Excessive local regulations punish SV housing providers, stymie housing growth
Local housing providers tell a bracing story regarding how local gov'ts (inc. City of San Jose) impose not only a voluminous array of regulations, but how those regulations make it increasingly impossible to sustain, fund, build, and grow our local housing stock. Which of course leads to increased rents and prices across the board. Irene Smith of United Housing Alliance and commenters on Featured.com elaborate.
Smith: Consider some of SJ's most onerous housing regulations
Rent Control in SJ is capped at 5%, while PGE has increased 41% over three years. Needed repair materials cost for wallboard/plywood has increased over 15% the past three years. And insurance for properties built before 1950 has surged 300%. Only 25% of apartments in SJ are under rent control primarily owned by mom and pop providers.
Use the rent cap increase or lose it - elimination of banking reserves. If an annual rent increase is skipped there's no ability to catch up, so SJ mandates a 5% increase every year
Elimination of RUBS. Landlords are prohibited from allocating utilities costs to tenants. Water cost has increased 20% over the past three years.
Annual Rent Registry. All personal tenant data must be updated in the public database.
Ellis Act. Providers can't move into their own property without paying 100s of thousands of dollars to tenants.
Just cause evictions. The rental contract never expires unless the tenant wants to leave. Limited reasons allowed for evictions, which cost $30K-$50K.
Eviction moratorium. Housing providers are still owed millions of dollars accrued under the multi-year eviction moratorium.
Code enforcement inspections unnecessarily frequent.
Requirement to copy the city on rent increases or eviction proceedings.
Prohibition against adding storage, pet, parking, or other add-ons once the contract has started.
Soft story inspections are paid for by owners to meet new regulations.
Mandated electrical conversion and placement of water heater in each apartment.
--Irene Smith, United Housing Alliance
Local housing providers examine regulations that make sense, and those that don't
As a real estate broker who's built and sold two billion-dollar companies, I've seen how regulatory burdens directly impact housing availability and affordability. Through ez Home Search's nationwide data, we track how permitting timelines vary dramatically - in California we see rebuilds taking 3-4 times longer than comparable projects in states like Florida or Texas. The data tells the story: our platform shows California has 3,454 Contemporary-style listings but critically low inventory in affordable segments. When we examine California's permit processes versus states like Mississippi (which has 6,190 listings with much faster approval timelines), the correlation between excessive regulation and housing shortages becomes clear. I believe the solution requires balancing necessary safety standards with practical implementation.
Based on our experience across all 50 states, the most effective approach is standardizing building codes while streamlining approval processes - particularly for disaster rebuilds and affordable housing projects.--Commenter on Featured.com
Having worked with real estate teams across the country for 20+ years, I've seen how regulatory bottlenecks kill deals and crush agent productivity. When I'm coaching teams through Digital Maverick, California agents consistently tell me they lose 30-40% of their buyers to other states simply because the timeline uncertainty makes people give up.
The core problem is fragmented authority without accountability. I've watched agents in Orange County wait 8 months for the same permit that takes 6 weeks in Texas. Each department operates in isolation with no incentive to coordinate or expedite. When ez Home Search tracks consumer behavior, California searches drop off dramatically once people research the actual buying timeline.
The most effective pressure I've seen comes from economic impact data at the local level. When our teams present city councils with hard numbers—showing how each month of delay costs their community X jobs and Y tax revenue—politicians pay attention. One team in Riverside showed their mayor how permit delays were costing the city $2.3 million annually in lost property tax revenue alone.
Smart agents are adapting by setting buyer expectations upfront and pivoting their business models. Some of our most successful California teams now specialize in investment properties or work with builders who have pre-approved plans, cutting months off the process.--Commenter on Featured.com
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