In a pre-emptive strike, East Palo Alto is drafting a tenant protection ordinance to prevent the new landlord of 1,812 apartment units from repeating the actions that turned a community against the previous owner.
Chicago-based Equity Residential earlier this month closed its purchase of the apartments from Wells Fargo, which had taken them over after Palo Alto-based Page Mill Properties defaulted on a loan. Page Mill angered East Palo Alto officials and residents when it exploited the city's failure to implement a rent stabilization ordinance by substantially raising rents and evicting tenants who couldn't afford the increases.
"After the Page Mill experience, I look at Equity with great caution," East Palo Alto Vice Mayor Ruben Abrica said in explaining why the city council has asked an attorney to prepare the ordinance. "With Page Mill we learned that we didn't have certain things in place that would have strengthened the position of tenants to have some recourse."
Among other things, the proposed ordinance may prohibit discrimination against families, require resolutions of tenant-landlord issues, forbid forms of "harassment" meant to force out tenants and mandate compensation of displaced tenants, said interim city attorney Valerie Armento.
For discussion at the council's meeting Tuesday night, Armento compiled a list of tenant protection laws in effect elsewhere, including Palo Alto, San Francisco, Davis, Los Angeles, Pasadena, Santa Monica and Santa Barbara.
Abrica said East Palo Alto has always made tenant protection a priority, noting that it enacted the now defunct rent stabilization law when it incorporated nearly 30 years ago.
But nothing prepared the city for Page Mill, which began buying mostly rent-controlled apartments in 2006. In addition to raising rents, the company legally challenged the city's rent stabilization law.
But Page Mill lost the 1,812 apartment units when Wells Fargo foreclosed on a $250 million loan in March 2010.
When the bank announced earlier this year it would sell the apartments -- which make up more than half of the city's rental stock -- to Equity, tenants and council members became alarmed. The company's chairman, Samuel Zell, is a well-known opponent of rent control laws and a self-described "professional opportunist."
Even before calling for a tenant protection ordinance, the council took some steps to try to discourage Equity Residential from following Page Mill's lead. Last month it updated a city ordinance to require landlords who change the use of their properties to pay tenants at least $7,500 in relocation costs.
Equity Residential officials have responded to the concerns by insisting they plan to maintain the city's affordable housing stock and not push out tenants now living in the apartments.
The company is "looking forward to developing a positive, long-term relationship with its newest residents and the East Palo Alto community," Equity spokeswoman Marty McKenna said in a statement to The Daily News.
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