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Economic & Planning Systems, Inc.18 <br />OTHER MARKET BASED PRESSURES <br />•Other financial pressures faced by building owners potentially <br />compounded by Proposed Ordinance, include: <br />–Insurance: Federal Reserve estimates multifamily property insurance costs <br />increased by more than 75% from 2019 to 2024 in real terms <br />–Financing: Rising interest rates make it increasingly hard to finance large <br />repairs and rehabilitation projects (commercial loans rates have increased <br />200 - 250 basis points since 2020) <br />–Decline in “real” rents: Inflation adjusted rents in Redwood City have <br />declined over last 10-years (see prior 9212 Report) <br />•Under Proposed Ordinance, pre-1995 owners have limited <br />ability to recover costs with rent increases capped at 60% of <br />percent change in CPI (and rolled back to 2025 levels)