Agda Pkt 2026.07.07 Special Council Meeting

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REDWOOD CITY 9212 Economic & Planning Systems, Inc. 30 Fiscal Implications of Proposed Ordinance Table 15 provides an illustrative calculation for a high and low fee tier structure designed to recover the estimated midpoint annual program cost, based on the unit categories and fee ratio assumptions described in this section. The higher fee would apply to the 6,341 nonexempt units, while the lower fee would apply to the remaining 9,827 partially exempt units, including 5,258 multifamily units built in 1995 or later and 4,569 single-family units subject to eviction protections and the rent registry. These estimates are intended to show the approximate scale of fees that may be required for full cost recovery and should not be interpreted as a recommended fee schedule. Table 15. Illustrative Two-Tier Annual Fee Structure These fees estimated above would increase operating costs for property owners, which may compress development margins and could require affordable housing operators to seek additional subsidy to maintain project feasibility. Given that the proposed Ordinance prohibits the City from using the General Fund to cover program costs, it is unclear how any shortfalls will be financed. In addition, actual fee revenue may be lower than modeled if not all covered property owners comply with annual fee payment requirements. As part of this analysis EPS collected data from other Bay Area cities that manage rent control and tenant protection programs on how owners and operators of rental properties comply with the reporting and payment requirements. This data indicates that payment compliance varies at both the property and unit level. Across the jurisdictions evaluated, average property-level compliance was approximately 86 percent, while average unit-level compliance was approximately 92 percent (see Appendix A Table A-5 for detailed data). Using the average unit- level compliance rate, fee revenue could fall about 8 percent below modeled revenues if fees are not adjusted or otherwise collected. Applied to the estimated annual program cost range of $4.0 million to $10.1 million, this could represent an annual funding shortfall of approximately $320,000 to $808,000. Unit Category Unit Categories Included Estimated Units Illustrative Fee Ratio Illustrative Annual Fee Estimated Annual Rent Stabilized/ Nonexempt Units Nonexempt Units 6,341 1.6x $545 $3.5M Rent Control Exempt Units Multifamily Built 1995 or Later + Single Family 9,827 1.0x $338 $3.3M Total 16,168 $6.8M [1] Fee ratios are based on the average high-to-low tiered fee ratios observed across the Bay Area jurisdictions evaluated, as shown in Appendix A-4. 8.A. - Page 158 of 168 168