Moratorium on Rent Increases
City Council
March 1, 2022
Agenda
Background
Resources currently available for tenants and landlords Actions taken by other jurisdictions
Alternatives for consideration
Background
April 21, 2020: The City Council adopted an urgency ordinance that initially placed a temporary moratorium on rent increases for fully regulated rental units.
December 15, 2020: City Council extended the moratorium on rent increases until 6o days after the rescission of the declaration of the Local Emergency.
December 21, 2021: Landlords expressed concerns about
continuing the temporary rent moratorium, citing financial impacts and City Council directed staff to present alternatives.
Government Resources Available to
Property Owners
• Alameda County Housing Secure Emergency Rental Assistance Program (ERAP)
• Mortgage Relief
• Economic Injury Disaster Loans (EIDL)
Actions Taken by Other Jurisdictions
• 14 jurisdictions adopted eviction moratoria
• Several also adopted moratoria on rent increases.
• Only two cities continued to have a moratorium on rent increases in place in January 2022
Los Angeles
Oakland
Alternatives for Consideration
• End Moratorium/Permit Rent Increases
• Annual General Adjustment (AGAs)
• Banked Rent Increases
• Address Costs
• Landlord Cost Relief Program
• Capital Improvement Pass-throughs
Annual General Adjustments (AGA)
Beginning September 1, 2019, the Rent Program calculates the AGA for a given year.
When a landlord elects not to increase the rent, the unused increase can be "banked" up to 8%. Current bankable increases:
• September 2019 - August 2020 AGA is 2.8 percent.
September 2020 - August 2021 AGA is 1.0 percent.
September 2021 - August 2022 AGA is 2.7 percent.
Rent increases using a banked AGA are capped at the current year AGA plus 3%.
Rent Increase Options
6 5
4 3.0
3 2
2.7 2.7
1 No Change Permit AGA AGA + Banked Rent
Addressing Landlords' Costs
Landlord Cost Relief Program
• Mortgage Principal and Interest
• Property Taxes
• Insurance
• Utilities
• Garbage
• Other
Capital Improvement Pass-throughs: Updates in May 2022
Regulatory Agreements
• Existing law grants an exemption for dwelling units that are subsidized or regulated by federal law or by regulatory agreements.
• At the time the ordinance was adopted, regulatory agreements were for 100% affordable housing.
• Proposed changes will clarify that the exemption is for properties with regulatory agreements that are 100% affordable housing.
Staff Recommendations
1. Permit landlords to implement a rent increase up to the AGA of 2.7%.*
2. Continue to allow landlords to bank rent increases
through the termination of the Local Emergency.
3. Clarify that the exemption from the Rent Program due to a regulatory agreement applies only to properties where 100% of the units are affordable to households earning
no more than 120% AMI.
* Clarified timing of noticing and implementation