San Jose recommends 5 percent limit on some residential rent increases

The San Jose City Council on Tuesday voted 7-4 to limit landlords to a 5 percent annual rent increases, rather than an 8 percent hike previously considered.

The updated ordinance, known as the Apartment Rent Ordinance, would apply to more than 45,800 units across the city that were built before 1979. The proposal limits landlords to 5 percent annual increases with no option to “bank” part of an unused increase from year to year.

The vote changes a previously recommended rent control measure the council discussed early last year. That plan would have allowed landlords to raise rents by up to 8 percent in a year, if they hadn’t increased costs to renters in a prior year, while limiting regular annual increases to 5 percent.

And look at what this smart dude did:

But Steven Hanleigh, a San Jose real estate broker for the past 45 years, told council members the discussion around the new ordinance prompted him to sell off his multifamily properties in the city last year.

“I kind of saw this coming,” he said.

Many local property owners are “people trying to get ahead in life,” Hanleigh said. “Now you’re talking about stamping down the income potential they have at the same time the costs are going up all around them.”

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Well, no one ever said that owning investment real estate, be it SFHs or multi units, is easy. There is inherent risk in all that we invest in. He decided he couldn’t handle it anymore. So what. Someone else obviously bought his properties and were willing to take it on.

Rent control is unfortunate. I think the bigger damage is fooling pols and the angry mass that something is being done. But in fact these are fake solutions that just treat the symptoms. Which suits the land-owning elites just fine. Less supplies means higher appreciation.

Hope that more supreme judges will be replaced by Trump

5% is pretty reasonable…I rarely raise my rents more than that for existing tenants…The key is raise every year, depending on market conditions. …


What if Trumpism brings runaway inflation after some years?

If so don’t buy mutli family in rent controlled cities…Not part of my strategy anyway…Buy self storage. …never will be rent control, easy to kick out tenants, and you can have fun auctions…Just like on TV.
Little known fact— self storage rents are same per sf as apartments in the same area and cost one third per sf to build…My self storage building in Ventura pays more than 10% cash on cash…I am just a part owner but I get rent every month with no management headaches …

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