East Palo Alto opened a new front Tuesday in its ongoing battle against the city's largest landlord.
The city council approved a resolution that calls on the California Public Employee Retirement System to withdraw its $100 million investment in Page Mill Properties. The city's fight with the company stems from a spate of rent increases - some as high as 38 percent - it began instituting earlier this year. Page Mill Properties has raised rents on roughly 1,000 of the 1,700 housing units it has acquired in the city since 2006.
The resolution calls on the pension fund as well as state and federal officials to "exercise their political, economic and ethical influence to help our community stop Page Mill Properties' predatory real estate practices." This move follows the city's withdrawal in November of a request for a permanent injunction against the company's rent increases.
"It's a statement of the feelings of the city council," said Mayor Ruben Abrica. "It's a protest."
The passage of the resolution came a day after Abrica, accompanied by housing advocates, presented the city's case against Page Mill Properties to the pension fund's board of directors.
CalPERS spokesman Brad Pacheco said the fund's leadership was disturbed by the group's presentation. He said CalPERS staff will investigate the charges, but it is too early to say whether the fund will consider reducing its investment because of the alleged predatory practices.
"We have been working with Page Mill folks to resolve these issues and I think there is still work that need to be done," Pacheco said.
Several community members spoke in favor of the resolution at Tuesday's city council meeting.
Matthew Fremont said the resolution should have been passed earlier. He recently went door-to-door to speak with Page Mill Properties residents and many told him they felt abandoned by the city. Based on data he collected, Fremont estimated 1,500 renters had been displaced by the hikes.
Russell Schaadt, a director of operations with Page Mill Properties, rebutted criticisms by saying the company has made security and aesthetic improvements to the properties. Outside of the council meeting, Schaadt said the company has spent $11 million on upgrades, including new appliances and safety lighting. He said Page Mill Properties should be allowed to make a return on its investment.
Not every council member supported the resolution. Peter Evans voted against the measure, saying it would do nothing to address the pain of evicted residents. He said the city needed to update its rules in order to prevent future major rent hikes.
Under city rules, landlords are allowed to raise rents by a certain percentage each year. Some owners of properties acquired by Page Mill Properties did not raise rents by the maximum allowable percentage. When the company bought those properties, it boosted rents to their maximum, taking into account unused increases from past years.
"The city council is the devil here, not CalPERS," Evans said.
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