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Just how high can rent be increased?!?

Original post made by mmmmMom, Downtown North, on Jan 30, 2013

I have been a great tenant for almost 16 years. The landlord (now in property management) is not the greatest, & maintenance is kept @ a bare minimum. No upgrades, or remodeling of any kind. I never complained, because I didn't want the rent raised. Then 5 years ago they started raising the rent every year. At least 10% every year.

This year they have raised the rent $720.00!!!!! Yes, that is a per month increase. I am a single parent & in no way can afford that.

Does anyone know if that kind of an increase is legal? I was hoping they would wait for just 1 more year, when my last kid graduates from Paly. But no...... Absolutely no consideration for our years as great tenants. Let alone my financial situation.

And in case anyone is wondering: Yes, I have been on the Palo Alto BMR waiting list to buy a condo for almost the entire time. If you have not been paying attention to the papers, the only new housing available is for VERY LOW income families; minimum wage only. There has been almost nothing for the working low-middle, upper-low income groups.

Thanks, in advance.

Comments (40)

Posted by Problematic
a resident of Another Palo Alto neighborhood
on Jan 30, 2013 at 11:52 am

This happens every time there is a real estate bubble like the one we are in now....landlords gouge tenants because they know they cannot buy a house, therefore they have no choice but to accept rent-rape.

The problem with Palo Alto is that if you are dirt poor or filthy rich, you get everything you need. But like the vast majority of folks, if you fall somewhere in between, you are out of luck.

Santa Clara County used to have, until two recessions ago, great rent relief and landlord mediation programs , and San Jose had the San Jose Housing Authority, all victims of budget cuts. Any programs that are left have waiting lists years long. Palo Alto has never been a city to comply with any sort of rent control.

Short of finding a lawyer or some kind of legal aid, I would simply go down to City Hall and ask one of the people in the front office for information concerning what is legal or not regarding rent increases. There are still some guidelines as to how much a landlord can increase rent per year without significant improvements in the property. The problem is, there is really no one left to enforce this, short of hiring a lawyer and suing.

Hopefully, one of our other posters has more information on this and can be more helpful.

Posted by Unfair
a resident of Another Palo Alto neighborhood
on Jan 30, 2013 at 11:54 am

Unfortunately, the middle class always get screwed. I'm sorry this has happened to you but Palo Alto is a desireable place in which to live and in our capitalistic country, money talks. Kudos to you for being a single parent and your will to keep them in a good school district. If there is a will, there is a way. Child support? Best wishes.

Posted by Negotiate
a resident of Another Palo Alto neighborhood
on Jan 30, 2013 at 12:13 pm

You're in a difficult situation and at the end of the day your landlord can ask for any rent. Yes, it's probably legal. It's possible if he didn't raise your rent for a while he still has a ways to go to catch up to the market.

The only way forward is to negotiate. So what do you want? What does your landlord want?

You want to stay at an affordable price.

Find out what your landlord wants. Does he want more short-term tenants who might be more demanding? Does he want long-term tenants? Does he understand that tenant turnover costs money and a couple vacant months can undo a higher rent? Does he actually want to sell and would prefer to deliver the property vacant?

If he doesn't want to sell, have you tried saying to him, "I've been your tenant for 16 years. I've tried to be undemanding, pay on time and keep the place in good shape. I understand you'd like to get a higher rent. Is there any chance I can stay on for 1 more year at a fair rent increase so my last kid can finish Paly. After that if you still want to increase the rent and I can't afford it I'll move on without any additional complaints. That will give me enough time to plan my next move."

If he does want to sell, try saying, "I understand you want to deliver the unit vacant to the new owner. I'm willing to be very flexible on showing. My plan is to move on after my last kid finishes at Paly. I'd be happy to discuss with the new owner."

In other words, find out what the landlord wants, and see how you can meet his needs without paying an immediate $720 rent increase.

Good luck!

Posted by Private Parent
a resident of Greenmeadow
on Jan 30, 2013 at 1:32 pm

[Warning, legal advice you get on the internet is worth what you pay for it....]

What the landlord can and cannot do is governed by Chapter 9.68 of the Palo Alto Municipal Code. The protections that section afford are dependent on the type of building that you are in, and your current lease. Renters in multi-unit dwellings generally have more protection than renters in single-family residences.

If you are in a multi-unit dwelling, Palo Alto law requires the landlord to offer 1 year leases at a fixed rent. However, you may have waived that right over the years--particularly if you signed a month-to-month agreement at some point and are still on it. (Single-family dwellings are not protected that way.)

In any event, by law, the rent cannot be raised under an existing lease. At the end of a lease, no law governs the new rent--it is solely a matter of negotiation between the landlord and tenant.

If you are month-to-month, then the law requires a 30-day notice of a 10% increase in rent, and a sixty-day notice for anything greater than 10%. $720 seems likely to be quite a bit more than 10%, so there is at least that.

But in the end, once a lease expires, and with sufficient notice, the landlord is free to charge what they think the market will bear. This is quite hard for renters and creates bad situations for them.

On the other hand, it doesn't seem fair for property owner to forego $8,000 a year just because someone has been living in a particular apartment a long time. My parents rent properties as a way of paying for their retirement (but not in Palo Alto), and giving up that kind of money would be a real burden.

So no matter what happens here, unless you can work out some sort of compromise with your landlord that works to both of your advantage, someone will end up with a financial hardship. The landlord may be able to bear it better than you, but it still isn't fair to them to, in effect, pay $8,000 so you don't have to move.

Posted by mmmmMom
a resident of Downtown North
on Jan 31, 2013 at 11:30 am

THANK YOU to all for intelligent, thoughtful responses. They are sincerely appreciated! I have since found out that PA has no rent control for single homes, & so the landlord can do whatever he wants with the rent. Boo-hoo.

I am going to try the negotiation approach; nothing to lose by it, right? By my math, he will not really lose anything. If I leave, he will in no way be able to have this place ready in less than 2 months of lost rent. And who knows HOW MUCH repairs, repainting, yard work, etc will cost him? (I've been checking, & places costing the amount he wants are in better shape than my little dump.) For both of us, it will be a break even, because what he will lose in lost rent, as well as renovation, will be more than what he will make in my increase over 11 months. Yes, I plan to offer only for 11 months, to "encourage" him to negotiate.

Do I think he will do it? Actually, I do not. But it would be so great for my kid to stay in the same house - just til graduation.
Less stress for mmmmMom, too, which is no small thing.

Thanks, again, everyone. You're why I do like living here.

Posted by Unfair
a resident of Another Palo Alto neighborhood
on Jan 31, 2013 at 11:43 am

@mmmmMom: I didn't realize you are in a house. It makes sense to me to move into a condo or apartment and pay less rent all around since you only have one child. You could start saving money. Your senior will be just fine and won't be traumatized, really (and I'm a totally nurturing mom). He would still have you around, just a different environment.

Posted by Private Parent
a resident of Greenmeadow
on Jan 31, 2013 at 11:54 am

One thing you can offer your landlord would be to figure out a way for him to renovate while you are still there. That way he can still collect some rent while he has all this work done, whereas he would have to stop collecting rent while he fixes it up.

If you are paying, say, $2100 a month (just to make it come out even), the having the place not vacant for a single-month renovation project pays for three whole months of the increased rent, and you are one-fourth of the way to paying for your entire year. Obviously you should fill in your own math.

But get creative, renovations are a hassle to deal with, but it might be worth it for both of you for him to renovate while you are present.

Posted by Shady
a resident of Midtown
on Jan 31, 2013 at 12:04 pm

[Post removed by Palo Alto Online staff.]

Posted by good luck
a resident of Another Palo Alto neighborhood
on Jan 31, 2013 at 1:32 pm


Private parent makes a good point,

allowing renovations and fixes to happen while you're in the house is a fairly big deal and should be a bonus to the landlord. You can also start shedding some of your stuff, which would happen anyway. You can make your own improvement suggestions, and by the time you're reedy to leave, all he has to do is paint.

School ends just in time for high season, summer, when everyone is looking for something for the new school year, including Stanford.

Posted by It's the wrong choice
a resident of Palo Alto High School
on Jan 31, 2013 at 1:47 pm

Have you renovated or remodeled? It doesn't happen in a snap and can be a long, drawn-out process. One has to find the people to work with, get quotes, be at the house, etc. I wouldn't wish it on my enemy. Renovating a house would allow you to stay there, but it would be completely disruptive to your Paly student, who is a junior this year. With grades being of the utmost importance this year, taking the SAT in March, and college app completion in summer and fall, perhaps taking the SAT again in October, renovating a house could ruin the academic career of your child, just to "win" and be able to stay in the house.

Let go and get over the "I got screwed" thinking and move to an apartment for the sake of your child. And be grateful your children have been in PAUSD without having to own a house in town.

Posted by Renovation nightmares
a resident of Old Palo Alto
on Jan 31, 2013 at 3:26 pm

I can tell you personally that remodeling is extremely stressful and inconvenient, but especially so if the kitchen is Involved This means having no way to cook or refrigerate food for six to eight weeks! It is something you do not want to do more than once or twice in an entire lifetime e, because it is so disruptive. Unless, of course, you can afford to move out and live elsewhere until it is finished. Even so, it is still a huge mess and inconvenience.

Personally, if I were you, I would negotiate with the landlord for this last year, and then move somewhere cheaper. You can rent a much nicer house almost anywhere else south of here for less than a crummy one in Palo Alto.

As for us, after our child gets out of school, we are buying somewhere cheaper and kinder, because school district will not matter any more. And we would love to have a nicer house on a larger lot!

@Shady: What in the world are you talking about????

Posted by Should be Illegal
a resident of Crescent Park
on Feb 1, 2013 at 11:25 am

When I was in high school many, many years ago, my single Mom used a PA address so I could stay at Gunn but we lived in Sunnyvale which had rent control and was much cheaper. I wish we all could just move out of these houses/apartments and let the greedy landlords suffer loss rent(s). Just ridiculous. I'm moving to Fremont in the next month, gave my notice already, because my tiny 1 bedroom is now $1895/month. I thought it was bad at $1565, but $1895 I will not do. And guess what? Someone has signed a contract to rent my apartment at the $1895 rate. Desperate to live in PA I suppose, but I am not.

Posted by another parent
a resident of Another Palo Alto neighborhood
on Feb 1, 2013 at 11:40 am

Under circumstances I had no control over, I moved to Mountain View with my son before the end of his senior year. It was the beginning of May, and Paly was fine with him finishing out the year at Paly. So - you do not have to stay in Palo Alto until graduation, although I would check on that. At what point can you move and still stay in the same school?

Posted by Curious
a resident of Barron Park
on Feb 1, 2013 at 11:48 am

Just throwing this out there - but could this possibly be a rather opportune time to move to another school district? PALY is competitive crowd when it comes to college applications, but colleges will only accept a few from each school. Wouldn't an application stand out more if it came from a less competitive school, but still showed three solid years of reaping the benefits of PALY? I have heard this theory bounced around but am curious to hear if anyone has ever done it and had success with it. Moving before senior year might look suspicious on an application, but this renter has a legitimate excuse. Thoughts?

Posted by Unfair
a resident of Another Palo Alto neighborhood
on Feb 1, 2013 at 12:01 pm

I think it would look terrible on a transcript to move in the last year. It would look like the student can't handle it at Paly. Any other public school around does not have the reputation of PAUSD.

She should just move from a house into an apartment for the last year. Commuting from another town would be stressful because they are used to the convenience of already living in Palo Alto. Plus, the child would feel like an outsider, driving from another town, even if the district allows it.

Posted by Paly parent
a resident of Embarcadero Oaks/Leland
on Feb 1, 2013 at 12:02 pm

Curious -Not too many kids would be happy to move for their Senior year of high school, leaving friends you have been with for 12 years (or more in preschool) would be hard for most kids.

Should be illegal - what your mom did is. Illegal that is. You need to be a resident of Palo Alto to attend school here. What a sad example to set for a child.

Posted by HaHa-as-if
a resident of another community
on Feb 1, 2013 at 12:36 pm

"Any other public school around does not have the reputation of PAUSD."

... unless you move on UP, to say, Saratoga. Give me a break, Palo Alto.

Posted by Robert
a resident of another community
on Feb 1, 2013 at 12:52 pm

So let me see if I got this, you mean that Palo Alto ISN'T exempt from the basic laws of economics? You limit the supply of housing in a desirable area with high demand; Was the expectation that all you folks who enjoy "keeping things the way they are" WON'T get priced out of the city?

Posted by Unfair
a resident of Another Palo Alto neighborhood
on Feb 1, 2013 at 1:13 pm

@HaHa: If you live in a different community, why are you here, reading Palo Alto opinions and news? People who bash Palo Alto display transparent jealousy and wish they could afford to live here. People who feel inferior feel the need to insult Palo Alto.
If they have the finances to be able to afford living in Palo Alto, they do, as we are the most conveniently located city on the Peninsula and people from neighboring towns come to Palo Alto for Stanford Shopping Center, Town & Country, and our downtown. People who cannot afford to live here choose to rent instead of owning, rather than move somewhere less expensive and own property.

My statement is still true. Moving to Fremont or Saratoga is too far of a radius from Palo Alto. The mom would possibly be driving an extra 45 minutes to reach her job, which makes no sense at all.

Posted by ndnorth
a resident of Downtown North
on Feb 1, 2013 at 4:45 pm

Insulting Palo Alto? Itś just a fact that some other school districts have better results and are more upmarket (Los Gatos for example).
Moving would not damage the gpa of the student- the years in PA would count the same.
It is wrong to say that you need to be a PA resident to attend school, legally, in town. Many school districts allow kids to finish the year as a non-resident, allow a senior year in the conditions described. Also, employees of PA companies and PAUSD employees can apply and many times get school placement here without residency.

Posted by Paly Grad
a resident of Duveneck/St. Francis
on Feb 1, 2013 at 5:45 pm

@ndnorth: Los Gatos high does not have better results than Palo Alto's high schools. e.g. The only public school that had a higher average SAT than Paly (1951) was Mission (1958). Web Link
Gunn (1943) came in 2 spots behind after Lynbrook (1949). Los Gatos had an average score of 1799. That's a huge difference.

Posted by maguro_01
a resident of Mountain View
on Feb 1, 2013 at 5:56 pm

In Mountain View also rents are soaring. In this complex month to month rents increased 10% March '12, 10% Sept '12, and will increase at least that much March '13 and that compounds, of course. In one apartment in this building there were 3 or 4 men in a one bedroom unit with no furniture and mattresses on the floor - probably theoretically illegal. Since they were tech visa workers they were making at least $200K between them. However, people are moving into these relatively modest apartments from units elsewhere that have increased to over $1.8-$2K/month for one bedroom.

Since I moved to the peninsula in the eighties everything has more than doubled including just about all expenses and incomes. Effectively most of the increases are inflation. But if someone's income starts to fall behind it's time to leave and fast. Here, Google's success up-markets Mountain View, but if someone is not part of that they need to leave. That's better than the short-term thinking of being driven out.

Here, home owners are depending on their house prices for savings and an inflation hedge. That's almost as risky as just buying one stock. Renters should understand that salaries here are not enough higher than elsewhere to support expenses and savings too. Also in the coming years tech jobs are likely to be effectively set asides for visa workers and GC holders. Read the news. Times change and corporations going to Washington with checks govern our futures. If someone is renting here and working they should consider it as not permanent.

There is no downside to the towns in moving up market except that there will be a growing need for bus service for manual and lower income workers. High rents have already cut Mountain Views crime rates and drive up rents and home prices. The valuation of a rental building is mostly a multiple of the rents. With that driving the politics too even middle income people have little chance. The only reasonable attitude is to be in Silicon Valley to get your ticket punched, then leave for an urban area with a reasonable diverse economy.

There is no necessity to be stable for 12 years for kids unless they have an unusually fragile temperament. If you move every 5 years it's not likely a problem. Life will be like that to them and being hopelessly rooted in a place will only do them harm in the long run. A local economy or category of work can be here today and gone tomorrow. In the future there will not likely be even floor sweeping or simple clerking jobs except as a conscious archaism.

Remember, right now we have a major political party which seriously proposes to make the US solvent by shortening US life expectancy by years. In their ideal world people would die off in net worth order. Yet it was that party and its ideas that brought us to where we are today. In 2000 the US was solvent. By 2008/9 we were broke and crashing. The US is going unstable. Life can change in a flash and people, including young people, should be prepared for it.

Posted by paly parent
a resident of Embarcadero Oaks/Leland
on Feb 1, 2013 at 6:00 pm

NDNorth - I believe PAUSD will allow you to finish your senior year if you move during the year, but otherwise you must reside in PAUSD area 7 days a week. Teachers and staff can ask for a transfer from their home District.

Posted by s
a resident of Charleston Meadows
on Feb 1, 2013 at 6:30 pm

Rents have a inverse relationship with property purchases.

Huge increase in speculative property purchases in Palo Alto means that these places will be rented out and rents will come down.

Posted by maguro_01
a resident of Mountain View
on Feb 1, 2013 at 8:08 pm

s, that's interesting. We have been reading that funds, that can get cheap money, have been buying up houses but with no details on where.

Some neighborhoods may get to be too expensive for single family homes at all. Areas go through development like a sort of forest progression. Neighborhoods that managed to stave off development will just skip stages - maybe some blocks will go from single family homes to row house blocks or even 5-6 story or more condos and apartments. Some monster houses will become the apartments, small offices, and even B&B's of tomorrow to be replaced in turn by larger, even high rise, buildings.

The people who think that the world should freeze around them to the horizon when they buy a house are out of luck. In the end the market not only determines rent, but land use. A high percentage of house owners in PA and Mountain View could not afford to buy the houses they live in now.

The area is changing in demographics which will result in changes of some sort. California's generational warfare will likely go away. Whether ethnic differences take their place we get to find out, my guess is no, at least in Northern California. The Boomers who wouldn't pay for schools in California should cash out and take off - when they are quite old they will be living among people who have zero interest in supporting them or their interests at all. What goes around comes around, always.

Posted by Rob
a resident of Woodside
on Feb 1, 2013 at 9:09 pm

Palo Alto has been pushing out the bottom earners for the last 20 years. We used to have cable installers and plumbers who owned homes within PAUSD. Good luck to even lawyers or doctors trying to shoehorn into this overhyped insanity of overpriced suburban normalcy. Even Redwood City landlords are now pushing out white collar professionals who rented in seedy areas to save a buck or two for living life.

My intuition tells me we're in tech bubble II. I wouldn't bat an eye if a tsunami level crash happens next week, tomorrow, 5 minutes from now.

Posted by JW
a resident of Mountain View
on Feb 2, 2013 at 8:15 am

I like the idea posted above that said find out how much of the school year you need to be in PA before you can move and still finish out the year. Plus, tell your story- to PAUSD and your landlord. When you are face to face and he's not just dropping an invoice in your mailbox, things are different. Good luck!

Posted by outrageous rent prices cost business and community
a resident of Midtown
on Feb 2, 2013 at 1:26 pm

Until recently , I lived for over 5 years in a older duplex paying a fair market rental price, where little maintainance was done but since I am handy, I did the minor repairs. My landlord then wanted a $900 increase in October. Shortly thereafter, my landlord decided it was time to sell since the landlord made too much money (??? )and "because it is time to sell to the chinese investors " and that I must move. This
property sits empty today without tenants.

Many Palo Alto businesses no longer has income from local purchases I made . If this trend keeps up many other local business will suffer since the number of people to use and buy from them will decline since the homes are no longer occupied but are just investments.

See and take an actual look at at the palo alto rentals in craigslist if you want your jaw to drop at how little you get for the money , so many of the offerings would be considered slum dwellings in many places. I am not against landlords making a profit but this market is verging on price gouging. The rental increases have occurred all over the bay area every month. It is no wonder why the hacker houses are packed to the brim and the average joe can not afford to live here anymore.

I looked for a decent replacement but decided that after looking for 2 months that it was time to move to another area where rents didn't far exceed the average mortgage payment in the USA. Yes , $2100+ for a PA studio is mind boggling especially when you realize it was someone's converted family room.

Looking at home prices in the the 1990's palo,alto was on the higher end but not so outrageous as todays market ,where only the super rich can afford to buy in PA and nearby areas. Sad, you lose the diversity and enrichment in the community of people who built this area when no one else can move here and live a normal life here on a salary under $200k.

so sad

Posted by Ralph
a resident of another community
on Feb 2, 2013 at 4:46 pm

Why do people even expect to live in Palo Alto on a moderate income? Those days are long gone. If one is not "new money" or "old money" it's just treading water in PA.

Posted by Palo Alto native
a resident of Downtown North
on Feb 2, 2013 at 5:57 pm

Some of us expect to live here because this is where we are from. I know that may seem silly to the newcomers with all the dough. It is crazy what is happening to my hometown. It is sad that when you get a good education & work really hard at a good paying job, that you can't afford to live in the town where you were born. It might be a reality, but "outrageous rent
prices....." is correct in the fact that it is,

so sad.

Posted by paly parent
a resident of Embarcadero Oaks/Leland
on Feb 2, 2013 at 6:03 pm

Palo Alto native - Towns change over time - sometimes for the better - sometimes not. The town I grew up in has gone totally downhill since I lived there, our family left when I started college. Many of the homes there are worth what they were paid for - if you bought in the 70's. For good or bad, Palo Alto is a very desirable, expensive place to live.

Posted by Exactly
a resident of Palo Alto High School
on Feb 2, 2013 at 7:20 pm

Ralph said it perfectly. For many families, they are living mortgage to mortgage or rent to rent with not enough left to have any extra to enjoy, save, or use for extras for their children to enjoy life. Some even buy used children's clothing to cut costs. Is it really worth it? I'd move elsewhere if I were in that situation. Our house is barely 2000sf but otherwise, we are enjoying our lives here and have excess money for savings and enjoyment.

Posted by palo alto native
a resident of Downtown North
on Feb 3, 2013 at 7:10 am

Dear paly parent,

I guess you missed this part of my comment "It might be a reality but....". That was meant to state that I understand that towns do change. Thanks for the lecture. People like you and Exactly make living here in Palo Alto "exciting".

Posted by Crescent Park Dad
a resident of Crescent Park
on Feb 4, 2013 at 11:56 am

It is not uncommon for a family to request from PAUSD that their child finish his/her last year of HS at Paly or Gunn. It happens quite a bit.

To gain this solution - you must gain approval from both PAUSD and the new school district in the city where you choose buy or rent your new residence. Both school districts need to agree - there is also an issue of transferring property tax / state funds to cover the costs of the child staying in PAUSD. If the new school district is unwilling to give up the funds, you're are likely going to be out of luck.

Posted by Paly Alum
a resident of Palo Alto High School
on Feb 4, 2013 at 1:16 pm

palo alto native: Life is unfair. I graduated from Paly in 1980 and my husband's income allowed us to buy a house here. However, there are only a handful of Paly alums who currently live in Palo Alto. Those alums who lived in Old Palo Alto, in those mansions, cannot afford to live here now. One has to do what's right financially for their family. Living with no finances for the future is just plain stupid. We have to save now because someday, we'll be too old to hold a job. The government won't help much and we cannot rely on our children - they are supposed to rely on us! Why would anyone live here if they can't save any money for the future? Throw caution to the wind and lose.

Posted by Palo Alto native
a resident of Downtown North
on Feb 4, 2013 at 3:14 pm

Dear Paly Alum,

Thank you for the lecture. I don't believe that life is unfair. I have a great job, family and life.
I simply agreed with the other poster that it is sad that my hometown is so expensive
that many people now find it hard to survive financially here. I also answered Ralph's question about why some people "expect" to live here. Remember from Paly High the riddle about what happens when you assume?

Posted by Huh?
a resident of Palo Alto Hills
on Feb 4, 2013 at 3:40 pm

[Post removed.]

Posted by Palo Alto Native
a resident of Downtown North
on Feb 4, 2013 at 7:35 pm

[Post removed.]

Posted by EconProf
a resident of Barron Park
on May 27, 2013 at 3:23 pm

As many posters mentioned, rents are related to real estate prices. Typically, a rental unit gives you a yield of 5-10% (give or take, depending on the area). Based on a run-down rental 4-plex I just saw listed in Menlo Park for $1.8 million (zero upgrades since the 50s), tax, mortgage and insurance ran about $10,000 a month. Divide by 4 and you get $2,500 a month for a 2 bed 1 bath unit. Add a 5% yield, and you get $2,625/month. That's the rock bottom rent you can expect in this area.

Posted by John
a resident of Midtown
on May 27, 2013 at 5:43 pm

>When I was in high school many, many years ago, my single Mom used a PA address so I could stay at Gunn but we lived in Sunnyvale which had rent control and was much cheaper

That is completely illegal.

It is little wonder that seniors in Palo Alto are requesting waivers to get out of the parcel taxes for schools.

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