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D. Tenant Safety Plans for Renovations — Sec. 42.10 <br />The Ordinance requires City approval of a tenant safety plan before any substantial <br />renovation permit can be issued. Affordable housing properties routinely undertake <br />rehabilitation work required by HUD, TCAC, or as a condition of financing. The added <br />requirement to obtain City approval of a tenant safety plan — with potential tenant <br />appeals and hearings — introduces delays and costs that could impair the ability of <br />affordable housing owners to satisfy their obligations to funders and regulatory agencies. <br />E. Annual Rental Housing Fee — Sec. 42.15(D) <br />The Ordinance imposes an annual rental housing fee of $120 per controlled unit <br />($10/month). This fee applies to all controlled rental units, including affordable housing <br />units. Because affordable housing rents are set below market and the fee cannot be <br />passed through to tenants without violating regulatory agreement rent limits, this cost <br />would be absorbed entirely by the owner, reducing project cash flow and potentially <br />jeopardizing debt service coverage and reserve requirements. <br />F. Harassment Prohibitions and Liability Exposure — Secs. 42.13, 42.18 <br />The Ordinance exposes landlords to civil liability of no less than three times actual <br />damages for harassment violations, excess rent charges, and improper evictions. <br />Affordable housing owners and managers operating in good faith under complex <br />regulatory frameworks face an elevated risk of inadvertent violations and associated <br />liability, particularly regarding rent calculation errors at the intersection of the <br />Ordinance's base rent rollback and existing regulatory agreement requirements. <br />G. Operating Cost Compression — Threat to Long-Term Viability <br />Affordable housing developments are subject to the same operating expenses as <br />market-rate properties. Sewer, water, trash removal, and property insurance costs are <br />assessed without regard to whether a property carries affordability restrictions. There is <br />no reduced utility rate for an affordable housing development, no differentiated trash- <br />hauling fee, and no discount on water service. Insurance premiums for affordable <br />housing are, in many cases, higher than those for comparable market-rate properties <br />because insurers perceive greater risk associated with the resident population and the <br />complexity of regulatory compliance. These fixed and quasi-fixed costs increase <br />annually at market rates, typically outpacing the rent increases permitted under existing <br />state law and affordability regulatory agreements. <br />This dynamic creates a structural compression of operating margins over time. As <br />expenses grow at market rates and rental income is constrained by regulatory <br />agreement rent limits, the gap between revenues and expenses narrows each year. <br />Affordable housing owners have limited tools to address this compression: they cannot <br />raise rents above regulatory limits, cannot readily reduce the scope of mandated <br />housing services, and must continue to satisfy debt service, reserve funding <br />requirements, and compliance obligations imposed by investors, lenders, and <br />government agencies.