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REDWOOD CITY FAIR AND AFFORDABLE HOUSING ORDINANCE <br /> <br />Economic & Planning Systems, Inc. 26 Cumulative Impacts <br />Table 13 illustrates the cumulative annual cost burden associated with the <br />proposed Ordinance, existing City fees, and recent utility rate increases for an <br />illustrative 10-unit multifamily property. Excluding business license registration <br />fees, water usage charges, and other variable operating costs, these items alone <br />represent approximately $806 per unit annually, or about $67 per unit per month. <br />These increasing costs have occurred during a period in which Redwood City <br />apartment rents have generally moved in the opposite direction. Between 2021 and <br />2025, the average asking rent in Redwood City declined by approximately $188 per <br />month, while the illustrative owner cost burden shown above equates to <br />approximately $67 per unit per month before accounting for insurance, labor, <br />maintenance, property taxes, utility consumption, and other operating expenses. This <br />combination of declining rents and increasing operating costs may place additional <br />pressure on property cash flow, particularly for older properties, naturally occurring <br />affordable housing, and deed-restricted affordable housing where owners may have <br />limited ability to offset rising expenses through rent increases. <br />Table 13. Illustrative Cumulative Change in Operating Cost from Local Fees and Charges (10-unit Bldg.) <br /> <br />Cost Component Assumption Monthly Annual Total Annual Increase <br />(10-Unit Building) <br />Proposed Ordinance <br />Administration Fee [1]Average enforcement scenario $39 $471 $4,710 <br />Business License Fee [2]Per rental unit fee, excluding <br />registration fee $1 $11 $110 <br />Sewer / Wastewater Rate Increase <br />[3]See Table 12 $7 $84 $841 <br />Water Fixed Charge Increase 4]See Table 12 $1 $11 $111 <br />Solid Waste Rate Increase [5]See Table 12 $5 $62 $309 <br />Total <br />Excludes business license <br />registration fee, water usage, <br />and other variable costs <br />$53 $639 $6,081 <br />[5] Fee increase for FY 23-34 to FY 26-27, Assuming 1.5" water meter <br />[1] Proposed Ordinance Administration Fee reflects the midpoint enforcement scenario per-unit fee from the EPS program administration cost <br />estimate. Under the maximum enforcement scenario, the estimated ongoing fee would increase to approximately $685 per unit annually. During <br />Years 1 and 2, the per-unit cost could increase further to approximately $756 per unit when operating reserve contributions and interfund loan <br />repayment for start-up costs are included. Actual fees could be higher or lower depending on final program costs, fee structure, number of <br />covered and partially covered units, collection rates, and whether a unit is subject to the higher fully covered fee tier. <br />[2] Business License Fee reflects the 2025 residential rental business license tax adopted through Measure BB in 2024. The modeled amount <br />includes the annual $32 per rental unit charge, up from the prior $21 per unit rate, and excludes the separate fixed annual registration fee. <br />[3] Fee increase for FY 23-34 to FY 26-27, assuming Multi-Family (10+ dwelling units) rate <br />[4] Fee increase for FY 23-34 to FY 26-27, Yard bin service rate of 11-20 yards <br />Illustrative Cost Increase from FY 2023–24 to <br />FY 2026–27 (rounded) <br />8.A. - Page 85 of 168 <br />95