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Rent Stabilization - Stable Rents Mean Stable Com $ a Page 139 <br /> Some important questions and answers about rent stabilization in California <br /> Excerpted from the California Housing Element Policy Best Practices Document: <br /> http://www.hlcsmc.org/images/Policy Best Practices Final.pdf <br /> Rent stabilization <br /> Summary and Benefits: <br /> Deed restricted affordable housing properties offer protections from market vacillations and provide stability for families. In <br /> contrast, market -rate units fluctuate with changes in the housing market. With the Bay Area housing market bouncing back, <br /> rent increases have exceeded 20% per year in some municipalities. These rapid rent increases have made homes that were <br /> previously affordable to lower- income families and households on a fixed income too expensive. <br /> Rent stabilization ordinances limit the amount that rents are allowed to increase as market values increase. Landlords <br /> continue to obtain ever higher returns on their rental properties while tenants have the certainty that their rents will not <br /> increase more than a certain amount each year. Once a tenant moves out vacancy decontrol takes effect, that is, rents "reset" <br /> to market rate values for new occupants. While the Costa- Hawkins Act of 1995 limits the use of rent stabilization for new <br /> construction, these rules can apply to units built prior to February 1, 1995. <br /> Below are a few examples of the diverse approaches to rent stabilization undertaken by Bay Area jurisdictions: <br /> Jurisdiction Applicability AIL j ilL Maximum Allowable Rent Increase <br /> East Palo Alto Most Rental Properties 80% of the increase in the Consumer Price Index <br /> Hayward All rental properties 5% annual increase <br /> Los Gatos Properties with three or more Cannot exceed annual increase of 5% or 70% of <br /> rental units the increase in the Consumer Price Index <br /> San Rafael Mobile Homes 75% of the increase in the Consumer Price Index <br /> San Jose Applies to triplex or larger 8% annual increase <br /> units built before 1979. Does If rent is increasing for first time in 24 months <br /> not apply to condominiums, limited to 21% <br /> single family homes, or <br /> properties paid by federal <br /> subsidies. <br /> Potential Policies: <br /> • Consider implementing controls on the rate of rent increases - note the distinction between rent control and rent <br /> stabilization. Rent control generally applies to setting the price of rent, while rent stabilization speaks to the rate of <br /> rent increase. New York City has both <br /> • Consider implementation of Just Cause provision for tenant evictions <br /> Model Ordinances /Useful Sources: <br /> • City of East Palo Alto, link: http: / /www.ci. east - palo - alto.ca.us /index.aspx ?NID=469 <br /> • City of Hayward, link: http:// www. echofairhousing. org/ images /ResidentialRentOrdinance -l.pdf <br /> • Town of Los Gatos, link http: // www .losgatosca.gov /faq.aspx ?tid =31 <br /> • San Rafael municipal code, link: <br /> http: //library. municode.com/ index. aspx? clientld = 16610 &stateld =5 &stateName= California <br /> • City of Berkeley Guide to Rent Control, link: <br /> http://www.ci.berkeley.ca.us/Rent Stabilization Board/Home /Guide to Rent Control.aspx <br /> • San Jose, link: http : / /www.sanjoseca.gov /index.aspx ?NID =2313 <br /> Brought to you by: <br /> Community Legal Services of East Palo Alto, Housing Leadership Council of San Mateo County, Public Advocates, San Francisco Organizing <br /> Project /Peninsula Interfaith Action, Urban Habitat <br />