Skip to code content (skip section selection)
(a) A tentative map, preliminary parcel map, final map or parcel map for a subdivision to be created from a conversion shall not be approved or recommended for approval unless such map is consistent with the purposes and requirements of state law, the Palo Alto comprehensive plan, this title, this chapter, and unless all of the following conditions are or will be met:
(1) Tenant Protections.
(A) Application Timely. If the applicant for conversion procures tenant consents pursuant to Section 21.40.050(b)(2) above, the tentative or preliminary parcel map for conversion must be received by the city within sixty days of the last date on which the signed consent forms may be returned to the applicant for conversion.
(B) Notice to Tenants in Accordance with Government Code Sections 66452.9 and 66427.1. The applicant for conversion shall give notice in the following form to each tenant of the rental housing complex at least sixty days prior to the filing of the tentative or preliminary parcel map:
To the occupants of
The owner(s) of this building, at ____________ plans to file an application with the City of Palo Alto to convert this building to a [specify community housing project]. You shall be given notice of each hearing for which notice is required pursuant to Sections 66451.3 and 66452.5 of the Government Code, and you have the right to appear and the right to be heard at any such hearing.
(signature of owner) ________________________________
Attached to this notice must be an explanation of all tenant protections required by this Section 21.40.060(a)(1).
(C) Right of First Refusal. Each of the tenants of the proposed community housing project has been or will be given notice of an exclusive right to contract for the purchase of their respective rental units upon the same terms and conditions that such units will be initially offered to the general public or terms more favorable to the tenant. Each of the tenants who was a tenant on the date of the completed conversion application shall be given such a right to purchase upon the terms and conditions, if any, quoted to the tenants and set forth in the subdivision application. Such rights to purchase shall run for a period of not less than ninety days from the date of issuance of the DRE report, unless the tenant gives prior written notice of his or her intention not to exercise the right.
(D) Extension of Leases. Tenants in the proposed community housing project on the date of recordation of the final map for said project have been provided assurances that they will have the opportunity to remain in their respective rental units after conversion as tenants under extended leases. Such extended leases shall be subject to the following provisions:
(i) Any tenant who has reached or will reach the age of sixty years at the end of the calendar year in which that tenant's unit is offered for sale shall be offered a lifetime lease to his or her rental unit.
(ii) Any tenant who does not qualify for a lifetime lease pursuant to subsection (a)(1)(D)(i) above shall be offered a ten-year lease to his or her rental unit.
(iii) Any lease(s) offered pursuant to subsections (a)(1)(D)(i) or (ii) above must:
a. Be circulated to all tenants at least sixty days before the consent forms are required to be returned to the applicant for conversion, if the applicant for conversion procures tenant consents pursuant to Section 21.40.050(b)(2) above;
b. Restrict the rent on each unit to the monthly rent charged two years prior to the date the conversion application is received by the city, with increases in the monthly rent for each ensuing year after such date not to exceed seventy-five percent of the preceding years increase in the Consumer Price Index for the San Francisco Bay Area for All Urban Consumers (all items), as published by the Bureau of Labor Statistics, United States Department of Labor, or any other standard recognized cost-of-living index which is published by the United States Government in lieu of the index;
c. Be subject to any "just cause" eviction ordinance adopted by the city;
d. Not be subordinated to the CC & R's adopted by the community housing project with regard to tenants' rights and tenants' financial obligations or other liabilities;
e. Be recorded by the applicant for conversion in the Santa Clara County recorder's office.
(iv) The applicant for conversion, upon the request of the tenants of at least one-third of all the rental units, must pay the standard hourly fees for an attorney selected by those tenants to represent them in negotiating the terms of the lease(s) offered pursuant to subsections (a)(1)(D)(i) and/or (ii) above, provided that such expenses may not exceed the fees for more than forty hours.
(v) The city's rental housing mediation task force shall be available to mediate any disputes arising from any lease(s) offered pursuant to subsections (a)(1)(D)(i) or (ii) above.
(vi) In the event that a tenant or tenants in a unit held by the city or its designee as below-market-rate rental housing pursuant to Section 21.40.050(b) is eligible to receive any available rental-housing assistance payments, such tenant or tenants may choose to enter into a lease providing for such rental-housing assistance payments in lieu of the extended lease required by this section.
(E) Termination of Tenancy by Developer. Each of the tenants of the proposed community housing project who does not choose to purchase his or her respective rental unit or does not choose to enter into an extended lease pursuant to Section 21.40.060(a)(1)(D) above must have been given one hundred eighty days' written notice of intention to convert prior to termination of tenancy due to the conversion or proposed conversion. The provisions of this subsection shall not deter or abridge the rights or obligations of the parties in performance of their covenants, including but not limited to the provision of services, payment of rent, or the obligations imposed by Sections 1941, 1941.1 and 1941.2 of the Civil Code.
(F) Termination of Tenancy by Tenant. The applicant for conversion shall permit a tenant to terminate any lease or rental agreement without any penalty whatsoever after notice has been given of the intention to convert the tenant's rental unit to a community housing project in accordance with Section 21.40.060(a)(1)(B) above, if such tenant notifies the applicant for conversion in writing thirty days in advance of such termination. Such right to terminate shall expire if the application for conversion is denied.
(G) Notice to Prospective Tenants in Accordance with Government Code Section 66452.8.
(i) Commencing on a date not less than sixty days prior to the filing of a tentative or preliminary parcel map, the applicant for conversion or his or her agent shall give notice of such filing to each person applying after such date for rental of a unit of the subject property immediately prior to the acceptance of any rent or deposit from the prospective tenant.
(ii) The notice shall be as follows:
To the prospective occupant(s) of
The owner(s) of this building, at (address), has filed or plans to file an application with the City of Palo Alto to convert this building to a [specify community housing project]. No units may be sold in this building unless the conversion is approved by the City of Palo Alto and until after a public report is issued by the Department of Real Estate. If you become a tenant of this building, you shall be given notice of each hearing for which notice is required pursuant to Sections 66451.3 and 66452.5 of the Government Code, and you have the right to appear and the right to be heard at any such hearing. In addition, if you become a tenant, if two-thirds of the rental units have consented to conversion and if the conversion application is approved by the City Council, the unit you rent will be offered to you for purchase; if you do not desire to purchase the unit, you will be offered an extended lease in accordance with Chapter 21.40 of the Palo Alto Municipal Code.
(signature of owner or owner's agent) ______________________________
I have received this notice on: (date) ______________________________
(prospective tenant's signature) ______________________________
(H) Remodeling. Repairs and/or remodeling proposed to be made in connection with the conversion shall not be performed without the tenant's consent during the ninety-day period from the date of issuance of the DRE report. If repairs and/or remodeling of the unit require the tenant's temporary relocation, the applicant for conversion must assume all moving costs and rent for comparable replacement housing for the tenant who is displaced on a temporary basis.
(I) Engineer's Report. In order to assist the tenants in their decisions whether to purchase their units upon conversion, the applicant for conversion must send a copy of the property report and structural pest report required pursuant to Section 21.40.060(a)(2)(B)(i) and (ii) to all tenants on or before the date of issuance of the DRE report.
(J) Notice of Compliance with State Law. The applicant for conversion must provide written evidence of compliance with Government Code Section 66427.1.
(2) Buyer Protections.
(A) Age Discrimination. No community housing project shall prohibit sales of units to persons with children unless it is determined by the director of planning and community environment upon review of a preliminary parcel map or the city council upon review of a tentative map that from the time of its development, the project was designed and built for the exclusive occupancy of persons sixty years of age or older.
(B) Certificate of Use and Occupancy. Prior to the sale or occupancy of any units which have been converted to community housing, a certificate of use and occupancy for community housing shall be obtained from the chief building official pursuant to Chapter 16.38 and subject to the following additional requirements:
(i) The applicant for conversion shall submit a property report describing the condition and useful life of the roof, foundations, mechanical, electrical, plumbing and structural elements of all existing buildings and structures. Such report shall be prepared by a registered civil or structural engineer, or a licensed general building contractor or general engineering contractor.
(ii) The applicant for conversion shall submit a structural pest report. Such report shall be prepared by a licensed structural pest-control operator pursuant to Section 8516 of the Business and Professions Code, relating to written reports on the absence or presence of wood-destroying pests or organisms.
(iii) The consumption of gas and electricity within each dwelling unit shall be separately metered so that the unit owner can be separately billed for each utility. A water shut-off valve shall be provided for each unit. The requirements of this subsection may be waived where the chief building official finds that such would not be practical.
(iv) All permanent mechanical equipment, including domestic appliances, which are determined by the chief building official to be a source or potential source of vibration or noise, shall be shock-mounted, isolated from the floor and ceiling, or otherwise installed in a manner approved by the chief building official to lessen the transmission of vibration and noise.
(v) The wall and floor/ceiling assemblies between dwelling units shall conform to the sound-performance criteria of Title 25 of the California Administrative Code.
(vi) Accessible attics shall be insulated to meet the energy conservation requirements of Title 24 of the California Administrative Code.
(vii) Electrical control panels shall be provided in accessible locations controlling the entire service to each unit.
(viii) The wall and floor/ceiling assemblies between dwelling units shall meet one-hour fire-resistive construction as specified in the latest edition of the Uniform Building Code.
(ix) Smoke detectors approved by the fire prevention division shall be provided in each unit.
(x) Any multiple-unit building three stories or more in height or containing more than fifteen dwelling units shall have an approved fire alarm system as specified in the Fire Prevention Code.
(3) Below-Market-Rate Requirement. In conversions of ten or more rental units, not less than ten percent of the units in the community housing project shall be provided for sale to the city for permanent low and moderate income housing in accordance with either the city's below-market-rate program, the city's rental housing acquisition program, or such similar program expressly approved by the city council as being in accord with the city's comprehensive plan's goals and objectives for low and moderate income housing. The provision of such low and moderate income housing in accordance with this subsection shall be in compliance with the city's below-market-rate requirement for subdivisions set forth in Housing Program 17 of the comprehensive plan, and as thereafter may be amended. This section shall be considered fulfilled if the applicant for a conversion meets the condition set forth in Section 21.40.050(b).
(Ord. 3295 § 1 (part), 1981: Ord. 3157 § 1 (part), 1979)