Why this matters
San Diego officials are grappling with an ongoing affordability and housing crisis.
San Diego leaders may make it illegal for property owners to overcharge tenants for city-provided utilities.
The city charges property owners for water and stormwater and plans to start charging for trash collection. The proposed law would bar property owners from charging tenants more than the utility bills, including any fees for third-party billing services. Tenants would also have the right to review a copy of the landlord’s utility bill to ensure transparency.
Under current law, tenants don’t have those protections, supporters of the change say.
“There is a massive power imbalance that exists between tenants and landlords,” said Councilmember Sean Elo-Rivera, chairing a recent meeting of the committee that brought the ordinance forward.
“Large corporate housing companies exploit this to charge renters whatever amount on their utilities they can get away with, because the tenants do not have the power to fight it nor the luxury to move without potentially uprooting their lives.”
From the Documenters
This story came from notes taken by Simon Mayeski, a San Diego Documenter, at a City of San Diego Environment Committee meeting last month. The Documenters program trains and pays community members to document what happens at public meetings. Read the note here.
City Council could take up the matter, which requires two votes and the mayor’s signature to be adopted, as soon as July or August.
The proposal comes in the midst of an ongoing cost-of-living crisis in San Diego. Half of the city’s housing supply consists of rental units that are nearly full. The lack of supply drives up rents.
The average asking rent in San Diego is $3,096, according to a Zillow analysis. Nationwide, the average asking rent is $2,024. Consumers in San Diego also experience higher inflation compared to the rest of the nation: San Diego’s CPI was 3.8% in March, compared to 2.4% nationwide.
“San Diegans are experiencing higher than average rental rates as well as higher increases in the cost of everyday goods,” Jefferey Nguyen, a policy advisor for Elo-Rivera, said during the committee meeting. The goal, he added, “is to promote fairness, equity and transparency regarding how landlords pass through utility fees to tenants.”
Those who represent property owners said they were neutral to the proposal, while raising concerns about implementation and new notice requirements.
Craig Benedetto, a public policy consultant, said while there may be some cases of overcharging, he described this as “a solution searching for a problem.”
“For the folks that we work with … the owners and operators of these buildings, we don’t see this as a problem,” Benedetto said. “There is no overcharging occurring. It’s strictly just passed through to the tenants. And if that information is requested, it is provided to the tenants.”
Attorneys who represent tenants suggested a couple tweaks to strengthen the proposal, such as requiring more notice, allowing tenants to raise a failure to comply as a defense in an eviction case and requiring landlords to provide a copy of utility charges without tenants having to ask.
“Sometimes tenants are scared to ask for this information from their landlords and fear retaliation,” said Gil Vera, deputy director of Legal Aid Society of San Diego, the largest poverty law firm in San Diego County. “So, having it be a requirement kind of diffuses that situation and also provides more transparency.”
After listening to public comment, Council President Joe LaCava said he could imagine a situation where a tenant would be intimidated to ask to see their landlord’s utility bill.
“Why not include the backup for that bill?” LaCava said, adding that he supports requiring landlords disclose actual utility costs to tenants. “I remember being in private business, when I tried to get reimbursement for expenses, I had to show the receipts for what I was asking for reimbursement.”
LaCava said he’s otherwise happy to move the item along to the full City Council.
The proposal is among recent efforts to encourage fairness in the rental housing market. Last month, the San Diego City Council banned software that allows landlords to coordinate rents based on nonpublic competitor data.
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