The divide of Measure Q: San Mateo’s rent control tenant protection initiative draws debate

A group of tenant advocates affiliated with the nonprofit Faith in Action Bay Area collected thousands of signatures to place the measure on the ballot. They feel the City Council failed to take actions to protect San Mateo against mass displacement of tenants, large rent increases and speculators they say have little regard for the community.

“We care about the supply side too,” said Jennifer Martinez, executive director of Faith in Action. “But what do we do in the meantime to stop the massive displacement of people who work in the county, to let the supply catch up? That’s where we see this being a really critical policy.”

Opponents include influential trade groups the San Mateo County Association of Realtors and the California Apartment Association; as well as landlords and two councilwomen. They argue the measure goes too far, forces property owners to bear the burden of subsidies, and could be costly to the city.

“This is a well-intentioned, but poorly-drafted measure,” said Josh Howard, CAA’s senior vice president of public affairs. Instead, he suggested increasing supply with a “communitywide dedicated source of funding, so all of us have some skin in the game.”

The measure applies to multi-family properties and would tie annual rent increases to the consumer price index, but at no more than 4 percent; prevent evictions without cause; and create a rental housing commission to oversee implementation and collect fees from property owners.

How did we get to this point?

Both campaigns agreed the jobs-to-housing imbalance has fueled a sturdy as well as rampant rental market, and that meeting demand requires increasing supply. But they inherently disagree as to whether it’s government’s place to bridle landlords with rent control.

“Demand is stampeding into the area and it’s a regional problem,” said SAMCAR member Michael Pierce, president of Prodesse Property Group. “The problem with rent control is it doesn’t let the market forces address all that. You artificially lower the price, what’s that going to do for demand? Demand will go up.”

Opponents argue wealthy tenants could remain in rent controlled units, further reducing availability in an already limited market.

The SAMCAR-sponsored Coalition for Housing Equality, along with the CAA has raised nearly $957,000 to oppose rent control and just cause eviction initiatives in San Mateo and Burlingame.

Martinez outlined what led up to tenants feeling disenfranchised and opting to seek protections. Distressed tenants approached city officials for more than a year, sharing stories about the detriment mass evictions and steep rent increases were having on the community, she said.

The council formed a housing task force comprised of both tenant advocates and landlords, however, it was unable to reach consensus on tenant protection measures. The council also opted not to enact measures to “stop the bleeding,” prompting them to turn to voters, she said.

With an uptick in rental property sales over the last few years, Daniel Saver, a housing attorney with Community Legal Services in East Palo Alto, questioned whether profit margins are to blame.

He agreed supply is a factor, but so too are the effects of an exploitative market. Many buying these properties at a high price are then left doing out steep rent hikes to account for a return on their investments.

“There’s a small group of people that are actually getting rich off the housing crisis. People say the housing crisis is affecting everyone, but some people win,” Saver said. “The speculation in the real estate market has been a huge driver. … I think it’s very disingenuous for speculators to come in and bet on displacing people.”

Predicting the effects

Both sides have varying ideas on how the measure might impact the community. Rent control only applies to multi-family properties built before Feb. 1, 1995, of which there are about 11,700 units in the city.

Opponents contend it only benefits those currently living in the apartment, adding landlords must further raise rents on newcomers to account for the loss in revenue.

However, proponents emphasized the market determines to what extent landlords can raise rents.

Pierce argued long term, the city could see more degradation of its housing stock while squelching the market.

It would “definitely have an impact on sales of properties going forward because new buyers would have to factor in caps on rent growth, as well as the [rental commission] fee. Then they would also have to think about their inability to upgrade their property,” Pierce said.

Martinez and Saver pointed to provisions in the measure that allow landlords to pass on the costs of necessary property repairs and that owners won’t be prohibited from upkeep.

They said best practices in other rent-controlled communities were considered and Measure Q is tailored to meet San Mateo’s needs, as well as target those who are most vulnerable.

To the extent that there may be a marginal increase on rents for new tenants, the cost is worth it to protect an estimated 30,000 people, Saver said.

Just cause eviction

Landlords of all multi-family properties would be prohibited from evicting tenants without cause. But those who break the law or the terms of their lease could still get evicted.

Former San Mateo police officer Bob Anderson said he’s seen cases where it’s taken months for landlords to evict problematic tenants who are disrupting their neighbors’ quality of life. Pierce and Howard pointed to the already lengthy eviction process that includes having to serve the tenant with a cautionary notice to cease.

If the law doesn’t guarantee credit checks for new sublease tenants, it becomes even more problematic, particularly as landlords remain accountable to maintaining quality of life for other residents in the building, Pierce said.

Saver, the attorney who helped draft the measure, said it does nothing to change the existing eviction process for problem tenants, but would help keep good tenants housed.

“Can you still get rid of problem tenants? Yes. Is the process to get rid of problem tenants any different than it is now? Absolutely not,” Saver explained.

He, Martinez and tenant advocates say the opposition is contorting the argument with fear tactics.

“This isn’t about problem tenants, what this is about is the good, rent paying tenant that has done everything right and has lived in their home 15 years, 20 years and has gotten a 60-day order saying you’ve got to leave your home and I don’t need to tell you why.” Saver said. “All this problem tenant stuff, in addition to having really racist and classist tones, is also an obfuscation of what’s going on.”

Potential costs

A major concern to two councilmembers who’ve publicly opposed the measure is the potential for the city’s pocketbook to be burdened by the cost of implementing the proposed law, as well as its creation of a housing commission.

A five-member commission would be appointed by the City Council to oversee the implementation of the law, set annual rent increase rates, hear disputes and more. The commission would be funded by a rental housing fee landlords would be required to pay per unit. Consultants have estimated the commission would require eight to 10 full-time staff, and an annual budget of about $2 million to $2.5 million. Initially, the city would likely need to fund the commission’s setup until rental fees are collected, according to a city report.

Proponents alleged the “No” campaign is disseminating misinformation, particularly regarding the potential costs of the law.

“The ordinance specifically states that all of the cost will be recoverable through a fee,” Saver said. “It will not come from the general fund, period.”

He noted the city has a variety of commissions and boards — such as planning, parks and recreation and library — whose members are appointed by the council to focus on specific sectors of governance.

“This is a commission that’s appointed by the City Council, therefore it’s accountable to the elected officials of the city,” Saver said, adding there are ways for the council to recall a commissioner.

Councilwoman Diane Papan is concerned by the commission’s quasi-judicial status and that it may drain city resources. She noted it could burden a variety of staff from the city attorney’s office, human resources, clerk, finance, information technology, code enforcement and more. Essentially, it is an unelected body that is legislating housing issues in the city, she said.

“We’ve never had an unelected commission not be accountable to the City Council, and we’ve certainly never had one that has the power of the purse. … If they didn’t get enough money [from fees], it taps into city services,” Papan said. “We’re adopting a measure that’s sort of inherently unfair and I think San Mateo can do better than that.”

But with prior proposals not garnering enough support — such as a 90-day urgency ordinance to freeze rents and prohibit evictions, as well as Mayor Joe Goethals’ suggested relocation assistance program — Papan acknowledged the election might have lasting effects on efforts to assist tenants.

“If [this] gets voted down, what right do we have to bring it up? I’m not sure,” Papan said, in regards to whether the city should reconsider options after the election. “Are there going to be people [saying] ‘this was just voted down, how dare you?’”

Consensus

Proponents and opponents agreed construction of more housing is vital to truly addressing the endemic housing crisis.

Although both sides claimed the other had been unwilling to work toward a meaningful compromise during the task force process, they restated their interest in finding amicable solutions.

An agreed upon challenge, however, is assuaging those already concerned about the impacts of taking on new residents.

“As a society we’ve said we don’t want to build on the hills, we don’t want to fill the Bay. What are we left with? Go up,” Pierce said, adding they need to “get people on board with density. … The only way we’re going to solve this is to build our way out of it long term; unless we draw a line and so no more population or job growth.”

samantha@smdailyjournal.com

(650) 344-5200 ext. 106

Measure Q Quick facts

Requires simple majority to pass

Does not apply to single-family homes, owner-occupied duplexes

Rent stabilization

• Only applies to multi-family properties built before Feb. 1, 1995

• Ties annual rents to CPI, no less than 1 percent no more than 4 percent. Allows up to 8 percent for rolling over two-year increase

• Landlord sets rent for all new tenants

• Exemptions for owners to cover improvement costs, receive fair rate of return

Just cause eviction

• Prevents evictions unless:

• Tenant breaches lease, engages in criminal activity or is a nuisance

• Unit needs substantial repairs, is taken off rental market, owner or family member seeks to move in

• Requires landlords pay relocation assistance if property demolished

Housing commission

• Five members appointed by City Council, no more than two can be landlords, Realtors or developers

• Determines annual rent increases, rental housing fees charged to landlords to cover commission costs

• Hears petitions for exemptions

• Establishes penalties for non-compliance

• Intervenes as interested party in litigation

• Is integral part of city government, independent from council

• Can request city funding to cover expenses, use city staff

* Information from the San Mateo Community Preservation and Fair Rent Charter Amendment, also known as Measure Q.