Rent Ordinance Update – Utility FeesProposed amendments to prohibit billing for utilities that are not separately metered July 16, 2026
Bill Chapin, Rent Program Director
1 Utility Charges for Rental Properties
2 Each rental unit is separately metered
Tenant sets up account and pays utility provider directly Landlord pays provider and bills tenant for usage
One master meter for entire rental property
Utility is included with the rent, landlord responsiblefor payment Flat monthly fee established in rental agreement
Fee varies month to month based on estimated usage (Ratio Utility Billing System or RUBS)
Current Regulations
3 Alameda: Landlords may charge for utilities as a separate fee not included in rent, including use of RUBS Must be established as tenant’s responsibility in original rental agreement; utilities included in rent may not be “unbundled” Not subject to restrictions on rent increases
Other jurisdictions with rent control: Most do not allow fees for utilities unless separately metered Bans in San Jose (2018), Mountain View (2023) & Berkeley (2024)
Justifications for RUBS Bans
4 Concern about utility fees being used to circumvent limits on rent increases Increasing tenant complaints about RUBS:
Lack of transparency
Confusing allocation formulas
Subsidization of larger households or vacant units
Investigations are complex and require significant staff resources
Increasing Tenant Complaints
5 EXAMPLES
34-unit property
After new RUBS billing provider took over, fees suddenly increased to exactly $200 One tenant’s sewer charges quadrupled
Multiple tenants charged for utilities that lease identifies as landlord’s responsibility Investigation ongoing after 16 months
Since June 2022
64 3,279
Tenant contacts
Rental units affected
Increasing Tenant Complaints
6 EXAMPLES
4-unit property
Lease states tenant to pay “proportional share” of utilities as fee separate from rent As three units have become vacant, remaining tenant charged for half of entire property’s utility expenses Average PG&E bill tripled YoY, including $1,346 for January 2026 Since June 2022
64 3,279
Tenant contacts
Rental units affected
Research and Outreach
7 Analysis of policies in other jurisdictions with rent control Interviews with staff in Berkeley and Mountain View
Three community workshops addressing RUBS and utility fees in March and April 2026 Online survey posted through April 2026
Participation by more than 100 community members
Survey Results
8 3 policy options:
Option A: Continue to allow RUBS with additional disclosure requirements for improved transparency – 36% Option B: Gradual phase-out of RUBS, fees banned for new tenancies only – 2% Option C: Full ban on fees for utilities that are not separately metered, with one-time rent adjustment petition – 44% None of the Above – 18%
Proposed Ordinance
9 RUBS BAN
Prohibit fees or charges for utilities without a separate submeter RUBS prohibited for new tenancies
For existing tenancies, landlords may continue to use current system until they have completed the rent-adjustment petition process
Proposed Ordinance
10 ONE-TIME UTILITY ADJUSTEMENT PETITION
Landlords submit documentation showing average monthly utility charges over 12-month period Tenant’s rent adjusted upward by this average plus allowance for inflation Deadline to impose adjustment and stop using RUBS
Utility allowances calculated by Housing Authority serve as a check against unreasonable charges
Proposed Ordinance
11 TENANT PETITIONS
Tenants may file a petition if the utility adjustment was not consistent with the tenant’s rental agreement, i.e. the calculation was based on a utility that was supposed to be included with the rent Will use existing process for downward rent adjustments, with independent Hearing Officers issuing binding decision
Proposed Ordinance
12 SUBMETERS AS A CAPITAL IMPROVEMENT
Installation of separate utility meters added to the list of projects that are eligible for a Capital Improvement Plan Landlords able to pass cost of installation on to tenants, amortized over long period of time with maximum caps Available for rental properties of all sizes
Staffing Requirements
13 Submissions cannot be reviewed with Rent Program’s current staffing without negatively affecting other program services.
Propose to hire two temporary, part-time administrative technicians for during of petition process Operational cost savings and existing fund balance are sufficient to cover cost of positions
Fair Return Petitions
14 Existing procedure already in place to address situations where landlords are experiencing significant cost increases If net operating income is not keeping pace with inflation, the landlord may petition for an upward rent adjustment based on the right of Fair Return Independent Hearing Officer issues a binding decision
Staff Recommendation
15 Introduce the proposed ordinance to update the City’s Rent Control laws to better regulate utility charges, banning fees for utilities that are not separately metered and providing a process for landlords to receive a one-time rent adjustment