Leaders reject proposal to tie rent increases in certain units to inflation

Mercury News November 14, 2017

SAN JOSE — Sandra Robles clutched a sign with the words “Housing Justice is Racial Justice” as she waited to speak out against rent hikes that could force her out of San José. A row away from her, Tom Fleissner, a longtime property owner, told city lawmakers that they’re treating landlords like they’re “evil.”

The stark divide between renters and landlords in San José grew even wider Tuesday. For the second time in the past year, city leaders rejected a proposal to tie rent increases in San José’s nearly 45,000 rent-controlled apartments to inflation.

Currently, San José caps rent increases in those apartments to no more than 5 percent per year. The City Council on Tuesday voted 6-5 to maintain that cap and rejected an idea from Councilman Don Rocha to explore adding 11,000 duplexes to the properties subject to the city’s rent control law. The dissenters were Vice Mayor Magdalena Carrasco, council members Sergio Jimenez, Raul Peralez, Sylvia Arenas and Rocha.

Tenants like Robles said a decade of rent increases have forced her to consider fleeing to Modesto or Stockton. The 36-year-old cafeteria worker pays $2,600 for a two-bedroom apartment in San José — but she’s a single mom and her wages have remained stagnant.

“All my family lives in Mexico City and I’m divorced,” Robles said. “It’s hard for me. It’s so expensive to live here, and I feel like the landlords are being greedy.”

The rules don’t apply to Robles because she doesn’t live in a rent-controlled unit, but she said it’s a social justice issue and she wanted to stand up for fellow renters. Robles’ job and kids keep her tied to San José, making it difficult to leave the city and its high cost-of-living.

Fleissner, on the other hand, said San José’s stringent rent controls are forcing him out of business. He’s owned six rent-controlled units near downtown since 1989 — but it’s getting harder to survive here.

“You’re going to get rid of us sooner or later,” Fleissner warned lawmakers. “Most of my renters have been there for 20 plus years because I keep the rents down. You’ve got to give us a break.”

In the last two years, San José officials have debated stronger tenant protections in Silicon Valley nine times — from requiring landlords to pay relocation benefits to adopting protections against no-cause evictions. But one sticking point remains: Determining how much landlords can raise rent in San José’s 44,359 rent-controlled units.

On Tuesday, hundreds of renters urged the City Council to support a proposal to tie rent hikes to the Bay Area consumer price index — which has ranged from 2.1 percent to 2.8 percent in the last five years. They said the current 5 percent cap is too high and renters are being squeezed out of one of the nation’s costliest rental markets. The city’s rent control law only applies to units built before 1979.

But Mayor Sam Liccardo worried that adding more regulations could force landlords to leave San José — or to stop investing in their properties.

“It seems to me that we have to allow folks the ability to invest the dollars they need,” the mayor said.

Instead of amending the city’s rent control law, Councilman Tam Nguyen said housing officials should focus on creating more affordable housing — and stop “pounding” on the landlords. But Councilman Raul Peralez argued that new housing developments take years to approve and build — and Nguyen last year voted against an affordable housing project in his district on Senter Road.

“When you’re talking about a city that has 4,000 homeless people — waiting 10 or 15 years to get those homes can’t be the only solution,” Peralez said.

Also on Tuesday, the San José council approved a registry to track rents in rent-controlled units and a proposal to allow renters to add new tenants to their leases without fearing eviction. The rules, which apply to all apartments, would limit tenants to two adults per bedroom and an unlimited number of kids — as long as they meet housing code limits.