For a San Jose building I want to know four things up front: whether it is a wood-frame building with three or more units built before 1990 (the soft-story ordinance’s scope), whether it was built and occupied before September 7, 1979 (the rent ordinance’s line), how close it is to Coyote Creek or another mapped flood area, and its inspection tier with the city. Earthquake and flood are separate policies. The list at the bottom tells you what to send.
What sets a San Jose apartment building apart
- Soft-story ordinanceApproved by the City Council on September 24, 2024. The city’s page now gives an effective date of April 1, 2027, after the Council delayed it.
- Apartment Rent OrdinanceCovers apartments with three or more units built and occupied before September 7, 1979, and allows one 5 percent rent increase in 12 months.
- Tenant Protection OrdinanceLandlords of multifamily dwellings may end a tenancy only for one of 13 listed causes, and some of those causes carry relocation benefits.
- Faults and soilsThe U.S. Geological Survey names the Hayward, Rodgers Creek, Calaveras and San Andreas faults as the Bay region’s most likely sources of a damaging earthquake.
- Coyote CreekValley Water is building flood protection along nine miles of the creek, designed to the level of the February 21, 2017 flood.
- City inspectionsThe Multiple Housing Inspection Program puts every apartment building in one of three tiers.
The coverage parts are the usual ones (how an apartment program is built); these local facts decide how an underwriter prices and conditions them.
The soft-story retrofit ordinance: passed, not yet in force
The city defines a soft-story building for this program as a wood-frame building with at least three residential units, built before 1990, that may have an unretrofitted crawl space or a level with large openings for parking or storage. Its consultants estimated about 3,500 such buildings from a visual survey, roughly 1,700 of them rent-stabilized, concentrated in Downtown and West San José. The city also counts about 300 Victorian or Edwardian-era rental buildings with cripple walls as a concern.
As of November 2026 the city’s program page says:
- Effective date: April 1, 2027. No action is required before then unless you want to be considered for the city or state retrofit grants, which need a screening first.
- Three groups: Group 1 is subject buildings built before January 1, 1978 with five or more units; Group 2 is those built from 1978 through 1989 with five or more units; Group 3 is the remaining subject buildings with three or more units.
- Deadlines: a screening phase for all groups, then design, permit and construction deadlines by group. The page lists April 1 of 2031, 2032 and 2033 for groups 1, 2 and 3, but its screening dates have not all been updated for the delay, so confirm yours with the Building Division.
- Cost pass-through: for rent-stabilized buildings, the city says owners would petition to pass retrofit costs to tenants, and an approved pass-through would run over 20 years.
Underwriters do not wait for an effective date. A tuck-under building is already asked whether it has been evaluated or retrofitted, and a finished retrofit with permits finaled is the strongest document you can send for earthquake coverage. If you retrofit, the work may need builder’s risk and certificates from the contractor.
Earthquake, three faults and liquefaction
The U.S. Geological Survey’s Bay region forecast gives a 72 percent probability of at least one magnitude 6.7 or greater earthquake somewhere in the region before 2043: 33 percent for the Hayward or Rodgers Creek faults and 22 percent for the San Andreas. The city’s own consultants found the most damaging scenario for San Jose’s soft-story buildings would be a magnitude 7.1 earthquake on the Monte Vista-Shannon fault along the west side of the city.
Soil matters as much as distance. USGS mapped liquefaction hazard for San Jose and neighboring cities under three scenario earthquakes, on the San Andreas, Hayward and Calaveras faults, and predicted liquefaction in all three in the young levee deposits along the major creeks. An earthquake underwriter will ask for the address, year built, construction, stories and any geotechnical or retrofit report.
None of this is in a standard policy. Earthquake shake damage is typically excluded from commercial property forms, and the California Earthquake Authority insures homeowners, condo unit owners, mobilehome owners and renters, not apartment buildings. Apartment earthquake coverage is a separate commercial policy, or a difference-in-conditions policy, with its own percentage deductible. How earthquake coverage works in California.
Coyote Creek and flood coverage
Coyote Creek flooded on February 21, 2017. Valley Water’s project to prevent a repeat covers about nine miles of the creek between Montague Expressway and Tully Road, and its stated objective is protection up to the 2017 level, which the agency equates to roughly a 5 percent, or 20-year, flood. As of its October 2026 update, the first phase of floodwalls is complete and the second phase is in construction with completion anticipated by the end of 2028.
Read that design level carefully: it is well short of the 100-year flood that federal flood maps and lenders use. Flood is excluded from standard property policies, so a building near the creek, or in any mapped flood zone, needs its own flood policy. Check that the limit covers ground-floor units and electrical and mechanical equipment, and whether lost rents are covered at all. Flood insurance in San Jose and how flood coverage works.
Rent-stabilized rent rolls and displaced tenants
Loss of rents coverage replaces the rent you were collecting while damaged units are repaired. In San Jose three ordinances decide what that rent is and what you owe tenants who have to move.
- Apartment Rent Ordinance. In covered buildings the maximum is one 5 percent increase in a 12-month period. Rent can be reset after a unit is voluntarily vacated or after a lawful eviction. Duplexes, condominiums and units first rented after September 7, 1979 are exempt.
- Tenant Protection Ordinance. Of the 13 just causes, five come from the landlord’s side: substantial rehabilitation, removal from the market under the Ellis Act, owner move-in, a city code enforcement action requiring a move-out, and converting an unpermitted unit. The city says relocation benefits must be paid for those five, in amounts set by unit size.
- Ellis Act Ordinance. Applies to apartments with three or more units when an owner redevelops or removes them from the market; owners of rent-stabilized buildings may have to offer former tenants a right to return.
So set the loss of rents limit from the actual rent roll and a realistic rebuild period, not from market rent. Whether a relocation payment is covered depends on the policy’s extra expense and rental value wording, and on why the tenant had to leave. How income coverage works.
Inspection tiers, balconies and liability
San Jose code enforcement inspects apartment buildings on a rotation set by tier, and the tier is public on the city’s Multiple Housing roster.
- Tier 1Six-year cycle with mandatory annual self-certification; the owner inspects every unit yearly and at each change of tenancy, and the city audits 10 percent of units.
- Tier 2Five-year cycle; the city proactively inspects 25 percent of the units.
- Tier 3Three-year cycle; 50 percent of units inspected. Buildings with more violations and verified complaints land here.
- Balcony inspectionsHealth and Safety Code 17973 applies to buildings with three or more units and wood-supported balconies, decks, stairs and walkways more than six feet above ground. The first inspection was due by January 1, 2026, then every six years.
A Tier 1 assignment and a clean balcony report are worth sending with the application. Older plumbing, wiring and roofs still get the usual questions, and rebuilding to current code after a loss is paid by ordinance or law coverage. Put a commercial umbrella over the primary liability limit.
What to send me
- Address, year built, stories, unit count and construction type, including any tuck-under parking or crawl space.
- Seismic paperwork: the city screening result if you have filed one, any engineer’s evaluation, retrofit permits and final sign-off.
- The current rent roll, marked to show rent-stabilized units, and a recent operating statement.
- Flood information: the flood zone and any elevation certificate, especially near Coyote Creek.
- Current declarations pages for property, earthquake, flood, liability and umbrella.
- Five years of loss runs, with what was repaired.
- System updates with years (roof, plumbing, electrical), your Multiple Housing tier and the balcony inspection report.
Common questions
Is the San Jose soft-story retrofit mandatory yet?
Not yet. The City Council approved the ordinance on September 24, 2024, and the city’s page, as of November 2026, gives an effective date of April 1, 2027. Until then retrofits are voluntary.
Which San Jose apartment buildings fall under the soft-story ordinance?
The city generally defines them as wood-frame buildings with at least three residential units built before 1990. The city offers an online screening form to determine whether a specific building is subject to it.
Does apartment building insurance in San Jose include earthquake?
No. Earthquake is typically excluded from commercial property policies and is bought as a separate policy with its own deductible. The California Earthquake Authority does not insure apartment buildings.
Do I need flood insurance near Coyote Creek?
Flood is excluded from standard property policies, and the Valley Water project along the creek is designed to the level of the February 2017 flood, about a 20-year event. Lenders generally require flood coverage in a mapped Special Flood Hazard Area; near the creek I would look at it either way.
Who insures older apartment buildings in San Jose?
Admitted and surplus lines insurers both write them, and the FAIR Plan writes buildings with five or more units when others decline. As an independent broker I match the building’s age, construction, retrofit status and losses to the insurers that want it.
Will loss of rents pay market rent on my rent-stabilized San Jose building?
No. It replaces the rent you were collecting, and under the Apartment Rent Ordinance a continuing tenancy can take only one 5 percent increase in 12 months. Size the limit to the real rent roll.
Do I have to pay tenants to relocate in San Jose?
Under the Tenant Protection Ordinance, relocation benefits are owed when a tenancy ends for substantial rehabilitation, Ellis Act removal, owner move-in, a code enforcement action requiring a move-out or conversion of an unpermitted unit. Confirm your situation with the Rent Stabilization Program.
General information about insuring apartment buildings in the City of San José as of November 2026, not legal advice. The soft-story ordinance’s dates, rent and tenant ordinances, flood project schedules and inspection rules change; confirm your building’s status with the Building Division, the Rent Stabilization Program and Valley Water, and your obligations with counsel. Coverage depends on underwriting and the terms, conditions and exclusions of the policy actually issued.