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Rent control voters will decide in November whether to adopt rent control and expanded tenant protections.
The City Council voted Tuesday evening to place a rent control measure on the Nov. 3 ballot. The multi-faceted ordinance would establish rent stabilization and add tenant protections and anti-harassment safeguards.
The proposed ordinance is a citizen-led ballot initiative backed by Faith in Action, an organization that advocates for affordable housing, tenant rights and social justice. Earlier this year, Faith in Action collected more than the roughly 4,500 signatures from Redwood City residents needed to qualify the initiative for the ballot. The measure will need a majority vote to pass.
Faith in Action has worked for years to get the initiative on the ballot. Supporters of the initiative say rent control is a necessary policy tool to help renters – including families, seniors and low- or middle-income people — who have faced skyrocketing rents in recent years.
“We know the impact of this measure,” said Harlow Srain, an organizer with Faith in Action. “It’s going to affect tenants, families, elders, essential workers. Everyone’s going to have greater stability to stay in the city they love.”
Opponents say that rent control fails to address the underlying cause of high housing costs – a shortage of supply – and may disincentivize further housing construction. Iggy Lopez, a Redwood City property owner and manager, said the measure would also reduce investment in existing properties and would make it harder for the small housing providers to keep up with rising insurance, taxes, maintenance and repair costs.
The council chose to place the proposed ordinance on the ballot rather than adopt it outright. The July 7 special meeting was the second time in a month the council convened to discuss the issue. At its June 8 regular meeting, the council expressed concern about the initiative and directed staff and the city’s consultant, Economic & Planning Systems, to further analyze its potential impact on property owners, affordable housing providers and the city’s finances.
While the proposed ordinance prohibits the city from using the General Fund to cover any funding shortfalls, EPS found that the program would cost an estimated $4 million and $10 million per year.
What the ordinance would do
The proposed ordinance would limit annual rent increases to 60% of the percentage increase in the local Consumer Price Index, with increases capped at 5%, and It would also roll rents back to Oct. 29, 2025, levels. Because the Costa-Hawkins Act exempts single-family homes, condominiums and most multifamily housing built after 1995, the measure would apply to about 20% of Redwood City’s total housing stock. The proposal is more restrictive than the state’s 2019 Tenant Protection Act, which allows annual rent increases of up to 10% for covered units.
In addition to rent control, the ordinance would implement various tenant protections that would apply to a broader swath of housing units in the city.
It would require landlords who ended a tenancy for reasons unrelated to the tenant’s behavior – a “no-fault eviction” – to pay tenants relocation assistance equal to four times the U.S. Department of Housing and Urban Development’s fair market rent or $12,000, whichever is greater. Additional relocation payments would be required for certain protected tenants, such as people older than 62 or tenants with disabilities. The proposed assistance surpasses the payment amount required in the city’s Tenant Protection Ordinance, phased in earlier this year, which requires one month of relocation assistance for most renters and three to four months of assistance for other qualifying residents.
It would also require landlords to create a tenant safety plan for any construction, repairs or renovations in a renter’s unit. Finally, it would require the city to administer a Rent Stabilization and Tenant Protection Program that would include a rent registry, legal services and a process for filing housing petitions and appeals.
City analysis raises financial concerns
With Redwood City projecting significant budget deficits in Redwood City of at least $22 million beginning in 2027, a key issue of the four-hour meeting centered on how the proposed ordinance would impact the city’s finances.
In its report, EPS found that the proposed ordinance would have a “relatively modest” effect on the city’s finances under current state housing law.
The proposed ordinance states that the program would be financed through fees of $84 or $120 per unit charged to the landlords. However, EPS estimated that the per-unit fee required to recover the program’s costs would be $246 to $622 per rental unit per year. Because of the gap in fees between the proposed fees and estimated costs, EPS projected an annual cost to the city of $4 million to $10.1 million and at least seven new staff members that would be required to administer the ordinance.
EPS and the staff report also found that the proposed ordinance was most likely to affect older, multifamily properties, “mom-and-pop” landlords and affordable housing providers, all of which generally have buildings needing more repairs and tighter operating margins.
The staff report also noted that the provisions of the ordinance could “increase operating costs and financial risks” for some landlords and owners of multifamily properties. It found that the tenant protections could make the rehabilitation and redevelopment of some properties more difficult.
The consultant and the staff report further discussed the possibility that the statewide Costa-Hawkins Act could be repealed, thereby expanding the number of rental units to which the proposed ordinance would apply. Efforts to repeal of Costa-Hawkins have failed three times, and a repeal could increase the financial impact to the city.
Community members weigh in
Nineteen public commenters weighed in on the ordinance, with most opposed to the ordinance – a reversal from the June 8 meeting, when 22 of 31 commenters spoke in its favor.
Some public commenters who owned or managed property said the costs of the proposed ordinance could hinder their ability to make repairs. Norman Goldau, a Redwood City resident and local real estate broker who owns three separate five-unit apartment buildings, said the additional expenses imposed by the ordinance would make his apartments unprofitable, which could prompt him to go into commercial real estate instead.
“I’ve never implemented or kept the rents on the cutting edge of what they could be. I’ve always been fair,” he said. “I have many tenants that have lived in the apartments for 10 years or more [and] many Spanish tenants as well.”
Commenters from two affordable housing providers – MidPen and St. Francis Center – also spoke out against the ordinance, saying it would add regulatory complexity and additional costs to their operations, limiting their ability to provide housing.
Diane Lopez spoke in support of the ordinance. She said that finding housing while looking for a job is a “nightmare.”
“I want to remind you… that dignity matters,” she said. “Without an affordable rent control measure, teachers, babysitters, cleaners, and babysitters, which are the heart of our society, will not be able to continue to live in Redwood City.”
In an email to the Pulse after the meeting, Martha Beetley – a volunteer for Faith in Action – expressed dissatisfaction with the focus of the EPS presentation.
“I was disappointed that the EPS presentation did not even mention their findings of the significant benefits for renters under the proposed Ordinance,” she wrote. “Instead, EPS seemed to be presenting Council with concerns only for the landlords’ bottom line, discussing inflated costs and ambiguous opinions, rather than suggesting how to implement the plan.”
Council members raise concerns
Several council members expressed concern about the potential “unintended consequences” for the initiative on the city’s finances, property owners and renters.
Council member Marcella Padilla worried about how the measure would affect the city’s finances.
“I don’t see how this doesn’t hit the General Fund. I don’t see how this doesn’t hurt all taxpayers. I just don’t see how it can be funded the way it is written,” Padilla said. “I’m trying to see how the math could work, but I fear that it would discourage housing production and repairs.”
Council member Diane Howard said she did not support the ordinance. She expressed concern that “mom-and-pop” landlords would be so put off by the regulations and rent stabilization that they would sell their properties or convert them to condos, which are exempt from most of the regulations.
“Policies like this might limit the truly affordable units,” she said. “More inventory will help bring the costs down, not punishing the very people who are providing the housing now in our community. I’m worried the unintended consequences [are] going to be counterproductive.”
Council member Isabella Chu also opposed the ordinance. Describing herself as “unequivocally pro-renter,” Chu said she was sympathetic to the challenges of paying a high percentage of one’s income in rent. But Chu argued that rent control benefits tend to accrue to the well-connected, an assertion that some research supports. The ordinance could have a strong negative impact on renters, Chu said.
“More housing gives renters power,” Chu said. “What [this ordinance] does is penalizes and encumbers the production of naturally affordable housing and expressly deed restricted housing.” She added, “This is a very seriously flawed, untenable ordinance.”
At the end of the meeting, Chu attempted to introduce an amendment to have the council formally oppose the ordinance. However, city staff quickly ruled that the council could not vote on it because the item was not on the agenda.
