San Leandro City Council Meeting on Rent Stabilization Ordinance Draft - October 13, 2025

The San Leandro City Council held a lengthy public meeting primarily dedicated to reviewing a draft Residential Rent Stabilization Ordinance. Staff presented the draft, which followed extensive public outreach, and sought council direction on three key policy questions: the annual rent increase cap, potential exemptions for small property owners, and the structure of capital improvement cost recovery. After a detailed presentation, council questions, and substantial public comment from both tenants and housing providers, the council gave majority direction to staff to revise the draft with specific parameters for further review.

Public Comments & Testimony

• Tenants and Advocates (Supporting Strong Protections): Multiple speakers expressed support for a rent stabilization ordinance, arguing it is necessary for housing stability and to prevent displacement. Specific positions included: support for capping annual increases at 3% or 60-65% of the Consumer Price Index (CPI), whichever is lower; opposition to capital improvement pass-throughs; and opposition to exempting small 'mom and pop' landlords. Concerns were raised about affordability, fear of retaliation from landlords, and the financial strain of unpredictable rent increases.
• Housing Providers and Business Representatives (Opposing or Seeking Modifications): Speakers from landlord associations, small property owners, and the Chamber of Commerce expressed opposition or concern. Key positions included: arguing the ordinance is redundant with state law (AB 1482), too costly, and would disincentivize housing investment and maintenance; support for keeping the existing rent review program; opposition to including a CPI metric; and requests to exempt owners of small properties (e.g., four or fewer units). Some landlords stated they do not raise rents annually or do so modestly.

Discussion Items

• Staff Presentation (Director Tom Liao): Presented the draft ordinance, detailing its purpose, covered units (over 7,600 eligible), proposed 5% annual cap, capital improvement pass-through structure, and fair return petition process. Outlined three questions for council: 1) Should the rent cap remain at 5% or include a CPI component? 2) Should small rental properties be exempted? 3) Should the capital improvement pass-through structure be changed? Also presented two preliminary program cost options ($1.4M and $1.6M).
• Council Questions & Deliberation: Council members extensively questioned staff on the ordinance's mechanics, enforcement, costs, and legal risks. Key points of discussion included: the definition of a 'fair return'; the administrative burden of petitions; the potential for 'double-dipping' via tax deductions and pass-throughs; and the lack of specific displacement data to quantify the problem.
• Council Member Positions:
  • Councilmember Viveros Walton, Aguilar, Bolt, and Simon expressed support for a lower cap (in the 3% to 3.75% range) tied to a percentage of CPI (e.g., 65%), elimination of the tiered capital improvement pass-through in favor of a uniform fair return process, and no broad exemptions for small property owners.
  • Vice Mayor Bowen was open to a compromise, mentioning a 4% cap, saw potential benefits in banking unused increases, and was more open to considering exemptions for very small providers.
  • Councilmember Azevedo supported a CPI-based cap (e.g., 3.75%), no pass-throughs, and expressed interest in means-testing.
  • Mayor Gonzalez defended the original 5% cap as a compromise position, emphasized the need to consider policy elements (like banking) as an interdependent package, advocated for means-testing to target aid, and cautioned against rushing without data from the new rent registry.

Key Outcomes

• Direction to Staff: By majority consensus, the council directed staff to revise the draft ordinance with the following parameters:
  1. Set the annual rent increase cap between 3% and 3.75%, specifically incorporating a limit of 60-65% of the regional Consumer Price Index (CPI).
  2. Eliminate the proposed tiered capital improvement pass-through. Cost recovery for improvements should be handled solely through the fair return petition process for all property sizes.
  3. Do not create broad exemptions based on property size ('mom and pop' exemptions).
  4. Do not include rent banking (accumulating unused increases).
  5. Do not include means-testing based on tenant income.
• Next Steps: Staff will incorporate this feedback and the extensive public comments into a revised draft. A deeper analysis of program costs and further policy discussion is scheduled for a council work session on December 8th, with a first reading of the ordinance anticipated in Spring 2026.