Rent Control

Max Rent Increase

The City of Stockton has limited the amount a landlord can increase their tenant’s rent per year to 5% + CPI (Consumer Price Index) of the last 12 months. The CPI Is a measure of the cost of living. The US Bureau of Labor Statistics provides instructions on how to determine rent increase based on CPI. For the City of Stockton, your rental agreement could / should including information like the following:

  • Base Payment Subject to Escalation: Rent
  • Consumer Price Index (CPI) Used for Rent Escalation:
  • Reference period: Annual average
  • Frequency of Adjustment: Annually
  • Adjustment Formula: 5% + 12-month CPI percent change
    • Minimum / floor: 5% regardless of CPI change
    • Maximum / cap: 10% regardless of CPI change

For example, if you increase rent on June 2021, then according to the data at https://data.bls.gov/timeseries/CUUR0490SA0&output_view=pct_12mths, we see the value is 6.0.

Therefore, the rent increase would be 5% + 5.2% = 10.2%. However, since there is a cap of 10%, then effective rent increase would be 10%.’

How to Calculate CPI Percent Change Using Index Points

Here’s an example for calculating the 12 month CPI percent change from June 2020 to June 2021 using the index data at https://data.bls.gov/timeseries/CUUR0490SA0.

ACPI for current period (June 2021 CPI)111.751
BLess CPI for previous period (June 2020 CPI)106.277
CEquals index point change (A – B)5.474
DDivided by previous period CPI (C / B) 0.0515
EMultiplied by 100 (D x 100)5.15%
FEquals percent change (rounded to one decimal point)5.2%

CPI-U vs CPI-W

The CPI is calculated for two population groups: All Urban Consumers (CPI-U) and Urban Wage Earners and Clerical Workers (CPI-W).  The CPI-W is used for escalation primarily in blue-collar cost-of-living adjustments (COLAs). Because the CPI-U population coverage is more comprehensive, it is used in most other escalation agreements.

CPIInflationCalculator.com

One quick way to determine the CPI increase is by going to https://cpiinflationcalculator.com/. Note, however, that this calculator shows the CPI increase for the entire United States as opposed to the Western areas only. To determine the CPI increase, click the link at the top for the current year’s rates, e.g. 2021 Rates. Then, find the most recent month (in the screenshot below, it’s May), and use the value under the Yearly Inflation Rate (%). In this case, it is 5%. So, your rent increase would be 5% + 5% = 10%.

No-Fault Evictions

The City of Stockton has banned no-fault evictions. Therefore, to evict tenants, you must have a legally-allowed reason including, but not limited to,

  • Hasn’t paid rent
    Tenant has not paid rent after being served with a Three-Day Notice to Pay Rent or Quit. This is the most common way tenants violate their lease or rental agreement.
  • Violated terms of agreement
    Tenant continues to violate a lease or rental agreement provision, such as keeping a dog on the property in violation of a no-pets clause, after being served with a three-day notice to correct the violation or leave.
  • Caused substantial damage
    Tenant has caused substantial damage to the premises and has been served with an unconditional three-day notice specifying the damage done and telling the tenant to vacate. Some cities require the landlord to give the tenant the option of repairing the damage.
  • Seriously disturbing other tenants or neighbors
    Tenant is seriously disturbing other tenants or neighbors, and has been given a three-day notice specifically stating when and how this occurred. Some cities require that the notice give the tenant the option of stopping the offending conduct.
  • Committing illegal activity
    Tenant has committed an illegal activity on the premises and has been given a three-day notice setting forth the specifics. Minor illegal activity is not sufficient cause, although dealing drugs is. In fact, landlords who fail to evict drug dealers can face serious liability.
  • Engaging in illegal business
    Tenant is engaging in an illegal business (such as prostitution), or even an otherwise legal business that’s in violation of local zoning laws,
  • Overcrowding
    Tenant is overcrowding the unit in violation of local health codes