City Council
Report
City Council Meeting: October 27, 2026
Agenda Item: 11.A
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To: Mayor and City Council
From: Oliver Chi, City Manager, City Manager's Office
Aileen Reynolds, Director, Housing and Human Services Department Subject: Affordability Agenda: Update on Affordability and Tenant Protection Initiatives, Including Food and Early Childhood and Childcare Costs; Worker Wages and Labor Protections; Consumer Pricing Fairness; and Housing Stability and Tenant Protections
Recommended Action
Staff recommends that the City Council:
1. Adopt a finding of no possibility of significant effect pursuant to Section 15061(b)(3) (Common Sense Exemption) of the California Environmental Quality Act (CEQA) Guidelines.
2. Introduce for first reading an ordinance adding Santa Monica Municipal Code (SMMC) Chapter 4.70 to allow employees who perform work in the City to designate an authorized representative to receive a final paycheck (Attachment C).
3. Approve the incorporation of Measure GS housing production funds into the Housing Trust Fund Guidelines (Attachment D).
4. Approve updates to the Preserving Our Diversity (POD) program, including expanded eligibility criteria, an annual cost-of-living adjustment to benefit payments, and a study of further program expansion.
5. Authorize staff to begin both development and outreach regarding amendments to the City’s Tenant Harassment Ordinance related to tenant organizing activities.
6. Approve changes to the FY 2026-27 Revised Budget, as described in the Financial Impacts & Budget Actions section of this report (requires 5 votes).
7. Authorize staff to prioritize an additional $300,000 in annual General Fund support for the Human Services Grants Program, dedicated to food assistance and childcare subsidies, in the Proposed FY 2027-29 Biennial Operating Budget, as described in the Financial Impacts & Budget Actions section of this report..
Executive Summary
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On January 27, 2026, the City Council directed staff to evaluate and advance strategies to make Santa Monica more affordable for the people who live and work here. The direction covered five areas, including food costs, early-childhood expenses, worker wage protections, consumer pricing fairness, and housing stability for tenants. The Council’s discussion also reflected concern about recent local losses, including the closing of an affordable grocery store in the Pico Neighborhood, and about the cost pressures residents are feeling now.
Based on that direction, staff has been engaged in an assessment shaped by a recognition that the cost of daily life in Santa Monica has risen faster than many household budgets. Groceries, childcare, and rent take an increasingly large share of family income, and the strain is greatest for households with the least financial cushion.
In translating the Council’s priorities into executable options, staff analyzed each strategy to identify whether it is legally defensible within the City’s authority, whether it can be absorbed within the City’s long-term budget strategy, and whether it can be carried out well at current staffing and resource levels.
Based on that assessment, staff has identified five actions for City Council consideration, as summarized below:
• Final Paycheck Designee Ordinance (first reading)
o Allows employees who work in Santa Monica to name a representative to receive their final paycheck when they are unexpectedly unable to do so themselves, including as a result of an immigration detention. • Measure GS housing production funds
o Incorporates up to $23.5 million in Measure GS housing production funds into the Housing Trust Fund Guidelines, allowing the City to reopen its over-the-counter affordable housing funding process in January 2027. • Preserving Our Diversity (POD) expansion
o Expands eligibility to reach more very low-income senior renters, adds an annual cost-of-living adjustment to benefits, and funds a study of further expansion, supported by a $360,000 FY 2026-27 budget amendment. • Food assistance and childcare subsidies
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o Direction to include an additional $300,000 per year in the FY 2027-29 budget for the Human Services Grants Program, dedicated to food programs and childcare subsidies.
• Prohibiting interference with tenant organizing activities o State law, the City Charter, and the Tenant Harassment Ordinance already prohibit retaliation against tenants for organizing. Santa Monica does not, however, expressly prohibit landlord interference with organizing activity as several other California cities do. Accordingly, it is recommended that the City Council authorize staff begin both development and outreach activities regarding associated municipal code amendments.
Additionally, this report also provides a status update on other associated initiatives referenced by the City Council that are either already underway, or which may require additional development, legal analysis, and monitoring before consideration of further steps.
Background
Council Direction
On January 27, 2026, Mayor Torosis, Councilmember Hall, and Councilmember Raskin put forward a Council discussion item directing the City Manager and City Attorney to evaluate and advance targeted affordability strategies addressing food costs, early-childhood expenses, worker wage protection, consumer pricing fairness, and tenant displacement, drawing on proven local and national models (Attachment A). The City Council unanimously approved the request, with direction to:
• Analyze what can legally and feasibly be done under the City’s authority, as distinct from State or Federal authority;
• Analyze community needs, the resources already available in the City, and whether existing programs can be expanded; and
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• Prioritize the restoration of former City programs, such as the Childcare, Recreation, Enrichment, Sports Together (CREST) program, and consider other related programs.
Within those five areas, Council identified specific strategies for evaluation, including a public grocery store model, a local “baby basket” program for new parents, childcare subsidies, local wage enforcement, protection of tips for app-based delivery drivers, wage recovery for workers detained by Immigration and Customs Enforcement (ICE), limits on surveillance pricing, a requirement for non-digital coupons, and support for tenant organizing and collective tenant rights. Each of those items is addressed further in this report below.
Of note, several of the recommendations in this report were designed to be incorporated into the Human Services Grants Program (HSGP), the City’s primary vehicle for funding community-based services. On August 11, 2026, Council approved the HSGP Funding Guidelines for the FY 2027-31 grant cycle (Attachment B). Eligible services under the new guidelines span the service areas relevant to this report, including housing and homelessness prevention, health and wellness, and financial stability. In particular, both food assistance programs and childcare subsidies are eligible services in the upcoming cycle, and staff’s assessment identified that the additional support for both program areas can be delivered through this existing initiative rather than start a new program.
Discussion
This section is organized around the five areas of Council’s January 27 direction. For each area, it describes the programs the City already operates, the specific strategies Council asked staff to evaluate, what staff found, and what staff recommends.
1. Food Costs
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Food insecurity is a pressing issue for vulnerable households, particularly older adults and families with children, and the rising cost of everyday items such as groceries puts additional strain on already tight budgets. Westside Food Bank, Meals on Wheels West, and the WISE Diner Program address these needs in our community, and all three face increased demand. The City has historically supported these providers through the HSGP.
Food Assistance Programs
Of note, food assistance programs are an eligible service in the FY 2027-31 HSGP cycle. Allocating additional funds in the next cycle specifically for food programs would allow these providers to serve more individuals and deliver more food and meals to those in need. As one example, the WISE Diner Program may be able to expand its lunch program for older adults into the Pico Neighborhood at Virginia Avenue Park, serving up to 100 meals per day, Monday through Friday.
Given this factor, staff recommends that the City Council authorize staff to prioritize an additional $300,000 in annual General Fund support for the Human Services Grants Program, dedicated to food assistance and childcare subsidies, in the Proposed FY 2027-29 Biennial Operating Budget, as described in the Financial Impacts & Budget Actions section of this report.
Public Grocery Store
As part of the policy around addressing food costs, the City Council also directed staff to evaluate public grocery store models. New York City is currently piloting a City-led model in which the City delivers grocery-ready sites, covers rent and property taxes, and sets operating requirements. $70 million in capital funding has been allocated to launch five public groceries under the pilot in New York City, and because the program is in its early stages, staff recommends that the City continue to observe its evolution and learn from that pilot before considering local implementation.
In the meantime, staff will continue to explore the feasibility of siting affordable grocers at City-owned sites, and specifically within the City’s affordable housing developments, 6 of 20
so that residents can afford the grocery stores in their own buildings. Of note, the affordable housing development on City-owned land at 1318 4th Street will include an affordable grocery store, the terms of which are still under negotiation.
2. Early-Childhood and Childcare Costs
The City supports families with children through two main channels, including subsidized childcare for income-qualifying families (delivered through Connections for Children), and out-of-school time programming for youth from elementary through high school (delivered through the CREST program on local school campuses, the Police Activities League (PAL), and Virginia Avenue Park).
Childcare Costs
Childcare subsidies are distributed by the City through Connections for Children (CFC), the local childcare resource and referral agency, which centralizes State and local funding for eligible families. The City currently funds $1.2 million annually in childcare subsidies for income-qualifying Santa Monica families through this initiative, and of note, the current program does not meet all of the known need. For instance, the City last increased its reimbursement rate in FY 2023-24, and although the City’s rate is higher than the State rate, it is still not high enough for some Santa Monica families in need.
CFC maintains a waitlist of children who are eligible for Santa Monica childcare subsidies but for whom funding is not available.
Subsidy amounts are calculated based on each family’s income and average $18,000 to $20,000 per child per year. Additional funding would allow staff to increase the reimbursement rate, serve more qualifying families, or both. As part of this program, for each additional $100,000 per year invested, we would be able to serve approximately five more children.
As noted above in the food costs overview, staff recommends that the City Council authorize staff to prioritize an additional $300,000 in annual General Fund support for the Human Services Grants Program, dedicated to food assistance and childcare 7 of 20
subsidies, in the Proposed FY 2027-29 Biennial Operating Budget, as described in the Financial Impacts & Budget Actions section of this report.
Out-of-School Time Programs
The City Council’s direction also asked staff to prioritize programs such as CREST.
CREST provides after-school childcare, school-break camps, and enrichment classes on local school campuses. While CREST charges a fee, the City offers a financial assistance program for qualifying families.
CREST is so popular that it has far exceeded its targets for full-fee families this school year, which allows the program to provide an even deeper level of financial assistance to those in need. For instance, in the current fiscal year alone, the City has forgiven $700,000 in fee revenue for families, and 320 youth currently receive financial assistance for CREST programs. PAL and Virginia Avenue Park also offer free programming for participating families.
To further support families with out-of-school time needs for their children, the City also recently executed an agreement with the Santa Monica-Malibu Unified School District (SMMUSD) to make after-school care more affordable. Through the District’s Expanded Learning Opportunities Program (ELOP), more students have access to free or low-cost after-school care and CREST camps during summer, spring, and winter breaks and on pupil-free days. Eligible students include those in foster care, students experiencing homelessness, low-income students, and English learners.
Newborn Supply Kits
Staff has also spent time evaluating the possible establishment of a local baby basket program. A comparable program, the Newborn Supply Kit, was piloted by the U.S.
Department of Health and Human Services during the Biden-Harris administration.
While well intentioned, the pilot identified several challenges. First, many households opted out because they already had the kit’s contents through their own families and networks. Also, the kits contained roughly $100 in goods, and the pilot found that the timing of when families learned about and received the kit was critical, which means a 8 of 20
program limited to families in need would require targeted outreach during pregnancy.
As we assessed existing City staffing resources, it was identified that an operation of that scale is unlikely to be cost-effective.
As an alternative to deploying newborn supply kits, staff identified that investing dollars into an expansion of our existing childcare subsidy programs (for which there is a known and unmet need in Santa Monica) could serve as a viable expansion of support for families. Moving ahead, staff would also recommend assessing the viability of establishing a new program which provides the value of the newborn supply kit (~$100) directly to income-qualifying Santa Monican families with newborns to use as they see fit. Finally, staff has had preliminary discussions with the nonprofit firm Baby2Baby, which is moving its headquarters into Santa Monica. Baby2Baby provides children in need with diapers, clothing, and basic necessities, and with the nonprofit’s relocation into Santa Monica, staff has had discussions with the firm about partnering on a local newborn supply kits effort for Satna Monica in the future.
3. Worker Wages and Labor Protections
Santa Monica has several ordinances that guarantee wage and labor protections that exceed what State law requires, including a higher minimum wage, more paid sick leave, and other protections for workers. These regulations are contained in our Minimum Wage Ordinance, the Hotel Worker Minimum Wage Ordinance, and the Hotel Worker Protection Ordinance. The City Attorney’s Office (CAO) Consumer Protection Division is responsible for enforcing these laws.
Local Wage Enforcement
For the first ten years after the City adopted its minimum wage ordinance, the City contracted with the Los Angeles County Department of Consumer and Business Affairs (DCBA) to investigate and administratively enforce violations. The CAO worked with DCBA investigators to ensure consistent application of the City’s laws and represented the City in administrative appeals of DCBA citations, but it did not oversee the program on a day-to-day basis.
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As part of the City’s Realignment Plan efforts, the Consumer Protection Division was able to add an in-house Senior Legal Analyst with extensive experience in minimum wage investigations to lead investigations of worker protection violations and improve efficiency. That staff member joined the CAO in October 2026, and with that new staffing resource, workers who believe they have been undercompensated can now file a complaint directly with the CAO, much as tenants do. Complaints are then assigned to the Senior Legal Analyst and an attorney, who investigate jointly and, where violations are found, develop an enforcement plan.
The added staffing will also allow the CAO to conduct outreach and education for local businesses and workers about their rights and obligations, beginning in the first quarter of 2027. Most businesses want to comply but may not know how, and proactive education improves compliance on the front end, which is better for workers and frees enforcement resources for the most serious cases.
Final Paycheck Designee Ordinance
The City Council also directed staff to return with an ordinance to support wage recovery for residents who are unable to collect final wages because they have been detained by ICE. To that end, staff has developed such an ordinance, which if adopted would allow a worker to designate a person to receive the worker’s final paycheck when the worker cannot collect it personally.
Under State law, Labor Code section 202(a) generally requires an employer to pay final wages within 72 hours after an employee quits, unless the employee gave at least 72 hours’ notice, in which case wages are due at the time of quitting. Employees who give notice may direct that final wages be mailed to a designated address. Also, Labor Code section 1555 requires employers to give employees the opportunity to name an emergency contact and to indicate whether that contact should be notified if the employee is arrested or detained while working. However, neither provision addresses what happens to a final paycheck when an employee is unexpectedly separated from employment and has not directed where it should be sent. 10 of 20
Against this backdrop, the City can adopt an ordinance requiring employers to allow employees to designate a person authorized to receive a final paycheck. The ordinance would apply whenever a final paycheck is available, but it is likely to be most useful when an employee unexpectedly fails to report to work because of an arrest, detention, illness, or other emergency during which they cannot communicate with their employer.
The core components of the draft ordinance (included as Attachment C) include the following provisions:
• Employers must provide all employees who perform work in Santa Monica a form to designate a person who may receive a final paycheck on the employee’s behalf;
• The form must be provided at hire and at least once each calendar year, and employees must be allowed to update it on request;
• The form must be provided in the language in which the employer provides other documents and information to the employee, unless the City has not provided a template in that language, in which case it may be provided in English; • Once prepared, the final paycheck must be provided to the employee or designee on request;
• If the final paycheck is not retrieved within 15 days after it is prepared, notice must be sent to the employee at the last known address and to the designee; • Enforcement is by the City Attorney’s Office; and
• The requirements may be waived by an express and unambiguous waiver in a collective bargaining agreement.
Staff sought feedback on these components from representatives of the Business Improvement Districts, Santa Monica Travel & Tourism, and the Santa Monica Chamber of Commerce, as well as from Familias Latinas Unidas and the CLEAN Carwash Worker Center. Community and worker representatives were strongly supportive and described at least one instance in which families wanted to get a paycheck to an employee or the employee’s representative after an immigration raid, but had difficulty determining how to do so.
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Chamber of Commerce representatives expressed some opposition on the grounds that the ordinance would increase administrative and compliance burdens for employers and could expose them to new liability for minor violations. In response, staff proposes that the ordinance take effect July 1, 2027, to allow ample time for outreach and support to businesses. In addition, the draft ordinance may be enforced only by the City and does not create a private right of action, and the Consumer Protection Division would lead outreach, education, and compliance with an education-first approach.
Tips for App-Based Delivery Drivers
The City Council directed staff to evaluate options to prohibit third-party delivery platforms from using customer tips to offset or substitute for base wages. In 2020, California voters passed Proposition 22, which classified app-based delivery drivers as independent contractors and set rules for minimum earnings and tips. Proposition 22 requires delivery platforms to pay drivers 120% of the applicable minimum wage for all “engaged time” and prohibits platforms from deducting tips from a driver’s earnings for engaged time. It also expressly preempts local legislation regarding app-based driver compensation and gratuities.
Given Proposition 22, the City is preempted from adopting its own regulations in this area. However, the CAO can and will accept complaints related to underpayment or diversion of tips under Proposition 22 as part of its expanded wage enforcement program and will collaborate with other prosecutors’ offices, as appropriate, to pursue investigations and enforcement.
4. Consumer Pricing Fairness
As part of the Affordability Agenda, the City Council directed staff to analyze the City’s authority to prohibit surveillance pricing, including a review of Federal Trade Commission (FTC) findings and pending State legislation, and to explore an ordinance requiring retailers to offer non-digital coupons.
Surveillance Pricing
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Surveillance pricing is the practice of using personal data about a consumer, combined with algorithms, to set individualized prices for goods, services, and even wages.
Particularly when shopping online, consumers may have very different experiences depending on their demographics, location, shopping history, and other factors.
In July 2024, the FTC issued orders to eight companies offering surveillance pricing products and services, seeking information about the potential effects of these practices on privacy, competition, and consumer protection. In January 2025, the FTC issued a research summary of early impressions from the responses, although these were not final findings. The preliminary information confirmed that surveillance pricing tools in use today can generate targeted prices and segment consumers based on defined attributes or behaviors, and that a broad range of businesses use them (including online and brick-and-mortar retailers, financial services, travel, credit card, and car rental companies). The FTC has not issued further information or final findings since January 2025.
Three states have passed laws addressing surveillance pricing directly. The California Legislature recently considered AB 2564, which would have prohibited surveillance pricing and furthered the purpose of the California Privacy Rights Act of 2020, but the bill did not advance to the Governor. The CAO will monitor whether similar legislation is reintroduced in the next legislative session.
While the City’s authority to broadly regulate surveillance pricing is limited, the City does prosecute businesses that charge more than the advertised price for a product under Business and Professions Code section 12024.2, based on investigations and referrals from the Los Angeles County Department of Weights and Measures. In some cases, these violations result from businesses changing an advertised price through surveillance pricing tactics without updating their point-of-sale systems.
Given these factors, staff is not recommending further local regulations at this time.
However, staff will continue to monitor federal and State action and to enforce existing price-accuracy laws.
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Digital-Only Coupons
In 2025, San Diego adopted an ordinance requiring retailers to make a non-digital coupon available for any deal offered through a digital coupon, so that seniors and people without cell phones can access the same discounts. After the ordinance was adopted, Albertsons, which also owns Vons and Pavilions, announced that its San Diego stores would significantly reduce the number of promotions and digital deals available, stating that many of its vendors and manufacturers do not provide alternative formats for their digital offers.
Given the experience in San Diego, staff is not recommending a local ordinance at this time. The potential that a new regulation related to digital-only coupons could reduce the availability of coupons for at least some segment of the populations suggests that the City should continue to monitor San Diego’s ordinance and experience, and return with further recommendations as appropriate.
5. Housing Stability and Tenant Protections
Housing stability is the area in which the City has the most existing tools and programs.
The Housing and Human Services Department operates several programs that support housing stability for at-risk households, including:
• The Preserving Our Diversity (POD) program provides cash assistance to low-income, long-term Santa Monica residents living in rent-controlled apartments. • The Measure GS-funded expansion of the Right to Counsel program provides free eviction prevention legal services to low-income renters through the Legal Aid Foundation of Los Angeles.
• Santa Monica Renter Aid (SMRA), a Measure GS-funded homelessness prevention program, helps eligible renters resolve immediate housing stability 14 of 20
crises through one-time or short-term financial assistance and housing stabilization services.
• The Homelessness Prevention and Intervention Division is partnering with Los Angeles County’s Homelessness Prevention Unit to launch the Santa Monica Predictive Prevention Pilot, which will proactively identify households at highest risk of homelessness.
The CAO Consumer Protection Division also enforces the City’s tenant protection laws, including the Tenant Harassment Ordinance, the Housing Anti-Discrimination Ordinance, and the Tenant Relocation Assistance Ordinance, to prevent displacement of the City’s most vulnerable renters.
Adding to the City’s affordable housing stock remains one of the primary long-term solutions for households struggling to afford rent or to stay in the city. In addition to the Housing Trust Fund and Measure GS, the City is participating in a regional study of social housing models. On May 18, 2026, ACT-LA, on behalf of the LA Housing Training Hub (The Hub), was awarded $499,567 through the Los Angeles County Affordable Housing Solutions Agency (LACAHSA) to work with the City of Santa Monica, LA Metro, and the City of Long Beach on innovative housing solutions. The work in Santa Monica begins with community outreach on social housing goals, which will inform housing models that give residents a meaningful voice in how rental housing is operated, share responsibility for managing a property, collectively govern and own housing through a cooperative, or allow ownership of a home that remains affordable for future residents. The Hub will then conduct a feasibility study of the financial viability of appropriate models, assess publicly owned land that may be suitable for future development, recommend best-fit models for Santa Monica, and provide education and technical support to developers through a workshop series.
Measure GS Housing Production Funds and the Housing Trust Fund Guidelines On June 1, 2026, the Measure GS Resident Oversight Committee voted to recommend that up to $23.5 million in Measure GS funds from the Housing Production category be 15 of 20
incorporated into the Housing Trust Fund (HTF) Guidelines process. The proposed exhibit to the HTF Guidelines (Attachment D) would create a new housing trust fund for Measure GS housing production funds, with guidelines governing eligible uses and affordability levels. Incorporating these funds into the HTF process will expedite affordable housing development in the City. With Council approval, staff would conduct outreach to affordable housing developers and reopen the “over-the-counter” process for affordable housing development funding in January 2027.
Preserving Our Diversity (POD) Program Expansion
Staff proposes updates to the POD program that would allow it to serve more very low-income senior renters, adjust benefits to better reflect current living costs, and study future expansion. The proposed eligibility changes would include the following components:
• Include participants living in deed-restricted affordable housing; • Lower the minimum age from 65 to 62;
• Lower the minimum tenure in a rent-controlled apartment to 10 years; and • Establish an annual cost-of-living adjustment to benefit payments, tracking annual changes in the Consumer Price Index for Los Angeles County as compiled by the U.S. Bureau of Labor Statistics.
Expanding eligibility would supports the POD program’s long-term goal of serving at least 300 very low-income senior households.
To make these changes without reducing the number of households served, staff requests City Council authorization to allocate $360,000 in currently available funding from Special Revenue Sources. That funding would include an additional $250,000 to fund the cost-of-living adjustments through FY 2027-28; an annual allocation of $10,000 for marketing and outreach; and up to $100,000 to commission a study of the feasibility of further expanding the program to serve low-income Santa Monica families and households that include persons with disabilities. These budgetary amendments are further described in the Financial Impacts & Budget Actions section of this report. 16 of 20
Tenant Organizing and Collective Tenant Rights
Council directed staff to evaluate and return with options to support tenant unionization and collective tenant rights, including best practices from similarly situated jurisdictions.
State law already protects tenants’ right to organize. Civil Code sections 1942.5 and 1942.6 prohibit retaliation for a tenant’s participation in organizing activity or advocacy for tenants’ rights, and expressly protects the right of any invited person to enter a building to share information about tenants’ rights or participate in organizing.
Prohibited retaliation includes raising rent, decreasing services, forcing a tenant to move out, or bringing an eviction action because of a tenant’s organizing activity.
Several California cities go further than State law. They generally fall into two groups, as follows:
• Cities that treat retaliation for, or bad-faith interference with, tenant organizing as a form of prohibited tenant harassment, subject to penalties and a defense to eviction. These include West Hollywood, Long Beach, Oxnard, Santa Ana, Los Angeles, Pasadena, and Mountain View. East Palo Alto expressly recognizes a right to organize but does not expressly prohibit landlord interference with that right or provide penalties for it.
• Cities that grant additional rights to tenant associations. San Francisco and Berkeley give associations supported by a petition signed by at least 50% of tenants the right to require the landlord to confer with the association on matters affecting all tenants and to attend quarterly association meetings.
Santa Monica falls within the first group. The City’s Rent Control Law (Charter Section 1806(d)) prohibits evictions brought in retaliation for a tenant organizing other tenants, and the Tenant Harassment Ordinance (SMMC section 4.56.020(n)) prohibits retaliation against a tenant for exercising any tenant right, which includes the right to engage in organizing activity. Violations of the Tenant Harassment Ordinance are subject to civil 17 of 20
penalties of up to $20,000 per violation or actual damages, criminal prosecution, and injunctive relief. Unlike many of the other cities in this group, however, Santa Monica’s Tenant Harassment Ordinance does not expressly prohibit landlord interference with organizing activity.
The CAO Consumer Protection Division has received few complaints of retaliation for organizing activity and is not aware of any complaint involving a landlord’s refusal to recognize or engage with a tenant association. It has, however, recently received a complaint alleging landlord interference with organizing activity. That investigation is not complete, and the CAO has not yet determined whether the tools available under the Tenant Harassment Ordinance are sufficient to address the conduct alleged or similar conduct in future cases.
With that being said, consistent with the City Council’s direction, the City can adopt an ordinance that expressly prohibits bad-faith interference with, obstruction of, or discouragement of tenants’ right to organize as a form of tenant harassment.
Accordingly, staff is seeking City Council authorization to begin both development and outreach regarding amendments to the City’s Tenant Harassment Ordinance related to tenant organizing activities.
Based on our assessment, staff does not believe an ordinance along the lines of Berkeley’s or San Francisco’s, which grants additional rights to tenant associations that demonstrate support from 50% of tenants, is necessary at this time. However, staff will report back if additional information warrants it.
Tenant Habitability
Separately, staff expects to return to Council in 2027 with recommendations to improve the processes for addressing tenant habitability complaints, which are under development. As part of that work, staff is evaluating what additional resources may be needed to support both individual tenants and groups of tenants in buildings with habitability concerns.
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Next Steps
If Council approves the recommended actions, the Final Paycheck Designee Ordinance would return for second reading and adoption and would take effect July 1, 2027, preceded by business outreach led by the CAO Consumer Protection Division, which also begins broader wage-enforcement outreach and education in the first quarter of 2027.
Staff would conduct developer outreach and reopen the over-the-counter affordable housing funding process in January 2027, implement the POD program updates, and incorporate Council’s direction on HSGP funding into the Proposed FY 2027-29 Biennial Operating Budget. Staff will continue to monitor the public grocery, surveillance pricing, and digital coupon developments described above, and will return to Council in 2027 on both a Tenant Harassment Ordinance and tenant habitability operations.
Environmental Review
The adoption of the ordinance, the revisions to the Housing Trust Fund Guidelines, the POD program updates, and the budget changes are exempt from CEQA pursuant to Section 15061(b)(3) (Common Sense Exemption) of the CEQA Guidelines, which provides that CEQA does not apply "where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment." The recommended actions are administrative and programmatic in nature and continue the City’s existing affordability and tenant protection programs. Therefore, it can be seen with certainty that these actions would not result in adverse physical impacts on the environment, and they are exempt from CEQA.
Financial Impacts and Budget Actions
FY 2026-27 budget amendment (POD program)
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Staff seeks authority to appropriate available funding from the Special Revenue Source Fund to implement the POD program updates described in this report. If approved, the following budget amendment is required:
FY 2026-27 Budget Amendment
Appropriate Funds
Account # Amount
10420002.555710 $250,000
01420010.521000 $10,000
01420010.552010 $100,000
TOTAL $360,000
FY 2027-29 budget direction (HSGP)
Staff seeks Council direction regarding the allocation of an additional $300,000 in General Funds annually to the Human Services Grants Program beginning in FY 2027- 28, dedicated to food assistance programs and childcare subsidies. The proposed split would be determined based on the responses received from through the HSGP funding process. If approved, staff will incorporate this direction into development of the FY 2027-29 Biennial Operating Budget.
Prepared By: Sergio Ramirez, Chief of Staff
Approved Forwarded to Council
Attachments:
A. Attachment A - Exploring Affordability and Tenant Protection Initiatives - Torosis, Hall, Raskin
B. Attachment B - Approval of Funding Guidelines and Authorization to Release Request for Proposals for Human Services Grants Program FY 2027-31 C. Attachment C - Ord - Employee Designation of Individual to Receive Last Paycheck 10.27.26
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D. Attachment D - MSGS Attachment to HTF Guidelines