San Jose Mayor and Council Members Express Mixed Views on Rent Control Proposals

Tuesday, March 8, 2016
Bryce Druzin
Silicon Valley Business Journal

Hundreds of San Jose residents packed a high school auditorium Monday night to hear the mayor and council members answer questions about proposed changes to the city's rent control ordinance, which covers around 43,000 units built before 1979.

The meeting took place at Overfelt High School and was organized by People Acting Together in Community, a network of religious congregations from San Jose and elsewhere that is active in social justice issues. PACT is part of the tenant advocacy group the Silicon Valley Renters' Association.

Mayor Sam Liccardo and council members Magdalena Carrasco and Raul Peralez attended and were asked questions related to the draft recommendations recently released by the city's housing department.

Here are the takeaways:

Maximum annual rent increases
Carrasco and Peralez said they would support tying allowable annual rent increases to changes in the Consumer Price Index, a measure of inflation.

"Eight percent is not rent control," Peralez said, referring to the current cap on annual increases.

Liccardo said while he supports substantially reducing the 8 percent cap, he thinks changing the cap to a lower fixed rate (he mentioned 4 percent as an example, though did not endorse that rate) is better than using CPI.

The mayor said that a fixed rate is superior to CPI because of its simplicity and predictability for tenants and landlords.

Using August to August annual changes (the same months the city uses to determine changes in its minimum wage), annual increases of the Bay Area CPI from 2006 to 2015 have been 2.5 percent.

Just cause
None of the three San Jose officials endorsed adopting a just-cause ordinance as part of the current efforts to modify rent control. The council is tentatively scheduled to vote on changes on April 19.

Currently, landlords can evict tenants without providing a reason to do so. A just-cause ordinance would require an apartment owner to cite and prove a specific reason, such as non-payment or other violation of the lease agreement, before evicting a tenant.

While Peralez said he does support just cause, he implied that in order to get enough council votes to pass any changes, just cause could not be among the proposed modifications.

Opposition among landlords to a just-cause ordinance is particularly fierce.

"This is something that is certainly a third rail," Peralez said.

Expanding the number of units covered by rent control
Peralez and Carrasco said they were in favor of having rent control cover duplexes, which would add another 10,000 rent-controlled units to the current number.

Liccardo did not endorse that idea. He echoed arguments made in the draft recommendations, saying that the housing department's resources would already be stretched thin with the job of enforcing any ordinance changes on the more than 40,000 units currently covered by rent control.

Section 8 discrimination
All three officials said they would support a ban on landlords discriminating against prospective tenants who receive Section 8 housing vouchers.

In California, it's already illegal for landlords to discriminate against applicants based on their sources of income, but Section 8 vouchers are exempted. State Senator Mark Leno, who represents San Francisco and parts of San Mateo County, introduced a bill in February that would add housing vouchers to protected sources of income.

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