On November 8, 2016, Mountain View voters adopted the Community Stability and Fair Rent Charter Amendment (CSFRA), also known as Measure V. This measure amended the Mountain View City Charter to enact a system of both rent control and eviction control on multi-family properties. This document is intended to provide general guidance to Mountain View’s rental housing providers on Measure V.
I. EFFECTIVE DATE OF MEASURE V
The text of Measure V states that it would to go into effect 10 days after the vote approving the measure was declared by the City Council. The City Council declared on December 13, 2016 that the Mountain View voters approved the measure. Thus, Measure V took effect on December 23, 2016.
II. RENT RESTRICTIONS AND PROVISIONS
A. RENT ROLLBACK
Measure V is retroactive. It requires that, for tenancies that commenced on or before October 19, 2015, rents be rolled back to the rent that was being charged to the tenant on October 19, 2015. For any tenancy that was established between October 20, 2015 and December 23, 2016 (the effective date of Measure V), it requires that the rent be rolled back to the amount the tenant paid at the start of the tenancy.
B. RENT ROLLBACK PROCEDURE
The rent rollback is effective as a matter of law, and Measure V does not specifically require that tenants be given written notice of the rent rollback. The City of Mountain View (“City”) has provided a template that can be used to notify tenants of the rolled back rental rate, referred to as “Base Rent” by Measure V. This form is available on the City’s website (http://www.mountainview.gov/depts/comdev/preservation/rentstablization.asp). While not required, providing written notice to tenants of the rolled back rental rate may be helpful for owners to maintain a record of compliance and can help to avoid confusion.
C. RENT INCREASE REGULATIONS
Measure V limits rental increases on rental properties in buildings of three or more units that first received a Certificate of Occupancy before February 1, 1995.
Under Measure V, an annual rent increase, or “Annual General Adjustment” (AGA), is limited to the annual change to the amount of the Consumer Price Index (CPI), with a floor of 2% and a ceiling of 5%. By June 30 of each year, the Mountain View Rental Housing Committee will announce the amount of the AGA which can then be effective for rent increases on September 1 of that year; the AGA will generally remain in effect until August 30 of the following year.
On May 21, 2018, the Rental Housing Committee announced that the AGA for 2018-19 is 3.6%. This rent increase can be implemented from September 1, 2018 – August 31, 2019. In order for this increase to take effect, landlords must provide tenants with at least 30-days’ advance written notice of the increase. If the notice is served by mail from within California an additional 5 days’ notice must be provided (i.e. the notice must be mailed 35 days before the date the increase is to take effect). For more information on the procedure for increasing the rent, see CAA’s Industry Insight – Rent Increases: 30- and 90-Day Notice Requirements. Rent cannot be increased prior to the expiration of a fixed term lease unless the lease expressly provides for the increase. CAA’s Lease Agreements do not include such a provision.
On May 21, 2018, Rental Housing Committee also approved an additional bankable rent increase of 2.6% to account for inflationary effects experienced prior to September 1, 2016. There are specific requirements which must be before this additional increase can be implemented. See Section E of this paper, “Banking of Unimplemented AGA,” for information about this additional increase.
Only one rent increase is allowed per year, and a landlord must provide a 30-day written notice of an increase. A tenant may petition the Rental Housing Committee, and the rent increase will NOT be permitted if the landlord:
- Has failed to substantially comply with any provisions of Measure V or any rules or regulations created by the Committee, subsequent to its creation;
- Has failed to keep the property in compliance with California’s Civil Code and Health and Safety Code;
- Has failed to make repairs ordered by a hearing officer of the Committee, the Committee itself, or the City
A landlord may not increase rent based upon cost increases incurred prior to the existing tenancy, servicing of debt (except for certain necessary capital improvements in Mountain View), or capital improvements that are not necessary to keep the property in compliance with the state’s Civil Code and Health and Safety Code.
D. RESTRICTIONS ON INITIAL RENT FOR NEW TENANCIES
While state law generally prohibits the city from setting rents on new tenancies (i.e., vacant units), the Committee will issue rules and regulations to restrict rent on vacant units, where the Costa-Hawkins Rental Housing Act permits. Under the following circumstances, the rent charged to a new tenant may be regulated or established by the Committee:
- The previous tenant had their tenancy terminated through no-fault of their own
- The vacancy followed a rent increase not permitted by the law
- The landlord failed to renew a government contract
- A serious code violation exists in the unit or on the property
- The tenancy was terminated pursuant to the requirements of the Ellis Act
E. BANKING OF UNIMPLEMENTED AGA
Measure V allows for banking of unimplemented rent increases. If a rental property provider chooses not to increase rent one year, the landlord may bank the AGA and use it the following year, but there may be no more than a 10% increase in a single year. The Rental Housing Committee will likely establish rules that govern how a landlord may bank unused rent increases and what notices may have to be issued to the tenant and city.
Measure V allows for banking of unimplemented rent increases, though any banked increases are lost when there is a change in ownership or after a unit is vacated (thus allowing the landlord to set the initial rent at market rate). If a rental property provider chooses not to increase rent one year, then assuming there has not been a change in ownership or unit turnover, the landlord may bank the AGA and use it the following year (or later). There may be no more than one increase per 12 months and the increase may result in no more than a 10% increase in a single year. The Rental Housing Committee has established rules that govern how a landlord may bank unused rent increases and what notices may have to be issued to the tenant and city, these rules are discussed below.
The Rental Housing Committee’s rule governing banking of unimplemented AGAs require that, in addition to the normal 30-day notice of rent increase required by state law, a landlord must provide additional information in a notice that implements a banked increase. The first additional piece of information required in a notice of rent increase implementing a banked increase is identification of both of the following: (a) the increase in the monthly rent due expressed in number of dollars, and (b) the rent increase expressed as a percentage of the pre-increase rent. For example, if the rent for a unit is $1,000 and a banked increase will result in the rent being increased to $1,050, the notice of increase must identify the rent as being increased in the dollar amount of $50 and a percentage of 5%. The second additional piece of information required in a notice of rent increase implementing a banked increase is the following text:
“The rent increase requested in this notice exceeds the annual general adjustment authorized for the current year. Landlords may save (“bank”) annual general adjustments that were not imposed in previous years and implement them with the current annual general adjustment in accordance with the Community Stabilization and Fair Rent Act, Section 1707, and implementing regulations. Rent may only be increased once every twelve (12) months and rent increases cannot exceed ten percent (10%) of the rent actually charged in the previous year. Tenants have the right to petition the Rental Housing Committee (RHC) for relief if this rent increase will cause an undue hardship. The RHC defines a hardship based on either household income or if the household spends fifty percent (50%) or more of household income on rent, with specific definitions for households with children, seniors, or persons with disabilities or who are terminally ill. If you believe the rent increase requested in this notice is incorrect, excessive, or causes an undue hardship, you can: (a) contact your landlord to discuss the increase; and/or (b) file a petition with the RHC. For more information about petitions or the hardship process, contact the Mountain View Rental Housing Helpline at 650-282-2514 or CSFRA@housing.org.”
When implementing a banked increase, the landlord is also required to file a copy of the rent increase notice with the city within seven (7) days of service of the notice on the tenant. This can be done through the city’s website. A tenant who receives an increase that includes a banked increase may file a petition within ten (10) days of the effective date of the increase claiming that they have an undue hardship. Undue hardships include: (a) making less than 100% of area mediation income or spending more than 50% of household income on rent, (b) making less than 120% of area mediation income or spending more than 50% of household income on rent, and having one or more household members that is under the age of 18, over the age of 62, disabled, or terminally ill, and (c) making less than 120% of area mediation income and demonstrating other extenuating circumstances. The merits of the petition must be determined by a hearing office, who may award relief including reducing the amount of increase or allowing the increase to be phased in over time.
CAA’s Thirty-Day Notice of Change of Monthly Rent (Form CA-157) should not be used when implementing a banked increase, as it does not include the information discussed above. However, the City has created a rent increase template that includes the necessary information and can be used to implement a banked increase. That template is available here.
On May 21, 2018, Rental Housing Committee also approved a bankable rent increase of 2.6% to account for inflationary effects experienced prior to September 1, 2016. In addition to the requirements applicable to all banked increases (discussed above), the following additional restrictions apply to this special banked increase: (a) the landlord must have continuously owned the property since October 19, 2015, (b) the current tenant must have continuously resided in the unit since October 19, 2015, (c) no rent increase may have been imposed for that unit between October 19, 2015 and December 23, 2016, and (d) the banked increase must be implemented on or before August 31, 2020 or it is forfeit. Because this increase must be implemented on or before August 31, 2020, and because Measure V prohibits more than one rent increase in a 12-month period, this banked increase must be implemented with either the 2018-19 or 2019-20 AGA or it will be forfeit.
III. JUST CAUSE FOR EVICTION
A. GENERAL PROVISIONS
Measure V contains sweeping “just cause” for eviction provisions which require a landlord to have a permissible reason to terminate a tenancy and evidence to support the reasons for terminating the tenancy. Under Measure V, ALL rental units in buildings of three or more units are subject to the eviction restrictions unless the unit received a Certificate of Occupancy after December 23, 2016, the effective date of Measure V.
In brief, the permissible reasons for eviction are listed below. Please consult with your attorney to determine whether your circumstances qualify. The descriptions below are simplifications of the actual requirements of the ordinance. Generally, the tenant must be a given an opportunity to cure the violation prior to eviction.
- Non-payment of rent
- Substantial violation of a material term of the lease: generally, a violation of a prohibition against subletting does not qualify if a tenant is replacing an outgoing roommate. Family members are also entitled to move into a unit as long as the number of occupants does not exceed the standards of the Uniform Housing Code.
- Nuisance
- Criminal activity
- Failure to provide access as required by law
- Necessary and substantial repairs requiring temporary vacancy of 30 days or longer: tenant has right to reoccupy/comparable unit/relocation assistance.
- Owner (or relative) move-in: Very specific conditions must be met including having at least a 50% ownership share in the property. Tenants who have lived in the unit for at least five years and who are disabled, seniors, or terminally ill may not be evicted unless the incoming owner or relative is disabled, a senior or terminally ill. Failure to comply with all the specified conditions can result in the owner having to allow the tenant to move back in and payment of all moving costs.
- Removal of the unit permanently from the rental market: 120-day notice is required (one year notice for senior or disabled tenants).
- Demolition of the unit and permanent removal from rental housing use.
Relocation payments, as defined, must be paid to the tenant if their tenancy is terminated for “f” through “i” as outlined above.
A landlord may not evict a tenant if the owner’s brother, sister, grandchild, in-laws, or the spouse of any close family member needs to move into the unit. To take advantage of the right for the owner to evict a tenant to move into their own property, the landlord must have at least 50% recorded ownership in the property.
A rental housing provider may not terminate a tenancy if a tenant has added family members to the rental unit, regardless of whether or not the occupancy standards in the lease are exceeded or the new family member is added to the lease.
The provisions related to eviction based on a tenant’s failure to comply with the rental/lease agreement also cast doubt on the landlord’s ability to enforce provisions of the rental/lease agreement which are added after the beginning of the tenancy. This is because Measure V requires that if the term was added after the beginning of the tenancy (either by way of a 30 Day Notice of Change in Terms or a new term in a renewal agreement), the landlord must first have notified the tenant in writing that he or she need not accept the new term.
Notably, the tenant’s refusal to agree to a renewal lease (even if on the same terms as the prior lease) is not a listed reason for eviction. This means that owners may offer tenants a renewal lease, but cannot require the tenant to enter into a renewal lease. It is the tenant’s choice whether to agree to a renewal lease or to let the tenancy go month to month. An owner cannot evict a tenant based on the tenant holding over after the expiration of a fixed term lease.
B. PROVISION OF NOTICES OF TERMINATION TO THE CITY
The landlord must specify, in writing, the basis for terminating the tenancy and must file, with the Committee, a copy of any notice terminating tenancy within three days after serving the notice on the tenant. An online form has been created by the City for submission of notices of termination.
C. RELOCATION PAYMENTS
Under certain circumstances, when a tenancy is terminated, relocation payments must be paid to the tenant. The relocation payment must be paid if the reason for termination is not a violation by the tenant (i.e., it is reasons “f” through “i” noted above and if the tenant’s household meets certain income requirements 120% of median).
The amount of relocation assistance is established by the Mountain View City Council and was most recently set in May 2018 to require the payment of three months’ market rate rent for a comparable size unit, a 60-day subscription to a rental agency, full refund of a security deposit, and an additional $3,000 payment in the event the household being asked to move has occupants who are senior citizens, disabled, or minor children. Information about the Mountain View Tenant Relocation Assistance Ordinance can be found here.
Landlords are advised to check with the City and their legal counsel before entering into any agreements to pay relocation assistance to ensure they are paying the proper amount and in the manner governed by the City’s relocation ordinance.
IV. EXEMPTIONS
Fully exempt from Measure V are hotel rooms rented for less than 14 days, hospitals, dormitories, government units, owner-occupied secondary dwelling units, and duplexes. In Mountain View, single family homes and condominiums are also fully exempt. The chart below illustrates which properties of three or more units are subject to Measure V and certain provisions:
| Certificate of Occupancy Date | Applicable Provisions |
| Before February 1, 1995 | Rent Control Regulations
Just Cause Eviction Provisions Relocation Assistance |
| Between February 1, 1995-December 23, 2016 | Just Cause Eviction Provisions
Relocation Assistance |
| December 23, 2016 or later | Measure V Provisions Do Not Apply |
V. RENTAL HOUSING COMMITTEE & RESOLVING LANDLORD-TENANT DISPUTES
Measure V creates a Rental Housing Committee, composed of five committee members. There are to be no more than two members who are involved in rental housing or real estate in any way. The City Council is responsible for appointing members to the Rental Housing Committee.
The Rental Housing Committee has broad powers and duties including establishing the annual allowable rent increase, holding hearings on landlord-tenant disputes, establishing regulations to administer and interpret Measure V, and determine the “reasonableness” of rent increases that exceed the annual allowable amount. Specifically, the Rental Housing Committee has the power to:
- Set rents and rental rates in accordance with state law
- Establish its own rules and regulations regarding rental units
- Determine and publicize the Annual General Adjustment (AGA) – the amount rental providers may increase rent in a specific year
- Appoint hearing officers to conduct hearings for rent adjustments
- Adjudicate petitions
- Administer oaths and subpoena witnesses and relevant documents
- Establish its own budget — including without limitation the hiring of staff and charging of fees to landlords
- Administer the withdrawal process for the removal of rental units from the market
- Hold public hearings
- Conduct studies, surveys, investigations, and hearings and obtain information
- Establish a schedule of penalties that may be imposed for noncompliance with Measure V
- Pursue civil remedies in courts of appropriate jurisdiction
- Intervene as an interested party in any litigation brought before a court with respect to rental units
- Conduct any other duties necessary to administer and enforce Measure V
The committee has the power to finance any expenses necessary, to hire any staff necessary, and to charge landlords any fee necessary. The committee is also empowered to receive funding whenever it deems appropriate from any available source, including the city and taxpayer money.
All landlords will pay a rental housing fee on an annual basis. The committee has the power to adjust the rental housing fee whenever it deems appropriate.
While the Rental Housing Committee and the programs and departments to implement and enforce Measure V are being set up, the City Council is responsible for funding the Rental Housing Committee and the administration of the rent control programs established under Measure V.
Measure V says that the committee will be an “integral part of the government of the City,” but the city will have no authority over the committee or ability to prevent it from making unwise financial decisions with taxpayer money. The committee is completely independent from the City Council, the city manager, and the city attorney, but may request the services of the city attorney, “who shall provide them pursuant to the lawful duties of the office.”
A tenant may petition the committee for a decrease in rent, and a landlord may petition the committee for an increase in rent. A decrease in maintenance or a deterioration of a rental unit without a corresponding reduction in rent is considered a rent increase. A tenant can file a petition to adjust the rent downward based on a “loss in rental value,” as a result of a decrease in maintenance.
Once a tenant files a petition with the committee, that tenant may request that the hearing officer order an inspection of the rental building prior to the hearing.
A tenant may sue a landlord for not following any provision of Measure V, including those rules and regulations that will be written by the Committee itself. In a civil suit, a landlord found to violate any provision of Measure V or the Committee’s regulations will be liable for all damages, including attorneys’ fees and costs. If the landlord is found to have violated any provisions or regulations willfully, he will be responsible for all parties’ attorneys’ fees.
A violation of any provision of the initiative — even a minor technical violation — will constitute a complete defense in any eviction proceeding, even where the requirements of the just cause-for-eviction provisions are met
VI. ADDITIONAL INFORMATION
The City has created resources to help landlords and tenants better understand Measure V. These resources can be found on the City’s website. In addition, the City has created a Mountain View Rental Housing Helpline available via phone at (650) 282-2514 and via email at CSFRA@housing.org. The City is also offering walk-in office hours at City Hall each Thursday between 12:00 p.m. and 2:00 p.m. (Public Works Front Conference Room at 500 Castro Street).