Palo Alto one step closer to ending decade-long rent control push — but fight isn’t over

A Palo Alto council committee voted unanimously Tuesday to indefinitely shelve the city's ongoing rent control effort, a significant victory for housing providers that now needs to be ratified by the full City Council.

The Policy and Services Committee voted to support a staff recommendation to defer work on a local rent control ordinance and a proposed expansion of the city's rental registry. Every committee member cited data from the city's own rent registry in justifying the decision.

The California Apartment Association has opposed this effort for more than 10 years and urges housing providers to keep the pressure on. When the full council considers the committee's recommendation, CAA will call on members to send letters and publicly support the proposal.

Registry data tells the story

Palo Alto's rental registry - established as part of the city's assessment of the rental market - showed stable conditions rather than the widespread rent increases that would warrant a new regulatory program:

• Nearly two-thirds of market-rate units - 62.85% - reported no rent change over the past year
• Only about 11% of units saw rent increases above 5%
• The citywide vacancy rate stands at 5.21%

City staff concluded the data "does not appear to demonstrate a pattern of widespread, acute rent increases that would warrant standing up a new local regulatory program." Administering a local rent control program, they noted, would cost an estimated $2 million per year and require five new city employees - a steep price given the city's current fiscal constraints.

The committee also voted to defer a proposed expansion of the registry to properties with two or fewer rental units. Going forward, an annual registry report will be produced, giving the council an ongoing benchmark and the option to revisit the issue each year.

Calls for rent control in Palo Alto date to 2016, when CAA led a coalition to defeat a proposal to study the issue. As the council's composition changed over the years, new members repeatedly revived the conversation, keeping the threat alive for more than a decade. CAA contends the unanimous committee vote - grounded in real data - shows the city recognizes that a costly new regulatory program is not warranted. But with the matter heading to the full council, one step remains.

When the full council takes up the committee's recommendation, CAA will call on members to send letters and publicly support the proposal to shelve rent control for good.