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REDWOOD CITY FAIR AND AFFORDABLE HOUSING ORDINANCE <br /> <br />Economic & Planning Systems, Inc. 12 Tenant Protection Impacts <br />Most affordable housing developers already include allowances for tenant <br />relocation. However, smaller operators with limited reserves may be pinched by <br />the increased obligations stipulated by the proposed Ordinance, particularly for <br />unexpected repairs that require tenants to relocate (e.g., flood, water leak, failure <br />in a major building system like water heater). In these cases, added relocation <br />payments may directly reduce funds otherwise available for resident services, <br />building amenities, or debt repayment to “soft” lenders.12 <br />As summarized in Table 5, the expanded relocation payments required by the <br />proposed Ordinance will increase the cost of landlords making repairs that require <br />tenant relocations. While this is a sporadic cost, smaller, “mom and pop” landlords <br />often do not carry adequate reserves to readily absorb major unforeseen repairs. <br />Larger and better capitalized operators will likely be more able to finance these <br />expenditures and recoup costs over time with increased rent if the units are built <br />post 1995. The expanded requirement may also reduce the financial feasibility of <br />larger residential projects that involve the redevelopment of existing housing <br />units. However, most of the City’s anticipated Housing Element sites do not <br />involve significant demolition of existing stock. <br /> <br />12 Soft lenders are usually public entities, such as Redwood City, that help fund affordable housing that are only repaid when <br />buildings generate surplus cash flow (aka “residual receipts”). <br />8.A. - Page 71 of 168 <br />81