Board of Supervisors Shows Little Interest in Rent Control, Supports Other Proposals

Hopes of passing a rent control ordinance in San Mateo County were dealt a significant blow on Tuesday at the Board of Supervisor's meeting.  The Board showed little to no enthusiasm for the controversial topic, and suggested that even if they were to end up passing such an ordinance, it would only apply to about 2,000 units located exclusively in unincorporated County territories - mostly in North Fair Oaks, southeast of Redwood City.  They ultimately decided not to have any County staff research a rent control ordinance until they were presented with more information on how the policy would work, and precisely how many apartment units are located within these unincorporated territories.

The Board was presented with 10 other proposals on how to address the affordable housing crisis, many of which they did show support for.  These included establishing a county-wide tenants right's education program, legalizing unpermitted second units, and putting together a prototype program that offers pre-approved plans for tiny houses.

Some people who spoke at the meeting urged cooperation with tech companies like Facebook and Google to construct more affordable housing since it is their workers that are helping drive up rents.

Facebook is already helping to fund a 394 unit apartment complex in Menlo Park, and has reached out to the city expressing their interest in helping them fund thousands of additional units.  The company expects to add around 3,000 jobs at its new Menlo Park campus in the coming years.

Currently it is estimated that there is a 24,000 unit deficit of housing for low wage workers.

Housing officials will report back in June to review the progress that has been made in developing the ideas discussed at Tuesday's meeting.

Bohannon Development Secures Partner for Menlo Gateway Project

David Bohannon 2nd from left.

Developer David Bohannon announced last Thursday that he has found a company to build his long anticipated Menlo Gateway project in Menlo Park's Belle Haven neighborhood.  Bohannon Development Co. will be teaming up with Ensemble Hotel Partners to construct a 193,000 square foot hotel and three office buildings totaling 694,000 square feet.  The project is expected to begin construction early next year and could be done by 2018.

The hotel will be a part of Marriott's Autograph Collection, which is known for its upscale design that reflects the personality of each hotel's location.  It will feature a restaurant, poolside lounge, 40,000-square-foot fitness center, a chef driven restaurant, and a meeting space/outdoor event center.  The hotel design includes 250 rooms, which is 20 more than what was initially approved by the city a few years back, but the additional rooms will generate a projected $1.2 million more in yearly occupancy tax revenue.  Rooms are expected to go for around $400 per night.

Bohannon's plan for the Menlo Gateway Project initially began over 5 years ago, but until recently had been derailed by the economy.  In 2009 the hotel industry took a nose dive and Bohannon was having a hard time finding a company to develop the project.  Soon even Marriott became disillusioned with the whole idea and jumped ship.  Since that time, Facebook has accumulated about 3.5 million square feet and 200 acres of land in or around the Belle Haven neighborhood, making it much easier for Bohannon to convince prospective developers/Marriott that the hotel will be able to attract enough guests.  Facebook's presence in the immediate area coupled with the recent economic boom effectively took Bohannon's project off life support and elevated it from dud to stud in the eyes of developers.

It will be interesting to see what type of impact all of this activity has on the Belle Haven Community, which happens to be among the poorest on the peninsula.  So far Facebook has been good about providing public services to the area.  They have made significant contributions to the local schools, have been active in talks with the city about getting a full grocery store to the neighborhood, and plan on taking a mixed-use development approach at their most recent 56 acre purchase.  The Zuck himself has even taught a class on entrepreneurship at a local middle school.

Mark Zuckerberg speaking at Belle Haven Middle School's 8th grade graduation

Still, the influx of money into the area is bound to lead to some level of gentrification.  Rents are already on the rise, and brand new townhomes have popped up on streets where the occasional gunshot can still be heard.  With any luck, the city will be able to find a way to clean up the Belle Haven neighborhood without displacing its current inhabitants.

Stay tuned for updates!

San Mateo County Set to Tackle Rent Affordability

Rent affordability in San Mateo County is becoming a serious issue, and pressure from residents and some city and county officials has led the Board of Supervisors to schedule a special study session to address the matter -  it will be held March 17th at 9 a.m. - 400 County Center, Redwood City.

A topic that is likely to be at the center of discussion at the Board meeting is rent control.  A few weeks back more than 200 people took to the streets of downtown Redwood City calling for the passage of such an ordinance, and since then the discussion has continued among residents and city councilmen.  County Manager John Maltbie has been the most instrumental in getting the Board of Supervisors to take a serious look at rent control - and while it is unlikely that there will be unanimous agreement among county officials to pass a rent control ordinance, most are in agreement that it needs to be looked at.

One thing is for sure - rent affordability is deteriorating quickly in the area.  According to county data, rent for a two bedroom apartment has raised 51% over the past four years, and now sits at an average of $2,648.  But the high rents are based on real economic growth, and for every $2,648 2 bedroom apartment on the market, there are multiple eager renters ready to snatch it up.  And with the economy expected to continue its upward trend in 2015, the rental climate shouldn't be expected to get any less competitive.

My best advice? Buy a home as soon as you have the means to do so.  Looser lending regulations are making it easier for first time home buyers to enter the market, and with the economy growing the way it is, buying a home in the Bay Area is a sound investment into your future.  If you don't believe me, take it from Chris Thornberg - a prominent economist who is widely known for predicting the 2008 market crash.  In a recent interview with KQED, he said that the Bay Area is NOT in a housing bubble.  He says that the market growth here is not built on speculation as it was prior to 2008, and predicts that while growth may slow down in the Bay Area, it will not stop.  His final advice to the listeners was to buy now, anything you can get. (Listen to the KQED segment here) .  And while I might not agree with the “anything you can get” portion of his advice, I would highly advise buying a home ASAP, as prices are only projected to rise.