Agda Pkt 2026.07.07 Special Council Meeting

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REDWOOD CITY FAIR AND AFFORDABLE HOUSING ORDINANCE Economic & Planning Systems, Inc. 39 Affordable Housing Impacts Interaction with Affordable Housing Programs The proposed Ordinance may interact with existing state and federal affordable housing programs in complicated ways, potentially adding costs and reducing flexibility, and making it more difficult to carry out mission-based activities. Subsidy Programs Affordable housing providers also identified current uncertainty regarding federal housing assistance programs, including Housing Choice Vouchers, Project-Based Vouchers, VASH, and other rental subsidy programs. Many affordable housing developments rely on voucher revenue to support operations, maintain services, and preserve long-term financial stability. While potential cuts to federal programs that benefit affordable housing is not caused by the proposed Ordinance, it may affect the flexibility affordable housing providers need to respond to future funding changes. If federal voucher funding were reduced, eliminated, or otherwise made less reliable, providers may need to rely more heavily on allowable rent adjustments, operating subsidies, reserves, or additional public funding to maintain project viability. Stakeholders noted that many affordable housing providers do not currently increase rents to the maximum level permitted under area median income (AMI)- based limits or regulatory agreements. Instead, providers may use CPI-based increases, internal rent policies, or other conservative approaches to balance operating needs with tenant affordability. If voucher revenue declines, providers may need greater flexibility to increase rents within existing affordable housing rules to offset lost subsidy revenue and maintain operations. The proposed Ordinance could reduce that flexibility in certain circumstances. If local rent limits constrain rent adjustments below levels otherwise allowed, providers may have fewer tools to respond to external funding shocks. The result could be greater pressure on residual receipts, reserves, maintenance, resident services, and future subsidy needs. Voucher uncertainty should therefore be understood as an external risk factor that could amplify ordinance impacts over time. The ordinance would not create federal funding risk, but it could make affordable housing projects less able to absorb that risk if other revenue sources become less reliable. Affordable Housing Preservation Through Re-Syndication Affordable housing providers also identified potential impacts on future re- syndication and preservation rehabilitation projects. Even without the proposed Ordinance, affordable housing projects often face long-term operating pressure because allowable rents may grow more slowly than insurance, utilities, maintenance, staffing, and other operating expenses. Over time, this can cause expenses to approach or exceed revenues, particularly in older properties with increasing capital needs. 8.A. - Page 98 of 168 108