Renting in Palo Alto: Our personal story
There are quite a few reasons why Palo Alto is considered one of the best places to live. The abundance of parks, protected open space areas, smart people, great restaurants, fantastic public and private schools, a myriad of city resources, and a culturally diverse environment are only some of the fantastic reasons that tempt people from all over the world to make Palo Alto their home. Not to mention that Palo Alto is situated in the heart of Silicon Valley’s tech industry, with Stanford University as a backdrop. Unfortunately, for many people this lifestyle comes at a price that escalates with each new resident that is born or moves here and with each existing resident that lives longer and decides not to move away for their retirement.
The realities of the housing market are sobering: according to Trulia, the average price of homes in Palo Alto as of December 2015 is $2.5 million dollars up from $1.2 in 2011. Those who want to participate should not only have at least $2,500,000 at their disposal, but also be ready to be in bidding wars and gamble on outdated homes with cramped square footage. That is one of the reasons why many people decide to rent instead of buying and yet renting has become just as expensive and competitive as buying. According to Rent Jungle, average rent in Palo Alto for apartments, condos and houses have also increased over 75% from 2011. Welcome to Palo Alto!
My family moved here because of an incredible job offer that my husband could not refuse. Out of the blue, this company tapped him to be their VP Sales – the hitch? We would have to leave New York for Santa Clara where the company was headquartered. We thoroughly considered the opportunity and since our last child had just been born, and the older kids had just started school, we decided to have the family stay in New York and have the kids complete their school year, to ensure an easy transition while my husband could go see if he liked his job, get a feel of the Bay Area, and then fully commit to the move.
Once the transition to moving to the Bay Area seemed inevitable in the summer of 2013, we seriously started looking at homes. We quickly realized that, a permanent move to California would mean we would need to sell our beloved home in New York, one which we had built at the start of our relationship 16 years ago, but I found myself emotionally attached to the memories and wanting to hold onto the option of returning to New York if our adventures in California didn’t work out. We rented it out instead and took buying in Palo Alto off the table completely.
With an extensive search for affordable rent, we secured a rental that needed lots of work. The landlord, a wonderful, eccentric human being, had taken a serious liking to our family. He owned his home since the 1980s and to our good fortune, wanted only rental income to cover his ownership costs as he already owned a home in the Napa area and was building his dream home in Ecuador, brick by brick. He was the kindest, most compassionate hippie that we had ever met. We truly had a wonderful relationship from the very beginning.
What came next was a bit of an untraditional landlord/tenant relationship where because we were in active conversation with him about renting his property indefinitely or until we were in a position to buy property ourselves, he was perfectly fine with us making changes to the home to suit our needs. I needed to lay my creative hands on the property and asked for his blessing to get started on turning this eyesore into a gem and, since we were going to be at the property for a while, we said to ourselves: why not?
We made and paid for a whole series of tenant improvements from pulling out the very outdated forest green rug, refinished and repaired the floors, dealt with the fence and created landscaping, and built a white surround fireplace mantel and painted the entire interior of the house to lighten up the modest home… Abracadabra! A new place was created. We loved our new home and our neighbors. We often visited each other’s homes and shared goodies. What’s more, the kids hung out very often and had developed a very close bond.
Our landlord was amazing and continued to rave about the Palo Alto schools. As a physicist, whenever he was visiting us, he took it upon himself to teach my older son cool formulas and scientific facts. He also introduced us to many of his Palo Alto friends. In return, we helped him out by receiving, opening and forwarding his mail, depositing his checks, and doing other personal errands on his behalf. All this made us feel part of his true inner circle. When we traveled out of town, and he was around, we would let him know that our casa was his casa (ironic!) and he reciprocated with inviting us to vacation and celebrate Easter at his Lake County cottage.
We had a fantastic relationship that developed out of mutual respect, compassion, and admiration. With no immediate family of his own, it was hard for him not to fall in love with ours.
A few days after our epic Easter celebration with our landlord, we got an email from one of his closest friends saying that he had passed away right when he got back to Ecuador. We were in total shock and disbelief. He had died of a blood clot that was triggered by the long flight back to Ecuador and the ankle pain which he had mentioned over Easter that refused to go away for weeks was a sign that something was terribly wrong. It was an extremely sad moment for us as we all met at his dear friend’s home, in downtown Palo Alto, to memorialize him. He was one cool, intelligent person and eccentric person who had been generous with us.
Throughout this loss, we could not help but wonder what was going to become of us. We immediately started thinking about owning our new home, which we had transformed from an extremely ugly duckling to a Palo Alto beauty. Prior to his death, we discussed extending our two year our lease with our landlord. If we liked the place, then we would extend it for 5 more years and another 5, and so on. Standing at just about 1000 square feet, this home was now our connection to our life in Palo Alto: having hosted family, friends, many playdates, school meetings, meals, Santa’s identity revealed. Its floors were stained with our tears when my mom passed away from pancreatic cancer. The smell of baked goods and stews, Caribbean cooking, great wines, and Christmas eggnog had all filled its air. It had become the talk of the block, as people often stopped by to thank us for its incredible transformation. Furniture was custom built just for it, and everything already had its place. This was our home.
Our landlord had already mentioned to us that, upon his death, all his properties would go into his education foundation, however, as it would so happen, the foundation was never formalized and the property entered probate with no named beneficiaries in his will. After a period of trying to position ourselves as prospective buyers, the reality was clear, we would have to move as the next of kin wanted the market to determine the best and highest buyer. Even with the improvements we had made. Our landlord bought the home for a “whopping” $140,000 back in 1986. The family wanted full market value. Who could blame them, with a hot Palo Alto market, why leave money on the table?
Once back in the rental market, it was disheartening to see what these properties were going for and how much little space they offered. Our family of five could not possibly fit into a two bedroom, and we were extremely lucky to find another 3 bedroom house that suits our needs. We were able to convince our new landlord, to let me personalize it a bit and make it feel like home. We have been here for over a year, and we have already started making lots of memories of our own.
We are simply a few of the lucky ones. We love Palo Alto and we would hate to have to move somewhere else. We are aware of the challenges renters face here. Some of our friends have moved out of the area because of high rent increases with some lamenting about rent increases even doubling in some instances especially on newly renovated homes, while others feel squeezed out of the area because they just can’t find anything available to rent. Countless have mentioned that landlords should also bear a brunt of the blame for wanting to increase rent way beyond what is needed to maintain their property. Many have indicated that the City needs to do something to make Palo Alto more affordable.
Sadly, this is not a unique Palo Alto issue, but a Bay Area issue as well. According to the Legislative Analysts Office, (LAO), analysis on California’s high housing cost causes and consiquences, when supply is lacking to keep up with demand for decades, the problem becomes chronic and the housing pool becomes smaller, making it harder for both renters and home buyers to find housing. Communities up and down the Peninsula are struggling with the same demand and lack of housing supply so it isn’t so easy to just look somewhere else.
In Palo Alto, our Housing Element of our Comprehensive Plan (the land use bible for the city) zones for about 2000 units for the next 8 years. However, based on the track record, the yield should only be about 60% of that. Obviously, it is an epidemic, and we need to bring attention to the issue. Thank goodness for the efforts of organizations such as Palo Alto Forward which I’ve recently come across. They put on regular educational forums, bringing in guest speakers to raise awareness about housing and transportation topics and talk about these challenging issues in a way that acknowledges that although we may not always agree on everything, growth is happening so we need to create the housing supply and transportation options that can meet those needs, while maintaining a high quality of life and secure the great character of our city.
Housing is a basic need we all have. We do not need to be planning experts or policy gurus to participate and help shape options for our great community. I’m someone who has wrestled with how to make living in Palo Alto a reality when life has offered our family an opportunity for growth. Part of our being able to stay here has been because of a unique situation with a wonderful eccentric landlord but how many unique solutions are there for everyone who is looking for housing?
Some people say that the bubble will soon burst. However, with the multiple booming industries in the area bringing in more people, baby boomers continue to stay here, with the influx of overseas buyers driving up the real estate market, there does not seem to be an end to housing challenges in sight. Hopefully the City will step in and build more housing units to address the epidemic. Otherwise the close to half of the city residents who are renters will just have to depend on the luck of the draw.
As for our family, Palo Alto now feels like home. We love the schools, the parks, our friends, the lifestyle, the foods, the trees, the openness, the inclusivity, the diversity, biking everywhere, the laid back atmosphere. We love it all. We are lucky to be in a lovely home, great neighborhood, and paying a rent we can afford. Fingers crossed that our situation remains consistent for the coming years and let’s think about what we can do to help others.