2019 was the year of housing in San Jose

If the San Jose City Council’s policy work this past year could be summarized in one word it would be housing.

In 2019, San Jose passed a slew of housing initiatives meant to increase the city’s housing supply, while also tweaking crucial rent control and tenant protections, which housing officials enforce and implement through the city’s Rent Stabilization Program.

The program provides services and resources to landlords, tenants and property managers who live in or manage rental units, which includes providing multi-language education on the city’s housing policies, providing legal services to low-income tenants, mediating between landlords and tenants on disagreements and managing submissions for just-cause evictions — which have steadily increased over the last two years.

In a new report, housing officials lay out the program’s top accomplishments from the past year, highlighting efforts to implement and enforce the Ellis Act, which provides protections to tenants after a rent-controlled building is redeveloped, the city’s rent control law, collecting rental housing data through a rent registry and processing petitions and eviction notices.

“The Rent Stabilization Program continues to play a critical role in stabilizing San Jose’s rental housing market, and has become an invaluable resource for tenants and owners seeking assistance in understanding their rights,” Housing Director Jacky Morales-Ferrand said.

Rent registry

The city’s newly-adopted “rent registry” database requires property owners to register their rent-controlled apartments online so city housing officials can enforce and track data and rent increases to ensure they’re not higher than the legal limit.

Apartment complexes under rent control are those built before Sept. 1979 with three or more rental units. There are 38,867 rent stabilized apartments in San Jose, the majority of which are one bedroom units, and 49,133 non-rent stabilized apartments in the city. About 74 percent of all rent-controlled units were recorded in the rent registry this year. According to new city data, the average rent for rent controlled units are:

• $1,457 per studio
• 1,652 for a one bedroom
• $1,979 for a two bedroom
• $2,354 for a three bedroom
• $2,856 for a four bedroom

The registry also collects information from landlords on rent increases, security deposits and vacancy reasons. So far, only 4.8 percent of all recorded apartment units in the rent registry are receiving rental vouchers, equaling to a total of 1,424 units. City officials plan on better verifying tenant information by adding a “tenant portal” to the rent registry by the end of next year.

Stronger tenant protections

Several crucial housing laws were changed or updated this year that apply to all rent control units in the city.

The apartment rent ordinance, commonly called rent control, was established in the 1970s to prevent exorbitant or unreasonable rent increases, alleviating “undue hardships” on tenants, and reassuring property owners that they’ll receive a “fair and reasonable return on the value of their property.” The city in 2018 no longer lets landlords pass down paying utilities to tenants.

The tenant protection ordinance, which applies to all rent controlled units, requires landlords to offer relocation assistance to tenants who are forced to leave because the units are being taken off the market, the owner is moving in or other acceptable reasons.

A total of 19 households were provided with relocation assistance this past year.

The city also made some major changes to prohibit landlords from asking tenants about their immigration status and to protect victims of domestic violence. San Jose also added “criminal activity” as a just cause for eviction this year, though the tenant is allowed to return to the apartment if he or she is acquitted of the crime.

When it comes to tenant protections for mobilehome owners and park residents, the report found rent increases for the last ten years have remained at the minimum of 3 percent. Right now, the city has 59 mobile home parks, 12 of which are designated for senior citizens, housing about 35,000 residents.

Ellis Act

Under the Ellis Act, only two property owners this year issued notices to withdraw their apartments from the rental market, amounting to nine apartments. In both cases, the plan is to demolish existing apartment complexes and build more than 200 units in each complex. Housing officials reported that all former tenants were “successfully relocated.”

The Ellis Act outlines requirements for landlords of rent-controlled apartments who choose to take units off the rental market. Lawmakers last month voted to tweak the policy, by reducing the amount of units developers have to put back under rent control after redevelopment — a move spurred by fear that the law was halting housing production.

New changes this year allow a “right to return” policy where tenants can move back into the new building and pay their previous rent plus costs attributed to the city’s consumer price index, or have the developer find the tenants replacement housing.

Just Cause evictions and petitions

Of the 13 reasons a landlord can evict a tenant, nonpayment of rent was the main reason in 93 percent or 9,081 reports of cases that a tenant was evicted, the report found.

The second reason, which made up 415 evictions, was material or habitual violation of tenancy — when a tenant violates their lease. For the last four quarters between 2017-2019, just cause evictions have steadily increased.

In the last quarter alone, evictions under the policy increased by 151, reaching 2,311 total. The most significant increase was in the third quarter, with an increase of 425 evictions, up 2,475 from 2,050.

In San Jose, a landlord must “buy out” a tenant if they plan on terminating the lease early by paying them to move out. This past year, only 12 tenant buyouts occurred, according to the report. On average, landlords paid nearly $30,000 in buyout fees.

The rent stabilization program also oversees petitions filed by landlords and tenants, conducting mediations to resolve disputes before going to court. In the last five years, there have been 1,515 petitions filed with only 263 petitions filed this year by both parties.

This past year was the first when housing officials administered “petition decisions,” resolving disputes for the landlords and tenants.

Contact Nadia Lopez at [email protected] or follow @n_llopez on Twitter.