San Jose Councilman: Landlords Should Pay To Move Displaced Tenants

Monday, April 11, 2016
Ramona Giwargis
San Jose Mercury News

As Silicon Valley's housing market heats up and tighter rent regulations from City Hall loom, landlords are trading rent-controlled units for market-rate housing faster than ever. Now one councilman wants them to pay to move displaced tenants.

The program, the first of its kind in San Jose, would require landlords to refund tenants' security deposits and pay relocation benefits to low- and very low-income households. The payout would be equal to three months of market-rate rent, said Councilman Chappie Jones, who released the plan Friday.

"We wanted to put together a policy that would at least reduce the amount of stress and concern in terms of having to be relocated," said Jones. The councilman has also proposed amending the city's rent control law by lowering the annual cap on rent increases.

Some residents, including those who are disabled, elderly or have more than one dependent child, would receive an extra $3,000 to help them move out.

The relocation plan would be triggered when a landlord applies to remove four or more rent-controlled units from the market.

Jones' district has about one-fourth of the city's 44,000 rent-controlled apartments, the most of any council district. The proposal comes as more than 200 residents in Jones' district are at risk of being displaced when The Reserve Apartments on South Winchester Boulevard are torn down to build new apartments with higher rent.

Residents at an emotional city meeting last month voiced concerns about losing their homes and not being able to afford anything else in San Jose.

That's what inspired Jones' proposed policy, though it won't be adopted in time to apply to The Reserve. Jones is working with the developer, Greystar Real Estate Partners, to offer some of the benefits outlined in his plan. Jones said they are "receptive" to the idea, but some housing advocates say the plan doesn't go far enough.

Dan Orloff, who's handling community and media relations for the developer, said demolition is slated for mid-2017, and residents will be given 120 days before they need to move out.

Tyrone Lockett is one of hundreds of residents who will lose his apartment. Lockett, who has lived at the Reserve for 12 years, said Jones' plan is a "great idea" -- but he hopes the councilman follows through on it. He also hopes Jones will meet with residents.

"People are scared and stressed out and we know the developer is not being fair to us," Lockett said. "It's hard to find a home out here with the way the prices are today."

Jones' plan also asks landlords to hire a relocation specialist to help residents find new homes, provide a 30-day notice when they apply to demolish or remodel their complex and 120-day notice before displacement.

Orloff said Greystar will refund residents' security deposit, offer "preferential treatment" at its other apartments and financial assistance based on needs.

Jones' proposal will be discussed April 19, when the City Council considers a host of changes to the city's rent control policy. The 40-year-old law, which applies to just one-third of the city's apartments, caps annual rent increases at 8 percent.

The city's housing department recommends tying annual increases to inflation, which would substantially reduce rent hikes. But to strike a balance between renters and landlords, Jones is asking to reduce rent increases to 5 percent -- a "sweet spot" he hopes will satisfy both sides.

His recommendation is the first of many that will come from City Hall's top floor in the days leading up to the council meeting.

Like the housing department, Jones said a program that allows landlords to pass off debt to renters should be eliminated, and landlords should annually report to City Hall the rent amounts they charge for each unit.

But Jones also included a provision to allow landlords who reduce the rent during "down markets" to increase it back to the previous rate, regardless of the proposed 5 percent cap.

Councilman Johnny Khamis, a vocal opponent of rent control, said he'll be recommending a 6 percent cap, and will propose allowing landlords to "bank" increases in years they don't use them. Jones' plan also supports banking increases.

While Khamis believes rent control could force landlords out of business, he said he worries housing advocates could go to the ballot box. He said he would prefer the council decide the issue because of its complexity.

"I'd rather see cooler heads prevail and a compromise we can all live with," he said.

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