$160 fee planned for MV apartments
The costs of Mountain View’s experiment with rent control now has a clear price tag — about $160 annually for almost every apartment in town.
At a Monday, Oct. 9, meeting the city’s Rental Housing Committee unanimously approved a proposed $2.5 million budget for launching the citywide drive to regulate apartment rents. This budget will be brought back to the committee for final approval on Oct. 23.
Mountain View’s new rent control program is at its most labor-intensive stage. The city’s five-member Rental Housing Committee is dealing with a series of complex and consequential decisions as it establishes the policy groundwork for citywide rent control. Given the stakes, routine committee meetings have featured a panel of three attorneys and a team of housing staff, none of whom are working for free.
Designed to run independently of city government, the rent control program eventually must pay for its own staffing, office equipment and material costs. For the upcoming year, city officials are budgeting for four new full-time office positions, including a program manager, a clerical assistant and two analysts. Taken altogether, these new positions will cost $686,000.
Mountain View’s rent-control program would actually be fairly lean in terms of staffing compared to other cities with similar programs. The city of Richmond, which adopted its own rent-stabilization policy in tandem with Mountain View, is reportedly looking at a $4.5 million program with seven full-time staffers. The cities of Berkeley and Santa Monica both had four times more city employees than Mountain View to cover an equivalent number of rent-controlled apartments.
About $774,000 is being dedicated to hire a variety of consultants to help manage the new program. Around $200,000 of this money will go to retain an outside law firm to help draft rules and attend meetings to answer questions. The rental committee also expects to spend $300,000 to hire nine hearing officers, who recently completed a training program and will soon adjudicate disputes between landlords and tenants. For the first year, city financial staff estimated these hearing officers will review about 300 cases filed by landlords or tenants.
“All of these costs are estimates,” warned City Finance Director Patty Kong. “If the costs end up being more than this, we may end up having to ask for (higher) budget amounts.”
To defray these costs, the Rental Housing Committee at previous meetings had considered placing a fee on landlords who file petitions seeking higher rents. On Monday, the committee decided to shelve this idea because they wanted to first get a sense for how many petitions the city would receive.
The new budget contains many one-time expenses that shouldn’t come back in the future. For example, the committee agreed to spend about $175,000 on a new database system to register and track all apartments in town. As a one-time cost, the rental committee must pay back about $431,595 borrowed from the city of Mountain View. That loan helped the committee get established during the first months of 2017.
Committee members agreed they would need to reassess the budget in a few months as the size of the workload became more clear.
“In my opinion, this budget is probably over inflated a lot, and we can make a course correction after about six months,” said committee member Tom Means. “It’s speculative, but I think we should go ahead and approve the budget.”
To fund the $2.5 million program, city officials plan to divide up the cost between nearly all the apartments listed in Mountain View, totaling about 16,800 units. That means apartment owners would be expected to pay about $160 annually for each unit. This fee will be levied on all apartments in the city built prior to Dec. 23, 2016, regardless of whether they are rent controlled. State law does not allow rent control to be imposed on apartments first occupied after Jan. 1995, as well single-family homes and small buildings such as duplexes.
It still remains an open question as to whether landlords can pass through the $160 fee onto tenants as a modest rent increase. The city’s rent-control measure doesn’t explicitly allow this, said Assistant City Attorney Krishan Chopra, but he promised to investigate whether it could be applied.