The Mountain View City Council hammered out a list of proposed updates intended to add flexibility to the city's rent control program, but the talks fell apart when it came to allowing higher rent increases.
At its meeting on Tuesday, Sept. 17, the full City Council got its first opportunity to weigh in on a proposed 2020 ballot measure -- now expected to come in March -- that would tweak the city's rent control policies, which have become a third rail of Mountain View politics.
For the last two months, a three-member subcommittee has worked on a loose package of changes to add more nuance to the rigid language of the 2016 charter amendment known as the Community Stabilization and Fair Rent Act (CSFRA), giving elected leaders more control over its implementation. But up to this point the discussion has mostly avoided touching the cornerstone of any rent control policy: the actual ceiling on rent increases year to year.
That changed on Tuesday night as council members debated whether tenants need to pay more in order to sustain the business end of the housing industry. For a majority of elected leaders, there was no question that the citywide rent control system as currently written is unfair to apartment landlords, motivating them to sell or redevelop their properties. To this point, tenant advocates contend that the number of apartment sales and redevelopments has not substantially changed since the CSFRA was passed in 2016.
The current law limits annual rent increases to the cost of inflation as set by the Consumer Price Index, which generally hovers just above 3%. Ever since rent control was enacted, landlords have complained tying rents to inflation is a pittance, hardly enough to balance the upkeep of their properties.
Responding to that concern on Tuesday, Councilwoman Margaret Abe-Koga, who spearheaded the ballot measure effort, pitched the idea of raising that rent cap to a fixed rate of 5%. Tenants had something to gain from this, she explained, because a fixed rate would provide certainty for how much they would be paying year to year.
"Housing has to be worthwhile for landlords to stay in business," she said. "As much as keeping rents low is definitely a useful purpose of the CSFRA, we've also seen cases where it's motivated certain landowners to redevelop their properties."
Overshadowing this discussion, rent control is on the cusp of being enacted statewide in an unprecedented response to California's housing crisis. Assembly Bill 1482, authored by San Francisco Assemblyman David Chiu, would force all cities in California to limit annual rent increases to 5% plus the cost of inflation. Last week, the bill passed out of the state Legislature, and it is expected to be signed by Gov. Gavin Newsom.
Yet the statewide move toward stronger rental protections has had the opposite impact in Mountain View. Abe-Koga and others have pointed to AB 1482 as a reason why Mountain View should water down its rent control laws, because the city would be following a completely different set of restrictions than other municipalities.
Other council members made it clear the idea of raising the rent cap would be a political non-starter. In a city where 58% of residents are not homeowners, any whiff of higher rents would likely kill the chances of a ballot measure winning voter approval, warned Councilman Lucas Ramirez, a member of the CSFRA subcommittee.
"Do you want to raise your rents? Then vote yes on this measure," he said. "I don't know how we would justify this in a campaign."
On this issue, the seven City Council members split into three camps. Mayor Lisa Matichak, Councilman John McAlister and Abe-Koga strongly backed increasing the rent cap to 5%. On the other side were Ramirez and Councilwoman Alison Hicks, who argued any hint of higher rents would torpedo the measure's chances at the ballot box.
"I have some grave reservations about the path we're going down," Hicks said. "We're churning this issue over and over again, and I think we should put our time and money on other priorities."
Somewhere in the middle were council members Ellen Kamei and Chris Clark, who were noncommittal and indicated they wanted more options. Clark was receptive to the 5% ceiling on rents, but he wanted it to be reserved for landlords who register with the city and have good inspection records at their properties.
A motion for the 5% rent cap ended up failing in a 3-4 vote, with Ramirez, Hicks, Kamei and Clark opposing. In a follow-up vote, the council unanimously agreed to send the CSFRA subcommittee back to the drawing board to discuss other potential options for revising the rent cap.
In another sign of how the debate is playing out, political activist groups seem to have picked their sides on the rent control ballot measure. California Apartment Association spokesman Joshua Howard praised the council's efforts to revise the CSFRA. In prior meetings, the CAA was more reserved, warning the council's measure could end up competing with their own ballot initiative to weaken the city's rent control.
"It's encouraging to see that you're developing options for the voters to decide," Howard said. "Without fixing the (CSFRA), we're going to see more units taken off the market and potentially more displacement."
Meanwhile, tenant advocates who rallied against the city in 2016 to pass rent control are now signaling they are ready to go to war once again. Like in past meetings, the Housing Justice Coalition listed out several "poison pills" that would result in outright opposition, such as higher rent caps or City Council discretion to change the law.
"Any of these things will trigger a campaign to defend these hard-won protections," warned Alex Nunez, a Housing Justice member. "Please don't go against the will of the people who banded together to pass this law."
While higher rent increases did not win support, the City Council unanimously approved other updates that could be packaged into a future ballot measure. Council members agreed to update the CSFRA petition process, a system for landlords to seek permission to pass through maintenance costs to their tenants. The proposed changes would create a new expedited process for landlords to recoup certain capital costs, such as environmental improvements, seismic upgrades or mandatory code requirements.
Similarly, all council members were in agreement that they should have greater sway over Mountain View's administration of rent control. Up to this point, the rental program has been controlled by the Rental Housing Committee, a five-member panel appointed by the City Council.
The proposed changes would broaden the criteria for rental committee applicants. Landlords who own rental property in Mountain View would be allowed to serve on the committee.
A future ballot measure would contain provisions giving the City Council some kind of oversight over the Rental Housing Committee, particularly on issues that would result in legal risk or costs to the city's general fund. The council's CSFRA subcommittee will discuss specifics at a future meeting for what kind of authority it would seek over the rent control program.