DATE: March 20, 2025
TO: Housing Policy & Resource Committee
FROM: Deputy Director of Development Services
SUBJECT: Work Session regarding the feasibility of a Rental Registration System
RECOMMENDATION
That the Housing Policy & Resource Committee provide feedback on the consideration of feasibility of a City run Rental Registration System.
SUMMARY
In December 2023, the Homelessness-Housing Task Force (HHTF) reviewed a proposed Rental Registration System (RRS), which would serve as a database tracking the rental market, landlords, tenants, rent changes, and terminations to ensure compliance with the Residential Rent Stabilization and Tenant Protection Ordinance (RRSO). The system would support policymakers with data-driven insights into rental trends and housing stability. HHTF members generally supported the initiative, recommending its evaluation as part of the City’s FY25 Strategic Plan. Key considerations include the collection of tenancy information, potential privacy concerns, and the feasibility of allowing tenants to verify landlord-submitted data.
Staff believes that to effectively implement and run a RRS would require an estimated 2.5 additional full-time employees (FTE). Staff are evaluating whether to develop an in-house system or use third-party software, balancing cost against functionality. While a regional collaboration was considered, differences in jurisdictional policies and financial structures pose seemingly insurmountable challenges. The City would need to increase the Rent Review Fees for Covered Rental Units and Rental Units to fund an RRS. The Housing Policy Resource Committee (HPRC) should consider key questions regarding data collection, compliance, enforcement, and funding strategies for the full City Council to review.
BACKGROUND
On December 7, 2023, staff provided the then-HHTF with an overview of what an RRS may consist of. An RRS serves as a database of rental information within a jurisdiction that includes information regarding the property owner or manager, tenant, the rental unit, and rent. This system enables staff to monitor whether rent increases for Covered Rental Units are compliant with the RRSO’s provisions, track rent increases, and maintain contact information of landlords and their respective tenants. Moreover, an RRS would provide policymakers with data-driven evidence for future policies related to housing and community development. Table 1 below highlights a sample of the information that staff could collect through an RRS.
Table 1. Sample RRS Data Collection Components
LANDLORD
PROPERTY OWNER
PROPERTY MANAGER
First & Last Name
Contact Info (mailing address, telephone, & email)
Preferred Language
Property Management Company (if applicable)
TENANT
First & Last Name
Contact Info (mailing address, telephone, & email)
Start/End date of Tenancy
Number of Occupants
Preferred Language
RENT
Covered Rental Units:
Amount of Current Rent
Amount & Date of Proposed Rent Increase
Percentage Rent Increase
Date of Last Rent Increase
Reason for Rent Increase above 5%
Banked Increase
Capital Improvement Increase
Fair Return Increase
Rental Units (not subject to rent increase limits):
Amount of current rent
Amount & Date of proposed rent increase
Percentage Rent increase
Date of last rent increase
UNIT INFORMATION
Number of bedrooms
Number of bathrooms
Unit category (CRU or RU)
Utilities (payee, RUBS Calculation, initial utility rate, current utility rate + % of current rent)
FILING NOTICES
(IF APPLICABLE)
Documentation of termination notice along with reasoning Noncompliance with lease terms & rules
Health, Safety, & Legal Violations
Landlord’s Right to Reclaim Property
Employee-Related Housing
Notice of Entitlement of Relocation Assistance
Rent Increases
During the December 2023 work session, staff provided the task force members with a high-level overview of an RRS’ benefits and costs, especially as they integrate with actively enforcing the RRSO. The HHTF broadly supported pursuing the benefits accompanying an RRS and recommended that the City Council place the evaluation of creating a rental registration system for the FY 2025 strategic roadmap. On June 4, 2024, the City Council adopted the FY 2025 Strategic Plan, which includes a proposed special project to evaluate the option of creating an RRS.
DISCUSSION
During the December 2023 work session, staff solicited feedback from HHTF members following an initial discussion regarding an RRS. HHTF members supported achieving the goals that may accompany an RRS and provided additional considerations.
Collection of Tenancy Information
Typically, landlords would shoulder the responsibility for entering information into the RRS. However, one HHTF member inquired about allowing tenants to input and update information onto an RRS. Other jurisdictions that administer an RRS allow tenants to verify information input by the landlord. This verification is contingent on the technology used for the RRS. This practice, however, has created privacy concerns from neighboring jurisdictions, particularly landlords, with the collection of tenant information. It would be incumbent upon the City to ensure that if tenant information were collected, such information would not be shared with outside agencies or personnel.
Vacancy Reporting & Rating System
An RRS would provide a robust database of Hayward’s rental housing portfolio, especially as it relates to vacancies and rental market trends. Such data would help the City identify patterns in unit vacancies, assess whether vacancies are due to market conditions or other factors, and develop targeted strategies to promote housing stability and occupancy. In addition to collecting information about vacancies, two HHTF members discussed the possibility of including a rating system to increase accountability and help prospective tenants decide where to live. However, an RRS would serve as a database to track rental prices, tenancy trends, and compliance with the RRSO. A rating system could dilute the RRS’ focus as a regulatory tool.
Moreover, staff consulted with the City Attorney’s Office regarding the feasibility of a rating system and concluded that it could raise First Amendment concerns. For example, if a tenant posts a negative or inaccurate review onto the RRS, the landlord may request that staff remove the review. Staff would then be placed into a situation in which they either publish all reviews indiscriminately or moderate content in a way that could infringe upon tenants’ First Amendment rights.
Personnel
To implement the RRS, the Housing Division would require additional staffing. An RRS would be designed so landlords could self-report. Nonetheless, based on conversations with neighboring jurisdictions, the City will need to maintain staff to process compliance forms submitted on paper, provide technical assistance, monitor for compliance, and enforce penalties for non-compliance. Currently, the Rent Review staff within the division consists of a Management Analyst, Community Programs Specialist, and Senior Secretary under the supervision of the Deputy Director of Development Services. The Rent Review program would require 2.50 additional FTE to administer an RRS, as shown in Table 2. Due to the anticipated increase of public interactions and increased number of staff, staff recommends reinstating the Housing Division Manager position.
Table 2. Proposed Additional Full-Time Employees
FTE
Class Specification
Roles
0.5 Housing Division Manager
Supervision of Rent Review staff; resolving sensitive matters
1.0 Community Programs Specialist
Landlord-Tenant outreach and communication; workshop facilitation
1.0 Senior Secretary
Data entry; addressing administrative inquiries
These additional positions and the development of the technology will increase costs to the City, as discussed in the Fee Analysis subsection. Furthermore, the Code Enforcement Division may require additional staff to engage with the RRS, including updating information for the landlord or property manager.
Technology & Collaborative Partnership
Staff are still exploring the technology required to implement the RRS. A third-party system would cost more than an in-house system but may provide more flexibility and capabilities with inputting information. Meanwhile, creating the RRS in-house would enable staff to save on technology costs, but an in-house system may limit functionality. For example, staff are exploring whether an in-house system could allow landlords with multi-unit properties to submit unit information into the RRS more efficiently, eliminating the need for manual, unit-by-unit entry.
One HHTF member suggested collaborating with other agencies to implement an RRS, especially to reduce the cost of the system. While a collaborative partnership could provide a strong, regional outlook for the rental market, staff anticipate several points of concern. First, an RRS is typically charged based on the number of units within the system. Therefore, a regional RRS would not necessarily lower the cost. Additionally, many neighboring jurisdictions (e.g., Cities of Alameda, Berkeley, and Oakland) already have an existing RRS in place, which may create difficulties in securing partnerships for a collaborative RRS.
A collaborative partnership between two or more jurisdictions may also be difficult to enact due to dynamic intergovernmental considerations. Cross-jurisdictional collaboration would require additional time and effort to manage the partnership itself in addition to managing the RRS. Moreover, multiple governing bodies would have to agree upon which units to include, what data to collect and division of responsibilities, funding allocations, final decision-making authority, and timeline and prioritization. For instance, if the governing body of a neighboring jurisdiction that has partnered with the City of Hayward to implement an RRS withdraws from the partnership, the City of Hayward would face significant logistical challenges (e.g., funding shortfalls, data management, operational adjustments, and contractual issues) in maintaining the RRS within Hayward’s boundaries. Addressing these challenges within a short time frame may be impractical, especially if the neighboring jurisdiction withdraws from the partnership within a short period of time.
Finally, data collection through a partnership may be difficult to coordinate between different jurisdictions. One jurisdiction may object to collect certain data while another may seek that data. Such differing policy preferences between jurisdictions could ultimately hamper that data collection that would inform future policies related to housing and community development.
Fee Analysis
Currently, Rent Review fees fund all personnel and operational costs for implementing the Rent Review Program. Adding an RRS will require additional staff to administer the RRS and ensure compliance. Table 3 below compares the current rates for the Rent Review with a proposed rate that funds RRS costs.
Table 3. Proposed Rent Review Fees
RENT REVIEW FEES
CURRENT RATE
PROPOSED RATE
Covered Rental Units
$66
$140
Rental Units
$32
$90
Staff propose levying a $140 annual fee for Covered Rental Units (e.g., those subject to the rent increase threshold of the RRSO) and a $90 annual fee for Rental Units (e.g., those exempt from the rent increase threshold of the RRSO). Covered Rental Units would be subject to a higher fee because of the costs associated with mediation and arbitration services that tenants and landlords of Covered Rental Units may rely on to resolve disputes regarding rent increases. Tenants and landlords of Rental Units are ineligible for using these services.
Staff’s proposed rent review fees are within the range of fees charged by neighboring cities, except for the City of Berkeley. Berkeley’s fees significantly exceed those of neighboring jurisdictions. Table 4 below shows the fees for rent-controlled and unregulated units in neighboring jurisdictions.
Table 4. Rent Review Fees – Neighboring Jurisdictions
CITY
RENT REGISTRY FEES
Rent-Controlled Units
Unregulated Units
City of Alameda
$168
$113
City of Berkeley
$344
$212
City of Mountain View
$120
City of Oakland
$101
Two HHTF members suggested that staff consider discounting the annual RRSO fees for landlords who comply with requirements on-time. However, any proposed RRSO fees would be imposed for cost recovery. The City does not intend to generate a profit from these fees but rather ensure they fully recover the costs associated with administering the RRSO. If the City Council would like to offer a discount, they must identify a funding source to subsidize the discounted portion of the fees. Without an identified funding source, offering discounts would result in a budget shortfall, negatively impacting the fiscal sustainability of the Rent Review program. Staff examined whether any grants could offset setup costs for an RRS. However, most housing and planning-related grants focus on the development of housing.
Importantly, the RRSO allows for landlords of Covered Rental Units to pass through up to 50% of the fee to their tenants. Rental Units do not have rent increase limitations. Therefore, while landlords of Rental Units may be subject to state legislation regarding rent caps, the RRSO does not prohibit landlords from including the fee or a portion of the fee in tenants’ rent. The Cities of Alameda and Oakland allow landlords to pass through up to 50% of their fees to tenants, while the City of Berkeley allows for landlords to pass through a portion of their fees to tenants for tenancies that began before January 1, 1999. Meanwhile, the City of Mountain View prohibits landlords from passing through their fees.
Enforcement
Currently, the Hayward Municipal Code allows staff to impose late penalty fees up to 50% of the original fee. The RRSO prohibits landlords who do not complete these payments for fees imposed upon Covered Rental Units from collecting any rent increase. However, the RRSO does not include a collection method should the landlord fail to pay.
As an RRS would transition the RRSO from a passive ordinance to an active one, staff would need additional mechanisms to increase enforcement to fully recover its costs. Staff recommend amending the RRSO to allow the City to impose an assessment against properties that fail to complete payments of the rent review fee.
Questions for Discussion
Staff have outlined overarching questions for HPRC members to consider.
Funding & Sustainability — Does the HPRC support continuing the development of an RRS with a clearer understanding of the costs associated with it? Data Collection & Transparency — Does the HPRC support the proposed data in Table 1 to be collected? If so, what, if any, of this information should be publicly accessible? Compliance & Enforcement — Does the HPRC support enforcement of fees and penalties through an assessment process?
ECONOMIC IMPACT
There is no immediate economic impact with consideration of this report.
STRATEGIC ROADMAP
This agenda item supports the Strategic Priority of Preserve, Protect & Produce Housing. Specifically, this item relates to the implementation of the following project(s):
Project HP10: Evaluate the option of creating a rent registry to obtain better data on rent increases, evictions, and occupancy
FISCAL IMPACT
This work session report does not propose any changes that would create a fiscal impact on the City’s General Fund. Should the committee recommend advancing this to the City Council, there would be additional staffing and software implementation and maintenance costs for management and enforcement of an RRS as outlined in this report.
PUBLIC CONTACT
Staff have previously reached out to stakeholders but did not receive responses for discussion regarding the RRS. Cities that staff surveyed indicated that the landlord community relayed concerns about the increased time required to input data into the RRS. Landlords also shared concerns about their tenants’ privacy; however, tenants have not demonstrated this concern for themselves.
Tenants generally supported the creation of an RRS. Community members, particularly tenants, from the December 2023 HHTF work session expressed support for the creation of an RRS. Community members cited the increased transparency to prevent unlawful rent increases, usefulness towards actively enforcing the RRSO, and ability to allow for data-driven policymaking as reasons for establishing an RRS. Community members also discussed concern about passing through the rent review fee to tenants.
If the full City Council approves the creation of the RRS, staff anticipate hosting numerous community engagement sessions towards the implementation of the RRS.
NEXT STEPS
If the HPRC supports continuing developing an RRS, staff will schedule a work session item with the City Council in June 2025.
Prepared by: Ayush Patel, Management Analyst I
Recommended by: Dustin Claussen, Assistant City Manager Sara Buizer, AICP, Director of Development Services
Christina Morales, Deputy Director of Development Services Approved by:
_________________________________
Dr. Ana M. Alvarez, City Manager
December 7, 2023 Homelessness-Housing Task Force Staff Report and Materials:
https://hayward.legistar.com/LegislationDetail.aspx?ID=6441050&GUID=784D448D-B0B2-4C53-8C60-AEEAA1179607&Options=&Search= For more information regarding the components of an RRS:
https://www.policylink.org/resources-tools/tools/all-in-cities/housing-anti-displacement/rental-registries Under current RRSO provisions, landlords for Covered Rental Units can increase rent by 5% once every 12 months or bank increases for up to 10%.
June 4, 2024 City Council Staff Report and Materials:
https://hayward.legistar.com/LegislationDetail.aspx?ID=6712541&GUID=FC1C8272-3788-4EEE-B855-19B21D44EFAE&Options=&Search= The Rent Review team currently reports to the Deputy Director of Development Services. Another funding source must be identified to cover the remaining expenses associated with a Housing Division Manager.
Includes landlord grievances that escalate to management, public concerns about the RRS, and implementing policy changes See HMC SEC 12-1.05 for more information about the rent increase threshold:
https://library.municode.com/ca/hayward/codes/municipal_code?nodeId=HAYWARD_MUNICIPAL_CODE_CH12HO_ART1RERESTTEPR_S12-1.05REREINTH See HMC SEC 12-1.17 for more information about fee pass-throughs:
https://library.municode.com/ca/hayward/codes/municipal_code?nodeId=HAYWARD_MUNICIPAL_CODE_CH12HO_ART1RERESTTEPR_S12-1.17FE See HMC SEC 8-1.24 for more information:
https://library.municode.com/ca/hayward/codes/municipal_code?nodeId=HAYWARD_MUNICIPAL_CODE_CH8FIRETA_ART1BULI_S8-1.24LIDUMAPA