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http://www.mercurynews.com/bay-area...e-rent-control-changes-go-committee-wednesday
San Jose: Proposal to tie rent control to inflation
By Ramona Giwargis, rgiwargis@mercurynews.com
Posted: 03/16/2016 06:22:02 AM PDT | Updated: 46 min. ago
SAN JOSE -- Amid growing public outrage over astronomical rents, city officials are considering a proposal to tie annual rent increases of 44,000 rent-controlled apartments to inflation, which would be a third or less of the hikes allowed under San Jose's 40-year-old rent control law.
The proposal, among several to be aired at a city committee meeting Wednesday, would mean landlords couldn't increase rent beyond the Consumer Price Index each year. The index, an inflation gauge, has ranged from 0.7 percent to 2.8 percent over the last six years. That's far less than the maximum 8 percent allowable increase under the city's current law, which ramps up to 21 percent if rents haven't been raised in more than 24 months.
The proposal will head to the City Council on April 19. It's already drawn the ire of apartment groups and landlords, who complain the changes will lead to a lapse in apartment maintenance and more housing shortages.
But it might be a lifeline for 34-year-old Nahima Aguiniga. Reeling from a messy divorce, Aguiniga moved her two kids into the only housing she could afford on $13.50 an hour -- a room inside a house that felt cramped and overcrowded.
"My kids were cooped up in a room and there was no freedom," said Aguiniga, who works as a cook at Intel's cafeteria. She made it through more than a year -- but last Christmas was her breaking point.
"My daughter asked me, 'Mom, are we going to have a Christmas tree?'" she recalled. "We couldn't put up a Christmas tree. We had no room for it."
So Aguiniga packed her bags and moved to Tracy. She wakes up at 2:30 a.m. to make the 60-mile trek to the Bay Area. And she's not alone. Others have moved back home with their parents, and some have even moved into warehouses converted into housing.
"It's the cheapest place I found," Patricia Huizache, 45, said of the warehouse she calls home.
Huizache said she moved into the unusual space after her family was thrown out of their previous home for complaining about a broken stove burner. "I don't have enough money for something else."
Jacky Morales-Ferrand, the city's housing director, said Huizache's story isn't unique. Hundreds of residents face homelessness after eviction because they can't afford soaring rents.
"When you have a rental environment where you have rents at the highest they've been historically, it makes it challenging for people to find replacement housing," Morales-Ferrand said.
In addition to tying rent increases to inflation, similar to San Francisco, Los Angeles and Berkeley, Morales-Ferrand recommends allowing owners to "bank" annual rent increases in years they don't use them. But regardless of how much is banked, total increases would still be limited to 8 percent per year. Rent control only covers one-third of some 122,000 apartments in San Jose.
Of the 11 California cities that have rent control, only three do not tie increases to inflation -- San Jose, Los Gatos and Beverly Hills.
Morales-Ferrand also suggests getting rid of an option that allows apartment buyers to pass 80 percent of their investment costs to renters and a provision that allows passing capital improvement costs to renters. Owners can petition the city if the rent increases don't cover upgrade costs.
The proposed changes mean landlords must report to the city the rent of each unit and update the data whenever someone moves out. That also means adding 15 to 20 city staff positions, Morales-Ferrand said, but it will help with enforcing the new rules. Owners also would be required to disclose the rents of previous occupants to new tenants.
Tenants and landlords alike would pay a small monthly fee -- about $3 or $4 -- to cover the costs of the new program, she said.
Joshua Howard, the California Apartment Association's senior vice president of local public affairs, called the proposed rules "cumbersome." He said the city should enforce its current rent control ordinance instead of reinventing the wheel.
"There is no evidence that suggests that the 8 percent has been a problem for the past 35 years," Howard said.
Tom Scott, who manages 700 units in San Jose, said San Francisco is an example of why rent control doesn't work. Scott's average rent increases have been 5 to 6 percent in the last two years. "When you overregulate, no one will move out and there will be nothing to rent. You're constricting the normal turnover," Scott said.
City leaders also are considering an anti-retaliation ordinance to allow residents to report code violations without "fear of retaliation." It would require owners to notify tenants in writing about problems before issuing an eviction notice.
Ashley McClintock, who works with the advocate organization PACT, applauded the city's efforts to stabilize rents and curb discrimination. The 28-year-old was forced to move back in with her parents three years ago after possible layoffs at her job.
"I was only supposed to move back for maybe six months," said McClintock, who now works at a web security company. "But with the rents, moving out is not looking like a possibility for me right now."
The advisory committee will meet at 6 p.m. Wednesday inside the City Council chamber at City Hall, 200 East Santa Clara Street.
Contact Ramona Giwargis at 408-920-5705. Follow her at Twitter.com/ramonagiwargis.
Posted for fair use.....
http://www.mercurynews.com/bay-area...e-rent-control-changes-go-committee-wednesday
San Jose: Proposal to tie rent control to inflation
By Ramona Giwargis, rgiwargis@mercurynews.com
Posted: 03/16/2016 06:22:02 AM PDT | Updated: 46 min. ago
SAN JOSE -- Amid growing public outrage over astronomical rents, city officials are considering a proposal to tie annual rent increases of 44,000 rent-controlled apartments to inflation, which would be a third or less of the hikes allowed under San Jose's 40-year-old rent control law.
The proposal, among several to be aired at a city committee meeting Wednesday, would mean landlords couldn't increase rent beyond the Consumer Price Index each year. The index, an inflation gauge, has ranged from 0.7 percent to 2.8 percent over the last six years. That's far less than the maximum 8 percent allowable increase under the city's current law, which ramps up to 21 percent if rents haven't been raised in more than 24 months.
The proposal will head to the City Council on April 19. It's already drawn the ire of apartment groups and landlords, who complain the changes will lead to a lapse in apartment maintenance and more housing shortages.
But it might be a lifeline for 34-year-old Nahima Aguiniga. Reeling from a messy divorce, Aguiniga moved her two kids into the only housing she could afford on $13.50 an hour -- a room inside a house that felt cramped and overcrowded.
"My kids were cooped up in a room and there was no freedom," said Aguiniga, who works as a cook at Intel's cafeteria. She made it through more than a year -- but last Christmas was her breaking point.
"My daughter asked me, 'Mom, are we going to have a Christmas tree?'" she recalled. "We couldn't put up a Christmas tree. We had no room for it."
So Aguiniga packed her bags and moved to Tracy. She wakes up at 2:30 a.m. to make the 60-mile trek to the Bay Area. And she's not alone. Others have moved back home with their parents, and some have even moved into warehouses converted into housing.
"It's the cheapest place I found," Patricia Huizache, 45, said of the warehouse she calls home.
Huizache said she moved into the unusual space after her family was thrown out of their previous home for complaining about a broken stove burner. "I don't have enough money for something else."
Jacky Morales-Ferrand, the city's housing director, said Huizache's story isn't unique. Hundreds of residents face homelessness after eviction because they can't afford soaring rents.
"When you have a rental environment where you have rents at the highest they've been historically, it makes it challenging for people to find replacement housing," Morales-Ferrand said.
In addition to tying rent increases to inflation, similar to San Francisco, Los Angeles and Berkeley, Morales-Ferrand recommends allowing owners to "bank" annual rent increases in years they don't use them. But regardless of how much is banked, total increases would still be limited to 8 percent per year. Rent control only covers one-third of some 122,000 apartments in San Jose.
Of the 11 California cities that have rent control, only three do not tie increases to inflation -- San Jose, Los Gatos and Beverly Hills.
Morales-Ferrand also suggests getting rid of an option that allows apartment buyers to pass 80 percent of their investment costs to renters and a provision that allows passing capital improvement costs to renters. Owners can petition the city if the rent increases don't cover upgrade costs.
The proposed changes mean landlords must report to the city the rent of each unit and update the data whenever someone moves out. That also means adding 15 to 20 city staff positions, Morales-Ferrand said, but it will help with enforcing the new rules. Owners also would be required to disclose the rents of previous occupants to new tenants.
Tenants and landlords alike would pay a small monthly fee -- about $3 or $4 -- to cover the costs of the new program, she said.
Joshua Howard, the California Apartment Association's senior vice president of local public affairs, called the proposed rules "cumbersome." He said the city should enforce its current rent control ordinance instead of reinventing the wheel.
"There is no evidence that suggests that the 8 percent has been a problem for the past 35 years," Howard said.
Tom Scott, who manages 700 units in San Jose, said San Francisco is an example of why rent control doesn't work. Scott's average rent increases have been 5 to 6 percent in the last two years. "When you overregulate, no one will move out and there will be nothing to rent. You're constricting the normal turnover," Scott said.
City leaders also are considering an anti-retaliation ordinance to allow residents to report code violations without "fear of retaliation." It would require owners to notify tenants in writing about problems before issuing an eviction notice.
Ashley McClintock, who works with the advocate organization PACT, applauded the city's efforts to stabilize rents and curb discrimination. The 28-year-old was forced to move back in with her parents three years ago after possible layoffs at her job.
"I was only supposed to move back for maybe six months," said McClintock, who now works at a web security company. "But with the rents, moving out is not looking like a possibility for me right now."
The advisory committee will meet at 6 p.m. Wednesday inside the City Council chamber at City Hall, 200 East Santa Clara Street.
Contact Ramona Giwargis at 408-920-5705. Follow her at Twitter.com/ramonagiwargis.