Soaring Rents, Falling Wages

October 2017

Soaring Rents, Falling Wages

The growing gap between rents and incomes in San Jose

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The growing gap between rents and incomes is stretching working families and seniors to the breaking point — while millionaire landlords and absentee corporations profit off our housing crisis.

The tech boom has driven San Jose rents sky-high. Between 2009 and 2015, the inflation-adjusted average rent for an apartment jumped by 32.2%. Yet over that same time, adjusted median incomes for renters have actually declined 2.8%. This has forced families to cram together in small apartments, move away to cheaper places, make unhealthy trade-offs between rent and other essentials like food and prescriptions, or sleep on the streets.

By capping allowable rent increases in rent controlled units at the Consumer Price Index (the cost of living), San Jose could help stabilize communities that are being hard hit by gentrification and rising rents. Currently San Jose allows landlords to charge up to 5% more each year, more than double CPI in recent years.

Most rent controlled units in San Jose are owned by large, extremely profitable corporations, which could easily absorb a lower annual rent increase. Just 1 in 8 rent controlled units are owned by small landlords.

Yet at the same time the City is considering limiting unaffordable rent hikes, the Housing Department has proposed allowing landlords to charge tenants a slew of new charges and fees. These costs could add up to more than an 8% increase on top of the rent cap, undermining the stability rent control is intended to provide.

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