A Report from the City Auditor
Issued October 2024
http://www.sanjoseca.gov/auditor
Presenter: Joe Rois, City Auditor
Community and Economic Development Committee
Agenda Item (d)1 1
T enant Protection Ordinance:
Housing Should Refine its Fee
Calculation Process and Standardize
Procedures to Improve Program
Administration
Background
2 • In 2017, the City Council passed the T enant
Protection Ordinance (TPO) to promote
housing stability and fairness within the
residential rental market.
• Housing administers TPO as part of the
Rent Stabilization Program.
• Units only covered by the TPO pay the
TPO-only fee. Units covered by the
Apartment Rent Ordinance are charged a
separate, higher fee.
The TPO-only fee is currently set
at $23 per unit.
The TPO limits evictions to 13
just causes, including at fault and
no fault to the tenant
Finding I: Housing Should Develop a Standard Roster of
T enant Protection Ordinance Units and Better Document
the Fee Calculation Process
3 • Housing estimated 48,000 TPO-
only units in San José but included
6,450 hotel/motel rooms which
should have been exempt.
• The unit counts in past fee
calculations fluctuated because
of the erroneous inclusion of
other properties and ongoing
data cleaning.
Exhibit 1: The TPO Unit Count Has Fluctuated Over Time
Finding I: Housing Should Develop a Standard Roster of
T enantProtection Ordinance Units and Better
Document the Fee Calculation Process
4 • Property exemptions from the
TPO can be better clarified
in communications with landlords
• Better tracking of staff time by
ordinance would further improve the
accuracy of the TPO-only
fee calculation.
Recommendations: Housing should:
→Develop a standard roster or
database of TPO-only properties,
excluding hotels and motels.
→Document and clarify the
methodology for identifying TPO
and exempt properties.
→Formalize procedures to track
staff time across the different
Rent Stabilization Program areas.
5 Recommendations: Housing
should:
→Update its Rent Stabilization
Program procedure manual.
→Enhance its interaction log data
collection.
→Develop performance measures
to assess performance of TPO
activities.
• Program staff documented 1,500 TPO-
related interactions across 600
properties in 2023.
• Rent Stabilization Program’s procedures
manual doesn't contain specific guidance
for TPO interactions and enforcement.
• Better data collection and performance
metrics can enable staff to better assess
the TPO's effectiveness.
Finding 2: Standard Procedures and Data Collection Would Enhance the T enant Protection Ordinance's Performance
Management
6 Recommendations: Housing
should:
→ Identify high-need areas for
outreach and address gaps in
landlords' knowledge of the TPO.
→ Collaborate with Fire to update
materials provided to tenants
displaced by incidents.
• Adopting a data-driven approach to
identify and target high-need areas could
improve the program's outreach.
• There appear to be gaps in landlord
awareness of their obligations under the
TPO.
• Housing and the Fire Department can
improve communication to tenants
displaced after fires or other incidents.
Finding 3: Outreach, Education, and Coordination Efforts Should be More Proactive and Data-Driven.
Conclusion
The report has 12 recommendations to refine the fee calculation process and improve program administration.
We would like to thank the Housing Department; the City Attorney's Office; Planning, Building and Code Enforcement; and the Fire Department for their time and insight during the audit process.
The audit report is available at www.sanjoseca.gov/auditor Audit staff: Alison Pauly, Shayleen Agarwal, Hiwad Haider, Maria Valle 7