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Apartment Rent Ordinance

Overview of the Apartment Rent Ordinance


In 1979, the San José City Council appointed a task force to address issues in rental housing. In July 1979, the City Council adopted a rent stabilization ordinance for mobilehome parks and apartments, and created the City's Rental Dispute Program (now known as the Rent Stabilization Program) to administer the ordinance. In 1985 the City Council voted to separate the Rent Stabilization Ordinance into two separate ordinances - one for mobilehome parks, and another for apartments. 


The Apartment Rent Ordinance, found in Municipal Code Chapter 17.23, and its companion Regulations control rent increases on apartments that are covered by the ordinance.


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Updates

On Tuesday, April 24, 2018, the City Council took action to amend the Ellis Act Ordinance, Tenant Protection Ordinance (TPO), and Apartment Rent Ordinance (ARO). Over the past several months, we have worked with community and stakeholders to develop recommendations for these challenging issues. The following list the results from the City Council meeting:

  • Clarify that the pass through of utility charges to tenants are not allowed (i.e. Ratio Utility Billing System (RUBS) or other methodologies); 
  • Allow landlords with written utility contracts for water, sewer, and/or garbage in place prior to January 1, 2018 to petition for a one-time rent increase equal to the utility charges in the 2017 calendar year or limited by the 2018 Santa Clara County Housing Authority Utility Allowance rates; 
  • Allow RUBS petition to be filed from July 1, 2018 to October 31, 2018. If the landlord does not file a petition, the existing RUBS contract shall be void after October 31, 2018; and 
  • Void all verbal RUBS agreements upon the effective date of the Ordinance amendment. 

On Tuesday, May 8, the City Council passed the second reading of the amendment to the Apartment Rent Ordinance


Apartment Rent Ordinance Coverage 

Properties that are covered by San José's Apartment Rent Ordinance include apartments with three or more units that were built and occupied prior to September 7, 1979.

Rental housing developments exempted from the ordinance include single family homes,in-law units/granny flats/accessory dwelling units, duplexes, condominiums, townhomes, hotels, boarding houses rented to transient guests for periods of less than 30 days, nonprofit homes for the aged, school dormitories, rental units owned and operated by any government agency, any new rental units first rented after September 7, 1979, and properties in unincorporated areas of San José.


If you have an inquiry about a property outside of San José, please check with that specific city for more information about any regulations that may apply.

To determine if a property is rent stabilized, you can view a map of rent stabilized properties. Use the map to search for properties and view other information about a property. Click on the orange icon associated with the property address to see if it is rent stabilized, how many units it has, if it is covered by the Tenant Protection Ordinance or Ellis Act Ordinance, and what Tier it has been assigned by the Code Enforcement Department.

Please contact staff at (408) 975-4480 if you have questions or to confirm the status of a particular property.

Rent-Stabilized Map 


Allowable Rent Increase Under the Ordinance 
Under the Apartment Rent Ordinance, rent increases may only be given once in a 12-month period. The maximum annual allowable increase is 5%.  

Exceptions to the Allowable Rent Increases

Rent increases that are exempt from these requirements include an increase after the rental unit has been voluntarily vacated by the tenant, and an increase after eviction of a tenant. 

A landlord can petition to pass through costs to tenants for the following reasons:

  • Specific Capital Improvements: The total monthly amount imposed may not exceed 3 percent of the monthly rent charged and is not considered rent. The improvement must have been completed within 12 months prior to the filing of the petition.
  • Fair Return Increase: A special permanent rent adjustment may be approved by the City when the landlord offers proof that their operating expenses exceed income as is adjusted for by inflation.
Tenants may also file a joint petition with their landlord for a 5% increase in rent per additional occupant.

Tenants with a rent increase subject to review and/or service reduction claims or housing code violations may file a petition. 


Service Reductions
 
A service reduction has occurred when the level of service provided by the landlord has been reduced without a corresponding decrease in rent. The Ordinance allows tenants to request an administrative hearing for a service reduction claim. The tenant has the burden of proof to their claim by submitting evidence such as maintenance record requests, photographs, and/or testimony. If the claim is proven, the Hearing Officer will determine the percentage that the usability of the rental unit was reduced and the duration of the reduction. If the rent increase is unreasonable, the Hearing Officer may reduce a rent increase, order a credit against the paid and/or permanent or temporary reduction in future rent. 

Housing Code Violations
 
A housing code violation has occurred when there are health and safety defects which violate the San José Housing Code and/or California Civil Code Sections 1941.1 and 1941.2. The tenant has the burden to prove their claim by submitting evidence such as a Code Enforcement Inspection which is considered presumptive evidence.  Unless there is sufficient evidence to the contrary, violations listed in the report are considered to have been proven to exist. Issues of this type may also be classified as 'service reductions' under the City's ordinance. The Hearing Officer may reduce, disallow or reasonably condition any rent increase based on the severity of any Housing Code violations. 

Freedom to Exercise Rights
 
Apartment owners may not do the following in retaliation for tenants demanding their rights under the Ordinance: 
•Threaten to sue, evict or terminate the tenancy of the tenant(s). 
•Harass you until you leave. 
•Reduce your services. 
•Increase your rent. 
•Impose a security deposit or any other new charge. 

If any of these actions occur, provide a written complaint to the Rent Stabilization Program.