SAN JOSE — As Silicon Valley’s soaring rents continue to squeeze out the working class and developers push to build more market-rate apartments, city leaders on Tuesday will discuss a controversial proposal to beef up San Jose’s rent control law by January.
The city’s current ordinance, adopted in 1979, caps annual allowable rent increases at 8 percent, the rate of inflation in the 1970s. But San Jose has never adjusted that amount, even though the annual Consumer Price Index for the area has increased an average of 3 percent since 1983.
“This allowable increase is among the highest of any jurisdiction in California with a rent ordinance,” said Jacky Morales-Ferrand in her memo to the City Council. “As such, the allowed rate is nearly equal to the market rate rent increases in the last five years.”
Now, a plan presented to the City Council on Tuesday proposes lowering the 8 percent annual allowable rent increases and adding a new provision requiring property owners to disclose all rents charged to tenants to prevent new renters from being overcharged.
As other Bay Area cities have done, San Jose is also looking at establishing a “just cause” ordinance to ensure renters are not evicted without cause to bring in new tenants to pay higher rents.
Although San Jose’s ordinance does not allow landlords to increase rents beyond 8 percent after the eviction of a tenant without cause, advocates and city officials agree the provision is impossible to enforce. That’s why city officials are recommending the new provision of having landlords report all rents charged to tenants.
The proposal to expand San Jose’s rent control and bolster tenant protections first was brought to the City Council by Councilman Raul Peralez in May. The council ranked the idea as its second-highest priority the following month.
But one thing not included in the plan headed to City Council on Tuesday is expanding rent control to cover more units, an idea mentioned in Peralez’s original proposal.
“We believe there were legal challenges to expanding it,” Morales-Ferrand said Monday.
Currently, the city’s rent control ordinance covers properties with three or more units that were constructed before 1979. That’s only 43,000 of the 122,000 renter-occupied dwellings in San Jose — about 35 percent — and the local ordinance excludes duplexes.
And even with its current rent control law, San Jose’s rents have skyrocketed nearly 54 percent in the past five years, city officials said. In 2010, the average rent in San Jose was $1,451 a month, but by this year, it swelled to an unprecedented $2,227 a month. By contrast, wages have remained stagnant with the median income rising only 11 percent from 2011 to 2015.
While San Jose leaders acknowledge the painful plight of renters, they’re also tasked with balancing the rights of landlords and property owners. The city held numerous meetings with stakeholders on both sides. During a meeting with the Tri-County Apartment Association, property owners said lowering allowable rent increases reduces their ability to improve the buildings and could lead to blight.
A memo from Vice Mayor Rose Herrera and Councilman Johnny Khamis urged the council to assemble a task force comprising renters and landlords to discuss those types of challenges. They also asked city staff to explore establishing income eligibility criteria for rent-controlled units.
One sore spot for the council members is establishing an ordinance to prohibit tenant discrimination based on source of income. Rental rights advocates say renters using Section 8 vouchers and other subsidies experience discrimination from landlords, but a memo from five council members recommended waiting to pass a law against it.
Mayor Sam Liccardo, along with Councilwoman Magdalena Carrasco and Councilmen Chappie Jones, Raul Peralez and Don Rocha, proposed waiting until the city of Santa Monica settles a lawsuit on a similar anti-discrimination ordinance.
Follow Ramona Giwargis at Twitter.com/ramonagiwargis or contact her at 408-920-5705.
