Rent Regulations in San Rafael’s Canal District

To:
Mayor Kate Colin
Members of the San Rafael City Council

RE: Rent regulations in San Rafael’s Canal District

Dear Esteemed Elected Officials:

We represent a coalition of Marin non-profits working alongside and on behalf of thousands of Marin residents, especially the Latino immigrant community, Black, Indigenous, and People of Color (BIPOC), and other lower-income residents disproportionately impacted by the current housing crisis.

We write to you with urgency regarding the threat to San Rafael’s tenants. While COVID-19 may pose less danger to our daily lives, tenants in San Rafael – and particularly in the Canal neighborhood – remain at serious risk of eviction and displacement. As a stark example, many of you are aware of the potential mass displacement crisis currently occurring at the 99-unit apartment complex at 400 Canal Street. This example is just the tip of the iceberg in a housing
crisis affecting one of the City and County’s most vulnerable communities. The residents of 400 Canal Street and from the surrounding Canal neighborhood represent a critical part of the City and County’s workforce. This community also represents the largest collection of lower-income Latino immigrant households at risk of being uprooted from their home. The City must take strong and immediate action to protect its residents.

We thus ask the City Council to take the immediate step of passing an urgency ordinance to institute rent regulation and additional just cause eviction protections for Census Tracts 1122.01 and 1122.02. These tracts were recognized as extremely vulnerable during the pandemic. Ordinance 1987, passed by a unanimous vote of the City Council on January 19, 2021 established a rent freeze and other protections for that area, with the precedence of protecting especially vulnerable areas of the city with added layers of protection. This Ordinance was the product of many hours of work by the Canal Policy Working Group, a critical venue for cross sector partnership in which the City has played a leading role.

Aggressive investor activity targeted in the Canal is causing an immediate threat to the homes of some of the County’s must vulnerable residents. Much as the Council acted in 2021 and provided much-needed protections to these Census Tracts, so must it act in 2022.

A Crisis in the Canal
In July of 2022, an opportunistic commercial real estate private equity company based outside of Marin completed its purchase of the 400 Canal apartment complex. 400 Canal lies in the heart of the Canal and houses well over one hundred San Rafael families and residents, the majority of whom speak Spanish as their first language. Within weeks of purchase, all prior management and maintenance personnel were replaced with new English-only speaking staff. The new staff quickly began to deliver notices written only in English to the residents of the apartment
complex, offering a buyout if a resident agreed vacate their lease within a short timeframe. Many of these initial buyout offers did not even meet the minimum threshold required by the San Rafael’s current relocation policy. The ensuing confusion and fear experienced by residents sparked overwhelming concern from the Canal community. Our agencies have worked closely with these tenants as well as the City to provide crisis response in recent weeks to distribute accurate, language-accessible information, and ensure that tenants are aware of their rights. Had stronger tenant protections been in place, many of this turmoil could have been avoided.

The crisis at 400 Canal Street makes it clear that the City must take action to strengthen rent regulations and just cause eviction protections in the most vulnerable census tracts. Soon there will be nowhere left to live for some of the hardest working and most vulnerable residents in Marin County.

The Council should instruct staff to prepare a rent regulation and strengthen its just cause eviction ordinance for Census tracts 1122.01 and 1122.02 in the City of San Rafael. The ordinance should include the following provisions, at a minimum:

• Protections against excessive rent increases all buildings eligible under state law, especially those comprised of five or more units;
• Enhanced just cause eviction protections for all buildings, except for single-family homes and accessory dwelling units, including protections from evictions for substantial repairs, withdrawals from the rental market, subletting, family size and additions, and any retaliatory actions;
• Tightening right-to-return protections, reducing incentives for specious Owner Move-In evictions, withdrawal from the rental market, and substantial remodels;
• Additional relocation assistance and longer notice periods for seniors, persons with disabilities, and households with school-aged children, and
• Increase of relocation payments to match current rental market conditions.

The Urgency to Act
We recognize that there are many factors underlying the current crisis in the Canal. What is happening at 400 Canal Street is part of a wave of investment-led displacement caused in part by Marin’s general lack of rental protections.1 Investors are targeting Marin; since May 2022, three large Marin residential complexes have been bought which total 265 units. The area is also a Federal Opportunity Zone, and it is quite possible that this status is exacerbating the situation. In the words of a local leader, the Federal Opportunity Zone has unfortunately become an instrument of gentrification.

In addition to taking immediate legal steps to prevent mass displacement, we urge the City Council to join us in working with counterparts at the County and with housing advocates from across the county to raise awareness about the challenges that are occurring in this Zone with the US Department of Housing and Urban Development and local Federally-elected officials.

Together we can discuss the long-term future of investment in these communities. We can build a community-driven path for renovating old buildings without displacing residents, and develop pathways that ultimately give residents control and ownership over the buildings where they have raised their families and supported our local economy and way of life.

In the meantime, we must recognize that local control is an obligation as well as an opportunity. As a City, we have the power to act to prevent displacement. Now is the time to utilize this power in service to those at greatest risk of losing their housing. During the pandemic, the City recognized the incredible vulnerability and importance of residents in this part of the City and took bold action to protect those residents. This action is clearly needed once again. Hundreds of Canal residents are under threat of being forced to uproot their families and leave the City they call home. This will have negative impacts for children and families as well as the strength of our local community and economy. The City of San Rafael must take immediate action to prevent this from happening.

Sincerely,

Omar Carrera
Chief Executive Officer, Canal Alliance

Laura McMahon
Executive Director, Legal Aid of Marin

Chandra Alexandre
Chief Executive Officer, Community Action Marin

Sources:
1 Buyers bet big on Marin multifamily market (therealdeal.com)
2 https://www.marinij.com/2022/09/25/san-rafael-tenants-in-canal-area-alarmed-by-offers-tovacate/?utm_source=pocket_mylist
3 For research on gentrification in Opportunity Zones, see Displacement Zones: How Opportunity Zones Turn
Communities into Tax Shelters for the Rich, SAJE, 2019; Kurban, Haydar, et al. “Gentrification and Opportunity
Zones.” Cityscape 24.1 (2022): 149-186