to craft this in a council chambers with input from all community stakeholders and staff, including the city attorney, than at the ballot box.

And that is also the case in Burlingame, whose voters are facing a decision on Measure R. That measure is a 180-degree turnaround from the city’s current policy, which states the City Council cannot discuss price controls for rental housing as mandated by Measure T, passed in 1987. Burlingame city officials have shied away from the discussion of tenant protections because of Measure T, but there really has been a certain amount of hiding behind it.

Still, the city has a couple of projects in the works including using two public parking lots for affordable housing and pursuing additional ways to increase housing overall in certain areas of the city where it makes sense. Worthwhile for sure, but not enough for many facing dramatic rent increases. Proponents of Measure R should have split the measure into both a repeal of Measure T and another measure listing new regulations. With that, at the very least, the city could then begin a discussion of tenant protection measures with the repeal of another ballot measure from 1987 that perhaps is no longer relevant.

Now to the point of rent control and its merits and flaws. Its merits are simple. It will keep rents below about 4 percent a year as long as a tenant remains in the unit. Just cause eviction typically works in tandem with rent control because, by itself, a property owner can simply raise the rent to get a tenant out so that is part of the rationale of combining the two into one new policy with a rent control board to oversee it. Proponents point to its ability to create stability in the rental market, and that is true. However, it is also flawed. It does not promote any new housing and actually provides a disincentive to property owners to maintain their properties since their rate of return is artificially limited, though proponents would argue against that. It also provides a disincentive to future investment in property in an area for the same reasons. Whether that is a positive or negative also depends on your situation. From a purely economic standpoint, it’s bad. Very bad. For many, property investment is a way to save for the future, whether it be for retirement or other family expenses. To cap a return on investment is not only unfair to those who have invested in this community but will discourage others in the future from doing so as well. From a renter’s standpoint, providing a disincentive for investment might be good since it would cool down property speculation and the human cost associated with it. In doing so, it limits a property owner’s ability to make improvements and reduces the quality of life for all. It is also unfair for future renters who would have to pay more than those locked in at lower rates, which could create tension within buildings and between property owners and tenants.

Additionally, nobody on any side of the argument actually suggests that rent control is a completely good answer. Proponents say it is a tool to help stem the displacement of a percentage of our populace and that the ends justify the means. Experts on poverty also say it is a blunt and relatively ineffective tool. Opponents feel it is an infringement of personal property rights and does more harm than good. The measures are 22 pages in Burlingame and 24 pages in San Mateo. They are interestingly both detailed and vague with no escape clause or sunset in case the economy turns and the only way to change them would be through another ballot initiative. That’s dangerous and not good public policy for something that affects so many.

We didn’t get to this situation overnight, and opponents say it’s simply a supply issue. That is partially true yet there is still construction taking place in Manhattan and it is often pointed to as the pinnacle of unaffordability.

So what should we do? Rather than focus on either rent control or merely supply, there should be more of a joint and concerted effort by both city and county officials to find a full range of solutions to the situation before us with proper vetting and safeguards against the inevitable economic downturn. Proponents of rent control point to the immediate need, and also the fact that Proposition 13 provides some security for property owners in that they know what to expect in their tax bill and that rent control is the renter’s version of that statewide policy that forever changed California. However, pointing to a proposition that many see as flawed as a way to also protect another group has its own perils in that rent control protects a group of current tenants without the same protections for those in the future.

More to the point of a concerted effort is that the county is looking for an extension of Measure A, a half-cent sales tax, into Measure K, with an increased emphasis on affordable housing solutions. We support Measure K as we do thought-out and fully vetted solutions that make sense for the entire community. Home sharing, secondary units, relocation assistance, new construction, renewed and emboldened partnerships for capturing new and older units at affordable rates, inclusionary zoning that sets aside a percentage of new construction at below-market rates, commercial linkage fees for housing and loan programs for renovation of older buildings with rents maintained as affordable are all workable solutions that will not just nibble away at the issue but also provide incentives for everyone to work together to keep this county diverse and livable for all income levels.

In San Mateo, more should be explored on protecting tenants and continuing the long-held goal of providing new housing for all income levels. In Burlingame, it is time the city stop hiding behind Measure T — which solely limits the city’s ability to restrict prices on property sold, leased, rented, transferred or exchanged — and work on alternatives to protecting tenants through other means while exploring current and new ways to supply housing for all income levels. The work at the county level must also continue in earnest and other cities should take note and get on board as well. It will take leadership and collaboration for this to happen and it is time to take the energy afforded to battling both for and against these measures and put it to arriving at the common good. The work here has only just begun.



Tags: measure, measures, there, housing, property, control,

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Editorial: No on measures R and Q
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