How does a Bay Area couple earning $300,000 get to stay in $1,800-a-month affordable housing?

At Sunset Square Apartments, a 96-unit affordable complex in East San Jose, two households earning more than $300,000 a year each pay about $1,800 a month for a one-bedroom. Roughly 22 of the building's households now earn above the affordable housing income limits.

No one is accused of breaking a rule, since every household qualified when they originally signed the paperwork and the rules generally let tenants stay after their income rises.

What $1,800 is worth in San Jose

A typical one-bedroom in San Jose costs $2,908 a month in our data. Apartment List puts it at $2,725 a month. Against our figure, an $1,800 rent is a discount of $1,108 a month, or $13,296 a year, per household.

A household earning $300,000 in subsidized housing spends 7.2% of income on rent, while the median renter in the same city paying market rate spends 42.2%, and both of those numbers describe households living a few miles apart.

Why nobody has to move

Income limits get checked once, at move-in, and after that the rent ceiling tracks the unit rather than the tenant, rising a little most years, with no real mechanism to revisit whether the household still needs it.

That was a deliberate choice, and the reasoning is that a raise shouldn't cost you your home, and that a household clearing the cap by a few thousand dollars may still not be able to afford $2,908 a month. Both points hold up, though they hold up considerably less well at an income of $300,000 a year.

San Jose Housing Director Erik Soliván described the incentive plainly: as long as an over-income tenant keeps paying, "the property doesn't have a strong incentive to move that individual out." Operators also point to California's tenant protection laws, which make removing someone purely for earning more difficult.

Mark Mikl, executive director of Charities Housing, which runs Sunset Square, put the operator's position this way: "Everybody's operating under the state regulations and fair housing (laws), and that's what's happening." Mikl said he hopes over-income tenants choose to leave on their own. "When people are successful, we would like to believe that they would give that opportunity to the next family."

How common this is

A June audit by San Jose's auditor sampled 878 city-subsidized units across 10 properties and found nearly 1 in 8 housing over-income tenants. A Los Angeles city controller's report last year found 13% of affordable properties out of compliance with income or rent limits. A Sonoma County grand jury flagged weak income monitoring in 2022.

California doesn't track how many households statewide exceed the caps, so the true figure is unknown. What is known is the shortfall on the other side: the California Housing Partnership counts a shortage of more than 1.2 million affordable rental units.

Assemblymember Anamarie Ávila Farías of Concord has a bill awaiting the governor's signature that would create good cause to remove tenants earning above 140% of local median income, at lease end. Over-income tenants, she said, "take away valuable housing stock and hinder the economic ladder of housing."

The bill is narrower than the headline suggests, because it wouldn't require operators to act and applies only to buildings made up entirely of affordable units that also receive federal tax credits. Ávila Farías couldn't say how many units statewide it would cover.

We covered the market side of this squeeze in where renters earn the most and least, and San Jose's broader run in the renter's market is ending.

Sources

• The Mercury News (September 6, 2026), for the Sunset Square figures, audits, interviews, and bill details

• San Jose City Auditor, June 2026 report on city-subsidized housing

• Los Angeles City Controller, affordable housing audit

• US Census Bureau, table B25119, median renter household income

• RentDataNow San Jose rent data, anchored to the Zillow Observed Rent Index, June 2026