California Apartment Association

San Jose’s long-standing cap on rent increases will soon get tighter.

On a 6-5 vote, the San Jose City Council early Wednesday approved lowering the maximum annual increase on rent-controlled units from 8 percent to 5 percent. This will affect about 43,000 units, or one-third of the city’s rental housing supply. The changes are expected to be ratified later this year and take effect no later than Jan. 1, 2017.

While not as onerous as the housing department’s proposal to tie rent control to inflation, lowering the price ceiling to 5 percent remains a bad policy change.

“The council found a compromise among themselves, but turned their back on solving the housing crisis,” Joshua Howard, senior vice president of local public affairs for the California Apartment Association, told the Silicon Valley Business Journal.

CAA has argued that increasing the housing supply — not changing the city’s 40-year-old rent control ordinance — is key to addressing the city’s housing crisis.

Despite Wednesday morning’s vote, however, hope remains that the city will take action to bolster development.

Councilman Manh Nguyen on Tuesday morning suggested passing a $1 billion bond to build affordable housing, a proposal the council will likely discuss at a future meeting. Council members did not take up the idea Tuesday because it’s not directly linked to rent control.

 

Related content: 

• San Jose rent control: Council caps increases at 5 percent (Mercury News, April 20)
• City Council approves new rent-control regime after dramatic testimony (Silicon Valley Business Journal, April 20)
• Mercury News editorial: Rent control in San Jose needs fixed maximum (April 18)