Healdsburg drops urgent plan to provide tenants relocation funds

Healdsburg has for now hit pause on a potential plan to charge landlords thousands of dollars in fees if they remove tenants without justification, or choose to update an apartment without providing alternative housing.

The City Council scrapped a proposed urgency ordinance on Monday that would have immediately required property owners to provide renters displaced from multi-unit complexes with a relocation assistance payment on their way out the door. The decision came only two weeks after the five-member body unanimously directed its staff to develop the ordinance at the insistence of community advocates who have been outspoken the past month about preserving the city’s limited affordable housing stock.

The ordinance would have ordered landlords to pay as much as $7,000 to departing tenants who lived in the rental for at least a year, so long as they hadn’t violated their lease and were asked to leave through no fault of their own. It would have exempted single-family homes, granny units and duplexes where an owner occupies one of the units.

Vice Mayor Leah Gold and Councilman Shaun McCaffery continued to support the proposal at the Monday meeting and Councilman Joe Naujokas said he was still open to the idea of backing it, while Mayor David Hagele and Councilwoman Evelyn Mitchell each took a step back. Hagele preferred to look at alternatives to an ordinance while Mitchell said she had remaining questions and no longer felt compelled to pass the new rental rules in emergency fashion. That stopped the concept in its tracks because an urgency ordinance needs four votes to pass.

“This is not a perfect ordinance, I recognize that,” McCaffery said. “But I think it’s important that we get this on the books and to kind of stem the bleeding. But I can count to four, and I can see that the urgency ordinance isn’t going to happen tonight.”

The payment plan seemed all but a certainty at the council’s Feb. 19 meeting. Housing administrator Stephen Sotomayor was instructed to come up with a final plan at the meeting, only to see his recommended action shot down Monday following a wave of opposition from local landlords, real estate brokers and a former city mayor who owns a property management company.

“It disincentivizes an owner from making improvements because they will have potential issues on asking a tenant to move out in order to make improvements to the property,” said Carol Lexa, president-elect of the North Bay Association of Realtors. “And it actually incentivizes owners to raise the rent as much as they can every year in order to keep up with the amount that they would have to pay a tenant to leave. I think we all want there to be protections, but not necessarily just laid at the doorstep of the property owner.”

The issue of preserving affordable units for lower-income tenants around the city cropped up again in January after a Marin County couple bought a nine-unit complex on Piper Street as an investment property. They initially told the remaining renters, all of whom are Latino, they could stay on in the transition. Upon seeing the extent of necessary upgrades, their property manager served tenants with 90-day notices to vacate.

The action set off an uproar among those who speak on behalf of vulnerable populations, including many among the working class who work in local agriculture, restaurants and hotels.

Along with some of the Piper Street tenants, they attended City Council meetings and demanded immediate action, leading to the development of the urgency ordinance by Sotomayor, who noted the concept is sometimes considered “rent control light.”

One of the Piper Street advocates said the sudden reversal of some of the council members was “shocking” just two weeks after they seemed to signal clear endorsement of the idea to aid displaced tenants.

“For them not to understand the urgency and the level of insecurity around housing that is happening right now for renters is shocking,” said Ariel Kelley, a six-year resident. “Renters are the majority of our workforce. Clearly it seems to me there was a lot of pressure from the real estate industry, landlords and interest groups who were in the audience.”

Hagele, who has a background in commercial real estate finance, said he was swayed by public testimony and suggested what came before the council was too reactionary and didn’t actually address the root problem of the city’s insufficient rental supply. He said he feared the proposal would have a chilling effect on building more multi-family rental complexes - a key goal of the current council.

“I think no matter what we do, we’ve got to look at any action we take up here as are we helping to create more housing or are we discouraging it?” he said. “There is a sense of urgency for the tenants that have been evicted, and I think we have avenues to help them … that’s more immediate than a blanket, throw an entire net over the entire city of Healdsburg.”

His position was backed by former Councilman Gary Plass, who twice served as the city’s mayor, in 2007 and 2012. He was thankful to the council for hearing out the public on both sides of the contentious issue, but encouraged them not to go ahead with the proposal.

“This is a big concern,” he acknowledged of local workers being displaced by the sale of investment properties.

“But I don’t think we’re at the stage where it’s an emergency. I think it’s quite obvious tonight that there is some urgency, but there’s not enough urgency that you pass this tonight.”

The majority of the council requested city staff do more community outreach and come back in the next three months with a refined tenant relocation assistance plan so it may again be considered. If it eventually returns as a proposed ordinance, it would require three votes for passage.

You can reach Staff Writer Kevin Fixler at 707-521-5336 or kevin.fixler@pressdemocrat.com. On Twitter @kfixler.