Much-Criticized Mediation Program Wins Council Approval

Thursday, April 28, 2016
Mark Noack
Mountain View Voice

In a 4-3 vote, the Mountain View City Council gave the final nod to an ordinance creating a mandatory-mediation program for the city's rental housing despite many misgivings from its own supporters.

While critics blasted the new ordinance as ineffective, the approving majority stressed that it was more important to establish a program -- even an imperfect one -- so it could begin helping renters.

The approval on Tuesday, April 26, was the second reading of the city's Rental-Housing Dispute Resolution Program, the city's answer to longstanding tenants' demands for some form of relief from soaring rents. The ordinance, set to take effect on May 26, will mandate a mediation process, if requested, for renters and landlords for any rent increases beyond a 7.2 percent threshold.

That process would include three separate stages of discussions, each meant to broker a compromise between the parties. While landlords would be obligated to attend, they would not be required to reach any resolution, leading some to question whether the process was doomed to fail.

"There are no teeth in this," said Councilman Lenny Siegel, a vocal opponent. "I don't know why any tenant facing a rent increase of 5 percent, or even 20 percent would seek mediation knowing there's no way the landlord can be forced to protect them from displacement."

In March, city staff had presented plans for a three-stage mediation process that would culminate, if mediation was unsuccessful, in binding arbitration with a third party. But facing a fierce backlash from landlords and their advocates, the council lost confidence in the program, which some began describing as tantamount to rent control. A council majority coalesced around the idea of making the arbitration step non-binding, leaving it up to landlords to decide whether to notch down their rent increases.

Final approval of the ordinance was on the agenda last month, but with the absence of Councilman Mike Kasperzak, the council was stuck in a 3-3 stalemate.

On Tuesday, Siegel pulled the rental program ordinance approval from the consent agenda so that the council could have a full discussion of it, and some council members laid out their concerns. Councilman Ken Rosenberg, who supported nixing binding arbitration, tried to persuade his colleagues to abandon the rest of the ordinance. A better plan, he suggested, would be to amend the city's tenant relocation program to penalize property owners who displace renters.

"I'm not a believer in rent control, but that doesn't mean I'm going to take a laissez-faire attitude," he said. "This is a vote that should be somewhat embarrassing."

That comment seemed to irk Councilman John McAlister, who said he had his own qualms with the program but felt it was better than any alternative that would take months to research and draft. He pointed out that the city's rental program would impact all apartment complexes with three or more units in Mountain View, whereas a policy that imposed any type of rent cap would be limited under state law to only apartments built before 1995.

McAlister's main grievance was the 7.2 percent threshold -- an amount originally proposed by Rosenberg -- which he felt was too high. He suggested the council should pass the ordinance with the plan to eventually lower that amount.

"If we pass this, we get something on the books in 30 days, if we don't do anything we have to wait until November," he said. "Let's get something on the books, and let's work it some more."

Kasperzak, McAlister, Chris Clark and Mayor Pat Showalter voted in favor of the ordinance.

At the end of the meeting, McAlister proposed a future agenda item to amend the threshold amount, but four council members wouldn't support it. Council members Kasperzak and Clark pointed out that the council previously had long deliberations and a series of votes to try to ascertain an appropriate amount. It was unnecessary to debate it again, they said.

"We do not have four votes for rent control; we don't have four for binding arbitration. So do we keep spinning our wheels?" Clark said. "We need to pass what we feel and get something on the books that I think will have some impact."

Exactly what that impact will be remains to be seen. Local attorney Gary Wesley repeated a warning he has made at recent meetings that the new ordinance could create a perverse incentive for landlords to evict tenants rather than deal with a lengthy mediation process. The city attorney had dismissed these concerns, saying the ordinance language was broad enough to cover these cases.

Project Sentinel, the organization in charge of the new mediation system, is expecting to spend $110,000 to hire new staffing to administer it. That cost will be recouped from a new $7-per-unit surcharge on all apartments. Meanwhile, Mountain View is planning to spend $70,000 on a campaign to educate affected tenants and landlords about the new program.

The city is preparing a data-collection effort to track participation in the new program and gauge its success. Speaking after the meeting, Project Sentinel officials said they are still working out what information could be publicly released, given the confidentiality requirements attached to mediation and arbitration.

Perhaps the most telling response to the council's action will come this November: If a planned community ballot initiative qualifies for the ballot, voters will decide whether to cap rent increases at a level no higher than the regional Consumer Price Index.

Siegel announced on Tuesday he would be supporting the measure. Meanwhile, Showalter, a supporter of the city's new mediation program, said she intended to meet with tenants' advocates to see if some compromise could avert a voter referendum. There's not much time left to do so, she admitted, since proponents have already begun collecting signatures they need to qualify the initiative for the ballot.

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