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<br />July 7, 2026 <br /> <br />Redwood City Council <br />1017 Middlefield Road <br />Redwood City, CA 9 4063 <br /> <br />Re: Impact on Affordable Housing Operators Under Redwood City Fair and Affordable <br />Housing Ordinance <br /> <br />Honorable Mayor & Councilmembers, <br /> <br />I am writing on behalf of MidPen Housing to provide feedback on the Redwood City Fair and <br />Affordable Housing Ordinance that will be appearing on the November 2026 ballot. <br /> <br />MidPen Housing is a developer, long-term owner, manager, and resident services provider of <br />affordable housing. Since MidPen was founded in 1970, we have developed 140 communities <br />and over 10,400 homes for low-income families, seniors and those with supportive housing <br />needs throughout Northern California. In Redwood City, our portfolio includes 375 homes <br />serving over 500 residents, with an additional 180 homes in our pipeline. <br /> <br />While well-intentioned, the Fair and Affordable Housing Ordinance would add additional <br />complexity to the regulatory statute of which affordable housing is required to comply. The <br />majority of local rent stabilization ordinances exempt affordable housing for a simple reason: <br />State and federal laws already govern rental increases in affordable housing, and additional local <br />laws threaten the funding sources that make these projects work. <br /> <br />One such example relates to the Federal Housing Choice Voucher Program - most specifically <br />Project-Based Section 8 (“Section 8”) which provides vouchers that pay a large portion of their <br />rent; residents pay approximately 30% of their income as a “tenant portion” of the rent, with the <br />Federal government backfilling the rest. Many of our residents rely on Section 8 to pay their rent. <br />Lenders of our developments contractually require that we may increase rents in the case that <br />Section 8 vouchers are not authorized in the Federal government’s annual appropriations process <br />– a real threat under the current Federal administration. Without confidence that affordable <br />housing can charge necessary rent if other subsidies are eliminated, the value associated with <br />project-based vouchers cannot be leveraged to provide upfront capital that helps refinance and <br />recapitalize projects i.e. current Federal resources cannot be effectively leveraged as lenders will <br />not be able to underwrite the income. As a result of the Redwood City measure’s stricter rent <br />caps, lenders will refuse to make loans to the existing portfolio of projects that will need to <br />eventually be refinanced. These existing obligations are in an untenable position as current loan <br />documents stipulate that property owners must allow rent float-up provisions in the event of <br />subsidy loss. <br /> <br />Furthermore, in some years, these contract rents do not increase at all. During the pandemic, <br />rents were flat for some years and then there was a “catch up” year. This ordinance would not <br />allow us to “bank” the increases and solve for what is not a steady rate of increase over time.