San Jose leaders this week will consider key changes to the city’s rent laws, including some that empower landlords and others that favor tenants.
One of the changes up for discussion at Tuesday’s City Council meeting would prevent landlords of rent-controlled units from passing unmetered utility charges on to tenants. So-called ratio utility billing systems—or RUBS, to use industry parlance—have created instability for tenants by giving property owners a way to circumvent San Jose’s 5 percent cap on yearly rent hikes, according to city officials.
“The use of RUBS results in monthly cost variations that are very difficult for a tenant to predict,” San Jose Housing Department Director Jacky Morales-Ferrand wrote in a memo advising the council to restrict the practice. “Variations can occur to a variety of factors. One such variation would be a change in the size or composition of the tenant household. A water leak or excessive usage by one individual could also contribute to significant oscillations in costs. Utility bills generated by RUBS pass on these fluctuating costs to tenants. These unanticipated costs may lead a tenant to a situation where they are unable to pay rent.”
To avoid unpredictable bills from displacing tenants, city housing officials suggest requiring property owners to install sub-meters at each individual apartment unit and only charging for actual usage.
As of this year, California law requires sub-metering for all new apartments. The proposals being considered in San Jose this week would extend that standard to all units covered by the local rent control ordinance—that is, all multi-family units built before the fall of 1979.
Councilman Sergio Jimenez said the city should reject all RUBS billing.
“[L]andlords who are currently utilizing RUBS or who have lease agreements with tenants that include RUBS should be considered in violation of the law as the city has been consistent with its interpretation of the illegality of RUBS,” he wrote in a memo. “Allowing rent increases for landlords who have chosen to violate city policy and implement this practice places the burden on the tenant.”
Landlords may complain about the cost of installing sub-metering systems, but Jimenez noted that property owners are already guaranteed to a “fair return” on investment under existing policy.
Several landlords in recent years have already had to pay back tens of thousands of dollars to tenants who appealed RUBS charges through the city.
Under San Jose’s tenant protection laws, which the council enacted last year, landlords can evict renters for any of a dozen reasons. Those “just causes” include nuisance activity, non-payment and other lease violations.
The council this week will consider clarifying the ordinance to note that landlords can oust tenants convicted of serious or violent felonies.
“Landlords have a legal and moral responsibility to protect their tenants from foreseeable risks of harm,” Mayor Sam Liccardo wrote in a memo to the council. “It is axiomatic that known criminal activity—particularly where those behaviors rise to the level of not merely felonies, but serious and violent felonies—can pose a foreseeable risk of harm to children and families living nearby.”
On the other hand, Liccardo added, tenants have expressed legitimate fears about how those laws could be applied.
“An understandable distrust— particularly among historically marginalized communities—persists of law enforcement and the criminal justice system, exacerbated by accounts of officer-involved shootings from Ferguson to New York, or of wrongfully convicted individuals freed by DNA evidence years after their sentence,” the mayor wrote. “Reasonable concerns also arise that the innocent families of the arrested person will also face displacement, particularly where domestic violence victims and immigrants could be illegally evicted or mistreated.”
For that reason, Liccardo said, juveniles should be excluded from the criminal activity provision, and tenants should have a chance to remain in their homes if they choose to evict the convicted felon.
Another important update up for review this week stems from a state law that prevents landlords from disclosing—or even threatening to disclose—a tenant’s immigration status to authorities.
The Ellis Act is a state law that establishes how a landlord can remove their rent-controlled property from the market. It requires property owners to give renters a 120-day notice and to provide relocation assistance, but only applies to apartments built before September of 1979, the same 40,000 or so now subject to the city’s 5 percent-a-year rent cap.
Because rent-controlled units are older, many of them lie in areas slated for redevelopment. City staff suggests requiring landlords who demolish and rebuild rent-controlled apartments to place at least 50 percent of the new units under that 5 percent yearly cap—with exceptions for those who instead put affordability restrictions on at least 15 percent of the new units.
Other jurisdictions in California, including Santa Monica, require all redeveloped rent-restricted units to come back under rent control if it’s built within five years of demolition. But San Jose officials determined that cities requiring 100 percent return to re-control have seen an overall loss in the number of rent-restricted units. Santa Monica, for example, has lost more than 2,000 rent-controlled units in recent years, according to Morales-Ferrand’s memo.
“One reason for this is because apartments are often replaced with for-sale housing, commercial use, and/or mixed use development,” she explained in her memo to the council. “In addition, developers building rental housing sometimes do not bring the apartments into the rental market until the five-year re-control period required under the Ellis Act has lapsed. These factors have led to the net loss of apartments covered by Santa Monica’ s rent control provisions.”
San Jose also suggests extending Ellis Act requirements to all apartments with at least three units, which would bring an additional 1,035 complexes under the ordinance.
One proposal that was dropped from Tuesday’s agenda would prevent property owners from rejecting tenants based on their source of income. The measure, which will come up for discussion at a later date, was designed to prevent property owners from turning away prospective tenants just because they rely on publicly funded rent subsidies known as “housing choice” or Section 8 vouchers.
More from the San Jose City Council agenda for April 24, 2018:
- The council adjourned the meeting in honor of Richard Kavanagh, an elderly handyman who died of cancer on Feb. 27 after getting evicted from the duplex where he lived with his wife, Helen, for 50 years. “Richard’s courage, fortitude and steady hand will be missed by all of us,” Councilman Don Rocha, whose district encompasses the Kavanaghs’ former home, noted in his commemoration.
WHAT: City Council meets
WHEN: 1:30pm Tuesday
WHERE: City Hall, 200 E. Santa Clara St., San Jose
INFO: City Clerk, 408.535.1260