Agda Pkt 2026.07.07 Special Council Meeting

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REDWOOD CITY FAIR AND AFFORDABLE HOUSING ORDINANCE Economic & Planning Systems, Inc. 40 Affordable Housing Impacts Re-syndication is one tool used to address this issue. Many affordable housing LITC projects are recapitalized after the initial tax credit compliance period or later in the project life cycle, when original investors may seek to exit the partnership and /or the property seeks a capital infusion for rehabilitation, modernization, or long-term preservation. Re-syndication can bring in new tax credit equity, restructure financing, and fund major reinvestment needed to preserve the property as affordable housing. This issue is important because re-syndication is not only a financing event; it is often a major rehabilitation event. Building preservation scopes may include roof replacement, plumbing, electrical systems, HVAC, life-safety improvements, accessibility upgrades, unit interiors, building envelope repairs, and other capital needs. These projects often require work in occupied buildings and may require temporary relocation of existing tenants, particularly when work affects kitchens, bathrooms, utilities, hazardous materials, or building-wide systems. The proposed Ordinance may interact with this process in several ways. If rent growth is further constrained, projects may reach operating deficits earlier than they otherwise would, potentially before the next feasible recapitalization or re- syndication window. At the same time, reduced cash flow may limit the project’s ability to contribute to reserves, making it harder to demonstrate long-term financial stability or fund needed rehabilitation at re-syndication. Affordable housing providers generally have experience relocating tenants during rehabilitation with minimal disruption and returning residents to their units. They are also governed by a variety of existing requirements to address the relocation needs of their tenants, the costs of which may exceed what is required in the proposed Ordinance. Unlike the proposed Ordinance, both the State Tenant Protection Act and Redwood City’s existing Tenant Protection Ordinance exempt deed-restricted affordable housing from certain relocation assistance requirements, in part because of these existing requirements. The proposed Ordinance may also increase uncertainty of rehabilitation by adding a new layer of requirements that may affect cost, timing risk, and administrative complexity. The incremental impact of the proposed Ordinance would vary depending on the project, existing relocation obligations, and scope of rehabilitation. This could have broader implications for Redwood City’s affordable housing preservation strategy. Re-syndication and rehabilitation are key tools for maintaining older affordable housing over the long term. If the proposed Ordinance accelerates operating deficits, reduces reserve capacity, or increases the cost and uncertainty of occupied rehabilitation, preservation projects may become more difficult to finance and may require greater City, County, State, or other public subsidy support. 8.A. - Page 99 of 168 109