DATE: December 19, 2024
TO: Housing Policy & Resource Committee
FROM: Acting Assistant City Manager
SUBJECT: Implementation Update on the Residential Rent Stabilization and Tenant Protection Ordinance
RECOMMENDATION
That the Housing Policy & Resource Committee accepts this informational report on the implementation progress of the Residential Rent Stabilization and Tenant Protection Ordinance.
SUMMARY
The Council approved the Residential Rent Stabilization and Tenant Protection Ordinance (RRSO) in June 2019, greatly increasing the number of Rental Units in Hayward covered by the new 5% annual rent increase threshold and creating additional protections, such as just cause eviction and prohibitions against harassing or discriminating against tenants. Additionally, in July 2020, Council adopted the Tenant Relocation Assistance Ordinance (TRAO), to ensure Hayward residents had the same protections that were afforded under the State Tenant Protection Act. Finally, the City administers the Mobilehome Space Rent Stabilization Ordinance (MRSO), which was adopted in February 1980.
This report provides an informational update on the RRSO following five years of implementation, MRSO data for the same time frame, as well as the TRAO following four years of implementation. This report includes data on petitions for review of rent, as well as rent increase and termination notices, and relocation assistance cases. This report also includes an analysis of evictions in Hayward, using unlawful detainer data from the Superior Court of Alameda County. Importantly, local and state eviction moratoria have been in place for the majority of the RRSO’s implementation. Beginning with the City of Hayward residential eviction moratorium in March 2020 through April 2023, evictions have been restricted by City, County, and/or State authority.
Additionally, findings from the 2023 Implementation Update on the Residential Rent Stabilization and Tenant Protection Ordinance Report have been addressed with Council’s recent adoption of amendments to the TRAO that clarify and streamline the requirements for relocation assistance.
At this time, staff does not recommend making any new changes to the RRSO and MRSO beyond what Council already authorized in July 2020.
BACKGROUND
MRSO
The MRSO was adopted in February 1980. It provides limits on space rent increases and prohibits retaliation for eviction for mobile home rental spaces within the city limits of Hayward. Space rent increases are limited to once annually in an amount not to exceed the greater of 3% or 60% of the increase in the Consumer Price Index (CPI). Additionally, space rent is vacancy-controlled, which means the space rent does not increase upon transfer of the mobile home.
RRSO Implementation
On June 18, 2019, the Council approved the introduction of a new RRSO to improve housing stability for Hayward tenants. Staff and community partners conducted a comprehensive and community inclusive process, including specific direction provided by the Council on February 19, 2019, a community workshop on April 6, 2019, and numerous subsequent then-Homelessness-Housing Task Force (HHTF) meetings, to develop the RRSO. The key components of the RRSO passed in June 2019 and made effective on July 25, 2019, include:
Mandatory mediation program with binding arbitration that would be available to tenants upon rent increases greater than five percent and applicable to all pre-1979 units except single family homes and condominiums consistent with State law; Provisions to protect Section 8 voucher holders from discrimination; Requirements that landlords file rent increase notices and eviction notices with the City to obtain data about rental housing activity; Tenant retaliation protection provisions; and
Just Cause for tenant evictions.
On March 5, 2020, staff provided the HHTF with a progress report on the implementation of RRSO and made recommendations for revising the RRSO based on changes to State law and an analysis of implementation challenges. HHTF members supported recommendations for revisions to the RRSO presented in that report, and on July 14, 2020, Council voted to adopt amendments to the RRSO and the addition of the Tenant Relocation Assistance Ordinance (TRAO; Chapter 12, Article 2 of the Hayward Municipal Code).
COVID-19 Response
In response to COVID-19, the City of Hayward instituted several renter protections intended to mitigate housing instability caused by the pandemic. These protections included:
Rent Relief Program: The Council authorized more than $1.7 million in HOME Investment Partnership Program (HOME) and emergency Community Development Block Grant (CDBG) funds for an emergency rent relief program, providing up to $5,000 in direct rent payments to landlords on behalf of almost 700 tenant households.
Expanded Mediation: The Council authorized the expansion of the City’s agreement with Project Sentinel to provide a free mediation program to support landlords and tenants negotiating repayment plans when tenants are unable to pay rent due to the pandemic. Both landlords and tenants were eligible for the program.
Local Eviction Moratorium: Before the State moratorium was enacted in August 2020, the Council adopted an emergency ordinance establishing a temporary moratorium on evictions for non-payment of rent caused by the COVID-19 pandemic or for no-fault evictions. Council extended the moratorium until it was superseded by State law.
Tenant Relocation Assistance Fund: The Council adopted a resolution approving the City’s federal stimulus expenditure plan for American Rescue Plan Act funds, including contributing $300,000 to a relocation assistance fund for tenants displaced due to Code Enforcement action and natural disasters. This fund allows the City to make payments directly to tenants and recover the costs from landlords when landlords do not make assistance payments required by the TRAO. It also allows the City to make emergency relocation payments to income-eligible tenants displaced by a natural disaster.
Legal Assistance Fund. Council adopted a resolution reallocating $500,000 of the City’s American Rescue Act Plan funds to provide legal assistance to low-income tenants facing evictions following the conclusion of Alameda County’s Eviction Moratorium.
DISCUSSION
This discussion section provides an overview of housing stabilization legislation and programs implementation, including the following:
Analysis of unlawful detainer filings and termination notices as well as legal resources provided for low-income tenants; Analysis of rent increase notices submitted as required by the RRSO; Analysis of petitions submitted as part of the rent review process associated with the RRSO and MRSO; and Discussion of TRAO implementation.
Importantly, while the RRSO has been in effect in Hayward for five years, the majority of this timeframe has been during the COVID-19 pandemic and corresponding local, state, and federal eviction moratoria. As such, it is difficult to measure the RRSO’s progress in meeting its goals of reducing displacement and to make comparisons between rent increase data submitted to the City’s Rent Review Office and market trends.
Hayward Eviction Landscape
Superior Court of Alameda County Unlawful Detainer Data In California, evictions follow the process outlined in Figure 1 below. Notably, the City of Hayward neither enforces evictions nor provides legal advice to landlords or tenants regarding the eviction process. However, the City has contracts with local non-profits to provide legal services to tenants. Hayward tenants may also access the Alameda County AC Secure program for legal resources.
Following the conclusion of the County Eviction Moratorium, the City entered into an agreement with Centro Legal de la Raza to provide legal services for tenants facing eviction. Eviction filings following the end of the eviction moratorium were four times as many as pre-pandemic filings. During FY 2024, Centro Legal met its goal of providing free consultations to low-income Hayward households on tenancy- and eviction-related issues. Most of these tenants identified as multi-racial and Hispanic, and a majority of these tenants were women. Furthermore, 42% of tenants identified as living with a disability, and 70% of tenants were extremely low income. While the program is meeting its stated goals, the demand exceeds the available resources. As such, the contract with Centro Legal was modified in FY 2025 to include more prevention activities including grassroots outreach to improve awareness of rights and pre-eviction legal consultation.
Figure 1. Summary of the California Eviction Process
Since the summer of 2021, staff has requested unlawful detainer (UD) data from the Superior Court of Alameda County and has compiled data from January 2000 through June 2024. While State privacy law prevents the Court from providing the address or party names in an unlawful detainer case, the Court was able to provide city, zip code, filing date, disposition (outcome) date, disposition type, and if a writ of possession was filed and satisfied for unlawful detainers in Alameda County. The UD data has some limitations, including that there is no information regarding if a tenant left the property or reached a resolution with the landlord outside of the court process prior to the writ of possession stage. Despite these limitations, the UD data illustrates trends in eviction filings and tenant response.
Figure 2A shows the total number of UD filings per year since January 2000, excluding filings determined by the Court to be most likely commercial evictions. Filings peaked during the 2008-2009 recession and were level beginning in 2016, averaging just under 600 filings a year in the four years prior to the COVID-19 pandemic. Since the onset of the pandemic, especially when local, county, or state eviction moratoriums were in place from March 2020 through April 2023, the number of unlawful detainer filings fell significantly. However, after the Alameda County eviction moratorium expired in April 2023, the number of unlawful detainer filings began to increase, surpassing the pre-pandemic numbers as illustrated in Figure 2B. Although unlawful detainer filings decreased during the fourth quarter of 2023 and the first half of 2024, filings still exceeded pre-pandemic numbers.
Figure 2A. Annual Unlawful Detainer Filings: January 1, 2000 – June 30, 2024 Figure 2B. Quarterly Unlawful Detainer Filings: January 1, 2019 – June 30, 2024 COVID-19 eviction moratoria endsCOVID-19 eviction moratoria endsCOVID-19 eviction moratoria beginCOVID-19 eviction moratoria begin COVID-19 eviction moratoria ends
COVID-19 eviction moratoria ends
COVID-19 eviction moratoria begin
COVID-19 eviction moratoria begin
Comparing Termination Notices
The RRSO requires that landlords provide the Rent Review Office with copies of all rent increase and termination notices. Collecting such information enables staff to identify trends in Hayward’s rental environment that were previously unclear without reliable data. However, there is no enforcement mechanism that ensures landlord compliance, so existing data may under-represent eviction notices.
The addition of UD filing data from the Court allows for comparisons between the volume of notices to terminate tenancy with actual UD filings. Notably, not all termination notices result in a UD filing. Often tenants pay rent late, resolve the issue with the landlord, or they may move out prior to the landlord filing a UD with the Court. From July 2019 through June 2024, the City has received 5,091 termination notices. About 96% of these notices received were for a failure to pay rent or utilities. In the period before the pandemic (i.e., July 2019 through March 2020), 86% of existing notices submitted to the Rent Review Office were for failure to pay rent or utilities.
As shown in Figure 3 below, prior to the onset of the pandemic and corresponding eviction moratoria, the number of UD filings was greater than the number of termination notices submitted to the Rent Review Office. However, landlords continued to file notices to terminate tenancy, despite existing moratoria on evictions during the pandemic. The significant increase in termination submissions to the City may be due to several factors, including increased outreach by the Rent Review Office during the pandemic, changes to state law that required serving the tenant with a 15 day notice of termination of tenancy related to non-payment of rent, and improved compliance as landlords paid closer attention to local requirements when trying to evict tenants during the pandemic. After the expiration of the final eviction moratorium in April 2023, the number of UD filings and termination notices significantly increased, with a total of 941 termination notices and 371 UDs filed during the second quarter of 2023. These increases steadily increased throughout Q3 of 2023. A slight decrease occurred for these termination notices and UDs in 2024, but they have remained high relative to before the expiration of the eviction moratorium.
Figure 3. Comparing Termination Notices with Unlawful Detainer Filings from July 2019 – June 2024 COVID-19 eviction moratoria beginCOVID-19 eviction moratoria begin COVID-19 eviction moratoria begin
COVID-19 eviction moratoria begin
Rent Increase Notices Submitted to the Rent Review Office As with termination notices, landlords are required to provide copies of any rent increase notices to the Rent Review Office. The RRSO relies on landlords to self-report; therefore, a compliance rate cannot be determined. The following analysis may not fully reflect all the rent increase trends in Hayward. Additionally, while there were no rent increase freezes in place in Hayward or Alameda County during the pandemic, many landlords may have opted not to increase rents for tenants who were already struggling to pay.
Since the RRSO was passed in July 2019 through June 2024, the Rent Review Office has received 3,165 rent increase notices for covered rental units (i.e., those subject to the RRSO’s rent increase threshold) and 2,432 rent increase notices for rental units. For rent increase notices that had sufficient information, the average rent increase amount was 4.38% for Covered Rental Units and 5.14% for Rental Units.
There was a substantial spike in increase notices in the first quarters for 2022, 2023, and 2024 as shown in Figure 4 below. During Q1 of 2022, seven owners submitted over 30 increases for large properties, accounting for most of the increases submitted in the first quarter of 2022. During Q1 of 2023, three owners submitted over 50 increases for large properties, accounting for one-third of rent increases. Finally, during Q1 of 2024, three property owners submitted over 25 rent-increase notices, accounting for one-third of rent increases.
Figure 4. Rent Increase Notices Received from July 2019 – June 2024 COVID-19 eviction moratoria endsCOVID-19 eviction moratoria endsCOVID-19 eviction moratoria endsCOVID-19 eviction moratoria ends COVID-19 eviction moratoria ends
COVID-19 eviction moratoria ends
COVID-19 eviction moratoria ends
COVID-19 eviction moratoria ends
Data from the CoStar real estate database provides some insights into the Hayward rental market by surveying effective rent on new leases in multi-family rental properties. When compared to the rent increase information shared with the Rent Review Office, market-level data show lower average effective rents during most of the pandemic, as shown in Figure 5 below. However, market rents rose notably, beginning in the third quarter of 2021 and through the first half of 2022, before experiencing a slight decline during the fourth quarter of 2022. Subsequently, average effective rents experienced both slight declines and increases throughout 2023 and through the second quarter of 2024.
Average effective rents for Covered Rental Units and Rental Units changed at greater rates than their market unit counterparts. Importantly, available data on multi-family effective rent changes does not capture existing leases or changes to those agreements over time, which includes potential substantial rent increases for individual households. While market prices for multi-family properties show decreases, not all tenants necessarily experience the relief of market rent depreciation.
Additionally, the average rent increase for Covered Rental Units throughout 2022, most of 2023, and Q1 of 2024 was above the 5% threshold for Covered Rental Units. The average exceeded the threshold in that quarter because the increases submitted to the Rent Review Office included banked rental increases. In other words, landlords that did not apply a rent increase in the prior year and used that increase along with the allowable annual increase for 2022, 2023, and 2024 exceeding the 5% threshold as permitted under the RRSO.
Figure 5. Comparison of Average Rent Increases Submitted to the Rent Review Office and Average Multi-Family Market Rents from July 2019 through June 2024, by Quarter Tenant and Landlord Petitions
The RRSO’s rent dispute resolution process is initiated by a petition, either from a tenant or a landlord. As shown in Figure 6 below, the number of petitions submitted by tenants was highest during the first six months after the RRSO was revised in July 2019, which is when access to the mediation and arbitration process was expanded to more units. In the months following the Governor’s declaration of a state emergency and local emergency orders due to COVID-19, the number of petitions remained low with an average of 1 petition per month through June 2021. Petitions spiked during Q3 2021. Of the 22 petitions during Q3 2021, 15 were from mobile home residents petitioning for a review of rent due to a decrease in housing services. The average number of petitions received after Q3 2021 was 9 per month. Petitions spiked again beginning Q3 2022 and continuing through Q3 2023, with a brief decrease during Q2 2023. Most petitions during these quarters were for the RRSO. During Q1 2024, the number of petitions fell to its lowest since Q2 2021 before slightly picking up again in Q2 2024.
Figure 6. RRSO & MRSO Petitions Received since July 2019 through June 2024 During FY 2024, the Rent Review Office received 37 petitions (all from tenants), bringing the total received at the end of FY 2024 to 149 petitions. Figure 7 below describes the outcomes of every petition received between July 2023 and June 2024. Most petitions were resolved during mediation or arbitration. 6 petitions were dismissed, rejected, or withdrawn. Dismissed petitions consist of petitioners who become unresponsive. Rejected petitions did not include all the required information or did not meet grounds for submission of a petition, and withdrawn petitions were cancelled by the petitioner.
Figure 7. Tenant Petition Outcomes, FY 2024
Under the RRSO, tenants can submit a rent review petition for any of the following reasons:
Unlawful Notice: Landlord did not properly notify tenants of rent increase, banked increase, or increase in government utility service cost per the RRSO’s noticing requirements Annual Rent Increase Over 5%: Increase is over the allowable annual Rent Increase Threshold of 5% of the tenant’s current rent Banked Rent Increase Over 10%: Banked rent increase is above the allowable Banked Rent Increase Threshold of 10% of the tenant’s current rent Utility Increase Over 1%: Utility increase is above 1% of tenant’s current rent Reduction in Housing Services: Tenant is reporting a reduction of Housing Services (e.g. lighting, heat, water, laundry facilities, elevator services, common recreational services, etc.) that have not been restored or remediated Housing Violations: Property has uncured health, safety, fire, building violations or repairs Capital Improvement Cost: A Capital Improvement Pass-Through cost that is unlawful or has been calculated incorrectly Additionally, landlords may submit petitions for the following reasons:
Fair Return: An increase in rent above the threshold in an amount necessary to obtain a fair return on investment Capital Improvement: To set the proper amount of a capital improvement pass-through Under the MRSO, tenants can submit a rent review petition for either of the following reasons:
Annual Rent Increase Exceeds Limit: Increase is over the allowable annual Rent Increase Threshold of the greater of 3% or 60% of percent increase in CPI Reduction in Housing Services: Mobilehome homeowner is reporting a reduction of Housing Services (e.g. lighting, heat, water, laundry facilities, elevator services, common recreational services, etc.) that have not been restored or remediated Figure 8 below describes the types of petitions the Rent Review Office has received for FY 2024. Petitioners can select one or more petition types when submitting their rent review application. As shown below, the majority of petitioners have submitted rent review applications for receiving rent increases that are above the 5% annual threshold, utility increases over 1%, housing code violations (e.g., healthy & safety), unlawful notices. It is also important to note that no petitions have been received from landlords requesting an increase based on not receiving a fair return.
Figure 8. Tenant Petition Types, FY 2024
Tenant Relocation Assistance Ordinance Implementation
Alongside the amendments to the RRSO approved in July 2020, Council also adopted Chapter 12, Article 2 of the Hayward Municipal Code, titled the Tenant Relocation Assistance Ordinance (TRAO). The TRAO creates permanent and temporary relocation assistance requirements for landlords to pay under certain circumstances when a tenant becomes displaced from their unit. Landlords are required to pay permanent relocation assistance when there is a no-fault just cause eviction. Temporary relocation assistance is required when landlords must complete substantial repairs that would temporarily displace the tenants, or when a government order is issued for health and safety issues. Since its implementation, staff has created several resources to facilitate compliance with the TRAO, including a summary, regulations and several noticing forms.
Since July 2020 through June 2024, staff has reviewed relocation cases at 40 properties, the majority of which have been initiated through a Code Enforcement inspection that has found the unit to be in violation of health and safety code. Staff from the Housing and Code Enforcement Divisions work closely to share information on these cases and to communicate with the tenants. In many cases, landlords are either unwilling or unable to make the required relocation assistance payments. This trend was present after the first year of implementation, so staff requested authorization to establish the Tenant Emergency Relocation Assistance Fund, which Council authorized as part of the expenditure plan for the American Rescue Plan Act. These funds allow staff to make relocation payments on behalf of non-compliant landlords, then recover the payment from the landlord through an assessment. The funds are also available to make emergency payments to low-income tenants displaced from their homes due to a natural disaster. Through June 2024, staff processed $233,276 in emergency payments for tenants displaced due to natural disaster.
Additionally, as previously reported, implementation of the TRAO has been challenging due to the volume of unknown variables that need to be established to determine the amount of assistance owed to tenants and the varying scenarios that establish compliance deadlines. On December 3, 2024, the City Council approved an amended version of the TRAO that improves clarity and streamlines requirements and completes one of the Strategic Roadmap projects.
Residential Rental Inspection Program & Code Violation Complaints The Hayward Rental Inspection Program, established in 1989, is designed to ensure healthy and safe housing conditions for all residents, in compliance with the State Housing Law. By safeguarding and preserving the city's housing stock, this program plays a crucial role in protecting tenants from substandard living conditions. Common violations include unpermitted construction, missing smoke detectors, faulty appliances, weather protection issues, faulty plumbing, junk and debris, mold and mildew damage, and general deferred maintenance.
A key component of the program’s success is its collaboration with the TRAO. This partnership helps mitigate tenant displacement when rental units are closed due to substandard conditions, such as fire damage, lack of utilities, or unsafe structures. The TRAO helps ensure that displaced tenants receive necessary relocation assistance, minimizing the impact of such displacements.
On average, the program conducts inspections of over 1,100 rental units annually to address an average of 221 complaints associated with substandard housing. Site inspections can occur in three ways: tenant requests, owner or designee requests, or periodic City inspections. These inspections ensure compliance with applicable codes and standards. In FY 2024, the Code Enforcement Division conducted 1,263 rental unit inspections of the estimated 23,000 active rental units.
However, one of the most significant challenges is the sheer number of housing units to be inspected. With an estimated 23,000 rental units in the City, conducting inspections within a five-year cycle to identify and address substandard conditions is an ongoing and demanding task. Nonetheless, the combined efforts of the Rental Inspection Program and the TRAO continue to uphold the standards of safe and livable housing, ensuring tenants have access to secure and sanitary rental properties.
ECONOMIC IMPACT
This report is an informational update on the implementation progress of the RRSO. It does not propose any substantial legislative changes that would create any new or differing economic impact.
STRATEGIC ROADMAP
This agenda item supports the Strategic Priority of Preserve, Protect, and Produce Housing. This item is not specifically related to a project identified in the Strategic Roadmap. Staff is bringing forth this item as part of an annual update on the implementation efforts for the RRSO.
FISCAL IMPACT
This informational update does not propose any changes or additions that would create a fiscal impact on the City’s General Fund.
PUBLIC CONTACT
Since the RRSO was passed in July 2019, the City has conducted several education and outreach workshops and received many inquiries regarding the RRSO. Despite COVID-19 restrictions, staff has held monthly remote and more recently hybrid workshops. Staff also attends resource fairs with faith-based and education partners.
In 2022, the Housing Division made changes to its walk-in and appointment-based communication with community members. First, the Division implemented the Microsoft Bookings feature, enabling community members to make an appointment online for either a phone or in-person meeting with staff in English or Spanish. Additionally, the Housing Division has started staffing the first floor Permit Center at City Hall. Co-location of Housing Services with Development Services and closer proximity to the Revenue Division help streamline communication for community members who often frequent multiple floors within City Hall to resolve an issue. Now, Housing Division staff are present at the Permit Center during its Monday through Thursday, 9:00 to 1:00 open hours and are available via appointments when the Permit Center is closed.
NEXT STEPS
Staff will continue monthly outreach activities and will continue to monitor implementation of the RRSO, MRSO, and TRAO, identifying additional opportunities to improve processes, forms, and outreach strategies. Staff will return with another annual update to the HPRC in December 2025.
Prepared by: Ayush Patel, Management Analyst I
Recommended by: Adam Kostrzak, Acting Assistant City Manager Christina Morales, Deputy Director of Development Services Approved by:
_________________________________
Dustin Claussen, Interim City Manager
June 18, 2019, City Council Staff Report and Attachments:
https://hayward.legistar.com/LegislationDetail.aspx?ID=3985848&GUID=52D1B678-D6BB-401A-AB3C-8990885C0CDD&Options=&Search= February 19, 2019, City Council Staff Report and Attachments: https://hayward.legistar.com/LegislationDetail.aspx?ID=3863371&GUID=E3FF2A1F-D770-463F-ACC2-8EBEFC711CF3 March 5, 2020, Homelessness-Housing Task Force Staff Report and Attachments:
https://hayward.legistar.com/LegislationDetail.aspx?ID=4344677&GUID=B0C788EE-6B8B-4B62-9006-2DA3C426E0B8&Options=&Search= July 14, 2020, City Council Staff Report and Attachments: https://hayward.legistar.com/LegislationDetail.aspx?ID=4590663&GUID=ADB12ECB-15EB-4DB2-B096-5A6D9877359A&Options=&Search= July 13, 2021, City Council Staff Report and Attachments:
https://hayward.legistar.com/LegislationDetail.aspx?ID=5028015&GUID=E0215022-6A47-486F-81C4-9BFB2583AE10&Options=&Search= The staff report from the July 2020 RRSO update includes a comprehensive list of all resources and materials created to help tenants and landlords comply with the RRSO, as well as a discussion of the revisions made to the RRSO after its first year of implementation.
Effective rents refer to the actual rent after factoring in concessions or other discounts.
For more information: https://www.nlc.org/initiative/eviction-prevention-learning-lab/ December 3, 2024, City Council Staff Report & Materials:
https://hayward.legistar.com/LegislationDetail.aspx?ID=7032916&GUID=F1E063D7-0B4E-41CD-A4D3-48925A3C8610&Options=&Search=