Redwood City rental housing providers now have official numbers behind what a proposed rent and eviction control ballot measure would cost the city to run. The same numbers show how much of that cost could land on landlords through new fees.

The Redwood City City Council received a supplemental economic and fiscal impact report Tuesday showing that the rent and eviction control ballot initiative, which has qualified for the Nov. 3 ballot, could require $5 million to $11.1 million a year to administer.

Under the highest-enforcement scenario modeled by the city’s consultant, Economic & Planning Systems, per-unit costs could reach approximately $756 a year in the program’s first two years, once the program repays its start-up loan and builds an operating reserve — far above the $84 to $120 per unit in initial fees the measure itself specifies.

The report found those stated fees would cover only about 13% to 32% of the program’s actual costs, meaning landlords could end up paying a much higher fee than the measure discloses, or the city would need to tap other funding sources such as obtaining a city loan.

The California Apartment Association pushed for this supplemental analysis last month, arguing that the city’s initial 9212 report examined only the measure’s rent control provisions and left out its broader effects on city finances, housing production, affordable housing and tax revenue.

CAA Senior Vice President of Public Affairs Rhovy Lyn Antonio testified at the June 8 hearing where the council ordered the additional review, and CAA sent the council a formal letter outlining its concerns.

The supplemental report also found that the measure’s greatest impact would fall on older multifamily buildings, “mom and pop” owners and affordable housing providers with pre-1995 properties, which make up about 40% of the city’s rental stock.

According to the report, affordable housing operators and developers in those buildings could be pushed into financial shortfalls that the measure itself creates, requiring additional public subsidy just to stay viable if it passes. Affordable housing projects already in the development pipeline could face added costs and delays that affect the city’s ability to meet its state-mandated housing production goals.

If adopted by voters this November, the measure would, among other things:

• Cap annual rent increases on many pre-1995 units at 60% of the local Consumer Price Index, up to a maximum of 5% (about 1.2% if the formula were in effect today).
• Create a permanent, city-administered rent regulation agency, funded by annual fees on landlords, that would govern rental housing including owner move-in regulations, tenancy adjustments, repair and renovation requirements and a host of new city laws.
• Expand just-cause eviction requirements to most rental housing in the city, including single-family homes, accessory dwelling units and affordable housing.
• Require relocation payments for no-fault evictions of four times monthly fair market rent or $12,000, whichever is greater, plus an additional $6,000 for tenants 62 and older.
• Add right-to-return, first-right-of-refusal and anti-harassment provisions.

The rent control provisions make up fewer than two pages of the 46-page measure; the rest establishes the program’s administration, hearings, enforcement, tenant safety plans and buyout restrictions.

Several council members raised their own objections during Tuesday’s discussion.

Councilmember Diane Howard cited a survey finding that 79% of the city’s rental buildings with one to 10 units are family- or small-business-owned, saying she worries the measure could push some owners to sell or convert their properties rather than keep renting them out. “I could see that happening. It’s already happening in San Francisco and New York,” Howard said. “I grew up in New York. I know a lot about rent control. I know it doesn’t work.”

Councilmember Isabella Chu, who said she rented from age 18 until she bought her first home at 45, said she agrees with the measure’s goal of helping tenants but not its approach, pointing to San Francisco as an example of what strict rent control can produce. She said she would vote to send the measure to voters because it had qualified under state law. “I would like to formally oppose this ordinance because I believe it will really hurt the people it is most intended to help,” Chu said.

At Tuesday’s meeting, Vice Mayor Kaia Eakin said the ordinance’s length alone was a concern, noting it runs more than 40 pages and that the city would still need to write separate implementing regulations if voters approve it in November. “Those regulations might be 100, 200 pages,” Eakin said. “We don’t know.”

Under California Elections Code Section 9215, the council’s only two options once the measure qualified for the ballot were to adopt it outright within 10 days or place it before voters in November. The council voted unanimously to send the measure to the Nov. 3 ballot, even as several members — including Chu and Howard — said they personally oppose it. The California Apartment Association is preparing a campaign to educate Redwood City voters ahead of the election. CAA argues the measure would not add any new units of housing and would not provide direct financial assistance to renters who need help paying their rent.