Owner is first to petition city to raise rates beyond what’s allowed by rent control law
Article by Mark Noack / Mountain View Voice
This small apartment complex is the subject of Mountain View’s first petition to raise rents by more than what’s allowed under the city’s rent control law. Photo by Natalia Nazarova In some ways, Jeanne Walker is a lucky woman. About a decade ago, she inherited a goldmine — an apartment complex on Plymouth Street, just across the highway from Google’s headquarters. Renting out the property’s apartments provides her with a steady income and even a small cottage out front for her to live in.
In other ways, Walker is unlucky. For most of her adult life, the lifelong Mountain View resident has suffered from recurring bouts of cancer. The disease has inflicted a hefty toll on her well-being, and her doctors have warned her it will come back. Now bound to a wheelchair and requiring assistance, the 78-year-old said she has learned to appreciate each day she has left.
Since inheriting the apartments, she has kept the rents astonishingly low by Mountain View standards. Each of her one-bedroom units is now being rented out for about $900 a month even though they could easily go for three times that price. After seeing so many seniors priced out of town, she said she wants to keep her rents low as an act of defiance against the greed of the area.
But being sympathetic to her renters also makes Walker feel foolish. Her cancer treatments aren’t cheap, and she now struggles to balance her medical bills with the cost of maintaining her apartments. If an expensive appliance, say a refrigerator, suddenly breaks, she has to buy a replacement on credit. She said she now wishes she had raised her rents a little more because now she is explicitly barred from doing so. Mountain View’s rent control law that took effect last year means that she can only raise rents by the cost of inflation. In her case, that’s about $30 extra annually.
All these conflicted feelings come spilling out as Walker describes her unique predicament as owner of a 10-unit apartment complex that is one of the best bargains a renter could hope for in Silicon Valley.
Ever since she inherited the property from her father, she has tried to abide by his principles — keep the rents low, and don’t sell the property. She is now near the point where she must cave on at least one of those rules.
“My dad felt people were being gouged by landlords. This place was all paid off, so we didn’t feel like we needed to raise the rent much,” Walker said. “But right now, I’ve got myself in a tight spot. I’m reaching the point now where if something bad happened, then I’d have to consider selling and getting out.”
Just released from a three-week hospital stay, Walker told the Voice it is getting more difficult to resist the temptation to sell. Every single week, she receives a few calls from real-estate agents with offers to put her property on the market, promising her up to $6 million. It’s a decision that would be life-changing, not just for her but also her tenants, some of whom have lived there for decades.
Before it comes to that, she is seeking another option. Walker’s Plymouth Street apartments are being reviewed by city officials as the first case for a special adjustment under the city’s rent control program. In November, Walker and her brother filed an exhaustive 66-page form to request an extra rent increase because her units were so far below the market average. If approved, the petition would allow her to raise rents to about $1,100 per month — which leaves them still far below even federally subsidized Section 8 housing, Walker points out. Later this month, a city hearing officer will review her case.
Across the city, landlords ranging from small-time family owners to large, publicly traded corporations have faced challenges as they comply with the Measure V rent control law. In the buildup to the 2016 election, these regulations were promoted as an appropriate response to the Bay Area’s housing crisis and the landlords suspected of profiting from it. On average, Mountain View’s apartment rental prices have increased by about 90 percent since 2011.
Walker’s apartments defy this trend. For several years, she simply didn’t raise rents. In 2005, she was charging just under $800 for most of her one-bedroom units. By the time the rent-control law took effect, those rents had been increased to just $990 per unit.
Measure V is admittedly a one-size-fits-all solution, and landlord advocates have warned that the new rules would fall hardest on small-time owners. For Walker, this means her low-priced apartments are restricted under the same price controls as market-rate units costing four times more. Additionally, she must pay the same $155 per-unit annual fee to fund the city’s rent program. In fact, when the rent-control program took effect she was forced to rewind her rents back down to $915 and give her tenants a refund for the difference.
“We had tenants who tried to give back the money, but I had to tell them we can’t accept it because it’s against the law,” said Jeanne’s brother Wayne Walker, who helps manage the property. “With the benefit of hindsight, we probably should have stayed closer to the market rate, but at least my sister is comfortable.”
Walker isn’t the only considerate landlord who is now struggling under the rent control measure, said Joshua Howard, spokesman for the California Apartment Association. She and other property owners are effectively being punished for trying to keep their rents low, he said.
“Measure V clearly hurts those housing providers who were most generous with their residents,” he said. “It’s not fair that this owner is now forced to choose between providing housing or paying her medical bills.”
Folks living at the Plymouth Street apartments would have to be blind not to know what a great bargain they’re getting, said Debbie Zimmerman, who’s lived there for 15 years. Among her neighbors are teachers, blue-collar workers and some retirees like herself. Tenants have tried to show their appreciation for Walker’s generosity by handling the upkeep, doing chores like gardening, yard work and cleaning, she said. For many of them, it would extremely difficult to stay in Mountain View if they were forced to leave.
“We know we’re getting a great deal here,” she said. “If we couldn’t live here anymore, we’d probably have to move out to Oregon.”
Walker’s thoughts are conflicted regarding her tenants. She is glad to provide a cheap place to live, and she knows her tenants are grateful for it. Some of them even scrawl a “thank you” on each monthly rent check. She has heard stories of seniors her age in Mountain View living out of their cars, so it seems right for her to help where she can.
But she doesn’t hide her frustrations with her current situation. Before her generosity was optional; now it’s mandatory. It has led her to ponder whether her tenants are making the same sacrifices she has had to make. Some of them take vacations and drive such nice cars, so maybe they have more money than they say, she said.
“I’m not complaining, but I wish I had a little more freedom to increase the rent more than 3 percent a year,” she said. “This is really financially hurting us.”
In 2016, the Plymouth apartments suffered a minor crisis when the Walkers had to pay $90,000 for sewer and roof repairs. Combined with the rent rollback, that year ended up as a loss for the family that will take years to recover, Wayne Walker said.
The Mountain View city staff were very helpful and they explained a variety of options under the city’s complex rent regulations, he said. Learning those rules, he saw that their apartment rents would likely be eligible to be raised as high as $1,400. After talking to his sister, they decided to keep their request modest, asking only to raise their rates to $1,100.
“We just thought that a $400 increase is a hell of a raise to put down on our tenants,” he said. “I was a renter for eight years. If my landlord jacked up my rent, it would have concerned me.”
Members of the Mountain View Tenants Coalition said the Walkers’ predicament is exactly the kind of unique situation that deserves to be reviewed under the city’s petition process.
“Measure V has built-in mechanisms for cases like this where someone has kept their rents so low,” said Steven Chandler, a Tenants Coalition spokesman. “I would think this will be approved by the Rental Housing Committee. If it’s not, then something’s wrong.”
Not knowing how much longer she will be around, Walker has already laid out plans to pass on the apartment to her nephew, who said he would try to avoid selling the complex.