Major changes to Mountain View's rent control law could go before Mountain View voters this fall.
The political action group Measure V Too Costly filed paperwork on Friday, March 30, for a November ballot initiative that would heavily modify Mountain View's rent control program. The proposal, dubbed the "Mountain View Homeowner, Renter, and Taxpayer Protection Initiative," seeks to curtail most limits on rent increases and create income eligibility requirements for tenants.
Among the proposed changes is a provision that under most circumstances would bring a halt to using the Consumer Price Index (CPI) as the baseline for determining citywide rent increases on eligible apartments. Using CPI, affected apartment owners last year were restricted to no more than a 3.4 percent increase in the rents they charged.
Under the proposed initiative, this CPI cap on rent increases would be lifted if more than 3 percent of the approximately 15,000 apartments in the city are vacant. In that scenario, the Rental Housing Committee would be obligated to suspend the CPI rent cap as well as the just-cause eviction protections written into the rent control law. These tenant protections could later be reinstated if the vacancy rate dips back below 3 percent for six consecutive months.
The city's vacancy rate on apartments has not dipped below 3 percent since at least 2009, according to CoStar data. About 4.3 percent of apartments in Mountain View are currently vacant.
For period when the vacancy rate is above 3 percent, the new initiative would set no limit on rent increases, although landlords would still be restricted to imposing only one increase per year. Any rent increases that exceed 7 percent would be subject to a three-step mediation program that could culminate in arbitration, which would not be binding. Under this system, landlords would have to demonstrate their rent increases are "reasonable" due to a variety of factors, such as maintenance and operation costs. The going market rate for similar apartment units in Mountain View could also be used to justify rent increases.
The higher rent threshold and arbitration program bear strong similarities to Measure W, a milder version of rent control that the Mountain View City Council put on the 2016 ballot as an alternative to Measure V, which was favored by tenant advocates and won approval. Measure W fell short of passage, receiving support from only 48.6 percent of voters.
Other big changes are proposed in the new initiative. Tenants would be eligible for the rental protections only if they earn less than the median income for Santa Clara County, which was $90,650 for a two-person household last year. Only tenants earning less than the median income would be eligible for relocation assistance if they were displaced due to redevelopment of the property or other reasons. Currently, under a program approved by the City Council, relocation benefits are available to most displaced tenants earning at least 120 percent of the median income.
The proposed initiative would require any tenants who seek rent-control protections to take the extra step of filing an annual application with the city, stating that they are earning less than the median income under penalty of perjury.
These changes reflect a common refrain among landlords that Mountain View's rental protections are primarily benefiting tech employees earning high salaries, not low-income families.
The Measure V Too Costly organization has made rent control's expense to taxpayers its central argument for changing Mountain View's rent control law. On its website and promotional materials, the group has highlighted the Rental Housing Committee's $2.59 million budget and its need to borrow start-up money from the city government.
"We filed the initiative to fix the inherent flaws within Measure V," former mayor John Inks said in a press release for the group. "Measure V was proving to be too costly for Mountain View taxpayers and was jeopardizing general fund dollars, which are critical to Mountain View's public safety and infrastructure budgets."
Mountain View housing staffers recently reported that the rental committee had paid back the city in full for the borrowed start-up funding. They announced they were expecting the rent control program to show a surplus and said it would likely operate on smaller budgets in coming years.
Landlords are required to fund rent control's costs through an annual fee on nearly every apartment unit in the city. For this year, the fee was set at $155, and apartment owners are prohibited from passing through those costs onto their tenants.
The proposed initiative would change that rule by explicitly limiting the fee to $100 per unit for 2019. Fees can be raised in future years, but these increases must be restricted to the CPI, according to the text of the initiative.
The initiative would amend Measure V with provisions that would bar the Rental Housing Committee from taking money from the city of Mountain View, unless approved by a City Council majority. The Rental Housing Committee members, who are unpaid, would be explicitly prohibited from receiving any compensation.
The proposed initiative is not guaranteed a spot on the November ballot. The city attorney has 15 days to review it and write up a summary. After that, supporters can begin the process of gathering signatures to put it on the ballot. Signatures will need to be collected from 15 percent of the registered voters in Mountain View, which is estimated to be about 5,500 people.