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REDWOOD CITY FAIR AND AFFORDABLE HOUSING ORDINANCE <br /> <br />Economic & Planning Systems, Inc. 3 Introduction and Summary of Findings <br />properties with more than 100 units. The outreach also included operators and <br />developers of deed restricted affordable housing, naturally occurring affordable <br />housing, and market-rate rental housing, as well as properties built both <br />before and after 1995, the key Costa-Hawkins3 cutoff year for local rent <br />stabilization applicability. <br />This supplemental report should be read together with the initial 9212 report to <br />gain a complete picture of the proposed economic and fiscal impacts of the <br />proposed Ordinance. Because the rental market is influenced by many factors, <br />including costs affecting development and operations (e.g., labor, materials, <br />interest rates, insurance), demographic and income trends, regional competition, <br />and State and federal laws, neither the initial nor this supplemental EPS report is <br />intended to predict with certainty how landlords and tenants will respond to the <br />proposed Ordinance. Instead, this supplemental report identifies potential areas <br />where the proposed Ordinance could affect housing operations, investment, <br />preservation, and City finances. <br />Summary of Key Findings <br />1. The proposed Ordinance’s impacts on Redwood City’s housing market extend <br />beyond the rent stabilization requirements and include additional provisions that <br />increase operating costs and financial risks related to building repairs, <br />rehabilitation, and redevelopment and related tenant just cause eviction, <br />relocation, and right to return provisions. Although Costa-Hawkins limits which <br />units can be subject to local rent caps, all the non-rent control provisions would <br />apply more broadly, including just cause eviction protections, relocation <br />assistance, right-to-return requirements, tenant safety plans, rental registry <br />requirements, fees, and enforcement. These provisions—particularly relocation <br />payments, tenant safety plans, the petition and appeal process, and right-to- <br />return obligations—may make substantial rehabilitation, re-syndication, <br />withdrawal, or demolition for redevelopment more difficult to underwrite. <br />2. The greatest impacts are likely to fall on older multi-family buildings, “mom and <br />pop” owners, and affordable housing providers, particularly those subject to the <br />proposed Ordinance’s rent control provisions because they operate properties <br />built prior to 1995 (about 40 percent of the City’s rental stock). These <br />properties generally have less flexibility to absorb new costs because they <br />are more likely to have older building systems, master-metered utilities, <br />limited administrative capacity, restricted rents, or existing affordable <br />housing compliance obligations. <br /> <br />3 The Costa-Hawkins Rental Act exempts single family homes, condos, and all housing built after 1995 from locally adopted rent <br />control. Costa-Hawkins also dictates that all units covered by locally adopted rent control are subject to vacancy decontrol, allowing <br />landlords to establish market rate rents for new tenants. <br />8.A. - Page 62 of 168 <br />72