CITY HALL — City Hall is recommending that owners of rent-controlled apartment buildings be allowed to raise rents by 2 percent this year, up from the 1 percent increase the Rent Control Board approved in 2009.

The Rent Control Agency’s five-member board is set to discuss the annual rent increase, or “general adjustment” on Thursday, and is expected to adopt an increase at its meeting June 1.

If adopted, the 2 percent increase would result in a rent of $804 for the average controlled unit, according to a Rent Control Agency report, up $16 from last year.

“It is a difficult time, certainly, for many tenants to be facing a rent increase of 2 percent,” said Rent Control Administrator Tracy Conden. But she added this year’s proposed increase is more moderate than it might have been —mainly because the analysis used to come up with the recommendation took into account the decrease in the Consumer Price Index during 2009 that wasn’t considered in the analysis that resulted in last year’s 1 percent rent hike.

On Tuesday, the proposal seemed to suit commissioners on both sides of an ideological divide.

“Taking into consideration all the factors, it does seem to be an appropriate increase,” said Marilyn Korade-Wilson, who chairs the Rent Control Board and is a staunch rent-control supporter.

Commissioner Robert Kronovet, a landlord who last year favored a 3 percent increase, also said he would support a 2 percent hike.

“I think it’s a reasonable increase this year,” he said.

Kronovet has been barred from participating in the rent increase vote by the California Fair Political Practices Commission because of a potential conflict of interest, but has said he nevertheless plans to vote.

Jay Johnson, a landlord who sits on the Planning Commission, said he believed the 2 percent hike was a balance between lower labor costs and higher rates for things like water and trash collection.

For the first time in eight years, coming up with the recommended increase included an adjustment to the formula’s property tax component.

In the updated formula, the amount of property tax attributed to the average apartment unit was increased 11.6 percent, from $66.09 per month to $73.76 per month.

“It has been eight years since the last significant adjustment was made to this component and staff believes an increase is warranted at this time,” the agency’s report stated.

The Action Apartment Association, which represents local landlords, last week filed a lawsuit against the Rent Control Agency, alleging the general adjustment formula has failed to adequately compensate owners for their property tax expenses.

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