East Palo Alto City Council will vote on OPA, the “Opportunity to Purchase Act” on Tuesday November 7th, 2023. OPA is a terrible policy, and I strongly oppose it. East Palo Alto does have a housing and displacement crisis, but the proposed solutions to these issues are atrocious, akin to a doctor telling an overweight patient that they need to amputate their legs to lose weight. There are many solutions for our housing issues – but OPA is not one of them.
Here are some reasons why I oppose OPA:
- OPA will hurt existing homeowners in EPA. About 70% of homeowners are residents who live in East Palo Alto. OPA is designed to lower home prices enabling non-profits to buy homes at a discount. This discount is directly paid by every homeowner in the city, who will see their property values affected with lower comparable home sale prices. You will not be able to sell your home for $950k when a similar rental house across the street sold for $850k under OPA. EPA resident homeowners understand this fact and are united in opposition to OPA.
- OPA will not result in home ownership for tenants. OPA is designed to enable non-profits to buy homes at a reduced price and own the land underneath the houses. Tenants would find themselves with most of the negative aspects of home ownership (maintenance, landscaping, depreciation, utilities) with none of the price appreciation found in traditional forms of home ownership. There is no “generational wealth” created with OPA for tenants.
- OPA will lead to less new housing in East Palo Alto. OPA creates strong disincentives for desperately needed new multi-family housing in East Palo Alto. Our housing stock is very old and needs to be rebuilt with new structures which are cleaner, safer (earthquakes! water piping! modern appliances!), and contain more units. OPA takes away the owner’s right of first refusal, which alone is thought to lower values by 8%-10%. OPA also slows down the sales process, which will kill deals and lower values. Why would anyone invest in new housing in EPA when they could build in Menlo Park, Redwood City, or Palo Alto instead?
- If East Palo Alto is serious about addressing housing, there are a variety of ways to do this other than OPA. We need to build more housing, and other cities have taken steps to speed up housing creation. This includes eliminating single family home zoning, allowing apartment buildings to be built in all residential neighborhoods, raising height limits on buildings, eliminating and reducing planning/permitting red tape, reducing parking requirements, and other common-sense measures. The City Council members behind OPA have been blocking new development for a generation, leading to EPA failing to meeting our RHNA housing goals. We can do better as a city and the solution to displacement and high housing costs does not include OPA.
- OPA focuses on single-family homes as a solution to the high cost of housing. This is a wrong strategy – single-family homes are the single most expensive form of housing and will not provide affordable housing for most people who need it. Apartments & condos are the way other cities in constricted geographic areas provide housing, not Single-Family Homes. Using today’s interest rates, a house in EPA would have a monthly payment of over $8800 when mortgage, taxes, and utilities are included. This is not affordable housing!
- OPA creates laws and rules for property sales that apply only to East Palo Alto residents and do not apply to our neighbors in Menlo Park, Redwood City, and Palo Alto. Why should EPA have different rules for property sales here? Do we want a “new redlining” for property in EPA?
- Cities like Berkeley, Richmond and San Jose have rejected OPA. Why would EPA pass OPA when other regional cities are rejecting OPA after open and thoughtful debate?
- There is no good reason to change our real estate laws – non-profits can and have bought property using normal channels like every other property owner in EPA. EPA could implement programs which use a variety of ways to help tenants buy OPA using the existing real estate market: down payment assistance, FHA loans, financial literacy education, and first-time buyer programs. EPA has done none of these programs with any intensity and focus.
- The Facebook/CZI funded non-profit “Partnership for the Bay’s Future” has spent over $500,000 trying to get OPA passed in East Palo Alto. It is worth asking the question “Why does Facebook want to change property laws in EPA which will enable CZI funded non-profits to buy property at a discounted price from private homeowners?” Do we want Meta to control our property at the point of sale in EPA?
- OPA would create a large bureaucracy in East Palo Alto to monitor and police most housing at the point of sale. The City of East Palo Alto has struggled with the basic functions of government: roads, parks, public safety, code enforcement, parking enforcement, staffing, and planning. Why would we want to increase the load on the limited capabilities of our local government when they cannot even do the easy things well?