In a unanimous vote, the San Diego City Council on Monday tentatively approved an ordinance establishing new rules for how landlords may pass along the cost of city-provided utilities to tenants.

The June 9 vote marked the first of two required approvals before the ordinance can take effect and came alongside the adoption of a new city trash fee for single-family homes, which will now be treated as a city-provided utility subject to the passthrough rules.

The measure applies to municipal services such as water, sewer, stormwater, and solid waste management. It would limit what landlords may charge tenants and would set requirements around tenant notice and documentation.

Since the ordinance was first introduced, the California Apartment Association has worked with the office of Councilman Sean Elo-Rivera to promote changes that would make the policy more practical for rental housing providers and legally consistent with existing state law. Following the ordinance’s advancement from the council’s Environment Committee in May, CAA continued to engage on specific provisions.

The ordinance greenlighted this week includes nearly all of the association’s requested amendments. These include removal of a certified mail requirement for notices, clarification that the rules apply only to city-provided utilities, and detailed standards for documentation and disclosures.

CAA’s most recent letter to the council, submitted ahead of the vote, expressed appreciation for the collaborative process and requested further refinements to support a smooth rollout.

The ordinance follows the implementation of Measure B, a 2022 voter-approved initiative that authorized the city to recover costs for residential trash service, ending the city’s longstanding practice of providing free solid waste collection at single-family homes. City officials have said they intend to collect trash fees for single-family homes via the tax bill, which tenants typically do not see—raising concerns that landlords could overcharge tenants without clear documentation.

If adopted on second reading, the ordinance would take effect 30 days later, with landlords then required to issue updated notices within 90 days of the effective date.

CAA is developing an Industry Insights compliance paper to help members understand the ordinance and its requirements. The association will also make a compliant notice form available to assist members with fulfilling the ordinance’s disclosure obligations.