A proposal from two San Jose council members that would have canceled rent for 90 days for tenants financially impacted by the coronavirus pandemic has been struck down over concerns about the initiative’s constitutionality.
City Attorney Rick Doyle said via Zoom at Tuesday’s virtual City Council meeting that the idea—proposed by Councilwoman Magdalena Carrasco and Councilman Raul Peralez—would violate a number of state and federal laws.
California’s Costa Hawkins Act bars cities from regulating rents on units exempt from rent control, but Doyle said the larger issue was the so-called takings clause in the U.S. Constitution’s fifth amendment, which prohibits private property from being taken without just compensation.
“Essentially, the landlords are being asked to allow people to occupy their property without just compensation,” Doyle argued. “Clearly the council has the authority to do rent control, but there are parameters as to how far you can go and the concern here in my view is significant because there are a lot of properties that could be impacted and a lot of dollars at stake and the city could be on the hook.”
Peralez and Carrasco opted to withdraw their proposal to instead pursue a citywide rent freeze. “Certainly it’s not an interest of mine to violate the Constitution and the constitutional rights of anybody,” Peralez said. “The interest that myself and council member Carrasco have is in ensuring that we do as much as possible to be able to protect our tenants, especially individuals that right now may be falling through the cracks in regards to the services, the support that’s available.”
Mayor Sam Liccardo agreed.
“I don’t see any harm in a rent freeze during this emergency period,” he said “Frankly, I don’t think there are any landlords out there that are about to hike up rents, but if it provides any additional insurance, I’m happy to support it.”
But before any decisions were made about moving forward with a rent freeze, councilors listened to countless public comments from both tenants and landlords who had waited in the virtual queue for hours to speak.
“Property owners just like renters are equally affected by job losses and economic hardships that we are all living through right now,” San Jose resident Ron Sorisho said. “Shifting the burden from renters to property owners is not a solution.”
Michale Trujillo, an attorney at the Law Foundation of Silicon Valley, challenged Doyle’s legal opinion by citing local government’s broadened emergency and police powers during a crisis. “City Council’s police power applies to the ‘...use of real property,’ and generally, ‘so long as a land use restriction or regulation bears a reasonable relationship to the public welfare, the restriction or regulation is constitutionally permissible,’” Trujilio and his colleague Nadia Aziz wrote in a letter referencing a 2016 court case between the California Building Industry Association and the city of San Jose.
“The broad authority of the police power likewise extends to local governmental authority to enact price controls, including on rent, provided the legislation is ‘reasonably related to the accomplishment of a legitimate governmental purpose,’” Trujilio and Aziz added.
The entire city council, minus Councilman Johnny Khamis who expressed legal concerns about voting on non-agendized items, requested that more information about a potential rent freeze be brought to next week’s Rules and Open Government Committee meeting.