Agda Pkt 2026.07.07 Special Council Meeting

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REDWOOD CITY FAIR AND AFFORDABLE HOUSING ORDINANCE Economic & Planning Systems, Inc. 17 Tenant Protection Impacts For properties withdrawn from the rental market or demolished, the proposed Ordinance establishes a multi-year framework. If a withdrawn unit is offered again for rent within a two-year period, the landlord may face damages exposure and must offer the unit back to the displaced tenant at the rent in effect at the time of withdrawal. If the unit is re-rented within five years, the rent is limited to the rent in effect at the time of withdrawal, plus allowable annual increases. If a rental unit is offered within ten years, the landlord must first offer the unit to the displaced tenant at the rent in effect at the time of withdrawal. The proposed Ordinance also requires program tracking, landlord reporting, and recorded notice, and that these obligations apply to successor owners. Stakeholders also raised concerns about how right-to-return requirements would apply when a property is redeveloped with a different number of units, bedroom mix, affordability structure, or rent level. For example, if a seven-unit building is redeveloped into a 20-unit building, owners may need clarity on which replacement units are considered comparable, and how obligations apply if the project is sold, refinanced, converted to condominiums but subsequently rented, or transferred to successor owners. It should be noted that in the above example the property would be subject to State law pursuant to SB 330 (Government Code Section 66300.5) which provides additional tenant protections and unit replacement obligations if the city approves a development project that requires the demolition of residential dwelling units. Under SB 330, any housing units that are demolished to accommodate a development project must be replaced either on site or, if the development project is non- residential, off site. If the units to be demolished are "protected units"14 those units must be replaced with units that are deed restricted affordable to lower income households for 55 years (45 years if ownership). Additionally, low-income occupants of protected units are entitled to relocation assistance in accordance with Government Code Section 7260 and have a right of first refusal to occupy the newly constructed housing at an affordable rent or cost, as defined in State law.15 As illustrative in Table 8, City data indicate that, over the past 15 years, redevelopment has generally resulted in substantially more housing units than were previously on site. During this period, 995 new housing units were constructed compared to 123 units demolished, representing approximately 8.1 14 Protected Units are units that are subject to (i) recorded covenants restricting the rents to rents affordable to low or very low income households; (ii) rental units subject to any form of rent or price control; (iii) rental units that are or were rented to lower income households in the last five years or (iv) rental units that were withdrawn from the rental market pursuant to the Ellis Act (Government Code Section 7060 et seq.) in the last ten years. 15GC Section 7260 essentially requires that the landlord provide the tenant with a rent differential payment of the difference between the lower of the tenant's pre-displacement rent and 30 percent of the tenant's income and the rent for a comparable replacement unit for 42 months. This relocation amount can vary depending upon the tenant’s actual income and the costs of comparable rentals but the City of Los Angeles has estimated that the relocation payments required under SB 330 for lower income households are in the range of $100,000. (B. Relocation Assistance Bulletin - Eviction for Demolition for New Construction Under the Resident Protections Ordinance) 8.A. - Page 76 of 168 86