San Jose Councilmembers Propose Comparatively Landlord-Friendly Rent Control Changes

Monday, April 11, 2016
Bryce Druzin
Silicon Valley Business Journal

After a month of heated debate over rent control recommendations proposed by the San Jose Housing Department, a more landlord-friendly alternative has been put on the table.

The city's rent control ordinance covers 44,300 units, about one-third of San Jose's total number of rental units. On Friday, District 1 Councilmember Chappie Jones issued a memo outlining several changes to the city's current Apartment Rent Ordinance. Among the most significant modifications proposed is lowering the annual allowable rent increases for rent controlled units to 5 percent, down from the current 8 percent cap.

This is significantly less stringent than the housing department's recommendation to have annual increases tied to changes in the Bay Area Consumer Price Index for Urban Consumers, a measure of inflation. From 2006 to 2015, annual increases in the Bay Area CPI-U averaged 2.5 percent and ranged from 0.7 to 3.3. The housing department's recommendation does allow landlords to increase rents by 2 percent in cases where inflation increases are below that rate.

Jones said he knows there are families struggling to keep up with rising rents, but also that many rent-control unit landlords are small "mom and pop investors" who rely on rental income for their retirement or supplemental income.

"(5 percent) gives renters some rent relief, and allows owner to continue operating," he said, adding that the simplicity of a flat rate was also a reason he made the proposal.

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