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Menlo Park Housing Commission to Review Rental Relocation Assistance Ordinance

From: domainremoved <Mical>
Date: Mon, 30 Jul 2018 18:18:54 -0700

Dear Mr. Curtin, Interim Housing and Economic Development Manager for the City of Menlo Park,

I received an e-mail message on July 27 that stated that “the Housing Commission will be reviewing and considering a draft ordinance that would require rental relocation assistance payments for eligible tenants within Menlo Park.” The staff report on, and draft of, this ordinance will be issued on August 2.

I am writing to you on July 30, in advance of even seeing the staff report and the draft ordinance, because I can tell you a priori that any such rental ordinance is a TERRIBLE IDEA for City of Menlo Park — indeed for any city on the planet.

If there is one precept that must be inviolate in the residential rental market, it is that no government interference in the workings of the marketplace, no matter how well intentioned, ever turns out well. There are always negative consequences to any attempts to regulate rent increases, eviction requirements, rental tenant screening practices, lease tenors, and now this, relocation assistance requirements.

Rental housing exists because investors build or buy residential properties to rent them at a profit. That is how capitalism works: it is underpinned by private property ownership. Property ownership has risks and it has rewards. The owner takes on both. The tenant is not an owner; he takes none of the risks of property ownership and gets none of the rewards. He has a contractual arrangement with his landlord to pay periodic rent in return for the opportunity to occupy the property. The government needs to steer absolutely clear of that relationship, just as it should in other contractual business relationships. If rents are regulated and a property owner’s return on investment is limited or eliminated, he will cease to rent, buy or develop residential rental property. Rent control guarantees a decline in a city’s habitable rental housing stock. This has been proven again and again, in rental markets from New York City (my home town) to San Francisco to Caracas, Venezuela. Imposing other rental regulations, like so-called just-eviction rules, the elimination of vacancy rent de-control, the requirement to consider tenants presenting Section 8 housing vouchers (this is NOT a requirement of the Federal Section 8 program, I will add) and now here, the requirement to provide relocation assistance to tenants whose leases are not being renewed after the lease term, inevitably reduces the return on rental housing and quickly diminishes the quality and quantity of rental housing stock in the city. Tenants have no right to occupy a rental property outside the terms of their lease and the consent of their landlord. The landlord has NO OBLIGATION WHATSOEVER to house or relocate his tenants beyond the term of the lease. The very concept of a “rental relocation assistance payments” flies in the face of this rental contract limitation.

If I own an exercise studio and decide to change it from one catering to adults to one catering to teenagers, am I obligated to find my existing exercise clients — even if they have loyally come to my studio for decades — a new gym and pay for their new gym’s initial membership cost? I have a membership contract with my gym clients, and that is the full extent of my obligations to them. A residential rental contract is absolutely identical in nature.

Menlo Park has started down a very dangerous and destructive road in the housing sector. First, the City Council unwisely passed an ordinance requiring landlords to be indiscriminate in viewing the source of a prospective tenant’s income — directly implying that Section 8 housing vouchers must be considered on an equal footing with earned income, something every landlord in the country knows is not true. Section 8 tenants have a long, long history of being more difficult, destructive, and abusive tenants than individuals who earn their rent themselves. Forcing a landlord to take on Section 8 tenants simply will drive landlords who offer lower rent properties out of the marketplace. They will sell their buildings to investors who will develop them into luxury housing, which will not be subject to the Section 8 tenancy requirement. The next step down this destructive housing road is to make that redevelopment process more onerous, by requiring tenant rental relocation assistance payments from property owners who want to redevelop their property. I can guarantee you that this will be the final nail in the coffin for middle and lower middle income housing in Menlo Park. No one will wait to unload properties immediately for redevelopment, before the relocation requirements and costs are litigated even higher as a result of whatever ordinance you pass.

Scrap this idea before it even reaches the drawing board, or you will be very unhappy with its eventual consequences.


Mrs. Mical Atz Brenzel
(30 year Menlo Park resident and homeowner)
Received on Mon Jul 30 2018 - 18:18:46 PDT

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