Category: local-ordinances

Understanding San Jose’s Rent Control Framework (SJMC §17.23)

San Jose’s rent control ordinance is one of California’s most restrictive local housing regulations. Enacted in 1979 and substantially amended multiple times through 2024, SJMC §17.23 creates a comprehensive system that affects rent increases, evictions, unit registration, and tenant protections. For self-managing landlords with units in San Jose, non-compliance is not a technical violation—it’s enforceable through tenant lawsuits, Housing Department fines, and loss of rental income.

Unlike statewide California law (which caps increases at 5% plus inflation under AB 1482), San Jose’s local rule is more restrictive: the lower of 5% or the Regional Consumer Price Index (CPI) adjustment. For 2026, the San Jose Housing Department calculated the annual allowable increase at 3.6%, based on the Bay Area CPI as of August 2025.

The ordinance applies to virtually all residential rental units in San Jose constructed before September 7, 1979. This includes apartments, condos (if rented), houses, manufactured homes, and mobile homes. However, critical exemptions exist that many landlords misunderstand, and claiming an exemption incorrectly exposes you to liability.

Which Properties Are Covered by SJMC §17.23?

Covered Properties (Subject to Rent Control):

• Residential units in buildings built before September 7, 1979
• Multi-family apartments and townhomes
• Single-family homes (if not owner-occupied)
• Condominiums (if rented, not owner-occupied)
• Mobile homes in San Jose (if built before the cutoff date)

Exempt Properties (NOT Subject to Rent Control):

• Single-family homes or duplexes where the owner occupies one unit (SJMC §17.23.100(c))
• Units in buildings with four or fewer units where the owner occupies one unit
• Accessory dwelling units (ADUs) created after January 1, 2020 (though earlier ADUs may be covered)
• New construction completed on or after September 7, 1979
• Hotel rooms and other transient occupancy (under 30 days)
• Units subsidized by government programs with rent restrictions already in place

Many landlords assume their small property is exempt because they live in one unit. This is correct only if: (1) the building has four or fewer units total, and (2) the owner actually resides in one of those units. If you own a 5-unit building and live in one, the remaining four units ARE covered. If you own a single-family rental home that you don’t occupy, it IS covered. Document your owner-occupancy status and keep proof (utility bills, voter registration, mail) in case the Housing Department audits your registration.

Annual Rent Increase Limits and 2026 Calculations

SJMC §17.23.500 mandates that rent increases for covered units shall not exceed the lower of:

1. 5 percent, or
2. The Regional Consumer Price Index (CPI) for the San Francisco Bay Area as published by the U.S. Department of Labor for the prior 12-month period

The San Jose Housing Department publishes the allowable increase each year by August. For 2026, the allowable increase is 3.6%, based on CPI data through August 2025. This means if a tenant’s monthly rent is $2,000, the maximum allowable increase is $72 per month (2,000 × 0.036), effective on the anniversary date of their lease or the date notice was served.

Important distinction: The 3.6% applies to increases that take effect in 2026. If a tenant’s lease anniversary is January 1, 2026, you can increase rent by 3.6%. If their anniversary is December 1, 2026, you still use the 2026 limit (3.6%), not the 2027 limit (which will be announced later).

How to Calculate Your Allowable Increase

Step 1: Confirm the tenant’s lease anniversary date. This is the date rent increases reset each year (usually the date the lease began or was renewed).

Step 2: Multiply current rent by 1.036.

• Example: Current rent = $1,500/month. New rent = $1,500 × 1.036 = $1,554/month (a $54/month increase)

Step 3: Serve written notice 60 days before the increase takes effect. SJMC §17.23.500(a) requires notice in writing, served personally or by mail, at least 60 calendar days before the effective date. If you serve notice on January 1, the earliest effective date is March 2 (60 days later). Serving fewer than 60 days’ notice renders the increase unenforceable.

Step 4: Include required information in the notice. The notice must state:

• The current rent amount
• The new rent amount
• The effective date of the increase
• A statement that the increase complies with SJMC §17.23.500
• Information on rent mediation services and tenant rights (San Jose provides a standard form)

Step 5: Keep proof of service. Retain copies of the notice and proof of delivery (mailing receipt, certified mail, or signed personal delivery acknowledgment).

What Happens If You Exceed the Limit?

If you increase rent above the allowable percentage without just cause for eviction, the tenant can:

1. File a complaint with the San Jose Housing Department — the Department will investigate and may order you to refund the excess amount plus interest
2. Sue in civil court for overcharge damages — SJMC §17.23.1000(b) allows tenants to recover treble damages (three times the overcharge amount) plus attorney fees if the increase was willful
3. Assert the overcharge as a defense to eviction — if you sue for eviction, the tenant can counterclaim for the overcharge, potentially exceeding the amount you’re owed

Real example: You increase a tenant’s rent from $2,000 to $2,150 (a 7.5% increase) without proper just cause. The tenant should have been offered a 3.6% increase ($2,072). The overcharge is $78/month × 12 months = $936/year. If willful, the tenant recovers $2,808 plus attorney fees. Your cost to defend the lawsuit will exceed $2,000–$3,000.

Property Registration and Annual Compliance Requirements

SJMC §17.23.200 requires all owners of covered rent-controlled units to register their properties with the San Jose Housing Department. Registration is mandatory, not optional, and must occur annually by a deadline set by the Housing Department (typically December 31 for the upcoming year).

What You Must Register

• Each covered residential unit (not just the building—each unit is registered separately)
• Current rent for each unit (as of the registration date)
• Number of bedrooms and bathrooms
• Owner name and mailing address
• Property address and unit number
• Contact information for rent increase disputes (name and phone of person to contact regarding rent mediation)

How to Register

San Jose offers online registration through its Housing Department portal (housing.sanjoseca.gov). The process takes 15–20 minutes per unit:

1. Visit the San Jose Housing Department website and select “Rent Increase Registration”
2. Create an account (use your landlord email)
3. Enter property and unit details
4. List current rent amount
5. Upload proof of property ownership (deed, tax bill, or HOA documents)
6. Submit the form and save the confirmation receipt

The Housing Department will issue a registration certificate, which you should retain for records. If you own multiple units, you must register each unit individually.

Penalties for Non-Registration

Failure to register is enforceable as a civil violation. SJMC §17.23.950 states:

• Up to $500 per violation per unit per year — calculated cumulatively
• The San Jose Housing Department can issue “Notice and Order to Comply” requiring registration within 30 days
• If you fail to comply within 30 days, the Department can impose daily penalties
• Non-registration also bars you from enforcing rent increases—meaning you cannot legally collect any increase amount during the period of non-registration

A landlord with five unregistered units who fails to register for one year could face $2,500 in fines, plus loss of all rental income above the tenant’s prior year rent. This creates back-rent liability to tenants, who can sue to recover it.

What Changes Require Re-Registration?

You must update your registration within 30 days if:

• Rent amount changes (due to an approved increase or tenant turnover)
• Ownership changes (if you sell the property)
• Contact information changes (phone, address, email)
• A unit becomes exempt (e.g., you move into an owner-occupied exemption)
• A unit becomes subject to coverage (e.g., you cease owner-occupancy)

Just Cause Eviction Requirements (SJMC §17.23.700–.750)

San Jose’s Just Cause Eviction Ordinance prohibits no-fault evictions of tenants in covered units. You may evict only for cause, and you must provide specific relocation assistance. This is separate from—and more restrictive than—California’s statewide AB 1482 protections.

Permitted Just Causes for Eviction

SJMC §17.23.700(a) lists the only grounds for eviction of tenants in rent-controlled units:

Just Cause	Requirements
Non-payment of rent	Tenant 3 or more days late (SJMC §17.23.700(a)(1)); you must serve a 3-day pay-or-quit notice
Material lease violation	Breach of a material lease term (not paying utilities, unauthorized occupants, etc.); serve 3-day cure-or-quit notice; tenant must fail to cure within 3 days
Nuisance or damage	Tenant or occupant commits nuisance, waste, or property damage; serve 3-day notice to cure or vacate
Criminal activity	Tenant or occupant engaged in criminal activity (drug dealing, theft, felony); serve 3-day notice to vacate immediately
Owner move-in	Owner or owner’s family member intends to occupy the unit as a primary residence; SJMC §17.23.700(a)(3); requires 60 days’ notice; relocation assistance required (see below)
Demolition or substantial rehabilitation	Property must be demolished or substantially rehabilitated (more than 50% of structure cost); requires 120 days’ notice; relocation assistance required
Legitimate business use	Owner intends to convert to non-residential use (office, commercial); rare and strictly construed; requires 180 days’ notice

No-Cause Eviction is Prohibited. You cannot evict a tenant to raise rent, due to a tenant complaint to the city, because of a lease expiration, or for any reason not listed above. If you attempt such an eviction, the tenant can sue you for wrongful eviction damages (often several months’ rent plus attorney fees).

Relocation Assistance Requirement (SJMC §17.23.750)

If you evict a tenant for owner move-in, demolition, or substantial rehabilitation, you must pay relocation assistance. SJMC §17.23.750(a) sets the following amounts (as of 2024; amounts are adjusted annually for inflation):

• Very low-income households (60% of area median income or below): $6,000
• Low-income households (61–80% of AMI): $4,500
• Moderate-income households (81% of AMI and above): $4,000

The tenant determines their own income category; you do not require income verification. Payment must be made at or before the tenant vacates. If you fail to pay, the tenant can sue for the amount plus penalties and attorney fees.

Example: You own a duplex and want to move into one unit (your spouse currently rents it). You serve 60 days’ notice on the tenant in that unit. At move-out, you must pay relocation assistance (assume $4,000–$6,000 depending on tenant income). Your cost is at least $4,000 in addition to the lost rent during the notice period.

Notice Requirements and Service Procedures

SJMC §17.23 contains strict notice requirements. Failure to follow proper procedures bars enforcement of rent increases and can result in invalid evictions that must be dismissed by the court.

Notice for Rent Increases

Timing: 60 days’ written notice before the increase takes effect (SJMC §17.23.500(a))

Content: Must include:

• Current rent and new rent amount
• Effective date of increase
• Calculation showing compliance with the annual limit
• Statement of tenant rights (San Jose provides a standard form at housing.sanjoseca.gov)
• Information on rent mediation services (phone number and website)

Service Method:

• Personal service (hand-delivery), or
• First-class mail to the address where tenant pays rent, or
• Email (if tenant consents in writing)

If you use mail, count the day of mailing as Day 0; the 60-day clock starts on Day 1 of mailing.

Notice for Just Cause Eviction

Pay-or-Quit Notice (Non-Payment): 3 days’ written notice (SJMC §17.23.700(a)(1)). Count days as: if served on Monday, the deadline is Thursday at 11:59 p.m. Weekends and holidays do not extend the deadline.

Cure-or-Quit Notice (Lease Violation): 3 days’ notice with opportunity to cure. The notice must specifically describe the violation and state that the tenant has 3 days to cure it or face eviction.

Nuisance/Damage Notice: 3 days’ notice to cure or vacate. For criminal activity, the notice can state “vacate immediately” (0 days).

Owner Move-In Notice: 60 days’ written notice (SJMC §17.23.700(a)(3)). Must include:

• Statement that owner intends to occupy the unit as primary residence
• Identification of the owner or family member who will occupy it
• Relocation assistance amount (calculated based on estimated tenant income category)
• Tenant rights information and mediation resources

Demolition or Rehabilitation Notice: 120 days’ written notice with relocation assistance details.

Rent Mediation and Dispute Resolution

Before filing an eviction case, SJMC §17.23.600 requires that rent disputes be submitted to the San Jose Community Mediation Services. This is mandatory pre-litigation mediation.

How Rent Mediation Works

1. Tenant or landlord initiates mediation by filing a request with the San Jose Housing Department
2. Both parties attend a mediation session (usually within 30 days of request)
3. A neutral mediator facilitates discussion about the rent increase, claimed hardship, and potential compromise
4. If agreement is reached, it is documented; if not, the mediator issues a non-binding recommendation
5. Either party can reject the mediation result and proceed to litigation

Mediation does not prevent you from filing an eviction for non-payment; however, if a tenant files a mediation request regarding a proposed increase and you proceed to evict without mediation, the court may dismiss the case or award the tenant attorney fees.

Cost: Mediation is free to both parties (funded by the City of San Jose).

Record-Keeping and Documentation Requirements

To defend yourself against tenant disputes and Housing Department investigations, maintain the following records for each unit:

Document Type	Retention Period	Why It Matters
Lease agreement	Duration of tenancy + 3 years	Proves lease anniversary date and terms; required for mediation disputes
Rent increase notices	3 years from date of increase	Proof of proper notice and 60-day timing; blocks overcharge claims
Proof of service (certified mail, receipt, email read confirmation)	3 years from service date	Establishes that notice was properly received; critical in eviction litigation
Annual registration confirmation	3 years per registration period	Proof of compliance; protects against Housing Department penalties
Rent payment records (checks, ACH confirmations, receipts)	3 years	Proof of amount actually collected; blocks tenant claims of undisclosed rent
Communication with tenant (emails, texts, letters)	3 years	Evidence of tenant acknowledgment, lease violations, or disputes; useful in mediation and litigation
Notice and Order to Comply from Housing Department	Indefinitely	Shows you were on notice of violations; required to show good-faith compliance efforts

Keep all documents in a central location (physical or cloud-based) organized by property and unit. If you store documents digitally, use encrypted storage and maintain backup copies. If the Housing Department investigates, you should be able to produce any document within 48 hours.

Common Compliance Mistakes and How to Avoid Them

Mistake #1: Calculating the Annual Increase Incorrectly

What landlords do wrong: They use the prior year’s increase as a baseline instead of the absolute limit. Example: “I increased rent 2% last year, so I can increase 3.6% this year” = 5.6% total increase.

Correct approach: The annual limit applies each year independently. If rent is $2,000 and the limit is 3.6%, the new rent is $2,072, regardless of what you charged the prior year. If you previously overcharged, you cannot “catch up” by reducing this year’s increase.

Mistake #2: Failing to Register (or Registering Late)

What landlords do wrong: They assume registration is optional or “just paperwork.” They miss the annual deadline.

Consequence: You cannot enforce any rent increase during non-registration. If you fail to register for one year and collect above-rent increases, the tenant can sue to recover the difference plus treble damages.

Solution: Set a calendar reminder for November 15 each year to begin your registration process. Allocate 30 minutes per unit. Check the San Jose Housing Department website for the current year’s deadline (usually December 31).

Mistake #3: Serving Fewer Than 60 Days’ Notice

What landlords do wrong: They serve 30 days’ notice thinking it’s sufficient. They miscalculate the clock (e.g., counting business days instead of calendar days).

Consequence: The rent increase is unenforceable. If you attempt to collect the increase, the tenant can sue and the court will order you to refund the difference.

Solution: Use an online calculator (include this in your tenant communication platform) to compute the 60-day deadline. Serve notice on the 60th day or earlier. Document the service date in writing.

Mistake #4: Attempting a No-Cause Eviction

What landlords do wrong: They serve a lease expiration notice or “non-renewal” without stating a just cause. Example: “Your lease expires on December 31. Please vacate.”

Consequence: If the tenant refuses to leave, your eviction case will be dismissed. The tenant can then sue you for wrongful eviction and recover $5,000–$15,000 in damages plus attorney fees.

Solution: Before serving any termination notice, confirm a legal just cause applies. Use the San Jose Housing Department’s standard forms (available on its website) that include language stating the specific just cause.

Mistake #5: Not Offering Relocation Assistance for Owner Move-In

What landlords do wrong: They assume relocation assistance is negotiable or can be waived if the tenant is cooperative.

Consequence: The tenant can sue for the relocation amount (typically $4,000–$6,000) plus attorney fees. If the eviction proceeds to court, the judge will order payment as a condition of the tenant’s eviction.

Solution: Budget relocation assistance as a cost of owner move-in eviction. Offer to pay it when serving the 60-day notice. This avoids litigation and accelerates the tenant’s departure.

Compliance Checklist for San Jose Landlords

Use this checklist at the start of each year and whenever you plan a rent increase, eviction, or property change: