San Rafael tells Canal landlord to cover tenants’ relocation after fire

San Rafael is ordering the landlord of a Canal area apartment building to pay relocation assistance to 27 residents who were displaced in a fire last month.

The City Council approved a relocation benefits policy Tuesday enabling officials to leverage the state health and safety code to demand payments upwards of $8,000 per each affected apartment. If the landlord fails to comply, the city manager is empowered under specific conditions to use municipal funds to advance the payments and to seek reimbursement up to 1.5 times the total sum from the landlord.

“We’re hoping that this will not be something that we have to do frequently because it means that there’s been a tragedy that has occurred,” Mayor Kate Colin said.

“We’ve been so involved with all the tenants affected,” said Vice Mayor Maika Llorens Gulati, who represents District 1, which includes that Canal area. “They are really struggling, so I think this is something they really need to have.”

The three-alarm fire happened on Dec. 19 at the 99-apartment Meridian complex at 400 Canal St. The fire damaged seven apartments and displaced 10 families who were living in five of the residences.

Marin County fire investigators concluded in a Jan. 10 report that “the fire resulted from unintentional ignition” connected to renovation work in a concealed wall area in a second-floor apartment bathroom. The report says the cause was traced to a handheld gas torch used to heat copper piping in the wall during plumbing work.

Wall openings exposed the initial smoldering to oxygen that fanned the flames, leading to a “convective heat transfer.” That, paired with an “absence of blocking” in sections of the second-floor top plate, ceilings and floors, allowed the fire to spread through the wall between apartments.

The renovations themselves, which are ongoing in several apartments, have been a source of tension among some residents and the building’s owner, Tesseract Capital Group. The San Francisco real estate equity firm began asking residents this fall to voluntarily relocate out of the complex, citing the need for renovations.

The adoption of the new policy on Tuesday came after City Attorney Rob Epstein sent the landlord a notice to vacate Jan. 3. The notice served to officially declare the five damaged apartments as uninhabitable, triggering a 10-day period for the company to comply with the tenant relocation assistance payments.

Under state health and safety code section 17975, a landlord is required to provide relocation benefits to tenants forced to leave their apartments through no fault of their own. The required payment is equal to two times the monthly fair-market rate for the apartment, plus any security deposit held by the owner, Epstein wrote. In this instance, that comes out to $8,222 for rental costs, plus the security deposit.

Furthermore, Epstein wrote, if the company intends to terminate the affected tenants’ leases, it is responsible for providing additional relocation assistance outlined in the city’s municipal code.

The city ordinance requires the landlord to pay the tenants, regardless of their income, two times the fair-market rent of the apartment; a security deposit based on the number of bedrooms in the apartment; moving expenses based on the number of bedrooms; a daily rate if the tenancy is terminated prior to the end of the month; and additional payments if there are children, seniors or people with disabilities in the household.

Epstein said the city cannot issue demolition, building or other city permits for repairs on the damaged apartments until it has received written verification that these payments have been made.

Puneet Singh, the company’s lawyer, responded in a letter Jan. 12, stating the property owners provided temporary housing at a local motel.

Singh wrote that repairs to damaged apartments will take approximately eight months, and with that in mind, the landlord offered displaced residents lease buyout packages ranging from $22,444 to $37,444, depending on the individual contract termination dates.

Singh wrote that “the fire was inadvertently caused by a subcontractor who was performing renovations in a unit. The fire was not caused by our client or their designated agent, as such, they are not required to pay relocation benefits pursuant to Health & Safety Code Section 17975.4.”

Additionally, Singh said, the city’s demands under the health and safety code were inapplicable because the code requires a city-adopted appeals process, which the city had not provided.

“It is TCG’s goal to provide high quality housing in San Rafael,” Singh wrote, suggesting a meeting with city officials. “It is our hope that the City will work in partnership with TCG in addressing the city’s and state’s critical need for housing.”

The relocation assistance policy approved this week outlined an appeal process.

On Wednesday, Epstein sent a notice to Singh, with the new policy attached, saying that city officials consider the attorney’s Jan. 12 letter to serve as a written appeal, and therefore set an appeal hearing for Friday afternoon.

“Your client should bring and present all evidence it has to support its position that benefits are not payable under Section 17975.4,” Epstein wrote. “The City Manager’s decision on the appeal will be considered final.”

“The City intends to hold the appeal hearing prior to taking any action to advance benefits,” Genevieve Coyle, assistant city attorney said in an email Wednesday.

Singh did not respond to request for comment. Representatives for TCG declined to comment.

Meanwhile, a coalition of Marin nonprofits has organized an emergency response to support the tenants, who include 20 adults and seven children. The coalition, led by executives of Canal Alliance, Legal Aid of Marin and Community Action Marin, have been urging San Rafael officials to adopt a rent control ordinance for the Canal neighborhood over fears of a “potential mass displacement crisis” at the Meridian.

An online fundraising effort was launched this week to raise $50,000 to support the families displaced by the fire. The effort raised more than $23,000 as of Thursday.

Considering the high rents and lack of affordable low-income housing, it will be a challenge for the families to stay in Marin, said Omar Carrera, chief executive officer of Canal Alliance.

“They lost everything, and we’re trying to fundraise to provide the resources for them to start all over again,” Carrera said.