In fewer than two weeks the City Council will make its final ruling on an eviction protection ordinance intended to protect the few La Mirage tenants that remain in the complex.
But local realtors and developers say that while they are sensitive to the need for a solution for the displaced tenants, the passage of this ordinance would discourage construction of new apartment complexes locally - the cause of the current problem. The ordinance would apply not only to La Mirage, but to all local rental properties.
These concerns are in line with comments by members of the council who worried that the ordinance would brand the community in the eyes of the commercial lenders who fund such projects.
Still the council did pass the first reading of this ordinance 3-1 during its July 15 session, with Vice Mayor Tom Wiknich voting in opposition. Chip Holloway, who was absent, would not identify how he planned to vote but said he has ,“about 20 questions,” regarding the measure.
The passage of the ordinance is, “probably not a very good thing,” remarked Carole Vaughn, Owner of Vaughn Realty, “It could limit the growth of apartments in Ridgecrest.”
How? According to Vaughn such restrictions could make lenders nervous about loaning to local developers. This would ultimately limit construction of the complexes desperately needed in a city with a rental vacancy rate of less than one percent.
And the measure, “a knee-jerk reaction” wouldn’t necessarily “fix” the plight of the tenants either, Vaughn argued, it would simply serve as a defense against eviction in court. The ultimate decision would lie in the hands of a judge. Not a particularly useful solution in Vaughn’s mind since, “their whole problem already is a lack of resources.”
“It’s very sad,” Vaughn said of the displacement, “But I don’t think it [the ordinance] is a fix.”
According to Vaughn this is also the larger opinion of the Board of Realtors, the local branch of an elite statewide group. Vaughn serves as President of the Board.
Coldwell Banker Commercial Kaye Glasco said she saw validity in arguments on either side of the debate. Glasco questioned why city leaders are considering sample ordinances passed in Bay Area communities while failing to look to examples set by cities “in our backyard.”
“These people are being violated,” Glasco remarked of the La Mirage tenants, “Why should we be uprooting people?”
While La Mirage’s foreclosure was unique in that it was caused by Real Estate fraud, a number of other rental properties have gone back to the bank in recent months as well Glasco reports, leaving their tenants to find new homes in a tight rental market too.
“I believe we need to protect the tenant right now, Glasco said, explaining that of the 30 foreclosure cases that have come across her desk recently, a majority - most owned by out-of-town investors - resulted in the displacement of tenants.
Still, Glasco remarked she was, “not totally convinced” the current ordinance is the answer. Glasco agreed that the passage of the ordinance would lead to greater caution by lenders, perhaps stalling future construction, and asked “Where does that leave us in the future?”
Nevertheless, “How else are you going to do this?” Glasco asked of aiding the tenants.
The answer, according to Glasco, is to look to the examples set by communities that most resemble Ridgecrest itself and “take a vote from local developers.”
How severe would the potential consequences be for local developers? According to PAM Development President David Michaels, the problem of restricted lending might not have “huge severity,” but would make developers think twice about selecting Ridgecrest for construction.
The ordinance “would make it more difficult to get loans. And developers need those loans to get new units for those tenants.” Michaels added. Lack of financial support could “potentially kill a project.”
Michaels added that the potential impacts of the measure would likely affect the estimated nine projects his firm has planned locally, including a commercial apartment complex and retail center.
Still, the solution must be “a balancing act,” Michaels said, “We do need to be compassionate to those tenants.”
When asked what decision he would make if he were on the council himself Michaels responded, “That’s tough. I would work with the brokerage community, even in nearby cities.”