California’s rent cap prohibits landlords from increasing their tenants’ rent by more than 10% every year, but it exempts those living in low-income units, leaving them vulnerable to a law that was initially meant to protect them. NBC 7’s Amber Frias reports on Jan. 18, 2024.
Renters of Potiker Family Senior Residences in City Heights are raising their voices over significant rent increases.
“We understand profit is not a bad word, but too much is a bad word,” Stuart Lundy, a senior housing resident, said.
Lundy has been living at the City Heights complex for three years. He says year after year he’s received rent increases above what he thought was the legal limit.
“Last year was 11 and a half percent, and then this year their last offer was 14%,” Lundy said.
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Starting next month, Lundy’s rent will go up from $877 to $1,002. That means an extra $125 he didn’t budget for and can’t afford.
“Most of us here, we’re on fixed income, social security,” Lundy said. “I have a budget because I need to know where every penny is going. It pushes that budget, and now we’re at a point where our disposable income after our rent payment is less than it was before.”
The one-bedroom apartment he lives in is part of the tax credit program for low-income renters. It is exempt from any cap on how fast or often the rent can grow.
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There is a rent ceiling, but there’s a catch there too. That amount is based on the area median income for the county you live in and that gets updated every year.
“Because inflation is going up, we see the area median income recalculated and that is reflected in the annual changes,” directing attorney at Legal Aid Society of San Diego Gilberto Vera said. “So that's why we've been seeing, over the last few years, large increases for these types of properties.”
Tenants living in these units are only responsible for a certain percentage of the area's median income. At Potiker, for example, renters pay anywhere between 30% and 40%.
“If they continue increasing it at the rate that they are we’re going to be moved out,” Lundy said. “There won't be any place to go but under the bridge or the grass.”
NBC 7 reached out to Senior Housing Corporation, owners of Potiker, and they shared that the rent increases received by Lundy and his neighbors were incorrect and the most the rent should’ve been raised is $76.
They added they would be addressing the mistake on Friday with their property management company but that rent hikes were set by the California Tax Credit Allocation Committee and the San Diego Housing Commission.
Meanwhile, back inside the complex, Lundy and his neighbors await anxiously for their next month's rent statement.
“February 1, I don't know what's going to happen, but it's going to be a razor's edge on the budget,” Lundy said.
