If Emeryville is ever going to reel in skyrocketing rents that are displacing not only low-income, but middle-class residents, they may want to keep tabs on whats happening across the bay in East Palo Alto (home to the other IKEA). Chicago-based Equity Residential, which in 2011 acquired a portion of Archstone Enterprise LP and the pending Parkside apartment development along with it, is challenging an attempt by EPA’s city council to create a tenant protection ordinance. Equity has challenged the proposal as an “unlawful” burden on apartment owners and landlords. Equity is vehemently opposing the proposed city law that would provide relocation benefits to displaced tenants, tighten restrictions on demolishing buildings and offer protection from landlord harassment.
Equity, the nation’s largest real-estate investment trust chaired by Chicago real-estate mogul Sam Zell, acquired EPA’s Woodland Park housing portfolio through foreclosure in 2011 despite opposition from the community & city council. Zell, a 72-year-old Harvard Business school graduate billionaire, has been the subject of recent protests calling him a “Grave Dancer” and a “grandma gouger” for his company’s alleged predatory tactics & ability to profit from distressed-asset investing. Zell recently thrust himself into the widening wealth gap debate with his comment that “The 1 percent work harder“.
The 2011 deal put Equity in charge of more than half of East Palo Alto’s rental housing market. After the acquisition in this interview with PA Online, Equity’s VP of investments for Northern California John Hyjer declared “We are not going to challenge any statute on rent-control affordability. Anything that’s currently affordable housing will continue to stay that way.” According to this KQED article, within six months of acquiring the more than 1,800 units from Wells Fargo in foreclosure sales, Equity raised the attention of EPA city officials by issuing 706 three-day eviction notices between January & June 2012. Equity’s notices warned tenants who were late on rent that they had three days to pay before they would face eviction. Equity has also filed lawsuits challenging city rent control laws in Santa Cruz and San Rafael. Apparently this is what we can expect from our new “neighbors”.
The already contentious development that demolished some architecturally significant brick warehouses, removed mature trees and forced the relocation of the popular Crossfit Oakland gym (yes, CF Oakland is in EMERYVILLE) is slated to start leasing units this summer with the first residents moving in August. The $70 million, 175-unit apartment community located at the prominent corner of Powell and Hollis will include 8,000 square feet of ground floor retail (Hopefully not another Subway franchise or mattress store). Amenities to its residents will including a private courtyard, a resort-style pool with spa, business center and a fitness center (Sounds familiar). The development is also promising another off-leash dog option presumably available to the rest of the community.
According to this SF Business Times report, rents will fall between $2,000 and $3,000, which Equity Development VP Peter Solar says “is a significant discount to what brand new apartments cost in San Francisco” (We’ll see where they net out when they finally open). The article praises E’ville’s “cool factor” … but apparently they’re also appreciative of our lack of rent stabilization controls! Equity is also targeting Berkeley for expanding its East Bay Real Estate portfolio. We’ve already touched on how every pending development in E’ville are slated for rentals. It’s your move Emeryville. Do you really want to create community? Do you really want E’ville to be “Family Friendly”? Time to start taking action instead of providing lip-service.
You can read more about this ongoing battle on PaloAltoOnline.com →
The spirited city council debate over this development can be watched on the EPOA YouTube channel:
[youtube id=”YDWMnXuVR3A” width=”620″ height=”360″]
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