Fremont City Council Meeting: 11/18/25 07:00 PM
3300 Capitol Avenue Div/Dept: Human Services Department Fremont, CA 94538 Category: Fees & Rates
SCHEDULED
Sponsors:
COUNCIL STAFF REPORT (ID # 5564) DOC ID: 5564
Updated: 11/13/2025 7:41 AM by Dina Lewis Page 1
RENT REVIEW ORDINANCE ANNUAL REPORT AND ADMINISTRATION FEE ADOPTION – Public Hearing (Published Notice) to Review the Annual Report on the Rent Review Ordinance, Adopt the Administration Fee for FY 2025/26 and Increase Budget Appropriation
Contact Persons:
Name: Robert Lopez David Persselin
Title: CDBG Administrator Finance Director
Div/Dept: Human Services Department Finance Department
Phone: 510-574-2043 510-494-4631
E-Mail: [email protected] [email protected]
Executive Summary: As required by the Rent Review Ordinance (RRO), City staff has prepared the RRO Annual Report for City Council review. The RRO Annual Report provides an update on the status of the Rent Review Program (Program). Staff has also determined the recommended FY 2025/26 annual RRO administration fee for Council’s adoption.
The RRO authorizes the City to recover all expenditures for the administration of the RRO by collecting a per rental unit administration fee from residential landlords. The purpose of this staff report is to recommend that the City Council adopt a per-unit administration fee of $23.00 for FY 2025/26 to recover the full cost of administering the RRO, and increase the RRO budget by appropriating an additional $16,906 in the Rent Review Fund (Fund 197).
BACKGROUND: On October 3, 2017, the City Council adopted the RRO, creating the Rent Review Program (Program) to review proposed residential rent increases exceeding 5% and establishing a Rent Review Board, although tenants and landlords are encouraged to attempt to resolve their differences through consultation and mediation before proceeding to a hearing. The RRO also requires written notice to tenants in multiple languages, establishes a penalty for landlord retaliation against tenants of $2,000 (the maximum allowable under state law), and specifies that rent may only be raised one time a year.
There is also a requirement for an annual report to the City Council assessing the effectiveness of the RRO. The RRO covers all residential rental units in Fremont, including single family homes and condominiums, with a few exceptions.
The RRO is funded through an annual per-unit cost-recovery fee (Administration Fee) that is approved annually by the City Council and subsequently billed to residential landlords. To determine the Administration Fee, staff divides the total costs incurred for the administration of the RRO by the number of residential rental units subject to the RRO, with adjustments to reflect the expected collection rate and remaining funds from the prior year.
In FY 2024/25, the fee was $16.00 per unit. This year the recommended Administration Fee amount is $23.00 per residential unit.
DISCUSSION/ANALYSIS:
FY 2024/25 Rent Review Ordinance Annual Report
Council Staff Report (ID # 5564) Meeting of November 18, 2025 Updated: 11/13/2025 7:41 AM by Dina Lewis Page 2
The following information serves as the required annual report to the City Council to continue assessing the effectiveness of the RRO. The report covers the period from July 1, 2024, to June 30, 2025. As of the 2020 Census, the City has approximately 234,829 residents and 78,038 occupied housing units.1 Of the total housing units in Fremont, about 21% are occupied by renters. There are approximately 17,084 rental units in Fremont that are subject to the RRO. Rental units that are not subject to the RRO include hotels, boarding houses, transient accommodations, dormitories, mobile home space rentals, shared housing units, and junior accessory dwelling units. The average cost of rent in 2024-2025 for a 1-bedroom unit was $2,577.2
The Rent Review Program received many calls throughout the year, and staff worked closely with Project Sentinel’s Tenant Landlord Program to triage and assist both tenants and landlords with an array of issues. Project Sentinel’s Tenant Landlord Program is funded with federal Community Development Block Grant and Rent Review Ordinance funds. In total, 818 housing seekers, tenants, and housing providers were provided with counseling, assistance and referrals that included, but was not limited to:
• repairs and habitability, including code enforcement issues • security deposit refunds
• terminations and evictions
• rent increases
• non-payment of rent
• small claims court
• legal aid
About 21% of requests concerned non-payment of rent, tenancy termination, or evictions, and Program staff helped tenants and landlords to understand their rights and obligations under the state Tenant Protection Act.
The Program provides a review process for residential rent increases over 5% in a 12-month period, covering all residential rental units in the City. The Program starts with tenant- landlord consultation, and if no agreement is reached, either party can request a formal hearing before the Rent Review Board.
A total of 26 requests for rent review were received between July 1, 2024, and June 30, 2025. Most cases brought to the City are resolved within the first two steps of the RRO process, which include: 1) consultation; 2) mediation; and 3) Rent Review Board hearing. Of the 26 cases, 14 were resolved by consultation, mediation, and/or Rent Review Board hearing, which is about 54% of the cases brought for review. Eleven cases were unresolved after consultation and mediation and 1 case was cancelled by the tenant. In addition, one pending case from the prior fiscal year was resolved by mediation.
The Rent Review Board did not hear any rent review cases between 2020-2023, but in the past two fiscal years, the Board convened to hear three cases. The Board heard one case in FY 2024/25, which was resolved during the board hearing.
1 Data from the United States Census Bureau;
https://data.census.gov/cedsci/table?q=population%20in%20fremont&tid=ACSDP5Y2020.DP05 2 The average rent is calculated using data from Rent.com, Rent Café, and Zumper, and may be skewed depending on how each reporting agency collects their data.
Council Staff Report (ID # 5564) Meeting of November 18, 2025 Updated: 11/13/2025 7:41 AM by Dina Lewis Page 3
Rent Review Ordinance FY 2024/25 Resolved Cases
1. An increase of 4.85% was accepted by Tenant and Landlord agreed to delay the effective date by four months.
2. An increase of 4.99% was accepted by Tenant and Landlord agreed to a 6-week concession according to the lease. (Subsequently, Tenant requested arbitration to resolve a dispute regarding interpretation of the mediation agreement, and the Arbitrator issued a Decision and Order for the tenant to receive the concession only after signing a new lease).
3. An increase of 15.68% was reduced to 6.0%.
4. An increase of 8.81% was accepted by Tenant after Landlord agreed to receive additional income information that confirmed the validity of the increase for the below-market rate unit.
5. An increase of 5.29% was reduced to 5.0%.
6. An increase of 8.75% was accepted by Tenant and Landlord agreed repair appliances.
7. An increase of 9.09% was reduced to 8.8%.
8. An increase of 8.76% was reduced to 6.98%.
9. An increase of 8.8% was cancelled.
10. An increase of 7.23% was cancelled.
11. An increase of 8.79% was reduced to 4.39%.
12. An increase of 8.78% was cancelled.
13. An increase of 5.0% was accepted by Tenant and Landlord agreed to a month-to- month tenancy instead of a lease.
14. An increase of 4.99% was accepted by Tenant and Landlord agreed to delay the effective date by two months.
15. An increase of 8.79% was cancelled.
16. An increase of 0% for a fixed-term lease was accepted by Tenant instead of an increase of 6.98% for a month-to-month tenancy.
FY 2025/26 Rent Review Ordinance Annual Administration Fee Staff has prepared a recommended per-unit Administration Fee for Council to adopt for FY 2025/26. The Administration Fee only applies to landlords with five or more units.
The Effect of Rollover Fund Balance: The Administrative Fee calculation utilizes a cost recovery model that factors in any unexpended RRO revenue from the previous fiscal year into the following year’s Administrative Fee by rolling over the unexpended amount to reduce the total costs to be recovered in the current fiscal year. For example, without the rollover balance in FY 2024/25, the Administration Fee would have been $22 per unit.
However, because of the $88,967 balance unexpended in FY 2023-24, the total cost-recovery amount in FY 2024/25 was reduced, and the Administration Fee was subsequently lower, at $16 per unit. That has been the history of the Administration Fee since the Program’s inception.
Council Staff Report (ID # 5564) Meeting of November 18, 2025 Updated: 11/13/2025 7:41 AM by Dina Lewis Page 4
Table 1
At the beginning of the Rent Review Ordinance, full cost recovery was projected to be $24 per unit, but years of unexpected rollover funding has kept the fee lower. In FY 2021/22, staff redesigned the fee collection calculation to a cost-recovery model that would use up the rollover reserves and return the Administration Fee to a true cost recovery model (see Table 1). The proposed fee of $23 is close to the full cost recovery amount that was originally projected.
Amount to be Recovered: The cost recovery model divides the FY 2025/26 budgeted expenditures for administering the RRO by the total number of billable residential rental units in the City. The projected expenditures for FY 2025/26 are $407,497. This estimate has been adjusted from the adopted budget amount to cover the addition of a temporary Program assistant and increase in staff time to backfill for Program staff on leave. With a $18,751 fund balance available as of June 30, 2025, the net amount to recover through the Administration fee is $388,746.
Item Amount
FY 2025/26 RRO Projected Expenditures $407,497
Fund Balance Available ($18,751)
FY 2025/26 Amount to be Recovered: $388,746
Total Number of Billable Units: Staff estimates the total number of billable residential units to be 17,084. This number is based on the number of landlords that participated in the FY 2024/25 Administration Fee process. Based on actual collections for FY 2024/25, staff is estimating a 100% collection rate for these units, which is 17,084 units. Staff is continuously identifying new rental housing developments that come online that are subject to the Administration Fee.
Estimated residential rental unit fee: $23.00*
($388,746/17,084)
Council Staff Report (ID # 5564) Meeting of November 18, 2025 Updated: 11/13/2025 7:41 AM by Dina Lewis Page 5
* Rounded up to the nearest whole dollar
Staff recommend that the City Council adopt a per-unit Administrative Fee of $23.00 for FY 2025/26, to recover the full cost of administering the RRO. The $23.00 fee is an increase of $7.00 from FY 2024/25. As mentioned above, this increase can be attributed to the lower fund rollover amount from the previous fiscal year. The increase is also partially attributed to the increased staffing costs.
At $23.00 per unit, the fee remains substantially lower than that of programs in the San Francisco Bay Area, that range from rent review programs like Fremont and Hayward, to full rent control programs like the cities of Berkeley, Oakland, and Richmond (See Table 2).
City of Berkeley $344
City of Richmond $267
City of Oakland $137
City of Mountain View $130
City of Alameda $168
City of San Jose $77
City of Hayward $66
City of San Francisco $58
Table 2: SF Bay Area Fees (per unit)
The Master Fee Schedule is amended annually to reflect each year’s budgeted or projected program expenditures, the rental unit inventory, and the estimated collection rate. In the event that the fees collected in one year exceed or fall below actual costs, adjustments will be made when the City determines the Administrative Fee for the following year.
FISCAL IMPACT: All of the City’s ongoing costs incurred in the implementation and administration of the RRO will be recovered from rental unit owners through the annual Administration Fee accounted for in the Rent Review Fund (Fund 197). In the FY 2025/26 adopted budget, the City Council appropriated an RRO budget of $390,591, but staff is requesting an additional appropriation of $16,906 in Fund 197 to account for the temporary increased staffing costs to cover for program staff on temporary leave.
ENVIRONMENTAL REVIEW: The proposed action is exempt from the requirements of California Environmental Quality Act (CEQA) pursuant to, without limitation, CEQA Guidelines Section 15378(b)(2), (4) and/or (5) and/or 15061(b)(3), because it is not “project” and/or is an administrative or fiscal activity of the City which does not have the potential for causing a significant effect on the environment, each of the foregoing providing a separate and independent basis for CEQA exemption.
ATTACHMENTS:
• Draft Resolution- RRO Master Fee Schedule Update
RECOMMENDATIONS: Staff recommends that the City Council take the following actions:
1. Receive the Rent Review Ordinance Annual Report.
2. Hold a public hearing on the amended Rent Review Administration Fee.
Council Staff Report (ID # 5564) Meeting of November 18, 2025 Updated: 11/13/2025 7:41 AM by Dina Lewis Page 6
3. Adopt a resolution to amend the Master Fee Schedule to modify the Rent Review Administration Fee to $23.00 per residential rental unit in FY 2025/26 to recover the costs of administering the Rent Review Program.
4. Appropriate an additional $16,906 in Fund 197.