Annual rental increase cap in San Jose stays at 5%; City Council decides in 6-5 vote

San Jose City Council in a 6-5 vote late Tuesday night, decided to keep the city's annual rental increase cap at 5 percent.

The vote came down around 11 p.m. in a meeting that lasted well into the night. However, the council had not had a chance to vote on several proposed changes to the city's Apartment Rent Ordinance as of 9 p.m.

Public comment portion of the meeting, which started around 3:30 p.m. and ended at about 9 p.m., was contentious and sometimes raucous, with tenants and landlords alike expressing concerns and support for the proposed changes to the Apartment Rent Ordinance.

There were two proposed options for the council to vote on to amend the ordinance when it comes to annual rent increases. The winning proposal allows for annual 5 percent rent increases for the apartments under the ordinance without banking. Banking allows landlords to roll over an unused 
banking from one year to the next.

The other option is to modify the annual rent increase maximum to 100 percent of the San Francisco-Oakland-San Jose Consumer Price Index for All Urban Consumers, with a 2 percent floor and 8 percent ceiling and to allow what the city calls a "maximum allowable rate form of banking with a limit of 5 percent in one year."

At about 7:30 p.m., as the list of speakers continued to grow, Mayor Sam Liccardo ordered that the speaking time for each public commenter be cut from 1-minute to 30 seconds, which resulted in speakers often blasting out their comments in rapid-fire, often having their microphone cut as they 
tried to force their few last words in.

Liccardo stood up from his chair towards the end of the public comment, at times with his hand on his chin and rubbing his eyes. He made a few comments at the end of the public comment session, reminding those in attendance that the ordinance being voted on would not help high rents in the 
city for residences built or occupied after the ordinance was adopted on July 22, 1979.

Several landlords wore green or yellow stickers with "5%" on their shirts or jackets. As tenants or tenant advocacy groups spoke, supporters snapped their fingers, some yelling in support when certain speakers raised points they agreed with.

One of the speakers, Reginald V. Swilley, the owner of Minority Business Consortium, told the council that they needed to make a choice.

"These guys have to make a decision about what we're going to do in this city: are we going to allow people to come here - and from all over the world - and buy property and force people out?" Swilley said. "Because when property is bought and used as an instrument for capital gain, it's 
going to continue to go up."

One landlord, Javier Vega, said he had completed his own case study which showed that operating costs for rental units under the ordinance have increased 16.3 percent from 2014-2017, and the landlords have to make up the difference for expenses. Vega - who claims to own a "few" buildings but declined to give an exact number, said he had supported the 8 percent raises before the council scaled them back last year.

"If we stick to 5 percent, we have to cover the difference in operating expenses," Vega said.

Longtime San Jose resident Bob Emmet, 73, said his rent went up 10 percent in the past few years. He said he works fulltime as a security guard and also lives off of social security to make ends meet. Emmet, a District 7 resident, said he's lived in the city since 1965 and he may be close to a breaking point.

"I might have to move to some place in the country where the rent is a lot cheaper," Emmet said.

Vanessa Honey, the chair of Mountain View's Rental Housing Committee, said she was attending the San Jose City Council meeting as a landlord and supported keeping the annual increases at 5 percent. She said she has managed tens of thousands of affordable housing units since 1989.

"We want to make sure we can make the important improvements to our properties for the sake of our tenants," she said.

San Jose State University geology faculty member Carlie Pietsch said she spend 41 percent of her wages on rent. Pietsch said she just started at the university in August. 

She was a post-grad student/professor in Ithaca, N.Y. before accepting the position at SJSU and rented a 2-bedroom apartment for $900 on the East Coast and now rents a 1-bedroom for $1,800 in Silicon Valley.

When she was interviewing for the position at SJSU, she said the faculty advised that the hardest thing about the position wasn't anything to do with the actual job, but affording to live here.

"They were definitely forthcoming with that information," Pietsch said.

She couldn't understand how students or individuals who don't have secure employment could afford to pay the rent and live in the community they're working in.

"Most of the faculty are buying houses hours and hours away, and I bike to commute," she said. "I don't want to drive and spend hours commuting and not working or being with family. It's a sacrifice to commute."

Swilley said the effects of the high rent in the city are very apparent, with veterans sleeping outside the steps in city hall in addition to people and families living in cars.

"We have special places in this city for people to put their campers and their cars so they can sleep without being harassed," Swilley said. "What kind of city is that?"