Officials in one West Valley city are taking action to combat a statewide policy gap that leaves residents in affordable housing vulnerable to rent increases that could price them out.
The Campbell City Council voted 4-1 last month to cap affordable housing rent increases at 5%, plus cost of living changes or a flat 10% annually, whichever is lower. The policy applies to all existing and future affordable housing developments and extends rental protections to residents living in affordable housing. Tenant protection laws such as 2019’s Assembly Bill 1482 mainly enforce similar rent caps on market-rate housing and exclude affordable housing with regulatory agreements to keep rent low, a disparity housing advocates said affects the most vulnerable.
The policy will cover existing affordable homes such as the 51 homes that affordable housing organization HouseKeys connects residents to, including a property known as Alvin’s Corner at Penny Lane. There are roughly 2,461 people experiencing poverty in a city of nearly 44,000, according to 2020 and 2022 census data. Vice Mayor Sergio Lopez voted no even though he supported the protections, citing concerns about other aspects that would require small housing projects to convert at least 15% of homes into affordable housing or pay a fee.
A resident living in an affordable studio, who requested anonymity over privacy concerns, said she wasn’t aware the owners could raise rent exponentially due to the state policy gap. She moved into Alvin’s Corner about eight years ago to be closer to family after the city helped her find an affordable home on her fixed income. Her recent rent was nearly $1,200 a month and her home could have been one of the eight asked to pay 24% to 1,368% more roughly two years ago when the property owners tried to raise rent on affordable apartments, according to city officials.
The rent hikes at Alvin’s Corner, while still considered affordable per city guidelines, would have created potential hardship for the renters. The city stepped in to help and resolved the exorbitant hike with the property owners and HouseKeys.
The resident said she wouldn’t have been able to live in Campbell without affordable rent and said she’s glad this policy will keep rents stable for young people.
“I’m glad to hear that they reached out to people who are just starting to work, young people as well those who are at the other end of the game, but in a similar position,” she told San José Spotlight. “If you can’t attract young folks who are starting out then that’s a real danger to the workforce.”
That was the first time Community Development Director Rob Eastwood said he’d seen high rent increases almost displace affordable housing residents, largely because of the property owner’s lost income due to pandemic rent moratoriums. He said this new city policy is critical to shield all residents living in affordable homes from rent shock. Alvin’s Corner is just one development the policy will affect.
“We hope (property owners) would notify residents (if) they want to increase rents, but it prevents those dramatic actions that could have someone not be able to afford (the hike) and have to leave their unit, be it below-market-rate or market-rate,” Eastwood told San José Spotlight.
Alvin’s Corner at Penny Lane management did not respond to requests for comment.
The issue goes beyond Santa Clara County. Candice Testa, director of HouseKeys’ multi-family housing division, said renters in affordable housing statewide are experiencing skyrocketing rents because there are minimal state restrictions. She said it’s pushing cities such as Campbell to implement their own affordable housing rent caps.
“It’s a shocking thing to explain to an applicant or a resident that, yes, they do qualify for low-income housing, but they’re exempted from rules that protect rent increases,” she told San José Spotlight. “This is the industry fixing itself.”
Neighboring municipalities in the county also have rent restrictions for different kinds of housing. San Jose caps rent surges at 5%, but only covers homes built and occupied before 1979. Los Gatos caps rent at 5% — or 70% of the Consumer Price Index, whichever is higher.
Campbell’s policy will protect residents in its ever-growing affordable housing stock. The city recently passed a policy requiring developments with five or more homes to build some affordable housing or pay a fee. It will also implement commercial linkage fees for projects without housing in about a year.
Testa said it’s easy to vilify property owners for the rent increases, but she said they need city affordable housing legislation to give them a framework to follow.
“Our developers want to do the right thing. We don’t work with slumlords or anybody that is not taking care of those residents,” she said. “But what developers really ask for is clarity. They want to understand what the rule is and how to abide by it.”
Contact Annalise Freimarck at [email protected] or follow @annalise_ellen on X, formerly known as Twitter.
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