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REDWOOD CITY 9212 <br /> <br />Economic & Planning Systems, Inc. 17 Redwood City Housing Impacts <br />federal government calculates a decrease in AMI and in turn rents would instead <br />remain at the same rate until the next time AMI increased. <br />Figure 1. Illustrative Rent Growth Based on AMI, Inflation, and <br />Proposed Ordinance, 2015–2025 <br /> <br />Source: San Mateo County Department of Housing, HUD, ABAG, City of Redwood City, and EPS. <br />Based on discussions with several affordable housing developers and operators, <br />rent increases for these buildings are typically tied most closely to inflation rather <br />than AMI to cover rising operating expenses (e.g., maintenance, insurance, <br />utilities, management, etc.). As a result, the lower rent growth that would be <br />allowed by the proposed Ordinance could materially constrain affordable housing <br />revenues below the level needed to keep pace with operating expenses. Given <br />that older affordable housing buildings (e.g., those built prior to 1995), often <br />operate with lower margins, limited reserves, and more extensive deferred <br />maintenance issues, the proposed Ordinance could threaten their long-term <br />financial stability and project viability. <br />In addition, the proposed landlord fee would impose new operating costs on <br />affordable housing providers. Unlike market-rate operators, affordable housing <br />projects typically have limited ability to absorb additional expenses due to fixed <br />rent structures and regulatory constraints. Even modest increases in operating <br />costs can create or exacerbate cash flow shortfalls, particularly for older <br />properties with deferred maintenance needs. Absent additional subsidy or <br />restructuring, these added costs could impact ongoing operations, capital <br />planning, or long-term asset preservation. This concern is consistent with recent <br />State efforts to reduce or eliminate certain monitoring fees for affordable housing <br />projects to improve project feasibility. <br />$1,649 <br />$1,215 <br />$1,356 <br />$1,000 <br />$1,100 <br />$1,200 <br />$1,300 <br />$1,400 <br />$1,500 <br />$1,600 <br />$1,700 <br />1 2 3 4 5 6 7 8 9 10 11 <br />Rent if Increased by San Mateo County AMI <br />Rent if Increase by Proposed Ordinance: 60% of Change in CPI <br />Rent if increased by CPI <br />8.A. - Page 145 of 168 <br />155