Messages from San Jose Housing Department: September 2, 2016

Dear Partners:

Thank you for your engagement and interest in the Apartment Rent Ordinance (ARO) process as we continue to implement the City Council’s directed changes to the ARO. This email contains important information on steps that have been taken to update the Ordinance. Please feel free to distribute it to other stakeholders that may not be on this list.

On Tuesday, August 30, the City Council approved the regulations that will implement the fair return petition process. Beginning today, in order to increase rent over the 5% annual allowable limit, an apartment owner must file a fair return petition to prove that their net operating income has fallen below the fair return standard.

The City Council also asked staff to seek additional input from the community. Staff has incorporated additional community feedback into a revised draft of the approved regulations. The Housing & Community Development Commission will take additional public comment on these regulations at their regular meeting on September 8, 2016. The meeting agenda, and item materials – including the revised regulations – can be found here. A revised version of the regulations will be provided to the Council for their approval later this month.

Cost-Pass Through Programs
Beginning today, opportunities to pass through the costs of debt service, operations and maintenance, and rehabilitation will be permanently eliminated for rent stabilized properties. The capital improvement cost pass-through opportunities have been temporarily suspended until the fully modified ARO is enacted by the City Council and the Ordinance becomes effective.

It is especially important that owners/managers of rent-stabilized apartments keep their 2014 base year financial documents so that the base year net operating income can be determined. These documents include records of bills, payments made, payments received, tax documentation, and any other financial documents related to the operation of your business in 2014.

Technical Assistance & Ongoing Outreach
To help owners understand this new process, the Department of Housing will be hosting multiple technical assistance workshops to help stakeholders become familiar with the new Fair Return standard and petition process. These workshops will provide opportunities for one-on-one assistance with the petition process. Additionally, staff is available to answer questions about your unique financial situation at any time via phone or email. A full schedule of workshops will be released soon.

Additionally, please let us know if you would like our staff to provide a presentation or training to your trade association or group of interested stakeholders. We would be more than happy to do so. Please contact Sara Wright to schedule a presentation at

Contact Us
Please check our website for periodic updates. If you have any comments or questions, please contact Paul Lippert at or 408-975-4443.


Jacky Morales-Ferrand
Director, Housing Department