As San Jose's burgeoning rents price out longtime residents, force some into homelessness and others to double-up with parents in multi-generational households, city officials are talking about how to bolster local regulations to help tenants.
In a memo on Tuesday's Rules and Open Government Committee agenda, downtown Councilman Raul Peralez proposes tightening up rent control and outlawing discrimination against Section 8 tenants. Supply and demand don't seem to be evening out anytime soon, he notes.
"In addition to providing shelter to the unhoused and increasing our rate of housing development at all affordability levels, we must strengthen tenant protections for renters," Peralez wrote, adding San Jose to a growing list of Bay Area cities considering rent control.
San Jose now caps rent control increases to 8 percent a year—a relatively lax rule compared to San Francisco and Oakland where annual increases have to keep pace with regional inflation, which the Consumer Price Index reported at 3 percent in 2014. San Jose's rent control only applies to homes built before 1979 anyway, leaving some 10,000 or so units unfettered by the ordinance.
Another legal hurdle: the Costa-Hawkins Rental Housing Act, which exempts properties built after 1995 from city or county rent control. But there's a possibility the city could extend rent control to include units built between 1979, when the municipal ordinance was first passed, to 1995, when the state adopted Costa-Hawkins.
Average rents in San Jose ticked up 11.5 percent this past year, making the monthly price of a two-bedroom apartment more than $2,600. For that price, someone would have to earn $31.70 an hour to afford it.
"Renters are facing a housing crisis of historic proportions in San Jose," Peralez said.
Some 27 percent of renters in San Jose (31,745) count as extremely low-income and 17.5 percent (20,465) as low-income, according to the city. More than 56,000 households shell out at least a third of their income for rent, and of that group, 29,500 pay at least half their gross income.
In addition to capping rent control, Peralez said the city should adopt a "just cause" ordinance making it illegal for landlords to evict renters without cause and another ordinance preventing discrimination based on source of income.
"In a normal housing market, the challenge a landlord may experience in filling a vacancy provides at least some protection against unfair evictions," he said. "In a market facing crises like those we see in San Jose today, such constraints do not exist, particularly for low wage seniors and families."
Peralez's proposal, amongst others, appears to have some support from council colleagues Margie Matthews, Magdalena Carrasco, Chappie Jones and Mayor Sam Liccardo. Though, they did caution that some proposals could have unintended consequences. The "just cause" rule, for example, could prevent landlords from evicting disruptive tenants. Others may be constrained by state law.
The California Apartment Association's Tri-County Division reportedly called the proposals, which are in their very early stages, "unwarranted."
"Rental property owners in San Jose have been operating under a set of rules for 35 years and to change the rules on them is quite unfair," Joshua Howard, the association's spokesman, told the Mercury News. "I think the city would be better served by thoughtfully increasing the supply of all types of housing."