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File #: RPT 20-090   
Section: Informational Report Status: Agenda Ready
Meeting Body: Homelessness-Housing Task Force
Agenda Date: 9/3/2020 Final action:
Subject: Analysis of Alternative Rent Stabilization Thresholds in the City of Hayward's Residential Rent Stabilization Ordinance
Attachments: 1. Attachment I Staff Report
DATE: September 3, 2020

TO: Homelessness-Housing Task Force

FROM: Deputy City Manager

SUBJECT
Title

Analysis of Alternative Rent Stabilization Thresholds in the City of Hayward's Residential Rent Stabilization Ordinance

End
RECOMMENDATION
Recommendation

That the Homelessness-Housing Task Force (HHTF) reviews and provides comments on the report summarizing analysis of potentially lower rent stabilization thresholds.
End

SUMMARY

On July 14, 2020, City Council directed staff to analyze alternative lower rent stabilization thresholds for HHTF consideration. This report analyzes the benefits and challenges of using a) a fixed percentage threshold, as established in the City's current rent stabilization ordinance, and b) a threshold based on an established economic index, with a discussion of three potential indices.
Analysis of available data indicates that housing is unaffordable for over half of Hayward renters and that, even though renters are seeing greater increases in annual median income, any income gains are often consumed by housing costs. With that consideration, staff presents the following options to the HHTF:
1. Maintain the current threshold as a fixed percentage at 5%. This option provides an approximation of long-term market appreciation and promotes clarity and predictability for both landlords and tenants. Further, available data indicate that this option would maintain the City's current stabilization rates and enables landlords to make a fair return on investment.
2. Implement a new threshold using 100% of the annual change in CPI, with a ceiling (5%) and floor (2%). Using 100% of CPI will likely result in a lower rent increase threshold, which will increase the likelihood that rental housing in Hayward becomes more affordable to tenants. The majority of Hayward renters are housing burdened, and one in four are severely cost burdened. Using CPI as a threshold would address growing affordab...

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