San Jose rejects CPI-based rent control, sticks with 5 percent cap

After hours of debate, the San Jose City Council on Tuesday rejected a proposal to begin basing its annual rent cap on the rate of inflation.

At the urging of CAA, the council instead voted 6-5 to maintain the city’s current 5 percent limit on annual rent increases.

The California Apartment Association attended Tuesday’s meeting in force, with members speaking against the proposal to base rent control on the Consumer Price Index. The CPI is now about 3.4 percent but fluctuates.

Extended its current policy on Ratio Utility Billing Systems, or RUBS, until March
The city’s 5 percent cap, on the other hand, provides a fixed, predictable limit, making it easier for owners and renters to budget for annual adjustments.

The council Tuesday also rejected a proposal to begin applying rent control to duplexes. The city’s rent control policy will continue to apply to multifamily rental units built before 1979.

Moreover, the council extended the existing policy on utility cost sharing (also known as Ratio Utility Billing Systems or RUBs) until March of next year, when it can be further studied.

The council’s decision to maintain current policies on RUBS and rent increases marks a significant victory for CAA and its members.

CAA extends its thanks to Mayor Sam Liccardo and Councilmembers Chappie Jones, Lan Diep, Dev Davis, Tam Nguyen and Johnny Khamis for their leadership.

Had the council approved CPI-based rent control, it would have marked the second time in two years that the city lowered its limits on rent adjustments.

The city’s 5 percent rent cap won approval in 2016. It had previously been set at 8 percent annually.

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