A. It is the intent of this chapter that an adjustment in rent that is higher than the annual rent adjustment be granted only when the landlord demonstrates by a preponderance of the evidence that such adjustment is necessary to provide the landlord with a fair rate of return. If a landlord is aggrieved by the limitation on the annual rent adjustment under section 5.156.050.A because the amount is less than a fair rate of return, the landlord may file a petition to seek review by a hearing examiner. The hearing examiner's decision is final unless the landlord timely seeks judicial review.
B. The hearing examiner shall consider relevant factors, including, without limitation, the following:
1. Increases or decreases in property taxes;
2. Unavoidable increases or decreases in maintenance and operating expenses;
3. The cost of planned or completed capital improvements to the rental unit, but only when necessary for compliance with the Sacramento City Code provisions affecting health and safety. Routine repair and maintenance improvements are not capital improvements. Capital costs shall be amortized over the useful life of the improvement;
4. Substantial deterioration of the rental unit, other than from normal wear and tear, that is not due to a lack of routine repair and maintenance;
5. The pattern of rent increases or decreases during the occupancy of the tenant;
6. Increases or decreases in the number of tenants occupying the rental unit;
7. Increases or decreases in the cost of Housing Services; and
8. Failure to comply with the rental housing agreement, provide Housing Services, or comply with applicable laws and regulations.
C. The hearing examiner shall not consider the following factors:
1. Landlord's income taxes;
2. The cost of debt service for the property where the rental unit is located unless there is a change in ownership;
3. Any penalties for violation of this chapter or any other chapter of the Sacramento City Code relating to the rental unit; or
4. Cost increases for the rental unit that arose before occupancy by the tenant. (Ord. 2024-0045 § 2; Ord. 2019-0025 § 2)