Will East Palo Alto become one of the first Bay Area cities to give tenants a shot at buying their homes? Anxious landlords and renters will have to wait a little longer to find out.
City Council on Tuesday night declined to vote on the Opportunity to Purchase Act, deciding instead to take it up again on March 1. While one council member expressed strong support for the measure, another said she didn’t believe it would benefit city residents, and a third wasn’t ready to vote. Multiple people dialed into the meeting to express concern that it would push their property values down, while others urged council to pass the measure and give more people a chance to achieve homeownership.
The ordinance would give renters, affordable housing nonprofits and the city the first shot at buying certain residential properties that go up for sale. The goal is to prevent corporate investors from scooping up homes, raising rents and displacing tenants, or flipping the properties. Oakland, Berkeley and San Jose are considering similar measures.
Councilwoman Regina Wallace-Jones speculated the measure wouldn’t do much to help East Palo Alto, because even if tenants have a chance to buy their homes, few have the funds to do so. And she worried how it would impact landlords.
“For the vast majority, and I would say upwards of 90 to 95%, maybe more of our tenants, we have not introduced a solution that is helpful for them,” she said.
Councilman Carlos Romero disagreed.
“I think it does affect and impact local people in the city of East Palo Alto, allowing them to acquire homeownership,” he said. “A transformational transition. And if we can help six or seven people a year, or even three or four people, this ordinance is worth it.”
The ordinance would require owners who want to sell their property to first offer it to their tenants, a qualified nonprofit and/or the city before putting it on the open market. If one of those groups makes an offer, the seller would be free to reject it in favor of a better one. But the owner would then have to come back to the tenant, nonprofit or city and allow them to match that offer. If they did, they would close the deal.
The ordinance would exempt owner-occupied single-family homes, duplexes and triplexes, as well as property transfers between family members and sales conducted as a result of a medical emergency. On Tuesday, city staff introduced several additional exemptions that take into account input from local residents. The new ordinance exempts rental properties that are owned by someone who lives in East Palo Alto. And properties of up to four units are exempt if the owner is selling to ward off a financial emergency, such as bankruptcy or foreclosure.
The new ordinance also shortens the time it would take to close a deal. Instead of waiting 30 days to put a property on the market, sellers would have to wait 15 days for a tenant, nonprofit or the city to express interest.
If the ordinance passes, it likely would impact just a handful of sales each year, said real estate consultant Nora Lake-Brown, who was hired by the city to study the potential economic impact of the measure. City Council members had questioned whether the measure would depress the real estate market, and Lake-Brown suggested it would not, but said there were no previous studies done on this issue.
Tuesday marked the third time City Council punted on the measure. Last month, council members decided they needed more information on how the ordinance might affect housing prices, and asked city staff to research that question. They were scheduled to revisit the matter last week, but a council member was absent and the discussion was postponed again.
Source: www.mercurynews.com