EAST PALO ALTO (CBS 5) ―
Police in East Palo Alto have racked up quite a bit of success in their fight against crime. But things are getting worse when it comes to robberies and burglaries, with some blaming a real estate firm that owns half of the city's rental units.
Connecting the dots between a falling real estate market and an uptick in crime is easy to see at some apartment complexes in East Palo Alto.
One company, Page Mill Properties began buying-up whole blocks of apartment buildings just before the crash. But now that company has defaulted on a $240 million loan.
"When you have vacancy rates going through the roof, when you have people, long term residents who helped keep the neighborhood safe, driven out of their homes its not surprising at all that crime rates would rise," said Dean Preston of Tenants Together. "And from the stats we've seen, that's exactly what's happening in East Palo Alto."
East Palo Alto police downplay the rise in burglaries and robberies, saying overall crime is down in the city. But residents are now surrounded by increasingly vacant apartments, a magnet for trouble.
"The sewage line, the main line got stuck. I had raw sewage coming out of my sinks and my bathroom and my kitchen," said East Palo Alto resident Louis Roman. "They repaired the sewage line but they never replaced the tiles they never replaced the rugs and things they were supposed to replace after that. I have mold in my apartment around my windowsills. It's like numerous things, health hazard issues."
"When you have a vacancy rate increase that certainly increases the possibility, you have vacant units that get vandalized," said Matthew Fremont of the Fair Rent Coalition.
These properties make up 50 percent of all the rental units in all of East Palo Alto. And activists say 1,500 tenants have been displaced because of massive rent increases.
Page Mill Properties' spokesman is well-known San Francisco PR man Sam Singer.
"When Page Mill took over the properties in East Palo Alto, they were inhabited by drug dealers and trouble makers. And the property owners were very happy to make these properties better and safer for the residents there," Singer said. "However, the properties are in receivership because of the downturn in the economy, and the problems that are occurring are really the fault of someone else."
But others say what happened here is being repeated all over the country.
"This is a classic predatory equity scheme," Preston said. "And what that means is that an investor like page mill properties overpays for the property under the assumption that they're going to be able to kick out all the rent controlled tenants, convert the properties to another use like condominiums and make a lot of money off it."
But it didn't work out that way, and now the remaining tenants are paying the price.
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