Rent Control Measures Spreading Like Wildfire


While I agree with you, you also must admit that a lot of shenanigans go on unreported. Just to be fair…


I agree that a lot of shenanigans probably go unreported (don’t have firsthand experience), but a number is a number. Policy can’t be set based on rumors or gut feelings.


Amid soaring housing costs and a tight rental market, tenant advocates are urging the San Jose City Council on Tuesday to limit increases for rent-controlled apartments to inflation levels.

Currently, landlords can raise rents in the 44,359 apartments subject to the city’s rent-control ordinance by no more than 5 percent a year. Tuesday’s proposal would limit increases to the area’s consumer price index, a variable rate determined by the federal government and considered an inflation gauge.

According to the city, the Bay Area consumer price index has risen annually by a range of 2.1 percent to 2.8 percent in the last five years, and from 1.07 percent to 4.19 percent from June 2001 through June 2011. It rose 6.59 percent from June 2000 to June 2001, but the proposed change would cap annual rent hikes at 8 percent per year regardless of the CPI.


Have to wonder what is the average annual increase in cost of maintaining such professionally managed apartment?
Are those managers saying it is more than 5% of the rent?



Can we vote to cap city budget increases to inflation? They appear to be increasing at 2-3x inflation. If there’s tax revenue beyond inflation, some of it should be saved for future recessions. The rest should be returned to tax payers.


Coming from a nation that does that thought this is the policy here :grinning:


5% or CPI, there is no scientifically-derived answer for this question. Whatever the end results is, it’s going to be a “gut feel”. So it simply comes down to who has more political power.

SF rent control sets the annual increase at 60% of CPI. I haven’t seen a single source that explains why the 60% number. It’s likely not scientifically derived either. I often wonder why it’s not 10% or maybe even negative since it’s doesn’t need to be data-driven. Technically we have constitution that guarantees property owners a reasonable return upon the taking of the property by renters, so a negative number doesn’t sound that reasonable and can be challenged in court so that’s why it hasn’t happened.

On the other hand, at least in Oakland (should be in SF as well), a landlord can petition for extra rent increase if landlord can demonstrate that he or she is not receiving a reasonable return on the property if the landlord can provide documentation for the numbers. First of all, I would think it should be reasonable to use CPI as a reasonable level of return target (just like rent control annual increase is usually tied to CPI, 60% or full), but nowhere have I seen that CPI is indeed a reasonable target. Laws are fuzzy and ambiguous for a reason to allow for maximum power for the body that interprets them. Secondly, when calculating the numbers for reasonable level of return, the amount of property appreciation needs to be included rather than just the operational revenue and expenses. This is very significant in my opinion. It leads me to think a negative annual increase is entirely possible for future rent control policies as property appreciation can be considered for tenant purpose calculations. In essence, if landlord has made enough money from property appreciation that even with a negative operational cashflow, it can still be deemed as reasonable return for the landlord so a mandatory rent reduction can be justified. In that case tenants basically get a share of the property appreciation just by living there, without any of the investment and market risk. It might seem unthinkable now, but as the policy turns more progressive bit by bit, at some point this might show up on activists’ radar as goal for the next fight.


The rent control tsunami worries me. I am thinking should I continue to invest in real estate? Or just beat it and move more into stocks? Another option is real estate in other locales, possibly even other countries.


Thinking in the right direction, finally :smile:


Pacifica has defeated rent control this month by a large margin.

San Jose has a homeowner majority. Will a depressing rent control cause a vote on rent control repeal? If a simple majority can repeal rent control, SJ can do it


Ok, just saw it reported on KTVU news: San Jose rent control measure goes down!!! Mayor casts deciding vote!!! Great job, guys!!!


Congratulations to San Jose. SJ has a homeowner majority, it needs to continue to build more ownership units and not become a Rental City.

A city full of renters are the start of mob abusing democracy


It will be tough though as rental units inevitably will come online in San Jose.


Start a new NIMBY movement against new apartment building, YIMBY to condos. It’s that easy

It’s dangerous to evolve our country to a country of renters.

Convert all the big apartment buildings into condos immediately, at least, allow the owner to convert anytime


Well, I am all for homeownership, even if via condo, but to think that everyone can be an owner is not realistic. It is just too damn expensive here!!! Oh wait, the new tax plan makes it a disincentive to be a homeowner, remember??? Thanks for not voting or not voting correctly people!!!


It’s more effective to control number of ownership units at planning stage. Tax incentive is so indirect




Singapore has majority home owners. You need government help.