Loading...
HomeMy WebLinkAboutMin - CC - 1979.04.24337 BURI,INGAME, CALIFORNIA April 24, L979 CALL TO ORDER A special meeting of the Burlingame Citlz Council was held onApril 24, 1979, in the City Hall- Council Chambers. The meeting was called to order at 7240 p.m. by Mayor lrving S. Amstrup. PLEDGE OF ALLEGIANCE The pledge of allegiance to the flag was led by City Attorney, Jerome F. Coleman. ROLL CALL Councilmembers Councilmembers present: absent: AI{STRUP, BARTON, CROSBY, MANGIN] , MARTIN NONE 1. CONSIDERATION OF RENT STABILIZATION Mayor Amstrup announced that the proponents and those opposed torent control would each be heard for one hour, followed by a fifteenminute rebuttal period for each group. Each speaker would be per-mitted three minutes, and organized groups ten minutes within theone-hour period. He commented that all communications received bythe City had been distributed to all councilmembers, ds had the sample form of ordinance prepared by the Legal Aid Society at therequest of the Concerned Renters of Burlj-ngame and the Housi-ngCoalition of San Mateo County. MS. MADELEINE OTCONNOR of 1901 Garden Drive stated that the Con-cerned Renters of Burlingame were present to demand the adoption ofa system of stabilization of the spiraling rent increases just beforeand subsequent to the passage of Proposition 13. The increases werefelt to be due to excessive speculation and exploitation of shortageof rental units, and had serious impact upon the elderly with fixed incomes and the young with moderate incomes. MS. DEBORAH CAPURRO of 1537 Eastmoor Road, a member of the Steering Committee of the Housing Coalition of San Mateo County, citedhousing statistics to emphasize the need for moderate cost housingwhich could be accomplished by the rent stabilization ordinancewhich had been submitted. MS. ALTHEA LEE JORDON of 2705 Adeline Drive stated she is a pro- fessor at Hastings College of the Law who has drafted rent controllegislation and rent rebate legislation in connection with herspecialty in property Iaw. The ordi-nance proposed is typical of second generati-on rent control legislation which differs from the New York type and has been held constitutional- in the case ofBerkenfeld vs. Berkele \7J.A11 rental units in Burlingame would be su6recE-Eo control except s ingle family homes, 2 to 4 unit owner-occupied dwellings, certain institutional and government housing,units which are under lease until lease expiration and originalrentals of new construction. Landlords may charge rent in effect May 31, 1978, and may increase rentals by the proportionate in- crease in the Cost of Living Index, thereby passi-ng through thelandlordrs increased costs of maintenance and repair. Severehardship may be overcome by petition for adjustment to assure afaj-r return on investment. Control- is proposed through a rentadjustment board composed of two tenants, two landlords and oneadditional member, and the program is financed by a charge per unitto the landIord. Miscellaneous provisions require just cause forevictions to protect against retaliatory evictions. There is aprovj-sion for control- to end when the vacancy rate exceeds 52. Shefeels the ordinance protects landlords, because it provides for a .-s.e.!& - . .!Jr .t.r'arl&Uoeial&uiJ..sr&dd)x 338 fair return; and taliation. tenants, because it prevents gouging and re- MS. SOPHIA KRILING, 1735 Marco Polo Way, urged adoption of the ordj-nance because landlords have not been following the 78guidelines requested by the President but have been gouging, thereby fueling the fire of inflatj,on. MR. KELLY CALLAHAN of 524 E1 Camino Real reported that there r-sa rumor that all rentals in his building will have a $50 in-crease. Tenants' main complaint, along with prospect of an in- crease, is poor maintenance. MR. TIMOTHY R. LEO of 82I E1 Camino the rental of the apartment next to $380 when it became vacant. apprehensive becauseraised from $285 to Rea 1 his is was MR. JoHN GILDERBLooM, a PhD candidate in the field of housing atthe University of California in Santa Barbara addressed Council. He has been a consultant for the Department of Housing and Community Devefopment of the State of California, and hj,s work on rent control has recently received an award for best policy research in the Western United States from the Western Govern- mental Research Councj-l-. He stated he had ret urned to Burlingame to give a background of rent control. Much information examines the experience of disaster of abandonments, halted construction, and decline in maintenance and valuation, whj-ch was experienced in New York during World War II. This was a freeze type control that did not guarantee a fair return on investment, permit in- creases to meet costs, or exempt new construction. Since 1969 "moderate rent controf" or "second generation rent control" which is designed to avoid the pitfalls of the New York controls, has been adopted by 140 cities in the country. In 15 studies of the Department of llousing and Community Devefopment no city whj-ch enacted moderate rent control experienced a decfine of new con- struction of mufti-family units, maintenance or taxabfe va1ue, but the resuft has been protection from exorbitant j-ncreases and better maintenance. Newly constructed units are exempt from con- tro1, there are guarantees of a fair and reasonable return on in- vestments based on simifar investments with similar risks, costs incurred by landlords can be passed along in the form of increased. rents. Studies show rent stabilization gives people a sense of community, stability and secur j-ty. MR. JIM CHANDLER, 1500 uewlands, commented that in granting per- centage cost of living increases to landlords consideration is not given to the fixed capital investment of landlords at re- latively Iow purchase prices and low rates of interest which have not been affected by inflation. He added that food prices reflect actual increase in cost to the retailer whereas landlortl's costs are refatively stable unl-ess the buildinq is resold. He afso pointed out that a 108 per year Consumer Price Index raise a year would result in an 100? increase in ten years. VICToR FRATESSA of 1901 Garden Drive spoke for the Senior Citizens of Our Lady of Angels Church who were not able to attend and urged a freeze similar to San Francisco's until a decision is made on an ordinance. DOROTIIY SHINDER of I17 Park Road pointed out that rental units homes just as owners' residences are, and that Proposition 13 intended to give benefits to home renters as well as home owners. MS. are \^/a S MS. LINDA C. LEE of 2000 Trousdale stated that the building where she lives has been owned by the same landlord since con-struction some 13 years ago and had a decrease in reaf property taxes from $14,735 to $6,047 from Proposition 13. Neverthelessrent has increased by 508 in the past 14 months, the largest increase from $240 to $300 in March, 1979. Others in the build-ing have had similar increases and al-1 fear the prospect of another raise in the near future. i tu*-L*i,---rrr-^-ldqr LaL,- ".r 339 She felt an unreasonable rent increase is tantamount to eviction vrithout just cause. An apartnEnt she looked at six months ago renting for $185 is presently for rent at $325. MR. TIMOTHY FANELLI of 1103 Paloma pointed out the risk of a destructive tenant which would prevent him from investing in rental property. MR. J. E. STELLER of 1901 Garden Drive said that the proposed ordinance gives relief to tenants on fixed or limited income, is fair and equitable to owners. If tenants have to spend more on rents they wilf have less to spend at 1oca1 shops for food and c loth ing. MR. JoHN W. THoMPSoN of 1830 Sequoia reported he is close to 70. Though he has not had a raise in the past year, he is concerned that responsible landlords will look at those who have raised rents unreasonably and will act similarly if there are no restraints. MS. ELIZABETH HAYES, 123 Anita Road, said her landlord is fair and the building well maintained but she is fearfuf because of the his- tory of new owners who raise rents to impossible amounts. MS. MARGUERITE NEWTINI , 20L0 Trousdale Drive stated most people in the building where she lived are of retired age. I{er rent has doubled in ten years, and everyone is concerned about continual rent raises. MS. SHIRLEY KAHN of 19f9 Garden Drive urged Council to to the need of renters and give the proposed ordinance be responsive a chance. MS. HEIDI BERRA of 1140 El Camino Real reported her rent has an- creased 40% in the past thirty months. Though the buifding is well maintained, she is concerned for people whose income is more limited than hers. She feels people can adjust quality of food and clothing but if one cannot afford rent, where can one sleep? Moving is im- possible because of first and last months' rental , numerous other deposits and moving costs. She said there is no substitute for rent control. MS. IRENE RoSE of 1901 Garden Drive thanked all the people who had worked hard for those in need of rent stabilization. Meeting reconvened, following a recess. IuR. CLAY HERMAN, President of the San Mateo-Burlingame Board of Realtors and owner of property at 251 Park Road said that, as an industry and as individuats, those in opposition to the proposed ordinance are concerned with all community problems and would like to act as med.iators with regard to community housing problems- In furtherance of the wish to educate, a group had relinquished speaking time so a film produced by the California Housing Assoc- iation, summarizing the effects of rent control, could be shown. The film was projected. Mr. Herman provided position papers for Councilmembers and others interested. MR. JOHN COCKROFT of 1250 Jackling Drive stated he is a business owner and part owner of a substantial apartment building and that they had not changed their rents since September, 1977. He felt the problem in Burlingame results from inflation, and over-reg- ulation of construction. He stated it may be time to consider compromises for higher density in the interest of providing add- itional rentaf housing. He said few rental units had been built since the major changes in the ordinances, particularly with re- spect to parking. The City saw fit not to permj-t any portion of the Anza property to be developed for housing. He pointed out that though rental costs may have increased 100t in 10 years, the cost of living has increased in excess of that. BRUCE MAKAR has a business in Burlingame and owns property at 1818 Trousdale Drive. He feels rent control is an attempt to deal with a system rather than the real illness, inflation. In the process 340 of dealing with other than the main problem, additional personal freedoms would be taken from one group and given to another. He commented on the influence of foreign investors, inflated prices, of old structures, demolition costs and new construction costs. He agrees with the concept that the inadequacies renters are faced with should be dealt with at the state leve1 and that every- one should work together toward a solution by dealing with the problem of inflation. MR. cIL McCOy has owned property at g47 Rollins Road for 4 or 5years and is probably behind in rents. He said the sma1l propertyowners who have not kept up with fair market varue in relalion to-rents should be granted some form of credits. MR. T. C. TRAYLOR owns the building at 4 Eoward and with one ex_ception hasn,t raised rent in 3 yeirs. He sympathizes with theproblems of the elderly and perhaps some controls would be fair.However, it is discriminatory- to iegulate only rental housing,because many businesses have- benefii.ed from pioposition ii. MR. NoEL FRELfcor of 1416 chapin related an experience with anapartment where there was an increase of 442 in 9 years. Howeverthe Pacific cas & Electric charges which he pays lici"ised 3008in one year. The tenant of the apartment moved in 3 cars and 3motorcycfes, and the resulting attempt to evict him incurred$1,000 in attorney,s fees. tie tenairt has lived 2_L ,norrifrs r"rrtfree. Mr. Frel-icot won a court action, the tenant appeafea. MR. STEVEN vARro of 1500 Floribunda is a renter but has worked asan apartment manager and has recently entered the real estatemarket. He said afr landlords cannol be praced in the same cfass-ification.. He suggested renters investigite trr" """I-"i-fraaes-men and maintenance. MR. TRACY HAMMOND, owner of property at 1136 El Camino ReaI ,stated that rents there do not cover al1 the expenses of thebuilding purchased 3-N years ago. He said tfrat' subseq"""t--t"Proposition 13 it cost only g220 instead of $350 to bieak even.He said it is unfair to regulate one sector of the economy wheneverything else is a free market. MR. ROCKhIELL STONE of 133 Humboldt Road said he stopped raisingrents when Proposition 13 was passed but if he is iegally not per_ Titleq to regulate rents to cover expenses he witl eitorle everylegitimate raise allowed. ue beli.eves it is unfair to single outall landlords because some have gouged. A gentleman who lives in San Mateo stated that he had just paid$3,000 for prans for a fourplex to be erected across tie boider insan Mateo. rt will cost 9240,000 to construct. He has considered.charging $400 a month for 2 bedrooms and one bath units, but tocover expenses of construction he shourd charge g700. rf Burlingameenacts rent control he will not build a fourplex but two townhouiesto be resofd because Burlingame control wilt affect neighboring MR. MARK REEVE from Foster city commented on the fack of interestof buifders in Foster city to construct apartment houses becauseof lack of incentive and cautioned againsl controfling individualfree enterprise. MAYOR AMSTRUP referred to an earli-er conment about cost of ad-ministering the proposed ordinance and asked for comment. MR. GTLDERBLooM referred to a memorandum prepared by the Departmentof Housing which discussed two cost formulas for adiinistering mod-erate rent control. The Massachusetts formula charges a fee ofbetween l1O !" 917 per unit per year and the rent c5ntrol board, onan individual basis, reviews the rental for each unit. The resultis many administrative people. The New Jersey formula is theopposite, charges range from 20 cents to $3.0b per unit. Basically, the rent control board is a volunteer board appointed by the city council to meet each year, review the Consumer Price Index and dec.ide on a percentage rent increase. If an owner cannot make a fair and reasonable return or meet the actual costs j-ncurred, he can petition the rent control board for a hardship rent increase in addition to the percentage determined in situations of building refinancing, major capital improve- ments, or tax increase. Drafters of the legislation decide on the method of administration. I{r. Gifderbl-oom referred to a LOS ANGELES TIMES article which reported investigation disclosed the abandoned buildings shown in the film presentation were never under rent control but their condition was the result of redlining, vandalism and arson by the tandlord in an attempt to claim insurance benefits. Com- menting on the relation between building abandonment and rent control, Mr. Gilderbloom pointed out that a National Urban League study ranks rent controlled Nev, York fifth in abandonment behind four other non-rent control cities, includinq St. Louis, Clevefand and Chicago. The ordinance proposed is not the type of rent con- trol adopted in New York and i{ashington, D. C., the two cities depicted in the film. The proposed ordinance exempts new con- struction from control. Many cities which adopted this type of controf have had net increases in multi-unit construction. He suggested Council consider that the construction of luxury uni-ts is not aimed at relieving the housing problem of the elderly and those on 1ow income, but is for the benefit of the affluent. In answer to Councilman Martinr s question, Mr. Gilderbloom that new construction would have to be completefy exempted control, not for initial rentals on1y, to avoid a negative Councilman Martin questioned the effect of the approximateyear appreciation of value of private residential property commercial real property values wifl not have a comparablepreciation with controls, and the improbability that there ever be a 58 vacancy factor in Burlingame. MR. ROSS BRUCE of 2957 Arguello Drive conmented that the only seg- ment that benefited when rents in Berkeley were regulated were realtors who made panic sale profits. MR. J. E. STELLER commented that a negative cash flow is frequently a device used by investors for tax purposes. Considerable equitiesare built up to the advantage of a speculator. 341 agreed fromeffect. 158 per while ap- would Council-woman Barton pointed out that 2500 Burlingame residents bypetition had indicated a few years ago that they did not want apartment encroachment into residential areas. Ms. Kreling stated she felt there is an obligation to provide affordable housing for the people who live in Burlingame now. It appeared that what is happening is that all construction is condo- minium aimed at sale to the wealthy, instead of housing for Burlingame people who need it and may fack mobility. Mr. Cfay Herman could not reconcile a builder- investor construct-ing a rental building in a market where he would have to compete with low-rent controlled buildings. He quoted from an article by Professor Sassar Lindbeck, author of Po]itical Economy of the New Left, that the direct effects of rent control on existing houses are (1) lower maintenance, (2) decreased property va1ue, (3) de- creased tax base and transfer of taxes to other property owners,(4) increased conversions to condominiums and cooperatives, and(5) difficulty of refinancing. He suggested as solutions to the housing problem: (1) a rent review board to make studies, conduc! hearings, receive complaints; (2) a speedier process of building permits through the Planning Commission, (3) increased density;(4) relaxing construction requirementsi (5) Co-operation of tenants in minimizing maintenance and operation costs; (6) exploration oftax deductions for tenants; (7) rental subsidies to senior citizens. MR. ANDREW PARKER, an attorney with the Legal Aid Society of San Mateo County responded to questions concerning format of theproposed ordinance, and explanation of its terms and provisions. Council raised a series of questions concerning: use of Res-idential Rental Index and Consumer Price Index as a guage forrental increases; determination of fair return on investment;what constitutes a capitaf improvement i power and accountabilityof the rent control board; appeal from dec.isions of the board; sources of funding for the board, including the appropriatenessof assessing all citizens for the benefit of a special group; and the effect of controls upon the saleabitity of rentaf prop-erty. Councilman Martj-n suggested public support for Assembly Bill 81introduced by Tom Bates which would increase rent subsidy from $37 a year to $300. Mayor Amstrup announced that Council will continue its reviewof the proposed ordinance. He set a further meeting for 8:00p.m., Tuesday, May 8th, in the Councif Chambers for the purpose of attempting to reach a decision. It was requested that a 30 or 60 day freeze be placed upon rentspending Councj-l action as the City of San Francisco had done.City Attorney Coleman advised that there is some doubt whethera general law city is empowered to take such action, but in any event it could not be done without public notice. 2. RESOLUTION NO. 24_79 - ACCEPTING GRANT TI BBETTS DEED FROM I. M City Attorney Coleman advised Councj-1 it is necessary to accept the deed for the Rhinette Parking Lot real property by resolutj-on so the escrow can be cfosed promptly, thereby avoiding furtherexpense. Councilman Mangini moved adoption of Resolution No. 24-79 - Accepting crant Deed dated May 23, L979 from f. M. Tibbetts. The motion was seconded by Councilman Crosby and carried unanimously^ on ro11 ca1l. 3. ORDINANCE NO. f147 - AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF BURLINGAME AUTHORIZING AN AMENDMENT TO THE CONTRACT BETWEEN THE CITY OF BURLINGAME AND THE BOARD OF ADMINISTRATION OF THE CALIFORNIA PUBLIC EMPLOYEES RETIREMENT SYSTEM Mayor Amstrup opened the meeting for public hearing on this ordinance. Mr. Coleman explained that this is an urgency orcU-n- ance amending the contract bet\,reen the City and the Publ-ic Re- tirement System to implement the provisions of the meet and con- fer agreements with employees of the City. There was no public comment and the Mayor declared the public hearing closed. On motj-on of Councilman Crosby, second by Councilwoman Barton, Ordinance l-l-47 was adopted unanimously on ro11. Mayor Amstrup adjourned the meeting at 10:50 p.m. (, t.,,. '/ d,' ( Evefyn 11. HiII City Cferk 342