Redwood City Council Shoots Down Moratorium on Steep Rent Increases

Redwood City councilmembers reaffirmed their opposition to any form of rent control at Monday night's meeting when they shot down a proposed moratorium on rent increases.

The Housing and Human Concerns Committee was tasked to meet with residents and stakeholders before making recommendations to City Council Monday about how to address the city's affordable housing crisis.  One of the proposals they put forth was a temporary freeze on rent hikes greater than 7-10%.   The proposal was met with general unease from the council, as 4 members voted against it outright, and the remaining 3 voted for more research to be done before proceeding.

“I don’t see a distinction between a moratorium on rent increases and rent control. And, rent control is proven not to work. It doesn’t treat everyone fairly, including everyone on the tenants’ side fairly, and doesn’t treat everyone on the landlords’ side fairly", said Redwood City Mayor John Seybert.  "Our council across the board has spoken in opposition of rent control, this isn’t something new".

City council did show interest in other alternatives to addressing affordable housing.   They instructed staff to continue studying the viability of a relocation assistance program, and discussed possibly requiring longer lease terms in order to limit the frequency of rent increases.

With rent control on the November ballot in both Burlingame and San Mateo, it will be interesting to see what effect the results of those elections will have on rent control's momentum in Redwood City.  Even without the backing of city council, rent control could make it on the next ballot if community activists obtain enough resident signatures.

Wells Fargo Scandal Shines Light on Benefits of Loan Advisors

As many of you have probably heard, Wells Fargo is currently embroiled in a cross-selling scandal involving millions of fraudulent accounts being made without their clients’ knowledge (cross-selling is when a different product/service is sold to an existing customer). Wells Fargo’s abuse of this practice – which is standard in the banking industry - was the result of bankers cutting corners to meet ridiculous product per customer quotas passed down by company executives.

While we'd like to think that most bankers aren’t subject to the same quotas that Wells Fargo employees were, most bankers are incentivized in one way or another - through bonuses, promotions, pay raises - to open up as many accounts per client as possible. If you’ve ever opened an account or taken out a loan with a major bank or credit union you’ve probably been at the receiving end of aggressive cross-selling before - “We recommend you move your car loan over to us”, or “While you’re here, can I interest you in opening up a savings account?” In the case of Wells Fargo, the pressure put on bankers to open these extra accounts was enough to lead many to fraud.

This is one of the advantages to working with a loan advisor rather than going to straight to a bank/credit union for your mortgage.  They have no financial incentive to do anything other than to make sure you are satisfied and feel comfortable referring them more business later on down the road. Just some food for thought!

If you're thinking about buying a home and you'd like to be put in contact with one of my preferred loan advisors, feel free to reach out - I'd be happy to make the introduction.

Commuter Ferry Service From East Bay to Redwood City Approved

East Bay commuters inching their way to the Peninsula every morning through bumper-to-bumper traffic will have an alternative come 2017.  Last week, the California Public Utilities Commission voted to allow two private ferry companies, PROP SF and Tideline Marine Group, to operate scheduled public ferries from Berkeley and Emeryville to San Francisco and Redwood City.  Tideline will actually begin limited service to San Francisco by the end of this month and expand as demand grows, but PROP SF plans to roll out their Redwood City routes by the first week of 2017.

In April, Redwood City's Port Commission penned a letter to the Bay Area Water Emergency Transportation Authority expressing disappointment that they had not included Redwood City in their long-term strategic plans for expanding their public ferry service.  At the time, the WETA  (the government agency tasked with expanding ferry service across the Bay Area) cited concerns that ridership in Redwood City would not be sufficient to make the program economically viable just yet.  The ferries WETA currently operate from SF to the East Bay carry 300 passengers, and they rely heavily on rider fares to cover costs.   Both Tideline and PROP SF operate much smaller vessels, ranging in size from 36-100 passengers, so they are less limited by ridership goals.

Take a look at the short video below showing one of Prop SF's 36 passenger vessel:

and one of WETA's much larger vessels:

WETA gave the Redwood City Port Commission a 7 point plan to follow in order to initiate service, part of which suggested that the city partner with a company like Google or Facebook to fund the program.  Currently, both companies use small private ferry services to shuttle employees to Redwood City from the east bay, but there has been talk for some time that RWC could form a public/private partnership with Google to fund WETA's expansion into RWC.  That talk intensified when Google purchased about a million square feet of office space at the Pacific Shores Center near the Port of Redwood City back in 2014.

Even with a Google partnership, I'd imagine the introduction of Tideline and PROP SF into the equation has just cast further doubt on WETA's future in Redwood City.  They were already concerned about ridership, and now their 300 passenger vessels would have to compete for ridership with two other companies.  I've reached out to the Redwood City Port Commission for comment and am awaiting their response.  You can check into my blog for updates.