If you want less of something, you tax it and make it more expensive -- that is what MV is doing with new housing. It's really a case of incoherence for the city to not understand the connection between raising fees and fewer developments.

Wow... Bullis seeking land from Mountain View, Bullis wanting to opening a new charter in MVWSD, and now these comments about school $ from the mayor. Does the mayor know something we don't?

The timing is just so very interesting.

If City leaders had been mindful and more responsible in balanced planning for transportation, schools, etc with regional precise plans and all of the recent development projects around town, the "hit" wouldn't be so heavy on the latest to the party.

Does anyone know if Google plans to move more of its operations to more affordable parts of the country? This area is becoming undesirable for all but the very wealthy making 500K+ in household income.

City Government and RHC seems to be operating in a bubble without thinking clearly about financial impacts on stakeholders. Have they ever heard of an Income Statement or Source and Use of Funds statements which are standardly used in the private sector? They seem to not comprehend the impact of their revenues raising activities and/or ignore/deliberately exclude certain expenses in order to make their numbers work in their own bubble. But when they step outside the bubble, reality presents itself. Fees of $60,000/unit or $120,000 unit? How could there not be a substantial impact on project viability? I do remember one member of the RHC commenting on an expense item in terms of "Its not much". In the private sector, we aggregate expenses and take ratios in context of revenue or impact on net revenue increases. In conclusion, the City Council and RHC needs to improve their accounting and finance skill sets along the lines of how things are done in the real world in order to avoid more surprises or create plans which are financially non-viable.

The city used to be able to build schools and parks without high taxes or asking others to pay for everything. What has changed? How did anything get built in the past without taxing everyone to death?

The construction loans will not get cheaper anytime soon.
The train has left the station.

City Council greatly upzoned the NBS area. That was a huge gift of wealth to the landowners there at the time. And not poor landowners, Google, etc. That was the time to tell those land owners "we're going to give you a huge gift of
wealth when we upzone, but you have to give us land for schools." But they didn't.

Council's solution over the past years has been to have developers pay fees to have schools built. now developers have said NO-fees for schools, affordable housing and parks will make it so they don't make enough profit. Council needs to CUT if they want development.

Now you might ask yourself...Where is our good corporate citizen Google in all of this?

We don't want cheap box dormitories to make up any part of our city. We want Communities with amenities like parks , quality schools and walkable retail.

We want a Council that knows when it is in over it's head. If you don't know how to urbanize a great city like Mountain View, step down or bring in a world class urban designer who does! This is an outrage!

Where would they build 9,850 apartments? Several 50-story buildings? Cover all of Shoreline Park with apartments? Build them out into the bay waters? Let's just ruin the baylands, right?

Instead of a percentage of the property value, why can't the developers just pay the actual cost of building the school and other facilities? That must not have increased by 50% like the property value did.

Building one school may help with overcrowding in primary schools, but it does nothing for middle and high schools. High density development is a curse to the quality of schools.

Mountain View was a great community before google came along.
I’m switching to Bing for my search’s. Google impacted our residents, schools, business and traffic.
They couldn’t show up to DC for hearings. Shame on google. Bunch of clowns.

The City Council has been out of its league for years and this is another example. Another bond measure? Really? After all that Siegel and crew have to done to cap landlord profits? After the new Federal tax plan doesn't even allow me to deduct all my prop taxes or income taxes? I have kids to feed and send to college too, not just those being displaced. How much of that potential bond measure is going to be supported by those folks living in RVs?

I'm not trying to sound insensitive, but Sigel and team keep sticking it to the people and companies funding the city budgets. Enough!

I bet the these developers are waiting till after the November elections to see if Prop. 1o passes. If Prop. 10 passes then all those thousands of new apartments will be under rent control. If that happens I bet they will not build those units.

They are just using the excuse of recent fee increases so as not to get into this hot button issue in the city.

If I was a developer, I would do the same thing.

Bingo, Prop 10 consequences . . . any developer with a brain realizes that 1978 is back. Costa-Hawkins, the state law slated to be repealed by Prop 10, will be the death knell for more rental housing in Mountain View. In 1978 Sacramento exempted new construction from onerous rent control, i.e. "community stabilization" efforts--that was FORTY years ago! New construction came to a screeching halt back then (I was there) given the prospect of highly regulated rents, vacancy control (Google it) and no meaningful return on investment commensurate with the risks involved in building multifamily housing projects.

Really? You expect a developer to pour millions of dollars into a development knowing they will never garner a return on that investment greater than the CPI index for the Bay Area? That's Mt. View's housing's future due to Measure V. Virtually every multifamily housing project in the pipeline for Mt. View is on ice. Any company moving ahead with building apartments in Mountain View is committing financial suicide if Prop 10 passes.

If Costa-Hawkins is repealed, the only new housing in Mountain View will be 20-30 year old RVs on every street in the city. Good luck, Mountain View. You have made your bed. Now sleep in it.

Someone is lying here, the math doesn't add up. If you can't make a profit on a home in Mountain View that costs < $700,000 to build then you're doing something wrong. This might be a case of developers complaining they will only be able to buy five private jets at the end of the year with their profits, rather than six.

To determine impact of new housing, I skimmed

* MV city budget. Web Link
* MV school district budget - Web Link
* MVLA school budget (high schools) - Web Link

Are there other impacted entities? (e.g. santa clara county, caltrain, buses, etc)

@JR

So, JR, since you're having such a difficult time wrapping your head around the concept that a $700K apartment leaves plenty of cash on the table for corporate jets, please enlighten the readers on your personal analysis and financial goals.

If you had $700K to invest, surely you'd be building a Mt. View apartment so you could also own a private jet! How much return would you like to receive on that investment of $700K? Perhaps 5% for the time and energy you put into owning the place? Is that too greedy? 5% of $700K is $2,916.00/month. That's your goal for a net return. Add to the $2,916 the various expenses; property taxes ($700/month) and insurance ($50/month) and utilities/garbage ($120/month) and maintenance/management at $200/month. In order to achieve your dream return of 5% on that $700K investment you would need to rent your highly profitable apartment for $2,916 + $700 + $50 + $120 + $200 = $3,984.00/month. Oh, before we're done, let's not forget to add in the vacancy factor when a tenant moves out and it takes you a few weeks to find a replacement. That's another 5% used by lenders to calculate the cashflow from an investment property. So add another $200/month to required monthly rent to sustain your 5% return.

Does anyone wonder why a new construction apartment in Mountain View is over $4,000/month? JUST TO ACHIEVE A 5% RETURN if everything goes according to plan? Passage of Prop 10 will be the only remaining affirmation developers need to take their business elsewhere. Instantaneous price controls. Imagine such a thing regulating the world's stock markets. Sorry folks, no one gets more than a 5% annual return plus inflation adjustment!

Reality check JR. Landlords in Mountain View are not out shopping for private jets with your rent check. Voters, beware of the unintended consequences. Learn from history and try not to repeat the same mistakes made 40+ years ago.

I hate to say I told you so.

This “project” like any other “project” was designed to take advantage of the lack of skills of the City Council.

Google has been dangling this steak in front of a muzzled dog. They use it to get the City to give them any incentives or advantages the City can dream up.

Now Google is making Mountain View compete with San Jose for getting a “race to the bottom” game on. They play the cities against each other to make either give them anything they want to “move forward”.

But they never do.

This is also the game played by the housing industry. They get cities to give them gifts, then the leave without even building anything.

This is why we need Cost Hawkins repealed. It is the only way to level the housing market playing field given that the industry has dictated to the state of California since 1995 and not produced anything to benefit the state at all.

Good!

The repeal of Costa-Hawkins will have little effect on new building in mountain view. The language of CH is included in CSFRA (Web Link

So if prop 10 passes MV would be among the few places in CA where new construction is still EXEMPT from rent control.

You need to stop spamming these posts with deliberate and false information.

As already posted in another thread,which you posted in,

If Prop.10 passes, ALL Rental Properties in Mountain View will be under rent control. NO EXCEPTIONS!!!

Just because you posted in all caps doesn't make you right, @ dude. Try reading CSFRA, you'll see the plain text. I know you're trying to instill a panic because you're terrified of your investments losing value, but don't lie to people.

mvrenter is correct that Measure V (CSFRA) contains wording in Section 1703 & 1704 which exempts new construction with an occupancy certificate after December 23, 2016, from rent control or just cause eviction [Sec. 1703(a)(5)]. It also exempts the rent stabilization portion of the charter amendment for any properties built between February 1, 1978 and December 23, 2016 (just cause still applies). SFR, condos and duplexes are permanently exempt from all provisions within the CSFRA [Sec. 1704(a-c)]

Every city in California with rent control has amended their ordinance (or charter amendment in the case of Mt. View) over the years. What's to prohibit a voter initiative to amend the CSFRA charter amendment to include all rental properties in Mountain View? Or add vacancy control to the oversight? Without state law prohibiting such a move (a Costa-Hawkins repeal), the tenant-majority voters of Mt. View will surely put forward an amendment to CSFRA further protecting every tenant in Mt. View. A Prop 10 win introduces enormous uncertainty to the multifamily housing market which any rational thinking developer would see as a very good reason to avoid building apartments in Mt. View. The rent control industrial complex is already in place and will only grow in size. That's what they all do.

The Democrat controlled state legislature unanimously voted in favor of supporting Prop 10. That is a pretty good indication the state legislature isn't going to introduce an updated version of Costa-Hawkins to address the same issues that prompted the state law in the first place.

2020 General Election prediction: A measure to further amend the CSFRA to cover all rental units whenever builtm put forward by the MV Tenant Coalition, and an opposing measure by the landlords to repeal the CSFRA.

State law trumps local laws.

Repealing CH, or passing Prop 10. removes all exemptions to rent control laws.

State law rules over any charter amendment.

There would not be a state law governing rent control if Prop 10 passes, therefore local rent control laws would be the only applicable laws to enforce. The CSFRA doesn't say, "if Costa-Hawkins is repealed then the clauses in Section 1703 & 1704 no longer apply." Those restrictions are baked into the local city charter. Only if the state legislature were to implement something similar to Costa-Hawkins would state law nullify any conflicting local laws. Read the CSFRA Sections 1703 & 1704. It's abundantly clear those exemptions exist with or without Costa-Hawkins.

Web Link

The CSFRA in its glorious entirety. LOL Web Link

@The Successful Businessman, you assume that local laws won't change.

But given the current local and state-wide socialistic trend another round of rent control measures are not impossible. Passing of Prop 10 will embolden local activists to argue for more renter protection.

When you invest in a stock you invest in the future of the company, not just what the company is right now. Same thinking when investing in housing. The stake is huge for developers. The trend on rental regulation is not friendly to developers.

Again, the real problem no one wants to discuss is that even without Costa Hawkins repeal, the property values are about to take a dive. Why? Please read this information from this article on Moneyish.com asking is it worth it to buy a home. (Web Link

“3 cities where buying outweighs renting by the slimmest margins

Metro area Percent cheaper to buy than to rent, Spring 2017

San Jose, Calif. 3.5% cheaper to buy than to rent

San Francisco 8%

Honolulu 9.9%

To tip the scales towards renting in San Jose, mortgage rates would only need to inch up 0.6 percentage points to 4.7%. And in San Francisco and Honolulu, a 1 percentage point and 1.2 percentage point uptick, respectively, would do it.

And experts say mortgage rates very well may tick up this year. “While rates took a dive last week, it’s not crazy to think that rates will rise this year,” a spokesperson for Trulia tells Moneyish, who thinks a slow and steady rise is most likely. “The Fed has indicated that they intend to raise rates again.” And, in general, rates are climbing: In Freddie Mac’s weekly mortgage rate report, the rates for 30-year fixed rate loans hit 4.02%, up from 3.58% a year ago.”

Also:

He article from SFCurbed titled “It’s now cheaper to rent than buy in San Francisco, says report” SF (Web Link stating:

“Trulia followed up with a new 2018 report on the topic released today, and now the tables have turned: In San Francisco and San Jose, home values have soared such that it’s now cheaper to rent than buy, at least for anyone in the enviable position of choosing from a perfectly median lease and a perfectly median mortgage.

According to Trulia economist Cheryl Young:

For as long as we have run this report, renting has never been a better deal than buying. But this summer, driven by epic home price appreciation and lifeless rents, renting tips the scales over buying in San Jose and San Francisco.

Home values in San Jose have soared 29.0 percent since last year, while, in San Francisco, home values rose 14.2 percent. Escalating prices are driving homes further out of reach, but there’s a silver lining for home seekers in these Bay Area markets: Rents were unchanged in San Jose and fell three percent in San Francisco.

Young calculates that in San Francisco you save 5.8 percent in the long run by renting, and in San Jose it’s a whopping 12.2 percent.

That’s based on an estimated home value of $1.39 million in San Francisco and $1.28 million in San Jose. Note that home values are estimates and the result of Trulia’s logarithmic projections and may not compare favorably to actual prices when a sale happens.”

Finally, just realize that many jobs are now clearly never tenure, must people are employed with shorter terms. When you buy a house, it should be a full term purchase, you own it for 30 years. But in this article titled “How Often Do People Change Jobs?” for the website The Balance Careers found here (Web Link

Average Duration of Jobs

A higher percentage of younger workers had short duration jobs. Among jobs started by workers with ages from 25 to 29, 87 percent had an average length of employment of fewer than five years as compared to 83% of workers with ages from 30 to 34.

76% of workers with ages from 35 - 39 had an average job duration of fewer than five years, and this figure declined to 69% for workers from ages of 40 to 48. There was little variation in average job duration by race with Hispanics and Blacks spending only a slightly shorter average length of time in each job.

The job sectors most frequently “changed” include media and entertainment, government, non-profits, law, and marketing.”

Thus if you own a home for 5 years and the values do not appreciate as it is currently looking like now, it makes no sense to have EVERYONE buy a house.

And that this article from Market watch titled “Mortgage rates tick up again as Fannie, Freddie start a second decade in limbo” found here (Web Link

The market is now on the edge of a correction, thus people will buy homes that will be underwater shortly. We learned from 2008 and buyers are already dropping plans to buy homes. Thus the market values are about to correct.

This will apply to apartments as well.

Lenny my Dear Mayor,

Please listen clearly, to me, a friendly fellow progressive political voice. If you SUNSET ON SHORELINE, that ancient 1969 law, you will cease DIVERTING millions of dollars PER YEAR from the two concerned school districts (MVWSD and MV-LA High School Dist.) Then the need to do the JOINT POWERS AUTHORITY 'temporary political dance' will end, and the schools can finance-for-themselves.

The public financing mechanism known as "Certificate Of Participation" (COP) can be used responsibly to turn a strong and increasing stream of SHORELINE-diverted general property taxes, into facilities financing. I hope my dear Lenny, that you are not unaware of this, or of the $15,500,336.97 that was diverted last year. (agreed - the JPA temporary dance that SHARE SHORELINE organized gives about 1/2 back to schools)

page H-9 of County of Santa Clara Compilation of Tax Rates & Information Fiscal Year 2017-2018,
otherwise know as the Tax Rate Book 2017-18.
Web Link

S. Nelson (the schools, only, could be legislatively exempted from any tax diversions)

Steven, aren't you a Republican? I don't think that qualifies you as a "progressive political voice."

Why 5% return on investment?
That's where you are trying to fool people (or don't know what you are talking about). Investment return depends on investment type, residential real estate does not typically have a return of 5%, it depends on the location but it typically is much lower because it has lower risk compared to say stocks which is considered a relatively high risk asset.

Other places with rent controls have survived and constructions have continued. And rent control only applies typically to existing contracts, that is you cannot increase rent on your tenants arbitrarily, it doesn't apply to initial contact, you are free to rent it at whatever price you like, but once you rent it you will be restricted on how much you can raise it to something like CPI.

Housing is a public good, not just one of investment categories, and it is totally accepted by economists that government can regulate a market for the benefit of public. If you don't like that you are free to go buy an island in the middle of ocean and have your unregulated Utopia.