Agda Pkt 2026.07.07 Special Council Meeting

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This results in projects not being able to cover the rate of increase for expenses such as utilities, insurance and typical replacement and maintenance costs, along with paying our staff a wage that is comparable to market and includes standard health benefits. In practice, when vouchers are cut, nonprofit/mission-driven affordable housing operators often seek to find a solution for affected tenants. This may involve finding another source of rental assistance or raising rents across a combination of units some amount to make up for the shortfall. This flexibility allows projects to continue operating even in the worst-case scenarios. Section 8 vouchers currently subsidize rents in approximately half of affordable housing developments in Redwood City, so ensuring operators can respond to changing federal policy is necessary to preserve existing buildings. We do not understand why the ordinance would exempt local housing authorities—the administrator of this subsidy program—for projects/units that they own but not extend to the projects/units subject to the contracts they administer. Regardless of whether vouchers are directly tied to homes operated directly by the local housing authority, or to affordable homes operated by a different provider in which there are contracted vouchers for, both circumstances are subject to complex regulatory agreements which could be at stake if requirements under this proposed ordinance conflict with federal voucher requirements. Other sections of the measure would unduly impact affordable housing operators. The “rental housing fee” would cost providers tens of thousands of dollars per year. This very scenario is currently unfolding in the City of Berkeley, with local affordable developer Resources for Community Development estimating that their annual registration fees will increase by more than $100,000 as a result of the change, from $16,500 in the 2024 fiscal year to $133,500 per year going forward. Cost increases such as these can lead to cutting back on other expenses, whether that be building maintenance or on-site resident services staff. Unlike landlords in the private market, affordable developers cannot raise rents to accommodate increasing costs. In the face of rapidly increasing operating costs over the past number of years related to insurance premiums, utilities and staffing, any cost increase will have a negative impact on the operational sustainability of our developments. As a result of the difficulties affordable housing operators are now facing in Berkeley, the City Council will be voting on placing clean-up amendments to the Rent Stabilization Ordinance on the November 2026 ballot which will either allow the Rent Board to establish a fee waiver program for nonprofit affordable housing providers or fully exempt nonprofit affordable housing providers from Rent Stabilization Board fees. Additionally, the rent increases paid by Section 8, HUD-Veteran Affairs Supportive Housing (VASH ) and other programs allow robust resident services. These subsidies are needed to preserve our literacy-based after school program, along with other specialized supports for seniors aging in place, veterans, and people exiting homelessness. As written, the Redwood City measure would result in greater financial pressure on affordable developments as it reduces the necessary flexibility that currently exists to respond to future funding changes. If federal voucher funding were to be reduced or eliminated, the end result would be an inadvertent reduction in resident services, maintenance, replacement reserves, residual receipts payments and/or preservation efforts as there would be fewer tools to respond to a changing funding environment. If the measure does not exempt affordable housing, it risks degrading the quality of affordable housing and potentially forcing buildings to shutter. Although the petition process has been