Good news for landlords in San Jose, California! The city released it’s ruling on rent control changes yesterday, and the final proposal shows little change. But, what’s on the table now is very, very concerning.
According to The Mercury News, the San Jose City Hall released a plan intended to further restrict how much a landlord can raise rents. Current laws limit rental increases to 8 percent per year.
But the final proposal was released yesterday, and to the surprise and relief of landlords, it shows little change to current law that’s been in place for 40 years and covers about one-third of the city's apartments, or about 44,000 units. The City Council will vote on the plan on April 19.
While this may offer some relief to outraged landlords, The Mercury News article states that the City Housing Director supports the idea of replacing the current 8 percent allowable rent increase with an increase no higher than the consumer price index.
While that would be in the landlords' favor if inflation were on the rise, the consumer price index has actually ranged from 0.7 percent to 2.8 percent over the past six years. Imagine landlords being limited to .7% rental increases when their other expenses for owning that property are rising much faster - like taxes, insurance, repairs and maintenance!
For now, the City Housing Director is asking for a temporary pause in annual rents until the city staff can finish work on the new rules.
Perhaps an even more controversial issue that’s on the table in San Jose, and likely coming to other high priced cities as well, is how to replace rent-controlled units when a landlord decides to go out of business or convert to condominiums.
Get the full transcript at www.NewsForInvestors.com
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