Photograph by Tim Kao
'No Vacancy' signs, like this one at a Los Gatos apartment complex, are showing up all over the Valley.
By Clarence Cromwell
David Fulmer was incensed about a letter, delivered on a Saturday afternoon last month, telling him the rent on his Vasona-area one-bedroom apartment would increase from $920 to $1,200--or 23 percent. He knew that he and his wife would have to move to another apartment if the rent increased that much, because he simply couldn't afford the higher sum.
So Fulmer joined 14 of his neighbors in signing a petition to challenge the rent hike through the town's rental mediation process.
A number of other Los Gatans are in similar circumstances. A total of four such petitions, including Fulmer's, were circulated in Los Gatos apartment complexes. And still others face increased rents.
A Silicon Valley hiring frenzy, combined with a longtime freeze in rental rates, is making rental housing both scarce and more expensive in Los Gatos and the rest of the Bay Area.
Because so many new high-tech workers have swarmed into the area, explained Beth Makosey, communications director for the Tri-County Apartment Association, only 1 percent of rental apartments are vacant. There are so many prospective tenants, she said, that landlords can afford to raise the rent. In past years, any rent increases would result in tenants moving out.
"It's basic supply and demand," Makosey said.
Makosey said landlords are raising rents because their increases haven't kept up with their costs during the past decade. Between 1984 and 1994, rental income increased 38.7 percent, but expenses increased 54 percent in the association's three-county area, she said.
Dilbeck added that before a 3 percent increase of last summer, he hadn't raised rents in 10 years.
"The market didn't allow the increases," Dilbeck said. "Then all of a sudden, the market makes up for 10 years."
Dilbeck said he has to raise rents now or face the possibility of not raising them for years. The town's rent control laws require the rent increase to take place at the same time as improvements to the property; he just completed a lot of work at Live Oaks and plans to do more. He added that his increased rents are still about $200 less than the going rate for apartments.
Tenants can dispute their rent increases if 25 percent of those affected sign a petition and return it to the Los Gatos rent mediation service, as Dilbeck's tenants have done. Counselors help the parties come to an agreement and can bring in arbitrators to lay down the law if tenants and landlords don't compromise.
The Town Code restricts property owners to a 5 percent annual rent increase, except under certain circumstances that include renovation or sale of a building. If the increase is found to violate the Town Code, the landlord can still raise rent the standard 5 percent.
Dilbeck said he thinks the improvements qualify his apartments for a rent increase. He plans new carpets, painting, landscaping, and new gym equipment and showers in the rec room.
Fulmer insists the rent increases are excessive.
"If they continue doing this to people, they're pushing them out," he said. "That seems to be that there's no compassion, and that's not good."
This article appeared in the Los Gatos Weekly-Times, June 19, 1996.
©1996 Metro Publishing, Inc. All rights reserved