California reaches settlement with Bay Area developer in first enforcement under Tenant Protection Act

A Bay Area developer has agreed to lower rent for several tenants and pay hundreds of thousands of dollars in fines and penalties as part of California’s first settlement under the Tenant Protection Act, the state attorney general announced Friday.

The settlement was reached with San Jose-based Green Valley Corp., also known as Swenson Builders, a Silicon Valley landlord, which raised rent for 20 of its employees more than 150% on average and evicted six of them during the pandemic in 2021.

Under the law, also known as AB 1482, which was signed in 2019, rent increases cannot exceed 5% plus the percent change in the consumer price index or 10% overall — whichever is lower. The act also bars landlords from evicting tenants without just cause, such as not paying rent or participating in destroying the property.

“Because of that critical legislation, impacted Green Valley employee tenants are getting financial relief,” Atty. Gen. Rob Bonta said in a prepared statement. “In addition, they are being protected from skyrocketing rent increases and evictions without just cause, including pretextual evictions that do not meet the Act’s requirements. There should be no doubt: Tenants have housing rights in California, and we have your back.”

A multiyear investigation into Green Valley found that the company raised rents an average of 151% on 20 employees who were living on its property at reduced rates and failed to meet the requirements to evict six of them.

The company will pay more than $330,000 back to the tenants plus $60,000 in penalties. Reduced rent rates were restored for three employees who continue to live on company property, officials said. The company must also train its staff on California’s housing laws annually for the next five years as part of the settlement. Swenson declined to comment on the settlement Friday.

AB 1482 was intended to help prevent homelessness after a 2018 study of Zillow data found that rent-burdened households were more likely to become homeless. It was also meant to lift the number of rent-controlled units in the state above 700,000. A study by researchers at UC Berkeley published last year suggests more accountability mechanisms are needed for the law to hit those goals.

Times staff writer Ruben Vives contributed to this report.