Redwood City Council pushes rent control proposal vote back 30 days

After an hours-long city council meeting, Redwood City leaders did not vote on a contentious rent control proposal. Rather, council called for a supplemental report on its potential fiscal impact and asked to return within 30 days to make a decision.

The "Redwood City Fair and Affordable Housing Ordinance" was authored by Faith in Action Bay Area, after volunteers had amassed 7,500 signatures in support of the proposal. If passed, landlords would have to cap rent increases to no more than 5%. This would impact multi-family properties that were built before February 1995. Officials said that amounts to about 19% of inventory in Redwood City. 

Kathy Layden, who is with Faith in Action Bay Area, has been living in Redwood City for more than 20 years. Her living situation, however, has been a bit tricky. 

"I have a pretty decent roommate right now, although she is having financial problems. So, I'm dealing with having to cover all of the rent, which is something I've never had to do before," Layden told CBS News Bay Area. 

She said her two-bedroom, one bathroom apartment in Redwood City costs just under $3,000 per month. But she said the rent continues to go up. 

"The landlord that came in 2017 instituted two rent increases: one in February and one in October that brought the rent up almost $600 a month," she said, adding that she is on a month-to-month lease. 

And that is why she is in favor of the rent control proposal. 

"I have to budget, I have to watch everything I spend. I can do things here and there. Seems to be kind of working in a certain way," she said. 

The ordinance also imposes stricter tenant protections, including paying out four months of fair market rent or $12,000 should the tenant fall under the just cause eviction. 

"There are two kinds of just cause evictions: "at fault", where the tenant is allegedly "at fault" (such as failing to pay rent or breaching a material term of the lease); and "no-fault", where the landlord evicts the tenant through "no fault" of the tenant (such as an owner move-in or withdrawing the unit from the rental market). State law requires notice of the reason for eviction and specifies requirements that must be met for certain types of evictions. For "no fault" evictions, landlords must provide tenants either relocation assistance or waive the rent payment for the tenant's final month. This initiative would impose stricter requirements on just cause evictions by, among other things, increasing the requirements for certain evictions and requiring longer notice periods. For no-fault evictions, the initiative would require landlords to provide tenants relocation assistance equal to four (4) times the monthly fair market rent or $12,000, whichever is greater. Tenants 62 years of age or older would receive an additional $6,000. The initiative's eviction provisions would apply to covered units regardless of when they were built. Other Provisions: The initiative contains additional provisions, such as requiring landlords to submit to the City for approval tenant safety plans before performing any repairs or renovations; prohibiting landlords from taking specific actions in bad faith; and establishing remedies for violations of the initiative, including monetary damages," a city document read. 

Officials added that Redwood City has about 1,400 deed-restricted affordable units, as well as about 400 affordable units in the pipeline that could be affected by the ordinance if passed. 

"Of these units, approximately 625 would be subject to the rent control provisions because they were built before 1995," the city document added. 

"It's a bit ill-conceived in a way that it can end up punishing a lot of low-income housing providers like the St. Francis Center and others in the community," Michael Pierce, president of Prodesse Property Group, told CBS News Bay Area. 

As the board chair of St. Francis Center, he helps oversee the operations of affordable housing onsite. 

"Our goal over the last 20 years for the board of directors has been to expand the footprint of the housing," he said. "Low-income housing providers could end up losing some of their key subsidies."

Pierce added that there are gaps in the ordinance, and that the eligibility requirements could change if tenants can add more people to their household income. 

"Low-income housing isn't carved out in this proposed ordinance. We could lose our property tax abatements. Across our five properties from the St. Francis Center, that's over $467,000 a year of property tax abatements that would be at risk. And that's because under this ordinance, the residents, let's say a resident qualifies as low-income, and their family income grows above that, they technically can't be living in that housing because they don't need. But there's no means testing in this ordinance," he said. "You have to have 90% of the tenants in each parcel qualify. So, in this group of parcels, one has only 10 units. One tenant is out of qualification, you're out on the edge teetering, a second falls out, you lose that."

Critics argue that rent control could skew the housing market, detracting investors from coming to Redwood City. 

The California Apartment Association and San Mateo County Association of Realtors had also voiced their criticism of the ordinance. 

"You're not solving the fundamental problem which is helping people find ways to find more housing. So, we'll just add more cost to the nonprofits and other people, and then we're stuck with the same number of people and growing number of people but we're not producing more housing," he said. 

But for neighbors like Layden, she is hopeful. 

"I say there's some sort of control that you can kind of count on a person that they're not going to raise my rent by 5%. And people can at least plan ahead if they have to leave, they have to leave regardless," she said. 

Layden said she hopes to continue staying in the city she loves. 

"I want to continue, I don't want to fight, I don't want to run. I don't want to give up and find a way to make this work," she said. 

Supporters say that many existing tenants will benefit, both financially and mentally from the stress of having to make ends meet.  According to a study by Urban Habitat, leaders predict 40,000 renters would have housing stability through anti-harassment protections from the ordinance. 

The ordinance also calls for a rent stabilization and tenants program. City analysts predict that the startup and upkeep of the program would cost anywhere from $4 to $10 million. 

There is no definitive date yet as to when city council will reconvene to follow up on the discussion. CBS News Bay Area reached out to the city for an interview, and a spokesperson said no one was available at the time.