In an abrupt change of course, the Palo Alto City Council approved on Monday night a law ensuring that tenants facing eviction would get some relocation assistance, regardless of their income levels.

By an 8-1 vote, with Councilman Greg Tanaka dissenting, the council voted to strip away from the new law a controversial clause that limited relocation assistance to residents who make below the area median income, which is about $90,000 for a one-person household. That clause was championed on Aug. 27 by Councilman Greg Scharff and Mayor Liz Kniss, both of whom changed their position on Monday in siding with the majority.

Just like the prior version of the law, the one that the council passed Monday only applies to housing developments with 50 or more units. These include President Hotel, a 75-unit apartment building that is slated to revert to its original use as a hotel under a proposal from the building's new owner, Adventurous Journeys Capital Partners. Residents of the historic building at 488 University Ave., are now facing a Nov. 12 eviction deadline and their plight has revised the city's tense, yearlong debate over tenant protection.

The initial ordinance was approved on Aug. 27 in conjunction with an "emergency law," which granted qualifying tenants rental assistance and which required seven out of eight votes to pass. At that time, Scharff had indicated that he would oppose the emergency law, dooming it to failure, unless the accompanying permanent law included a "means test." He had initially proposed limiting assistance -- which ranges from $7,000 for studios to $17,000 for three-bedroom apartments -- to those tenants who make below 80 percent of area median income. He later acceded to setting it at 100 percent of area median income.

The council was prepared on Sept. 10 to officially adopt that ordinance on a "second reading," which is usually a formality. At that time, however, Councilman Tom DuBois moved to pull it off the "consent calendar" and hold a full discussion, a proposal that the council majority supported. On Monday night, with the "emergency" ordinance no longer in play, the council needed only a simple majority to change the law and remove the clause that several members acknowledged was a mistake.

Councilman Adrian Fine, who was absent during the Aug. 27 meeting, made the motion to remove the means test and said the council erred in including it.

"What we're saying is that those impacted by eviction deserve some type of subsidy," Fine said.

The Monday vote was a rare point of near-consensus on an issue that has created a deep fissure on the council. DuBois, Councilwoman Karen Holman and Councilwoman Lydia Kou have all advocated for the past year for exploration of stronger rental protections, including possible limits on allowed rent increases. Scharff, Kniss, Fine and Tanaka have all vehemently opposed anything resembling rent control.

Vice Mayor Eric Filseth voted against considering rent caps last October, though last week he joined DuBois, Holman and Kou in recommending that the council explore it as part of a broad package of potential reforms (the proposal nevertheless fell by a 4-4 vote). Councilman Cory Wolbach has also opposed rent control, though he joined DuBois, Holman and Kou this summer in submitting a revised version of the memo, which steers clear of rent stabilization but supports exploring more modest steps, including better enforcement of the city's requirement of one-year lease and a stronger mediation program. The council voted 7-1 last week, with Tanaka dissenting and Kniss recusing herself, to refer these steps to its Policy and Services Committee for further exploration.

Tanaka once again spoke out against adopting new policies to help tenants and appeared to agree with AJ Capital's attorney, David Lanferman, who claimed in a letter to the city that the proposed ordinance is unlawful and that it would not apply to President Hotel tenants. Lanferman wrote that "mandating universal relocation assistance payments without regard to the financial resources or incomes of affected tenants would be contrary to state law, arbitrary, unreasonable and not supported by substantial evidence."

Tanaka said Monday he is worried that revising the law would expose the city to "significant legal liability." When City Attorney Molly Stump disputed this assertion, Tanaka repeatedly pressed her to explain her legal rationale, a discussion that Stump said would be better suited to a closed session.

Stump noted that the law being considered by the council is general in nature and does not target President Hotel or any other particular development.

"It is my opinion and that of my office that this ordinance does not expose the city to significant legal liability or any legal liability," Stump said.

The council's removal of the "means test" provision was widely expected, given the council members' comments at prior meetings. DuBois reiterated his view that the restriction effectively ensures that the relocation-assistance ordinance would not apply to most people in Palo Alto, where income levels and rents are generally higher than in Santa Clara County as a whole. The council, he said, has an "ethical and moral imperative" to fix what he called a mistake.

"Eviction without cause is probably a renter's worst nightmare," DuBois said. "The one thing this does is provide a disincentive to remove a large amount of housing from the community."

Wolbach also said he was pleased with the new renter-assistance ordinance, which he noted was always the clear preference of the council majority. He urged all his colleagues to unite behind the revised ordinance. He also chided Tanaka for proposing to delay the vote, noting that the legal issues could have been raised three weeks ago, when Lanferman initially submitted his letter.

"There are a lot of Palo Altans across the city who live in properties this ordinance would cover," Wolbach said.

With the repeal of the income requirement all but certain, the two council members who supported it last week changed their positions. Scharff didn't make any comments during the discussion, while Kniss, whose family owns an interest in a rental property, said she was concerned that the city is "still really flirting with rent control," which she said she opposes.

As in prior meetings, the council's hearing featured comments from more than a dozen residents, including tenants of President Hotel and their supporters. Most speakers implored the council to remove the income restriction and do whatever it can to aid the tenants facing displacement. Roberta Ahlquist, an advocate for affordable housing, said it's unfortunate that the city of Palo Alto, which some on the council described as "paradise" earlier in the meeting, turns its back on its tenants. The city, she said, needs to consider rent control.

"You need to support the community," Alquist said. "Our community is the residents of President Hotel and everyone else who is having a hard time making a living."