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CC 06-17-2025 Item No. 15. Anti-Displacement BMR Policy_Staff PresentationThis section may be cropped for TV This section may be cropped for TV This section may be cropped for TV This section may be cropped for TV Nicky Vu, Senior Housing Coordinator June 17, 2025 Below Market Rate (BMR) Anti - Displacement Policy This section may be cropped for TV This section may be cropped for TV This section may be cropped for TV This section may be cropped for TV Agenda ●Background on displacement ●Alternative strategies studied ●Review the 2024 Housing Commission meeting study session ●Below Market Rate Anti-Displacement Policy This section may be cropped for TV This section may be cropped for TV This section may be cropped for TV This section may be cropped for TV Background ●Below Market Rate Inclusionary Policy ●Market rate housing development must provide 15% of units as affordable ●Expiration date of (35) years (now 99 years) ●Rental units that expire risk displacement for tenants if landlords increase rent to market rate This section may be cropped for TV This section may be cropped for TV This section may be cropped for TV This section may be cropped for TV Expiring Rental Units Apartment Building Units Restrictions Expire Property Owner Aviare 20 7/8/2026 Legacy Partners Forge Homestead 15 7/15/2026 De Anza Properties Park (City Center)4 7/31/2026 Prometheus Hamptons 34 10/20/2027 Irvine Company Arioso 20 1/29/2028 FPI Management Biltmore 2 8/30/2029 Prometheus Aviare 2 7/8/2038 Legacy Partners Markham 17 11/4/2039 Prometheus TOTAL 114 This section may be cropped for TV This section may be cropped for TV This section may be cropped for TV This section may be cropped for TV Tenant Data 5 17 2467 Age 29 and under 30 - 39 40 - 49 50 and Above 0 5 10 15 20 25 30 35 40 45 Household Size 1 2 3 4 5 6 This section may be cropped for TV This section may be cropped for TV This section may be cropped for TV This section may be cropped for TV Unit Data [0, 4](4, 9](9, 13](13, 18](18, 22](22, 26] 0 10 20 30 40 50 60 Years Lived in Unit 96 17 Quality of Unit Good Needs Upgrade This section may be cropped for TV This section may be cropped for TV This section may be cropped for TV This section may be cropped for TV Housing Element Strategy HE 3.3.2 ●Ensure proper legal and noticing procedures for properties with expiring rental BMR units ●Attempt to preserve units. If not feasible, work with tenants or organizations to mitigate displacement Strategy HE 3.3.6 ●Study rent stabilization and other potential Anti-Displacement policy and create new policy to protect 100 households This section may be cropped for TV This section may be cropped for TV This section may be cropped for TV This section may be cropped for TV Concurrent Actions ●Redwood City ●East Palo Alto ●Menlo Park ●San Leandro ●Mountain View ●Sunnyvale ●Santa Clara County This section may be cropped for TV This section may be cropped for TV This section may be cropped for TV This section may be cropped for TV Alternatives Explored This section may be cropped for TV This section may be cropped for TV This section may be cropped for TV This section may be cropped for TV Acquisition Preservation ●Buy buildings to preserve 15% BMR ●McClellan Terrace $66.7 million ●To purchase all expiring BMR buildings: $525 million ●Not financially feasible Purchase units and re-restrict as BMR This section may be cropped for TV This section may be cropped for TV This section may be cropped for TV This section may be cropped for TV Rent Stabilization ●AB1482 exempts expiring BMR units from 5% + CPI increase limit ●Explicitly states expiring BMR units to return to reestablish initial rent ●Not legally permissible for BMRs, but could still be studied for city - wide Anti-Displacement Strategy Limit rent increases of expiring BMR units This section may be cropped for TV This section may be cropped for TV This section may be cropped for TV This section may be cropped for TV Deposit/Fee Regulations ●Require primary source documentation before charging tenants maintenance costs ●Could lower housing costs overall ●Doesn’t address the disproportionate high rent increase of expiring BMR units ●An issue that effects all tenants, could still be studied for city-wide Anti-Displacement Strategy Add requirements for charging unexpected fees This section may be cropped for TV This section may be cropped for TV This section may be cropped for TV This section may be cropped for TV Eviction/Legal Defense ●Enact ordinances that expand just cause eviction protection or reinforce no net loss ●Fund low-income legal aid orgs to represent evicted tenants/enforce laws ●Doesn’t address the disproportionate high rent increase of expiring BMR units ●An issue that effects all tenants, could still be studied for city-wide Anti- Displacement Strategy Prevent eviction and defend tenants This section may be cropped for TV This section may be cropped for TV This section may be cropped for TV This section may be cropped for TV County BMR Waitlist ●Add Cupertino Displaced BMR Tenants as priority for replacement into County list ●The County does not have a BMR list ●Negotiating with developers requires $$$ ●Rehoming low-income Cupertino households outside of the City would be an exclusionary fair housing concern Rehome tenants in the County waitlist This section may be cropped for TV This section may be cropped for TV This section may be cropped for TV This section may be cropped for TV Anti-Displacement Incentives ●Negotiate with developers to extend affordability for development incentives on future projects ●Depends on developer’s desire for future projects in Cupertino ●Agreements executed prior to expiration ●Potential for some success as part of staff workplan, supplemental to BMR Anti- Displacement Policy Offer development incentives for extensions This section may be cropped for TV This section may be cropped for TV This section may be cropped for TV This section may be cropped for TV BMR Anti-Displacement Policy This section may be cropped for TV This section may be cropped for TV This section may be cropped for TV This section may be cropped for TV Development ●Consulted RISE Housing and WVCS ●Consulted neighboring cities ●Redwood City, Campbell, Sunnyvale, Santa Clara County, Menlo Park, San Leandro, Mountain View, San Mateo ●Dec 19 Housing Commission Study Session ●April 21 Housing Resource Fair – Public Outreach This section may be cropped for TV This section may be cropped for TV This section may be cropped for TV This section may be cropped for TV BMR Waitlist Priority ●City’s BMR waitlist has a system that awards priority points for: ●Cupertino residents ●Cupertino employees ●Cupertino public workers ●Add three additional points for “Displaced BMR Renter” Category – if one was a tenant of a BMR rental expiring within 12 months ●Allow Displaced BMR Renters to reapply anytime Rehome tenants in the City waitlist This section may be cropped for TV This section may be cropped for TV This section may be cropped for TV This section may be cropped for TV Example Priority List This section may be cropped for TV This section may be cropped for TV This section may be cropped for TV This section may be cropped for TV Relocation Assistance ●Costs of relocation are high: deposit, first & last month of rent ●Add responsibility of property owners to: ●Pay tenant 3 months of Fair Market Rent, if tenant moves from BMR to market rate unit before or after 12 months of expiration (1 additional month for special circumstance) ●Provide notice of new rental rate and relocation assistance (120) days from expiration Offset costs of rehousing, prevent homelessness This section may be cropped for TV This section may be cropped for TV This section may be cropped for TV This section may be cropped for TV Per Unit Assistance Payment 2024 Santa Clara County Fair Market Rent Unit Size Studio 1 Bedroom 2 Bedroom 3 Bedroom 4 Bedroom 5 Bedroom 6 Bedroom Fair Market Rent $2,383 $2,694 $3,132 $4,011 $4,425 $5,089 $5,753 3x $7,149 $8,082 $9,396 $12,033 $13,275 $15,267 $17,259 This section may be cropped for TV This section may be cropped for TV This section may be cropped for TV This section may be cropped for TV Comparative Relocation Assistance Policies City Term of Assistance Activation Notice Eligibility Time Available Service Agency Service Enforcement Redwood City 3 months FMR and 1 month special circumstance Eviction/With draw 30 days after filing application 80% or lower Within 30 days 3rd-party escrow 60 day subscription Void Application East Palo Alto $9,444.11 in unit <2 years, $12,592.14 for 2+ years Eviction/With draw 120 days prior to withdraw 80% or lower Immediately upon notice City escrow None Void Application Menlo Park 3 months FMR and 1 month special circumstance Eviction/With draw 30 days after filing application 80% or lower Within 30 days 3rd-party escrow 60 day subscription Affirmative Defense San Leandro 3 months FMR and 1 month special circumstance Landlord Termination 90 days/at time of rent increase All AMI Within 5 days Direct None Affirmative Defense Mountain View 3 months FMR and 1 month special circumstance Eviction/With draw 30 days after filing application 120% or lower Within 30 days 3rd-party escrow 60 day subscription Affirmative Defense Santa Clara County 3 months FMR and 1 month special circumstance Eviction/Haza rd Immediately upon application All AMI Within 15 days Direct None Affirmative Defense Sunnyvale 3 months FMR and 1 month special circumstance Eviction/With draw 30 days prior to termination All AMI Within 15 days Direct None Affirmative Defense This section may be cropped for TV This section may be cropped for TV This section may be cropped for TV This section may be cropped for TV Staff Analysis ●Waitlist Priority provides a long-term structural solution, but is dependent on new units coming available ●Relocation Assistance provides short -term assistance as emergency intervention, but does not provide a long-term solution ●Pursuing both options would provide the most comprehensive tenant protections, but it is still important to construct new restricted affordable housing This section may be cropped for TV This section may be cropped for TV This section may be cropped for TV This section may be cropped for TV Motion Adopt Resolution No. 25 -00X (Attachment A) approving amendments to the BMR Admin Manual to create an anti -displacement policy for tenants residing in expiring Below Market Rate units.