As you may have heard, the Lafayette City Council has recently been discussing the topics of large increases in the rents for some residents in apartment complexes and what actions, if any, the City will take in response to these rent increases. This is new for us: in fact, to our knowledge, the City Council hadn’t heretofore discussed the topic.
That changed last month. At each of two City Council meetings, fifty or sixty residents of apartment buildings located on Second Street and other scattered locations rose to complain that their rents were going up. By a lot. A local school teacher said she was asked to pay an extra $500 per month for the three-bedroom apartment she shares with her 8-year-old twins, and other residents described increases of 30 to more than 60 percent.
At these same meetings, many owners of properties with a small number of units stated that they value their tenants, have implemented only modest increases in rents but are worried about the consequences that rent control could have on them.
The problem, it seems, is that rents in the Second Street buildings were under-market for a long time, and the new owner was making up for lost time. Also, the building had a lot of deferred maintenance and the new owner is making necessary improvements.
After hearing from all sides, the City Council acknowledged in early May that high rents are a problem all over the Bay Area and expressed sympathy for the renters. Furthermore, the Council directed the City Manager to meet with the new property owner to learn if the company management was willing to develop a modulated program for rent increases and also directed the City Attorney to draft a resolution that would place a temporary moratorium on rent increases.
That moratorium resolution was considered by the City Council at its meeting last Monday night. Shortly before the meeting, the CEO of the property owner indicated via a letter that the company had been doing a lot of work to understand, internally, its own financial requirements for the property and, externally, the needs and capabilities of its tenants. As a result of that work, the property owner committed to give all residents an option to sign a long-term (approximately one-year timeframe) lease with a “maximum 10%” rent increase; residents who want shorter leases or month-to-month leases would see higher increases. Higher rent increases that had been issued will be rescinded and tenants who receive housing assistance would remain in the building with the current assistance program.
According to the property owner’s CEO and the California Apartment Association, the so-called Max-10% lease option is something that many local landlords are offering in reaction to the current market boom and has widely become an industry-sponsored best practice.
The Council viewed the new rent increase policy, coupled with the actions of other property owners, as positive developments and ultimately did not adopt the moratorium on rent increases or introduce a rent control ordinance. Instead, it directed that a survey of local landlords of larger apartment complexes should be undertaken so that the Council can better understand the local market. The Council will also seek information from additional tenants.
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