Mayor calls proposed ballot measure a ‘sneak’ repeal of rent control

Mayor Lenny Siegel

BY ALLISON LEVITSKY
Daily Post Staff Writer

Mountain View Mayor Lenny Siegel says a ballot measure proposed by a group backed by landlords would effectively repeal the city’s year-old rent control law.

The measure would suspend rent control when more than 3% of the city’s rental housing supply is vacant — which, Siegel pointed out, it always is.

“The vacancy rate never goes below 3%, so the just cause eviction and rent control elements of the charter amendment would never apply, and so that’s why I call it a sneaky repeal,” Siegel told the Post. “They’ve got a whole lot of smoke and mirrors there.”

A group called Measure V Too Costly filed the initiative on March 30 to amend the city charter section applying to the rent control law passed by 53.6% of voters in 2016.

Measure V applies to units in multi-family properties with three or more units built before 1995.

City data shows that since 2009, vacancy rates across all rental housing in Mountain View have hovered between 3.9% in 2011 and 5.8% in 2016. It’s currently 4.4%, down from 4.7% last year.

Laura Teutschel, a communications consultant working for Measure V Too Costly, dismissed Siegel’s assessment, but said she didn’t know what the vacancy rates were.

“That’s his opinion. Does he have a crystal ball about vacancy rates? That’s what I would ask him,” Teutschel told the Post. “That’s conjecture on his part. The amendments that we offered make Measure V a more effective tool, vacancy rates notwithstanding.”

Vacancy rates

The existing rent control law gives the Rental Housing Committee the option of lifting rent control protections if the vacancy rate among affected units goes above 5%. Measure V Too Costly is proposing to lower that to 3% and make the lift mandatory.

That vacancy number would also be expanded to include all of the rental units in the city, not just the ones built before 1995. Newer units have a slightly higher vacancy rate because they’re more expensive, Siegel pointed out.

According to the Rental Housing Committee, units built before 1995 had an average vacancy rate of 4.3% since 2015, ranging from 3.9% in 2015 and 2016 to 4.8% last year. It’s currently 4.6%, down from 4.7% at the end of 2017.

“The proponents of Measure V seem like they were careful in choosing 5% as a level because vacancies could go above 5%, and that would be an indication that there’s less need for rent control because the market is starting to operate,” Siegel said. “It’s not that far from from 5%. It’s not like they chose 20% and it would be moot.”

Siegel said he was speaking for himself and not for the entire city or City Council in light of a controversy around Councilwoman Margaret Abe-Koga, who ruffled feathers last month when she spoke out against rent control in an ad for Measure V Too Costly.

Tenant income restrictions

Other parts of the initiative were designed to attract votes, Siegel claimed. It would limit rental protections to families who earn less than the median household income, currently $125,200 when adjusted for family size.

It would also make it easier for landlords to evict problematic tenants and ensure that the $2.6 million organization that runs the rent control program doesn’t access general funds without City Council approval.

Rental Housing Committee members would be explicitly barred from being paid a salary.

In fact, the Rental Housing Committee is financed entirely by rental units. Landlords are charged $155 per year, which the initiative would reduce to $100 per year starting in 2019. Committee members aren’t paid a salary.

Improvements by landlords

Under the current rent control law, landlords are only allowed to charge higher rents for capital improvements that are necessary to bring the property into compliance with local codes affecting health and safety.

The initiative would strike that rule and allow landlords to improve their properties however they see fit and charge higher rents accordingly.

Once City Attorney Jannie Quinn drafts a title and summary, the group will need to collect 5,500 signatures to qualify for the November ballot.

12 Comments

  1. How is it a “sneak” move if the ballot measure will be printed on the ballot and Voter Guide? This is just another case of a liberal who assumes people are stupid and can’t think for themselves.

    • Will the ballot measure say the following: “The vacancy rate is always above 3% in Mountain View so if you vote for this measure then it will effectively kill the just cause eviction and rent control elements of Measure V.” Lowering the vacancy rate % in this measure and the paid spokesperson for the measure’s campaign not even being aware of the current vacancy rate is disingenuous at best. I’m sure the paid signature gatherers are hardly going to be any more forthright than Teutschel is being about the vacancy rate issue. As a liberal, I actually have every confidence that people can think for themselves when they are presented with facts that exist rather than references to crystal balls.

  2. What’s better than rent controls? A tax on vacant lots and unoccupied housing. While rent controls make it less attractive to supply housing, a vacancy tax makes it less attractive NOT to supply housing! A vacancy tax of $X/week makes it $X/week more expensive NOT to get a tenant, and thereby REDUCES, by $X/week, the minimum rent that will persuade the owner to accept a tenant.

    If NEW buildings are exempted from rent control in an effort to encourage construction, the stock of rent-controlled housing becomes an ever-shrinking fraction of the housing supply — unless the exemption is only for a limited time, in which case there is less incentive to build! A vacancy tax avoids such conflicts; it unequivocally tends to increase the effective supply of housing and therefore to reduce rents.

    Similarly, a vacancy tax on commercial property would reduce rents for job-creating enterprises.

    With a sufficiently heavy vacancy tax, evictions due to foreclosures would be consigned to the past, because the foreclosing bankers, in order to avoid the tax, would want to retain the current tenants or former owner-occupants as continuing tenants. Of course the existing stock of empty foreclosed homes would be immediately made available for rent, as it should have been all along — not just drip-fed to buyers over a period of years.

    Under a vacancy tax, squatters would not count as occupants, because they don’t officially exist. So the squatters (and the nuisances they cause) would be displaced by lawful tenants. The owners would get rent, the tenants would get accommodation, and the neighbors would get peace.

    A vacancy tax would be GOOD FOR REALTORS — who would get more rental-management fees for properties coming onto the rental market, plus commissions from any owners who decided to sell vacant properties.

    And the political trump card… Avoidance of the vacancy tax would initiate economic activity, which would expand the bases of other taxes, allowing their rates to be reduced, so that the rest of the city/state/country gets a tax cut!

    • Somehow, I don’t think that would pass scrutiny by the courts.
      I don’t think you can tell someone NOT to rent out their property if they don’t wish to.

      • Crap. I need another beer. Let me try that again…

        Somehow, I don’t think that would pass scrutiny by the courts.
        I don’t think your can force someone to rent out their property if they don’t wish to.

        There. That makes more sense.

        • Matthew, you seem to misunderstand what is being proposed by a vacancy tax. Of course it can’t force anyone to rent out their property if they don’t want to. With a vacancy tax in place, a landlord just has to pay a higher tax to keep their property vacant than to rent it. This type of vacancy tax is already in place in Washington, DC which has some of the strongest tenant and rent control laws in the country but yet doesn’t have extreme skyrocketing rents like the Bay Area despite having a huge influx of people moving into the city in the last 10-15 years.

  3. If the landlords want to repeal rent control, they ought to open their books for the past few years and show us they weren’t gouging tenants. This is obviously a move financed by the landlords, and their behavior over the years should be an issue here. If they were being fair to renters before rent control, show us!

      • There is also something called a fair investment rate which has been more than protected by the Costa Hawkins Act for all owning class landlords in the state of California. This housing crisis we are in didn’t happen by accident – a series of owning class protections (Prop 13 and Costa Hawkins being two of the cornerstone legislative protections) were put into place under republican governors to ensure the owning class had their economic interests supported over time. Thus the “market rent” has been intentionally inflated to ensure a huge return on investment for landlords and now they want to squash any and all attempts to control their greedy pursuit of profits over people. Lets not forget that the first rent control ordinances enacted in California cities like San Francisco, Berkeley and Oakland back in the late 70s and early 80s were also in response to a housing crisis after Prop 13 was passed.

        • Heather,
          Are you *honestly* this clueless?
          ‘”market rent” has been intentionally inflated’
          Seriously?
          It’s this sort of thinking that makes rent control seem attractive to the hoi polloi. Yet over 90% of the folks who’ve actually, you know, *studied* rent control think differently.
          Gee, I wonder who has more of a clue.

          “Other than bombing, rent control is the fastest way to destroy a city”.

          And that was from a liberal Swedish economist.

  4. Mountain View has a rental vacancy rate of 4.4% which is lower than the national average and Washington, DC which does have a vacancy tax doesn’t even have a vacancy rate lower than 3%. The rental rates in Silicon Valley are completely out of control compared to other cities that do have rent control in place like Berkeley, Oakland and Washington, DC. What we need is Measure V in place so Mountain View can be a leader as a Human Rights City and lead the way on rent control being in place in all Silicon Valley cities. And the other piece of this housing crisis puzzle is for Mountain View and other Silicon Valley City Councils to enact requirements for more affordable housing and alternative housing projects instead of only focusing on the development of luxury housing units. And Silicon Valley City Councils need to hold Big Tech companies responsible for building affordable housing as a requirement if they want to increase their office spaces and work forces. Measure V is just one piece of the puzzle to solve the housing crisis that must remain in place and spread region wide in order to protect the renting class and the diverse communities we have left from the decades of economic greed of the owning class which has caused massive gentrification in recent years here in Mountain View in particular and on the Peninsula in general.

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