Hayward City Council Votes NO on 2% Rent Caps!
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Categories: Homes Planning Real Estate Residents
Published 11/11/2020
The Hayward City Council demonstrated wisdom and long-term thinking last night in voting not to accept the Staff recommendation to limit future rent increases in Hayward to the Consumer Price Index - capped at 5%, with a floor of 2%.
The Hayward City Council held a meeting last night to vote on whether or not to accept a recommendation that limits rent increases to the Consumer Price Index (inflation) with a ceiling of 5% and a floor of 2%. Had the measure passed, rent increases in 2021 would have capped at 2%.
Mayor Halliday and council members Lamnin, Marquez, and Mendall all voted NO. They all had slightly differing reasons for their votes, but all saw the proposed change as something that would harm renters in the long term.
Voting in favor of further restricting the rights of housing providers were council members Salinas, Wahab, and Zermeno, who cited their reasoning as there are more renters than landlords in Hayward.
So what does this mean for Hayward property owners? The current Residential Rent Stabilization and Tenant Protection Ordinance (RRSO) will remain in effect, which means the following:
Allowable Increases:
- Annual Rent Increase: A landlord may increase a tenant(s) rent once in 12 months by 5% or less of the tenant(s) current rent;
- Banked Rent Increase: Banked or Banking refers to annual rent increases (up to 5%) not charged to the tenant. The landlord can charge the banked rent increase in future years with an increase annually. The total rent increase will be the annual increase plus the banked rent increase, maybe 10% or less of the tenant(s) current rent. Banked rent increases expire after ten years. Banked increases are eligible to be deferred up to 10 years. Banked increases not given to the tenant within ten years expire. Landlords must issue the tenant a copy of the rental history if they receive a banked rent increase.
- Capital Improvement Pass-Through: Capital Improvement costs may be charged to the tenant to cover the cost for improvements by the landlord. The home improvements must be complete and paid for by the landlord before they can bill the tenant(s). The increase requires approval by the City of Hayward, and the landlord must confirm approvals from the City within 24 months of completing the work. The rent increase cannot be more than 10% of the tenant(s) current rent, including annual rent and the banking increase applied — not considered a rent increase. After half of the total costs for the improvements have been recovered by the landlord — the tenant(s) must receive a rent deduction.
- Fair Return Rent Increase: Rents are eligible to be increased above 5% if a landlord must cover costs and receive an adequate return on their investment. The landlord can request City approval through the rent review process. Through this process, the landlord will have to provide evidence to justify the rent increase. If the landlord does not get approval, the tenant can request a rent review, and the landlord will have to provide evidence to justify the increase.
- Rent Increase after Non-Voluntary Vacancies: Landlords can increase rent up to 5% of the previous tenant(s) rent;
- Rent Increase after Voluntary Vacancies: Landlords can set initial rent without limitation.
Covered Units:
Rent increase limits only apply to specific housing units (covered units). Specifically, units built before July 1, 1979. Major exceptions include:
- Single unit properties that are exempt due to state law (Costa Hawkins); Page 3 of 12
- Owner-occupied properties with a legal accessory dwelling unit such as a converted garage;
- Affordable housing units with other rent controls;
- Hospitals, care facilities, convalescent homes, and transitional housing;
- Motels, hotels, inns, and boarding houses;
- Non-profit cooperative units are owned or occupied by most of the owners.
To learn more about the Residential Rent Stabilization and Tenant Protection Ordinance (RRSO) please click here.
Thank you to those of you who took the time to write to the Council expressing your concern — it made a huge difference. Your voice helps develop housing policies that promote the long-term health of Hayward's rental housing. If you have any questions or wish to offer suggestions about that, please contact us at Team@adventpropertiesinc.com and let us know so we can accurately represent your interests.