Rent Caps and Tenant Rules by City: What Silicon Valley Landlords Should Know

Buying a rental, or keeping your old home as one, means knowing two layers of rules: California’s Tenant Protection Act and any local ordinance on top of it. In Silicon Valley the local layer changes city by city, and several cities updated theirs in 2025 and 2026. Here’s the lay of the land as of October 2026. It’s a summary, not legal advice, so confirm the rules for a specific property with the city and an attorney.

The state rules

• Rent cap. Over any 12 months, rent can rise no more than 5% plus the change in the cost of living, or 10%, whichever is lower, with no more than two increases a year. The Attorney General publishes the maximum by region: 8.8% for San Mateo County and San Francisco for increases from August 1, 2026 through July 31, 2027.
• New tenants. When a unit is empty, the owner can set the starting rent; the cap applies to later increases.
• Exemptions. Housing with a certificate of occupancy from the last 15 years is exempt, as is a duplex where the owner lives in the other unit. Single-family homes and condos owned by individuals are exempt only if the tenant got written notice of the exemption in the law’s wording; homes owned by corporations or REITs are covered.
• Just cause. After a tenant has lived in the unit for 12 months, a landlord can end the tenancy only for a reason listed in the law. No-fault terminations require relocation help equal to one month’s rent.
• Owner move-ins and remodels. Since April 1, 2024, an owner or relative who moves in must do so within 90 days and stay at least 12 months. A substantial-remodel termination needs permitted work that requires the tenant to be out at least 30 days; cosmetic work doesn’t count.
• Sunset. The current law runs until January 1, 2030 unless extended.

Where local rent control can apply

Under California’s Costa-Hawkins law, still in force after Proposition 33 failed in 2024, local rent caps can’t cover single-family homes or housing built after February 1, 1995, and owners can reset rent between tenants.

City by city

• San Jose. The Apartment Rent Ordinance covers buildings of three or more units built and occupied before September 7, 1979: one increase of up to 5% every 12 months. Houses, duplexes, condos, townhomes and ADUs are exempt.
• Mountain View. Under the Community Stabilization and Fair Rent Act, apartments built before February 1, 1995 have rent stabilization and eviction protection. The allowed increase is 2.5% from September 1, 2026 to August 31, 2027.
• East Palo Alto. The rent stabilization and just cause ordinance allows 2% from July 1, 2026 to June 30, 2027. Buildings of three or fewer units where the owner has lived at least a year are exempt from the cap.
• San Francisco. The allowed increase is 1.6% from March 1, 2026 to February 28, 2027, and landlords need a rent-increase license first.
• Palo Alto. No local rent cap. Just cause applies after six months instead of the state’s 12, the city requires relocation help for eligible no-fault evictions and keeps a rental registry. In June 2026 a council committee recommended deferring a possible rent stabilization ordinance.
• Redwood City. No rent cap. A tenant protection ordinance in effect since January 1, 2026 requires relocation payments for no-fault terminations, with more for some tenants, and adds a right to return after a substantial remodel.
• San Mateo. No rent cap. A program adopted December 1, 2025 gives no-fault just-cause protection after 11 months and requires relocation equal to one month’s rent.
• Menlo Park. No rent cap. Relocation payments are required for no-fault evictions, and landlords with four or more units must offer a one-year lease. The city adopted an anti-displacement plan in May 2026 that may bring new rules.
• Los Gatos. A rental dispute program for properties with three or more units: one increase a year, with 5% presumed valid and larger increases open to tenant petitions.

Short-term rentals

San Francisco allows short-term rentals only in a host’s primary residence, with unhosted stays capped at 90 nights a year, and charges a 14% hotel tax on stays under 30 days. San Jose’s hotel tax rose from 10% to 12% on October 1, 2026. Units created under SB 9 can’t be rented for 30 days or less.

Run the numbers

Our Investor Toolkit covers rental math, 1031 exchange deadlines and depreciation, and the Build Lab checks ADU and lot-split options for a property.

Thinking about a rental? Call the Boyenga Team at (408) 373-1660 or (650) 383-8606. Commissions are negotiable, and we offer bundled services, so ask us what’s included.