Could Mountain View's landlords soon be on the hook to pay back a small fortune in overcharged rents?
Tenants' attorneys are calling for Mountain View officials to formally recognize last December as the time the Measure V rent-control law went into effect. If granted, this demand would open the door for thousands of apartment tenants to press for a refund of about four months of excess rent payments, potentially forcing affected landlords to pay back a total of $12 million or more.
In a letter sent last week to the city, a coalition of attorneys who defended the rent-control program warned that the group was prepared to seek a court order to force the city and its Rental Housing Committee to comply.
"We write to demand that the Rental Housing Committee publicize through all reasonable means the effective date required by the plain language of the (rent control law)," wrote Stanford Community Law Clinic professor Juliet Brodie on behalf of her colleagues. "It's our strong preference that you simply undertake this duty to avoid the expense and burden of litigation."
Measure V did indeed include "plain language" about its effective date -- Dec. 23 -- but complications cropped up after Mountain View voters approved the law in November with about a 53.4 percent majority. A widely anticipated lawsuit was filed by the California Apartment Association on Dec. 21, derailing the planned implementation two days later.
At the time, city officials decided not to defend Measure V, and the new rent-control law was blocked from taking effect by a temporary restraining order.
The CAA lawsuit collapsed just a few months later. On April 5, the apartment group's request for an injunction was shot down by a Santa Clara County judge, signaling that the rent-control measure could immediately take effect. Not long afterward, the CAA and its partners announced they were dropping the case.
Aside from a pile of legal bills, the lawsuit's only result was to delay Measure V's rollout, particularly its provision to reset rents on thousands of Mountain View apartments back to what tenants were paying in October 2015.
Since then, renter advocates have asserted that tenants are entitled to a refund of the excess amount of rent they were forced to pay from January to April, while the lawsuit was active. For the most part, city officials avoided the question because they were focused on the significant challenges of launching the Rental Housing Committee.
In recent weeks, Brodie and other attorneys who defended the rent-control measure have been ramping up pressure on the city to acknowledge Dec. 23 as the official date of effect. In May, they sent a letter asserting that the city's website was spreading misinformation by claiming Measure V took effect on April 5, the day of the judge's decision.
City officials later removed any reference to the date on the site, but the CAA still instructs its members that April is when the law took effect.
Asked for comment, City Attorney Jannie Quinn indicated the city's Rental Housing Committee could take up the issue during its next scheduled meeting on July 24. That could be difficult since the meeting's agenda is already packed with a variety of complex issues that the committee had to postpone after its last meeting was overwhelmed by a deluge of public comment.
The idea of a refund for tenants is likely to be no less controversial, given the size of the financial hit landlords could be delivered. Since October 2015, the average rent for a one-bedroom apartment in Mountain View has increased by more than $200 a month, according to the apartment market analytics site Rent Jungle. That figure suggests that more than $12 million could be at stake, spread out among the 15,000 apartments affected by the new rent-control program.
CAA representatives dispute that landlords can be forced to pay back any money. Based on the court order, the true effective date of the measure is April 5, wrote CAA vice president Joshua Howard in an email to the Voice.
"Nothing in Measure V requires the refunding of rents lawfully collected prior to its effective date," he wrote. "We have not identified any legal mandate that owners refund any amounts lawfully collected from residents while the effective date of Measure V was stayed by the court order."
Brodie and her colleagues say city officials don't have a choice in the matter since they're legally compelled to recognize Dec. 23 as the official date. They point out that the City Council formally declared on Dec. 13 that Measure V had passed, and the language of the law specifically states that it goes into effect 10 days after that action.
If city officials were to acknowledge Dec. 23 as the effective date, they wouldn't necessarily compel landlords to pay back any money immediately, city attorney Quinn wrote in an email to the Voice. Tenants could be advised to take the matter before the Rental Housing Committee and its hearing officers, and they could recover excess rent or block the landlord from future rent increases.
Nevertheless, the Measure V rent control law does allow the Rental Housing Committee to initiate certain actions on a tenant's behalf, she pointed out.