HomeMy WebLinkAboutStaff Report 2508-5120CITY OF PALO ALTO
Policy & Services Committee
Special Meeting
Tuesday, March 10, 2026
6:00 PM
Agenda Item
3.Discussion of the Rental Registry Program First Year Report and Rent Stabilization
Analysis, Including Recommendations to the City Council to Not Expand the Rental
Registry Program to Properties with Two or Fewer Units and to Defer Further
Consideration of a Possible Rent Stabilization Ordinance. CEQA: Exempt pursuant to CEQA
Guidelines Section 15061(b)(3). Presentation
1
Policy & Services Committee
Staff Report
From: City Manager
Report Type: ACTION ITEMS
Lead Department: Planning and Development Services
Meeting Date: March 10, 2026
Report #:2508-5120
TITLE
Discussion of the Rental Registry Program First Year Report and Rent Stabilization Analysis,
Including Recommendations to the City Council to Not Expand the Rental Registry Program to
Properties with Two or Fewer Units and to Defer Further Consideration of a Possible Rent
Stabilization Ordinance.CEQA: Exempt pursuant to CEQA Guidelines Section 15061(b)(3).
RECOMMENDATION
Staff recommend that the Policy and Services Committee discuss and provide feedback on the
findings from the first year of the rental registry program andthe related rent stabilization
analysis, and recommend the Council defer indefinitely:
a) an expansion of the rental registry program to properties with two and fewer units, and
b) further analysis or preparation of a draft ordinance related to possible implementation
of a local rent stabilization policy.
EXECUTIVE SUMMARY
This report presents the Rental Registry Program's first year findings andresponds to Council
direction to analyze the feasibility of a local rent stabilization ordinance and evaluate expanding
the Rental Registry Program to properties with two or fewer units.
The Rental Registry Program registered 95.4% of covered properties and 97.9% of covered units
in its inaugural year, with 414 properties and 7,653 unitsregistered. Key findings based on
landlords’ self-reported data include a 5.21% vacancy rate, median monthly rents for non-
discounted market rate unitsranging from $2,095 (studio) to $4,495 (three-bedroom), and
moderate rent increase activity with almost two thirds of market rateunits reporting no change
in rent.Detailed Program Year 1data is provided in Attachment A.
Regarding rent stabilization, thisreport examines state legal protections and constraints, the
effects of local rent stabilization measures in peer cities, and resource requirements. The Costa-
Hawkins Rental Housing Act significantly limits which units a local ordinance could regulate, and
2
the Tenant Protection Act already caps rent increases for most of those units. A local program
would require a conservatively estimated $2 million annual budget, including five new full-time
employees, in direct costs, which may eventually be cost recovered in part or in full through
higher rental program fees. Staff do not recommend pursuing a rent stabilization ordinance at
this time given the other competing priorities and the significant implementation resource
needs.
Staff similarly recommend deferring expansion of the Rental Registry Program to properties
with two or fewer units, pending further program maturation and improved fiscal conditions.
BACKGROUND
In November 2021, City Council directed staff to bring a proposal and discussion on “expanding
anti-gouging measures to address loopholes” to the Policy and Services Committee, referencing
gaps in coverage from California’s Tenant Protection Act of 2019, which introduced statewide
rent stabilization.1 In 2024, Council directed staff to prepare an analysis for a possible anti rent-
gouging policy.2
On December 9, 2024, staff held a preliminary discussion on this topic with the Housing Ad Hoc
Committee. Staff reviewed state law with the Housing Ad Hoc Committee and explained the
limits on local regulation imposed by the Costa-Hawkins Rental Housing Act of 1995 (Costa-
Hawkins), which precludes the City from implementing the kind of expansive local rent
stabilization program that would cover all units not regulated by the Tenant Protection Act. The
Housing Ad Hoc Committee discussed and deferred the matter until the first year Rental
Registry Program data was able to help inform the discussion. The Housing Ad Hoc has since
disbanded, and Council directed staff to engage the Policy and Services Committee for
additional consideration.
City Council established the Rental Registry Program (PAMC Chapter 9.65) to collect data on
Palo Alto's residential rental landscape, support data-informed policy decisions, promote
awareness of renter protections, and advance the City's Housing Element goals. The inaugural
registration period opened October 1, 2024, and focused on rental properties with three or
more units.
The program achieved a 95.4% property registration rate (414 of 434 properties) and a 97.9%
unit registration rate (7,653 of 7,821 units) by the close of the extended grace period on April 6,
1 See action minutes from November 29, 2021 Council meeting for details and other direction from Council on
renter protection policies:
https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=42829&dbid=0&repo=PaloAlto
2 See 2024 Council Objective #55: https://www.paloalto.gov/files/assets/public/v/1/2024-council-priorities-
objectives-4-30_final.pdf
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2025. Registration fees were waived for Program Year 1; the Program Year 2 fee is $35.00 per
unit, with exemptions for owner-occupied units and 100% affordable housing properties.
Key findings from registered properties include: an occupancy rate of 94.8% and a vacancy rate
of 5.21%; a rental stock comprised of more studio and one-bedroom units (58.89% combined)
than larger units, with units of three or more bedrooms comprising just 5.97% of inventory; and
a building stock where nearly half of units (49.52%) were constructed between 1960 and 1979.
Over half of current renters (53.73%) began their tenancy within the prior three years. Median
monthly rents for non-discounted market rate units ranged from $2,095 for a studio to $4,495
for a three-bedroom unit. Almost two thirds of market rate units (62.85%) reported no change
in rent, while approximately one quarter of renters (25.57%) experienced a rent increase of
between 0% and 5% and one tenth of renters (10.94%) experienced a rent increase above 5%.
Detailed program data and administrative implementation notes from Program Year 1 are
provided in Attachment A. Data and analysis from Program Year 2 are forthcoming.
In addition to directing the Program Year 1 focus on properties with three or more units,
Council's November 27, 2023 action establishing the Rental Registry Program included direction
for staff to return with an evaluation of potentially expanding the program to all rental
properties, including single-family homes and properties with two or fewer rental units. The
American Community Survey estimates approximately 4,305 rental units on such properties in
Palo Alto, with roughly 4,116 being single-family residences 3. Staff's assessment of this
direction is discussed in the analysis section below.
ANALYSIS
State law protects many renters from certain rent increases under the Tenant Protection Act of
2019 (TPA). At the same time, Costa-Hawkins significantly limits the City’s ability to impose local
rent stabilization.
For covered units, the TPA restricts annual rent increases for units to either 10% or 5% plus the
percentage change in the cost of living (whichever is lower). Notable exemptions include units
built in the last 15 years, units already protected by affordability restrictions, and certain single-
family homes.
Costa-Hawkins places significant limitations on the scope of local rent stabilization programs.
Specifically, it prevents local governments from regulating the residential rent of single-family
homes, condos, or any units built after February 1, 1995.
3 U.S. Census Bureau, U.S. Department of Commerce. "Tenure by Units in Structure." American Community Survey,
ACS 5-Year Estimates Detailed Tables, Table B25032,
https://data.census.gov/table/ACSDT5Y2023.B25032?t=Units+and+Stories+in+Structure&g=160XX00US0655282.
Accessed on 24 Feb 2026
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Costa-Hawkins also requires local rent stabilization programs to include vacancy decontrol –
that is, when a tenancy ends, a landlord must be allowed to set the initial rent for the next
renter notwithstanding local caps.
There were three unsuccessful ballot initiative attempts (2018, 2020 and 2024) to repeal Costa-
Hawkins and therefore reduce barriers to local rent stabilization policies. Meanwhile, the TPA
was enacted in 2019 and expanded in 2023.
If Palo Alto were to establish a local rent stabilization program, it would be limited to following
protections for rental households:
1) Lowering allowed annual rent increases and/or establishing a tenant-initiated rent
increase petition program for units already protected under existing state law, such as:
x Units on market-rate, multi-family properties built before February 1, 1995.
2) Expanding rent stabilization protections to units not protected by existing state law,
such as:
x Affordable housing units not covered by AB 846;
x Duplexes built before February 1, 1995 where one unit is owner-occupied;
x Mobile homes; and/or
x Dorms built before February 1, 1995 (N/A in Palo Alto).
Effects of Local Rent Stabilization Measures
Public and academic opinions on the effects of local rent stabilization measures are mixed.
Furthermore, findings on the effects (positive and negative) of rent stabilization programs vary
by program and by source.
Supporters highlight that those living in units which can be regulated under local rent
stabilization programs benefit generally from increased predictability in housing expenses,
reduced displacement risk, and the promotion of lasting community connections. There is data
that confirms that cities with local rent stabilization policies have lower citywide rates of
residential mobility, however it remains unclear how reduced mobility may affect tenant
welfare.4 In some cases, it may prevent displacement, in others it may limit housing choices
and/or necessitate long commutes.5
Local rent stabilization programs can also provide renters with more direct benefits and
services. For example, Alameda’s rent program refunded $125,918 in invalid rent increases to
4 Chris Alvarez Campbell, Derek Hyra & David J. Schwegman (21 Nov 2025): Evaluating Rent Control Intensity in
California Cities, 2010–2019, Housing Policy Debate, DOI: 10.1080/10511482.2025.2582717
5 Chris Alvarez Campbell, Derek Hyra & David J. Schwegman (21 Nov 2025): Evaluating Rent Control Intensity in
California Cities, 2010–2019, Housing Policy Debate, DOI: 10.1080/10511482.2025.2582717
5
80 different rental households in 2024.6 Similarly, Mountain View’s expansive Rent Stabilization
Program reported offering free legal assistance to 51 households through their Housing and
Eviction Help Center in 2022-2023.7 Palo Alto could offer similar direct benefits to those in
covered units, if it were to adopt a local rent stabilization program.
Opponents argue that local rental stabilization programs can have many unintended, negative
consequences. A 2018 policy brief developed by the Terner Center for Housing Innovation at UC
Berkeley confirmed that there is a significant body of literature showing rent controls without
vacancy decontrols – such as those established before Costa-Hawkins was passed in 1995 –
constrain new housing supply and lead to the removal of existing units from the market 8.
However, the data related to the negative consequences of programs with vacancy decontrol is
less clear. A 2025 study of multiple California cities with local rent stabilization programs with
vacancy decontrol found no consistent or significant relationships between the intensity of local
rent stabilizations measures and the citywide rental supply.9 On the other hand, the same study
did find evidence that cities with local rent stabilization policies had median rents $39 higher
than similar cities without these policies, but the relationship was not statistically significant.10
In some cases, there seems to be conflicting data around the potential negative consequences
of rent stabilization. For example, opponents argue that limited income potential may
disincentivize property owners from investing in maintaining or improving their rental units.11,12
Findings from a recent mail survey in Berkeley seem to support this argument with 65% of
renters in rent-stabilized units reporting that their unit was in the same condition as when they
moved in and 62% of renters considering their unit to be in good or excellent condition.13
However, a 1994 report conducted by the City of Berkeley’s Planning and Development
department analyzed the number and value of permits obtained before and during a period of
6 City of Alameda, City Attorney’s Office. Rent Program Annual Report 2024.
2024. https://www.alamedarentprogram.org/files/sharedassets/housingauth/v/1/resources/2024-rent-program-
annual-report.pdf (accessed February 19, 2026).
7 City of Mountain View Rent Stabilization Program. Annual Report FY 2022–23. January 26,
2024. https://issuu.com/mountainviewrentstabilization/docs/2024.1.26_annual_report_fy_22-23_pdf (accessed
February 19, 2026).
8 “Finding Common Ground on Rent Control: A Terner Center Policy Brief.” Terner Center for Housing Innovation at
UC Berkeley. May 2018. https://ternercenter.berkeley.edu/wp-
content/uploads/pdfs/Rent_Control_Paper_053018.pdf (accessed February 25, 2026).
9 Campbell, C. A., Hyra, D., & Schwegman, D. J. (2025). Evaluating Rent Control Intensity in California Cities, 2010–
2019. Housing Policy Debate, 1–25. https://doi.org/10.1080/10511482.2025.2582717
10 Campbell, C. A., Hyra, D., & Schwegman, D. J. (2025). Evaluating Rent Control Intensity in California Cities, 2010–
2019. Housing Policy Debate, 1–25. https://doi.org/10.1080/10511482.2025.2582717
11 “The Effects of Rent Control Expansion on Tenants, Landlords, and Inequality: Evidence from San Francisco.”
Diamond, Rebecca, McQuade, Tim, & Qian, Franklin. 4 March, 2019.
12 National Apartment Association. “10 Unintended Consequences of Rent Control Policies.”
https://naahq.org/news/10-unintended-consequences-rent-control-policies (accessed February 19, 2026).
13City of Berkeley Rent Stabilization Board. 2022 Tenant Survey: Presentation and Results.
2022. https://rentboard.berkeleyca.gov/sites/default/files/documents/2022%20Tenant%20Survey%20Presentatio
n%20and%20Results.pdf (accessed February 19, 2026).
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strong rent controls from 1979 to 1991 and found that there was no evidence that rent controls
reduced expenditures on repairs below pre-rent control levels.14
It is important to note that vacancy decontrol requirements under Costa-Hawkins may also
create incentives that work against the goals of many rent stabilization programs. Specifically,
to regain access to market rents, property owners may be incentivized to threaten or pursue
evictions of long-standing tenants.15 A study of San Francisco eviction filing rates from 2003 to
2013 found that living in a rent-controlled unit increases the likelihood of a tenant’s eviction by
approximately 127% per year.16 According to this study’s authors, this “finding is best
understood not as an inherent characteristic of rent control policy in general, but rather as the
result of specific state-wide laws, passed in the years following the adoption of rent control in
San Francisco, which granted rent-controlled property owners an economic incentive to evict
and the legal means to do so.”17 A local rent stabilization program in Palo Alto would be subject
to the same state-wide laws.
In conclusion, numerous arguments exist both for and against local rent stabilization, but most
lack strong, conclusive data to support them.
Resource Requirements
Staff reviewed recent rent stabilization program operating data from a variety of cities to
determine the resources required to administer different programs. Based on published data
from the peer cities of San Leandro, Mountain View, Alameda and Berkeley, local rent
stabilization programs required dedicated teams of anywhere from six to 29 full-time
employees and total program budgets up to and over $9 million annually. These programs
provided varying levels of services to up to 40,000 units and all had program fees to offset the
program costs at least partially. Staff estimates that expanding Palo Alto’s Rental Registry
Program to include rent stabilization would require approximately five additional full-time staff,
approximately $2 million in additional funding. Net program cost would depend on fees
assessed and based on other organizations, cost recovery is estimated to ramp up over 2-6
years.
14 City of Berkeley Planning Department. Historical Berkeley Rent Control, 1978–1994 (Planning Department
report). 1998. https://rentboard.berkeleyca.gov/sites/default/files/2022-
01/Historical_Berkeley_Rent_Control_1978-1994_1998_Planning_Dept_report%20%281%29.pdf (accessed
February 19, 2026).
15 Gardner, M., & Asquith, B. (2025). The Effect of Rent Control Status on Eviction Filing Rates: Causal Evidence
From San Francisco. Housing Policy Debate, 35(2), 334–354. https://doi.org/10.1080/10511482.2024.2393629
16 Gardner, M., & Asquith, B. (2025). The Effect of Rent Control Status on Eviction Filing Rates: Causal Evidence
From San Francisco. Housing Policy Debate, 35(2), 334–354. https://doi.org/10.1080/10511482.2024.2393629
17 Gardner, M., & Asquith, B. (2025). The Effect of Rent Control Status on Eviction Filing Rates: Causal Evidence
From San Francisco. Housing Policy Debate, 35(2), 334–354. https://doi.org/10.1080/10511482.2024.2393629
7
The need for additional funding for a potential rent stabilization program should be balanced
against the City's current fiscal constraints and its efforts to prioritize resources. While program
costs could eventually be recovered, doing so comes at the expense of the landlord, who may
pass these costs through to the tenant despite anticipated local efforts to limit such pass-
throughs. Establishing a rent stabilization program is a significant undertaking requiring
specialized functions, administrative procedures, adjudication, and enforcement. Standing up
the program would require considerable staff time across several city departments, diverting
resources from other priorities at a time when the City is focused on reducing rather than
expanding its workforce.
A brief summary of peer jurisdiction’s rent stabilization programs and commensurate resource
needs are below.
Summary of Peer Program Resourcing
San Leandro established a new rent stabilization and registry program in February 2026. The
program will have six full-time employees in addition to the City’s existing five-person Rent
Board.18 The program requires a $1.3 to $2.2M General Fund loan to initiate both the rent
stabilization and rent registry portions of the program.19 The program will register and
regulate rents for approximately 7,700 units beginning this year.20 San Leandro staff
anticipate the program will achieve full cost recovery though collected program fees over the
next three to six years.21
Mountain View offers another relevant case study. The Rent Stabilization Division of the
Housing Department has 8 full-time employees and supports the City’s five-person Rental
Housing Commission. The Division currently has an approved annual budget of approximately
$2.6M, with recent annual revenues totaling $1.8M.22 Mountain View’s program registers
and regulates rents for approximately 14,500 units.23
18 City of San Leandro, Community Development Department, First Reading of an Ordinance to Amend the San
Leandro Municipal Code by Adding Chapter 4-46 to Establish Residential Rent Stabilization,
https://sanleandro.legistar.com/ViewReport.ashx?M=R&N=Text&GID=191&ID=6605505&GUID=BB2A856A-77CB-
4893-885E-603BADCC2F95&Title=Legislation+Text (accessed February 19, 2026).
19 ibid
20 City of San Leandro, Community Development Department, Draft Residential Rent Stabilization Ordinance and
Preliminary Cost Options, https://www.sanleandro.org/DocumentCenter/View/14185/Powerpoint_101325_Draft-
Rent-Stabilization-Ordinance?bidId= (accessed February 19, 2026).
21 City of San Leandro, Community Development Department, First Reading of an Ordinance to Amend the San
Leandro Municipal Code by Adding Chapter 4-46 to Establish Residential Rent Stabilization,
https://sanleandro.legistar.com/ViewReport.ashx?M=R&N=Text&GID=191&ID=6605505&GUID=BB2A856A-77CB-
4893-885E-603BADCC2F95&Title=Legislation+Text (accessed February 19, 2026).
22 City of Mountain View, City Manager, Adopted Budget Fiscal Year 2025-26,
https://www.mountainview.gov/home/showpublisheddocument/12247/638950076197470000 (accessed
February 19, 2026).
23 City of Mountain View, Rent Stabilization Division, Activity Report Fiscal Year 2025-26,
https://issuu.com/mountainviewrentstabilization/docs/rent_stabilization_division_report_fy_25-26 (accessed
February 19, 2026).
8
Alameda’s rent program registers and regulates rents for approximately 16,500 units.24 The
program has five full-time staff housed in the City Attorney’s Office. The current annual
expenses associated with the program total $2M.25 Alameda collected $1.8M in Rent Review
Fee revenue in 2022.26 Petitions and similar issues are resolved by hearing officers and/or the
program administrator.
Berkeley’s Rent Board is supported by 29 full-time employees.27 The program registers and
regulates rents for 40,000 units 28 with a FY 2025-2026 annual budget of just over $9M.29 The
Rent Board reported revenue of just under $7M in FY 2023-2024.30 Berkeley’s Rent Board is
made up of nine elected commissioners.31
Program Considerations
By law, any rent stabilization program must allow a landlord to make a fair return on their
investment. The following program components ensure landlords can make a fair return, as
required:
x Annual general adjustments: Automatically allowed increases in rent based on a
formula determined by ordinance or rent board.
24 City of Alameda, City Attorney’s Office. Rent Program Annual Report 2024.
2024. https://www.alamedarentprogram.org/files/sharedassets/housingauth/v/1/resources/2024-rent-program-
annual-report.pdf (accessed February 19, 2026).
25 City of Alameda, City Attorney, “FY 2023-25 Biennial Budget”,
https://stories.opengov.com/alamedaca/published/KHkeRFzR4J (accessed February 19, 2026).
26 City of Alameda, “FY 23-25 Budget Summaries: Rent Review Fee”,
https://alamedaca.opengov.com/transparency#/69813/accountType=revenues&embed=n&breakdown=types&cur
rentYearAmount=cumulative¤tYearPeriod=years&graph=bar&legendSort=desc&proration=true&saved_vie
w=255143&selection=BD4055BF9DE56E9E99F25064297A4AB0&projections=null&projectionType=null&highlightin
g=null&highlightingVariance=null&year=2025&selectedDataSetIndex=null&fiscal_start=earliest&fiscal_end=latest
(accessed February 19, 2026).
27 City of Berkeley, Rent Stabilization Board, Recommendation to Board on FY 2025/26 Line-Item Budget, Staffing
Model & Expenditure Level,
https://rentboard.berkeleyca.gov/sites/default/files/documents/Budget_Rent_Board_Staff_Report.pdf (accessed
February 19, 2026).
28 City of Berkeley Rent Stabilization Board. “About/Contact Us.”
https://rentboard.berkeleyca.gov/services/aboutcontact-us (accessed February 19, 2026).
29 City of Berkeley, Rent Stabilization Board, Recommendation to Board on FY 2025/26 Line-Item Budget, Staffing
Model & Expenditure Level,
https://rentboard.berkeleyca.gov/sites/default/files/documents/Budget_Rent_Board_Staff_Report.pdf (accessed
February 19, 2026).
30 ibid
31 City of Berkeley Rent Stabilization Board. “Elected Rent Board.” https://rentboard.berkeleyca.gov/elected-rent-
board (accessed February 19, 2026).
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x Landlord-Initiated Petitions: Ability to petition for a greater increase if landlord is
unable to make fair return on their investment from the annual general adjustment.
Programs may optionally include tenant-initiated petitions to help tenants resolve concerns
such as an unlawful rent increase, failure to maintain a habitable premise, or a reduction in
housing services.
To administer these various program components, some cities primarily used their own staff
while others engaged consultants to provide customer support, legal services, administer
hearings, conduct mediations and/or complete property inspections. Some cities used either an
appointed or elected rent board with staff support to hear cases instead of hearing officers.
The City currently offers tenants and landlords (and all community members) access to free,
confidential and impartial mediation services through the Palo Alto Mediation Program to
resolve disputes.32 The Palo Alto Mediation Program is administered by Project Sentinel, a local
nonprofit, on behalf of the City. Chapter 9.72 of the Palo Alto Municipal Code requires landlords
to register with the City and requires parties to respond in many types of disputes involving
rental housing properties.33 Funding from the City is provided annually to support Project
Sentinel.
Rental Registry Program Data Considerations
Viewed alongside the preceding analysis of state law, the effects of rent stabilization measures,
and the resource implications of program administration, the Program Year 1 data offers
additional context. Ultimately, none of the below findings are intended to suggest that
affordability pressures do not exist for Palo Alto renters. Pressures clearly exists in a market at
these price points. Staff’s interpretation of the data in aggregate does not appear to
demonstrate a pattern of widespread, acute rent increases that would warrant standing up a
new local regulatory program.
When considered alongside Palo Alto's limitations under California's Costa-Hawkins Rental
Housing Act, the protections already afforded to many renters through the TPA and expanded
local just cause eviction protections beyond those required by state law under the TPA, and the
relatively narrow universe of units a local ordinance could reach, the practical impact of a rent
stabilization program would be limited. Paired with the significant resource requirements of
establishing such a program and the budgetary constraints currently projected for FY 2026 and
beyond, staff recommend indefinitely deferring implementation of a rent stabilization program
at this time.
Current Data Considerations Summary: Of the 5,174 units included in the rent increase analysis,
approximately one quarter of units (1,323 units; 25.57%) were reported with a rent increase of
32 Palo Alto Mediation. “Home.” https://www.paloaltomediation.com/home (accessed February 19, 2026).
33 City of Palo Alto. “Landlord Resources”. https://www.paloalto.gov/City-Hall/Housing/Tenant-Landlord-Resources/Landlord-
Resources (accessed February 19, 2026).
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between 0% and 5% and one tenth of units (566 units; 10.94%) were reported with a rent
increase above 5%. Nearly two-thirds of units (62.85%) were reported with no change in rent.34
A very small percentage (3 units in total) reported a rent decrease. See Exhibit 1 Figure 9 and
Table 7 in Attachment A for more information.
Arguably, these findings suggest that existing state protections aimed at keeping rent increases
below 10% (or 5% plus the percentage change in cost of living, if that’s lower) for covered units
are functioning largely as intended for the majority of Palo Alto's registered rental units.
Further analysis would be needed to determine what percentage of units that reported a most-
recent rent increase over 5% may have violated state law.35
A meaningful share of the rental stock already operates with some form of market adjustment
based on the self-reported data. About 26% of renter-occupied units carry deed restrictions,
rental assistance, or informal rent discounts, which may reduce the practical reach of additional
rent regulation on the units most in need of affordability protections.
The age of the housing stock is also a relevant consideration. With 74% of registered units in
buildings constructed before 1980, property owners face rising maintenance and potential
retrofit costs. Staff has heard directly from property owners that the market is price-sensitive
and that even modest cost increases are difficult to absorb. Constraints on rent adjustments
could, over time, affect the capacity to maintain these aging properties, a concern that takes on
added significance as the City explores mandatory retrofitting requirements for seismically
vulnerable buildings, which may represent a substantial additional cost obligation for many of
these same property owners.
Palo Alto renters also benefit from existing local protections beyond TPA. The City's ordinance
requiring landlords to offer one-year leases provides tenants with 12 months of rent
predictability at each lease term, addressing one of the more common concerns that rent
stabilization is designed to resolve.
Rental Registry Program Expansion
With respect to Council's direction to evaluate expanding the Rental Registry Program to
include single-family homes and properties with two or fewer rental units, staff recommend
deferring this expansion indefinitely. Program Year 1 was the City's first year administering the
registry, and the process surfaced a number of operational refinements, including unit count
36 Rental Registry Program participants were asked to report both the date and amount of the last rent increase for each unit.
Many participants reported a “$0.00” rent increase for a unit and a corresponding date in the past, confirming that the unit had
not experienced rent increases since that date. For example, reporting of “$0.00” for a rent increase frequently coincided with
known tenancy start dates, meaning that there was no change in rent since initial occupancy. However, some renters have
tenure lengths longer than the date of last rent increase reported as “$0.00,” so it is unknown if those renters had a rent
increase at some point earlier in their tenure.
35 In order to complete this analysis, staff would need to compare the rent increase amount to the TPA rent cap at the time the
rent was increased and then determine that the rent increase occurred in a covered building and was not associated with any
tenancy changes.
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verification against Santa Clara County Assessor data, registration notification challenges
associated with property sales, clarifications around senior housing and condominium
registration requirements, and the deployment of new reporting and payment functionality.
Program Year 2 is the first year in which returning participants are updating existing
registrations, paying the newly adopted registration fee, and using improved event-based
reporting tools. Staff believe it is prudent to allow these processes to mature and stabilize
before introducing a significantly larger population of property owners into the program.
Indeed, the estimated 4,305 units on properties with two or fewer units, predominantly single-
family residences, would require coordination with a substantially larger number of individual
property owners, many of whom may be owner-occupiers who would be exempt from
registration fees and/or would be navigating the program for the first time. Staff have
previously identified that expansion at this scale would require at least one additional full-time
employee.
FISCAL/RESOURCE IMPACT
The recommendation in this report does not have any budget or fiscal impact. However, if Palo
Alto were to pursue a local rent stabilization program or expand the Rental Registry Program
(RRP), it would need to be resourced. Because rental registries are often tied to rent
stabilization programs, many cities fund their rent stabilization program partially or entirely
through rental registry fees. The City’s current Rental Registry Program fee of $35 per unit in
Palo Alto supports approximately one full-time employee and specialized contract work needed
to run the rental registry program at its existing scale. The RRP is currently focused on
establishing and maintaining a multi-family rental unit inventory and does not regulate rents.
This program’s fee for covered units would need to be significantly increased if it were to be the
sole funding source to develop, implement and enforce a local rent stabilization program.
Based on a rough analysis, staff estimate that covered units may need to pay a fee up to or
above $300.00 per unit 36 in order to achieve full cost recovery for an expanded program. While
staff estimate that approximately five additional staff may be needed to run a rent stabilization
program in Palo Alto, the final size of the team needed would be based upon the number of
registered units (which would increase if the program were to be expanded to one- and two-
unit properties), the complexity of the program, the level of customer support provided to both
renters and landlords, the potential use of contracted services, enforcement procedures, and
other factors.
STAKEHOLDER ENGAGEMENT
This agenda item was publicly noticed as part of the March 10, 2026, Policy and Services
Committee meeting. City staff maintains a list of groups and individuals interested in renter
36 For reference, Berkeley currently charges $344 per fully covered unit, Richmond charges $267 per fully covered
unit and Alameda currently charges $170 per fully covered unit.
12
protection policy development and the implementation of the rental registry program; an email
advertising the March 10, 2026 Policy and Services Committee meeting and discussion on this
topic was sent to this list after publication of this report. Staff also sent targeted emails to
representatives at the California Apartment Association, Alliance of Californians for Community
Empowerment, Public Advocates, Tenants Together, Palo Alto Forward and Silicon Valley at
Home after publication of this report. Lastly, staff sent an email after the publication of this
report to all property owners and/or representatives who have participated in the Rental
Registry Program to date, upon the publication of this staff report to inform them of this
upcoming policy discussion.
ENVIRONMENTAL REVIEW
Committee action on this item is exempt from review under the California Environmental
Quality Act (CEQA) pursuant to CEQA Guidelines Section 15061(b)(3), as it can be seen with
certainty that discussion and direction regarding regulation of residential rental units will not
have a significant effect on the environment.
ATTACHMENTS
Attachment A: Program Year 1 (FY 2024-2025) Summary Report
APPROVED BY:
Jonathan Lait, Planning and Development Services Director
Page 1
CITY OF PALO ALTO
RENTAL REGISTRY PROGRAM
Program Year 1 (FY 2024–2025) Summary Report
Program Overview
City Council established the Rental Registry Program by adopting Palo Alto Municipal Code (PAMC)
Chapter 9.65. The program serves four purposes: understanding the residential rental landscape as
experienced by renters and landlords; supporting data-informed policy decisions that protect
public health, safety, and welfare; promoting community awareness of existing renter protections;
and supporting the City’s Housing Element goals for rental unit protection, preservation, and
production.
The City launched its inaugural registration period on October 1, 2024, running through January
15, 2025, with a grace period extended through April 6, 2025. Per City Council direction, Program
Year 1 focused exclusively on rental properties with three or more units. All information was self-
reported by property owners and property managers. Please see Exhibit 1 to this report for
additional program data analysis.
Registration Results
The program achieved a 95.4% property registration rate (414 of 434 properties) and a 97.9% unit
registration rate (7,653 of 7,821 units) by the close of the grace period on April 6, 2025. See the
summary table below or Exhibit 1 Table 1 for more information.
Registration Status Properties Units
Total Required 434 7,821
The majority of registrations were completed later in the registration period; only 55% of
properties (237) and 33% of units (2,581) completed by the initial January 15, 2025 deadline. The
remaining registrations arrived steadily through the extended grace period. Staff conducted
outreach through postcards, registration letters, direct email campaigns, staff-hosted workshops,
and one-on-one customer service. Only four properties did not complete registration by the close
of the grace period and received administrative citations.
Page 2
The 16 exempted properties (an estimated 148–162 units) were deferred to Program Year 2
because recent property sales resulted in new owners not receiving registration notice letters.
Key Findings from Registered Properties
Occupancy and Vacancy Rates
Of the 7,653 registered units, 94.79% were occupied and 5.21% were vacant. Among occupied
units, 93.13% were occupied by renters, 0.98% by property managers, 0.48% by owners, and
0.20% by rent-free occupants. Among vacant units, 3.68% were available for rent and 1.53% were
not available for rent. See Exhibit 1 Table 3 and Figure 1 for more information.
Unit Diversity
The registered rental stock is predominantly composed of smaller units. Studios and one-bedroom
units together account for 58.89% of all registered units. Two-bedroom units represent another
35.14%. Units with three or more bedrooms constitute 5.97% of the inventory. See the summary
table below or Exhibit 1 Table 4 and Figure 2 for more information.
Unit Type Avg. Size (sq ft)Units % of Total
Age of Building Stock
The registered rental stock spans buildings constructed from 1893 through 2022. Nearly half of all
registered units (3,790 units; 49.52%) were built between 1960 and 1979, and nearly three fourths
of registered units were built before 1980 (5,701 units; 74.49%). Only 1,203 registered units
(15.72%) are in buildings constructed after 2000. See Exhibit 1 Figure 3 for more information.
Properties that are 15 years old or newer are exempt from the rent stabilization provisions of the
California Tenant Protection Act of 2019 (TPA).
Amenities, Services, and Auto Parking
Among the most commonly included amenities for renter-occupied units were outdoor common
space (4,010 units), bicycle parking (3,853 units), laundry (3,650 units), and pool/spa access (3,073
Page 3
units). Utilities included in rent varied: refuse/recycling was included for 2,953 units, water for
2,916, and sewer for 2,233. Internet (347 units) and cable (370 units) were rarely included. EV
charging was available for 924 units. See Exhibit 1 Figure 4 for more information.
Parking was included in rent for 6,932 units (90.58%). An additional 231 units (3.28%) had parking
available for an additional fee and 410 units (6.14%) had no onsite parking offered. See Exhibit 1
Figure 5 for more information.
Stability and Turnover
Over half of current renters (3,834 units; 53.73%) started their tenancy within three years of the
April 2025 registration close. The next largest group (1,283 units; 17.98%) had tenures exceeding
10 years. Approximately 300 renter households (4.21%) have lived in their units for over 20 years.
See Exhibit 1 Figure 6 for more information.
The most common lease arrangement was a one-year lease (66.63%), followed by month-to-
month leases (28.44%). Under Palo Alto Municipal Code Chapter 9.68.030, all landlords must offer
a one-year lease term in writing, but renters or potential renters may decline this offer in favor of
a shorter, negotiated lease term (such as month-to-month).
Rental Discounts and Incentives
Of 7,127 renter-occupied units, 3,889 (54.57%) were market rate units without formal market
adjustments. The remaining 3,238 (45.43%) renter-occupied units received some kind of market
adjustment. Specifically, 981 units (13.76%) were deed-restricted, 554 units (7.77%) were deed-
restricted with rental assistance or subsidies, 418 units (5.87%) had rental assistance or subsidies,
and 1,285 units (18.03%) were market rate but with other rent discount or incentive, such as a
rent concession during the course of the lease term or an employee housing rate. See Exhibit 1
Table 5, Figure 8, and Table 6 for more information.
Rents for Market Rate Units
Rent data can be reported in aggregate for market rate studio, 1-, 2-, and 3- bedroom units. Rent
data for 4- and 5-bedroom units are known but excluded from aggregate reporting due to few and
potentially identifiable numbers. See Exhibit 1 Table 4, Table 5, and Table 6 for more information.
Median monthly rents for non-discounted market rate units were as follows:
Unit Type Median Rent 25th Percentile 75th Percentile
Page 4
3-Bedroom $4,495 $3,993 $4,993
Rent Increases for Market Rate Units and Market Rate Units with Other Rent Discounts
Among the 5,174 market rate units or market rate units with other rent discounts included in rent
increase analysis, almost half of units (2,470 units; 47.64%) reported no change in rent between
October 2022 and April 2025, including units with renters who had been in their unit for less than
one year. Another group of units (787 units; 15.21%) reported no rent increase over an even
longer timeframe, such as since before October 2022 or even beyond five years prior to open
registration. Approximately one-third of units (1,685 units; 32.57%) reported a rent increase
between October 2022 and April 2025. A small number of units (204 units, 3.94%) reported their
last rent increase in the more distant past, since before October 2022 and even beyond five years
prior to open registration.
Of the 5,174 units included in the rent increase analysis, only approximately one quarter of renters
(1,323 units; 25.57%) experienced a rent increase of between 0%-and 5% and approximately one
tenth of renters (566 units; 10.94%) experienced a rent increase above 5%. A very small
percentage, accounting for 3 units in total, reported a rent decrease instead of a rent increase. See
Exhibit 1 Figure 9 and Table 7 for more information.
Some reported rent increases may exceed Tenant Protection Act of 2019 (TPA) limits (5% plus local
CPI, or 10%, whichever is lower). However, the program data notes that caution is warranted in
interpreting these figures: the TPA does not apply to all units, allowable percentages vary year to
year, and some data entry errors may remain in this initial round of self-reported information.
Additionally, it is likely that some of the larger recent rent increases reported in Program Year 1
were associated with a change in tenancy, which is allowed under the TPA; however, change in
tenancy data was not collected during Program Year 1. Staff introduced an occupancy/tenancy
change reporting form in Program Year 2 to better understand the nature of reported rent
increases going forward.
Geographic Distribution
Most registered rental units were located within a half-mile of a commercial area (88.1%) and a
public park (77.6%). The majority of units (59.5%) were within a half-mile of a public school and
were within 500 feet of an arterial road (62.2%). Proximity to transit was lower: 27.4% of units
were within a half-mile of a Caltrain station and 33.0% were within a half-mile of a major bus stop.
Program Administration and Implementation Notes
Data Quality
The initial property inventory relied on Santa Clara County Assessor data. Staff identified minor
unit count discrepancies on approximately 30% of properties, which were resolved through
Page 5
systematic verification during registration review. Property owners and property managers reliably
reported accurate unit counts with no instances of over- or underreporting identified.
Property Inventory Refinement
The initial inventory methodology did not capture all 3+ unit rental properties. Staff identified
additional properties, primarily smaller rental properties and those in non-residential zoning
districts, estimated at approximately 852 units across roughly 229 properties. These have been
added to the inventory for Program Year 2.
Registration Clarifications
During implementation, staff clarified several registration requirements. Properties with three or
more units where the owner or manager occupied some units were still required to register.
Condominiums where a single owner holds three or more units and rents at least two were also
included. Units lacking independent cooking, bathing, or sleeping facilities (such as certain Junior
Accessory Dwelling Units) and units in hospitals, skilled nursing facilities, or continuing care
retirement communities were determined not to require registration.
Senior housing presented particular complexity. Some units, while residential in form, either
shared core living facilities or included individualized healthcare services in their rates. These were
exempted through a City-administered affidavit verification process.
Registration Fees
Program Year 1 registration fees were waived by City Council direction. For Program Year 2, City
Council approved a registration fee of $35.00 per unit, with exemptions for owner-occupied units
and units on 100% affordable housing properties. Staff has received feedback from property
owners that the Palo Alto rental market is price-sensitive and that the fee, combined with other
rising costs, may be impactful.
Event-Based Reporting
In addition to annual registration, the program requires property owners to report certain events
as they occur: rent increases, notices to quit, unlawful detainers, and evictions. Rent increases are
the most frequently reported event. Some property owners expressed unfamiliarity with these
requirements, and staff received complaints questioning the need for event-based reporting. In
response, staff released improved reporting forms, clearer rent increase reporting, and a new
optional rent decrease form.
Looking Ahead: Program Year 2
Page 6
Program Year 2 (FY 2025–2026) registration opened on October 1, 2025, with the annual open
registration period running through January 15, 2026. The City extended a grace period through
February 16, 2026 and is presently preparing to send administrative citations to unregistered
properties. The program continues to focus on properties with three or more units.
Program Year 2 incorporated the 16 properties previously exempted due to recent property sales
(148–162 units), as well as the approximately 229 additional properties (~852 units) identified
through improved inventory methodology during Program Year 1, and two newly constructed
properties (160 units).
City Council previously directed staff to evaluate potential expansion of the program to all rental
properties, including single-family homes and properties with two or fewer units. The American
Community Survey estimates approximately 4,305 rental units on such properties, with an
estimated 4,116 being single-family residences. Staff has noted that expansion at this scale would
represent a more than 600% increase in the number of property owners requiring coordination
and would require additional staffing. Based on FY 2025–2026 budget discussions, no additional
staffing was requested, and Program Year 2 has proceeded without this expansion.
As the Rental Registry Program’s online portal retains baseline registration information from
Program Year 1, staff anticipate a less time-intensive update process for returning participants,
though learning the new fee payment module will be part of the Year 2 experience.
Attachments
Exhibit 1: Program Year 1 (FY 2024-2025) Supplemental Program Data
-2025) SUPPLEMENTAL PROGRAM DATA 1
Exhibit 1
CITY OF PALO ALTO
RENTAL REGISTRY PROGRAM
PROGRAM YEAR 1 (FY 2024-2025)
SUPPLEMENTAL PROGRAM DATA
October 30, 2025
Planning & Development Services Department
Rental Registry Program
rentalregistry@paloalto.gov
-2025) SUPPLEMENTAL PROGRAM DATA 2
Property Inventory and Registration Status
Table 1: Rental Registry Program - Program Year 1 Property Registration Status (as of April 6, 2025)
Registration Status Number of Properties Number of Units
Properties in Completed Registration Status 414 Properties (95.4%) 7,653 units (97.9%)
Properties in Open Registration Status/Payment Pending 4 Properties (0.9%)
Properties Exempted from Program Year 1 Registration Requirement 16 Properties (3.7%)* 148 Units (1.9%)*
Total Number of Properties in RRP Requiring Program Year 1 Registration 434 Properties 7,821 Units
Additional Property Disposition Information
Properties Vetted/Removed from Program Year 1 Property Inventory 6 Properties** N/A
Properties Retained in RRP for Recordkeeping Purposes, but Not Registration 26 Properties*** N/A
Properties/Units Added for Program Year 2 ~229 Properties**** ~852 Units****
Properties/Units Added for Program Year 2 due to New Construction/Occupancy
Notes:
• The anticipated number of rental units in Palo Alto on rental properties with 3+ units (8,673 units) exceeds the American Community Survey estimates (7,545 units), which would be verified at the close of Program Year 2.
• *These properties were exempted from the Program Year 1 registration requirement because property owners did not receive critical registration notice letters because of incorrect contact information due to recent
property sales. Registration of these 16 properties will be required in Program Year 2. The estimated total unit count for these properties ranges from 148 units to 162 units and will be confirmed at Program Year 2
registration.
• **These properties were found to be either residential non-rental/entirely owner occupied (3 properties) or commercial property (3 properties).
• ***These properties are retained in the Rental Registry Program property inventory for administrative/recordkeeping purposes, but not for registration in Program Year 1 or Program Year 2. These properties are retained
because they were either rental properties with two or fewer units (18 Properties) or properties with one or more units as part of a hospital, extended medical care facility, skilled nursing facility, health facility, or continuing
care retirement community (8 Properties).
• ****The unit count for these properties is estimated at ~852 units across ~229 properties.
Table 2: American Community Survey (ACS) Distribution Estimate of Palo Alto Rental Households by Rental Unit Property Type
Mobile
Home
Boat, RV, Van,
etc.
Single Family
Detached
Single Family
Attached Duplex Triplex
and Fourplex
Small Sized
Rental Property
(5 to 9 Units)
Medium Sized
Rental Property
(10 to 19 Units)
Medium Sized
Rental Property
(20 to 49
Units)
Large Sized
Rental Property
(50 or More
Units)
Total
# of Units 89 0 3,289 827 189 715 1,343 1,234 1,621 2,632 11,939
% of Total Units 0.75% 0% 27.55% 6.93% 1.58% 5.99% 11.25% 10.34% 13.58% 22.05% 100%
Source: U.S. Census Bureau, 2019-2023 American Community Survey 5-Year Estimates Table, B25032 Tenure by Units in Structure: https://data.census.gov/table/ACSDT5Y2023.B25032?g=160XX00US0655282.
-2025) SUPPLEMENTAL PROGRAM DATA 3
Occupancy and Vacancy Rates
Table 3: Program Year 1 Occupancy Rate and Vacancy Rate by Occupancy Type (7,653 Registered Units)
Occupant Type Number of Units Percentage Combined Percentages
Occupied by Owner 37 0.48%
Occupancy Rate 94.79% Occupied by Property Manager 75 0.98%
Occupied by Renter 7,127 93.13%
Occupied by Rent-Free Occupant 15 0.20%
Vacant - Available for Rent 282 3.68%
Vacancy Rate 5.21%
Vacant - Not Available for Rent 117 1.53%
TOTAL 7,653 100.00%
Figure 1: Program Year 1 Unit Vacancies by Number of Bedrooms in Unit (399 Registered Units)
-2025) SUPPLEMENTAL PROGRAM DATA 4
Unit Diversity
Table 4: Program Year 1 Rental Units by Number of Bedrooms (7,653 Registered Units)
Unit Type Average Size (sq ft) Number of Units Percentage of Units
Studio ±500 1,197 15.64%
1-Bedroom
2-Bedroom
3-Bedroom
4+-Bedroom +1,500 29 0.38%
TOTAL N/A 7,653 N/A
Figure 2: Program Year 1 Comparison Between Unit Size and Number of Bedrooms in Unit (7,653 Registered Units)
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
0 1 2 3 4 5
Si
z
e
o
f
U
n
i
t
(
S
q
F
t
)
Number of Bedrooms in Unit
-2025) SUPPLEMENTAL PROGRAM DATA 5
Age of Building Stock
Figure 3: Program Year 1 Number of Registered Rental Units Built by Decade (7,653 Registered Units)
-2025) SUPPLEMENTAL PROGRAM DATA 6
Amenities and Services
Figure 4: Program Year 1 Amenities/Services Included in Rent for Renter Occupied Units (7,127 Registered Units)
347
370
2953
2916
2233
982
1036
1562
3650
1459
3853
924
2761
3073
4010
2432
853
0 500 1000 1500 2000 2500 3000 3500 4000 4500
Internet
Cable
Refuse/Recycling
Water
Sewer
Natural Gas
Electricity
Outdoor Private Space
Laundry
Storage
Bicycle Parking
EV Charging
Gym
Pool/Spa
Outdoor Common Space
Indoor Common Space
Community Kitchen
-2025) SUPPLEMENTAL PROGRAM DATA 7
Auto Parking
Figure 5: Program Year 1 Auto Parking Availability for Rental Units (7,653 Registered Units)
-2025) SUPPLEMENTAL PROGRAM DATA 8
Stability and Turnover
Figure 6: Program Year 1 Tenure Length for Renters (7,136 Registered Units)
-2025) SUPPLEMENTAL PROGRAM DATA 9
Figure 7: Program Year 1 Lease Lengths for Renter Occupied Units (7,127 Registered Units)
-2025) SUPPLEMENTAL PROGRAM DATA 10
Occupancy of Market Rate Units and Units with Market Adjustments
Table 5: Program Year 1 Distribution of Market Rate Rental Units Versus Units with Market Adjustments by Occupancy Type (7,653 Registered Units)
Occupancy Type Market Rate Units Market Rate Units with
Other Rent Discount Deed Restricted Units
Deed Restricted Units with
Rental Assistance/
Subsidy
Units with Rental
Assistance/
Subsidy
Other/
Unknown if Market Rate Total
Occupied by Owner - - - - - 37 37
46 10 15 1 3 - 75
Occupied by Renter 3,889 1,285 981 554 418 - 7,127
12 1 2 - 15
Vacant - Available for Rent 22 - 7 3 1 249 282
6 - - - 3 108 117
TOTAL 3,963 1,307 1,003 559 427 394 7,653
Notes:
• Some market rate rental units do not have any rent discounts, whereas others do have some sort of rent discount. Examples of rent discounts in Program Year 1 data include:
o rent concessions, such as a free month during the lease term;
o lower rent rates offered to employees; or
o informal rent discounts, such as a lower rent rate for a family friend or for helping with property maintenance tasks.
• Market rate adjustments include deed-restrictions so that the unit is offered at below the market rate rent at a specified percentage level of area median income.
• Other market adjustments include a unit having some form of subsidy or rental assistance, such as a utility allowance or a Section 8 voucher to cover the difference between what a renter could afford and the market rent for the
unit.
-2025) SUPPLEMENTAL PROGRAM DATA 11
Figure 8: Program Year 1 Distribution of Market Rate Rental Units Versus Units with Market Adjustments by Number of Bedrooms in Unit (7,105 Registered Units)
-2025) SUPPLEMENTAL PROGRAM DATA 12
Rents for Market Rate Units
Table 6: Program Year 1 Median Monthly Rent for Market Rate Units by Number of Bedrooms in Unit (5,164 Registered Units)
Number of
Bedrooms
in Unit
Unit
Rent Type Number of Units Median Q1
(25th %)
Q3
(75th %)
IQR
(Inter-quartile
Range)
Min Max Avg Stnd Dev
Studio
Market Rate Unit 338 $2,095 $1,895 $2,395 $500 $0 $3,825 $2,176 483
Market Rate Unit
with Other Rent 118 $2,223 $2,064 $2,334 $271 $1,590 $3,453 $2,283 449
1
Market Rate Unit 1911 $2,600 $2,300 $3,000 $700 $0 $100,120 $2,757 2311
Market Rate Unit
with Other Rent 547 $2,800 $2,565 $3,330 $765 $1,000 $5,800 $2,971 575
2
Market Rate Unit 1463 $3,295 $2,895 $3,846 $951 $400 $398,508 $3,738 10373
Market Rate Unit
with Other Rent 573 $3,531 $3,291 $4,300 $1,009 $1,630 $6,138 $3,815 672
3
Market Rate Unit 167 $4,495 $3,993 $4,993 $1,000 $1,685 $18,000 $4,862 2265
Market Rate Unit
with Other Rent 47 $5,024 $4,929 $5,120 $191 $2,262 $6,694 $4,914 789
Notes:
• Number of Units is the total number of units included in this group (based on bedroom count and rent type). This tells us how large the sample size is — the bigger the number, the more reliable the rent statistics.
• Median is the "middle" rent value — half of the units rent for less than this amount, and half rent for more. This is often the most accurate reflection of typical rent because it isn’t skewed by outliers.
• Q1 (25th Percentile) shows that a quarter of the units rent for less than this amount. This shows the lower end of the rent range.
• Q3 (75th Percentile) shows that a quarter of units rent for more than this amount. This shows the upper end of the typical rent range.
• IQR (Interquartile Range) shows the range between Q1 and Q3 — it shows where the middle 50% of rents fall. A smaller IQR means rents are more consistent. A larger IQR suggests wider variability in rent pricing.
• Minimum is the lowest rent reported, which may sometimes reflect data errors (like a typo or missing zero). It is to be used as a flag, not a benchmark.
• Maximum is the highest rent reported. Like the minimum, maximum may include typos or unusually high figures, which can skew the average — so it's important to view this in context with the median and IQR.
• Average is the total of all rents divided by the number of units. While average gives a general sense of rent levels, it is sensitive to data errors or extreme values (too high or too low).
• Standard Deviation is a measure of how much rent values vary from the average. A low number means most rents are similar; a high number means there’s a lot of variation — which could reflect different unit sizes, locations, or
data errors.
-2025) SUPPLEMENTAL PROGRAM DATA 13
Rent Increases for Market Rate Units
Figure 9: Program Year 1 Number of Market Rate Units Reported with No Change in Rent by Unit Tenure Length (3,254 Registered Units)
Notes:
• 3,254 units included in analysis; excludes units with rent decreases and date of last increase reporting errors
1277
802
352
184
116
52
56
47
55
37
276
0 200 400 600 800 1000 1200 1400
1 year or less
>1 to 2 years
>2 to 3 years
>3 to 4 years
>4 to 5 years
>5 to 6 years
>6 to 7 years
>7 to 8 years
>8 to 9 years
>9 to 10 years
Over 10 years
Number of Units with No Change in Rent
Un
i
t
T
e
n
u
r
e
L
e
n
g
t
h
-2025) SUPPLEMENTAL PROGRAM DATA 14
Table 7: Program Year 1 Frequency of Rent Increases and Rent Increase Percentage for Market Rate Units (5,174 Registered Units)
Rent Increase Percentage
Rent Increase
Timeframe Date of Last Rent Increase
Rent
Increase
Reporting
Error
Rent
Decrease
No
Change
0% and
1%
1% and
2%
2% and
3%
3% and
4%
4% and
5%
5% and
6%
6% and
7%
7% and
8%
8% and
9%
9% and
10%
Over
10%
Grand
Total
Between
October 2022
and
April 6, 2025
(October 1, 2024 – April 6, 2025) 3 1 641 28 59 102 100 105 62 20 21 40 6 20 1,208
Prior to Open Registration 8 0 1039 21 86 110 122 103 58 28 16 13 23 11 1,638
Prior to Open Registration 4 1 430 13 36 49 71 90 44 17 5 6 11 8 785
Prior to Open Registration 0 0 249 7 15 11 20 27 15 6 8 8 11 1 378
Prior to Open Registration 0 0 111 3 4 8 5 14 10 1 1 1 5 0 163
Before
October 2022
Prior to Open Registration 0 0 181 1 1 5 11 13 5 0 3 7 4 2 233
Prior to Open Registration 0 0 61 0 0 2 1 0 6 2 2 1 0 1 76
Prior to Open Registration 0 0 59 1 0 0 0 1 0 0 0 0 0 0 61
Prior to Open Registration 0 1 49 1 0 0 1 1 0 0 1 1 0 0 55
Prior to Open Registration 0 0 38 0 1 0 1 2 0 0 1 0 0 1 44
Prior to Open Registration 1 0 29 1 7 5 11 4 4 1 3 0 0 2 68
Prior to Open Registration 2 0 370 0 6 8 10 19 24 5 2 0 6 6 458
Date of Last Rent Increase Reporting Error 0 0 5 0 0 0 0 1 0 1 0 0 0 0 7
Grand Total 18 3 3,262 76 215 300 353 380 228 81 63 77 66 52 5,174
-2025) SUPPLEMENTAL PROGRAM DATA 15
Notes:
• For Program Year 1 initial registration, the City asked for the current monthly rent for each unit, as well as the initial monthly rent (if known) and the date and amount of last rent increase. Consequently, the City was able to gather
past rent increase information for Palo Alto rental units.
• This analysis reflects rent increase information gathered between October 1, 2024, through the close of the open registration period on April 6, 2025. Initial findings are provided for studio, 1-bedroom, 2-bedroom, and 3-bedroom
market rate units (5,164 units), both without and with some form of rent discount.
• Reported dates of the last rent increase were sorted into the open registration period of October 1, 2024, through April 6, 2025, and otherwise in half year increments prior to the October 1, 2024, start of open registration.
• The California Tenant Protection Act of 2019 (TPA; AB 1482) came into effect January 1, 2020, during the timeframe included in this analysis. Units regulated by TPA are limited to annual rent increases of no more than 5% + local CPI
(CPI = inflation rate), or 10%, whichever is lower. Properties that are 15 years old or newer are exempt from the rent stabilization provisions in TPA.
• Program Year 1 information shows possibility of some rent increases exceeding 5% + local CPI. However, caution is recommended for interpreting this Program Year 1 information for at least the following reasons:
o TPA does not apply to all residential rental units;
o Allowable rent increase percentages vary from year to year;
o TPA does not apply when a rent increase is associated with a change in occupancy;
o Staff were able to filter out clear errors, but other data entry errors might remain; and
o Future reporting may correct data entry errors.
-2025) SUPPLEMENTAL PROGRAM DATA 16
Geographic Distribution
Figure 10: Program Year 1 Registered Rental Unit Locations (7,653 Registered Units)
Table 8: Program Year 1 Proximity of Registered Units to Special Features (7,653 Registered Units)
Feature Number of Registered Units
within Proximity
Number of Registered Units not
in Proximity
Public schools (1/2-mile radius) 4,553 units (59.5%) 3,100 units (40.5%)
Public parks (1/2-mile radius) 5,935 units (77.6%) 1,718 units (22.4%)
Caltrain stations (1/2-mile
radius) 2,100 units (27.4%) 5,553 units (72.6%)
Major bus stops (1/2-mile
radius; include VTA, SamTrans, 2,528 units (33.0%) 5,125 units (67.0%)
Commercial Areas (1/2-mile
radius) (Only if Possible) 6,744 units (88.1%) 909 units (11.9%)
Arterials (500 foot radius) 4,760 units (62.2%) 2,893 units (37.8%)
MARCH 10, 2026 PaloAlto.gov
Rental Registry
Program & Rent
Stabilization
Policy & Services Discussion
1
PRESENTATION OVERVIEW
1.Renter Protection Policy Background
•Past and ongoing policymaking
2.Preliminary Rental Registry Program (RRP) Data
•Program participation information
•Market overview
3.Rental Registry Program Expansion
•Anticipated resource requirements
4.Local Rent Stabilization Program Analysis
•Program scope and legal limitations
•Preliminary analysis of rent changes in Palo Alto
•Peer programs and anticipated resource requirements
5.Recommendation
2
Local Rent Control Program ConsiderationsRenter Protections Policy Background
3
KEY POLICY DEVELOPMENTS
2023: Council adopts just cause eviction protections and enacts a security
deposit limit for unfurnished rental units via Chapter 9.68
2022: Council extends relocation assistance requirements via Chapter 9.68
1980: Council establishes Chapter 9.68: Rental Housing Stabilization, including
requirements for written 1-year lease offers
2024: Council adopts PAMC Chapter 9.65: Residential Rental Registry Program,
provides direction to focus on properties with 3 or more units
2002 & 2009: Council adopts and amends 9.72: Mandatory Response to
Request for Discussion of Disputes Between Landlords and Tenants, including
voiding rent increases given without notice of rights
1983 & 1997: Council adopts and amends Chapter 9.74:
Discrimination Against Families With Minor Children In Housing
2018: Council amends Chapter 9.68 to add relocation assistance requirements
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ONGOING DISCUSSIONS WITH P&S
•Rental Registry Program Expansion Discussion (today)
•Program launched October 1, 2024
•1- and 2- unit rental properties not required to register during
Program Year 1 & Program Year 2
•Local Rent Stabilization Program Establishment Discussion (today)
•Adopted as 2024 Council Priority
•December 2024 Policy discussion with Housing Ad Hoc Committee
•Adopted as 2025 Council Priority
•Fair Chance in Housing Ordinance Discussion (Estimated April/May 2026)
•Adopted as 2024 and 2025 Council Priority
•October 2024 Human Relations Commission discussion
•April 2025 Council reading of draft ordinance and referral to P&S
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Local Rent Control Program ConsiderationsRental Registry Program Findings & Expansion
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PROGRAM YEAR 1 PARTICIPATION & SUPPORT
•Very high compliance and participation rate
•95.4% property registration rate (414 of 434 properties)
•97.9% unit registration rate (7,653 of 7,821 units)
•4 properties received administrative citations for non-registration
•Participation Exemptions and Fee Waivers
•Properties with 1 or 2 units were not required to register
•Registration fees waived for all units required to register
•Extended registration period
•Annual Open Registration dates: October 1, 2024 – January 15, 2025
•Grace period: January 16, 2025 – April 6, 2025
•Wide variety of participant support services, including:
•In-person property owner workshops and 1:1 support sessions
•Dedicated staff support email (rentalregistry@paloalto.gov)
•Registration technical support HelpDesk (phone, email, chat)
•Online demonstration videos and portal user guide
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KEY FEATURE: PUBLICLY ACCESSIBLE REGISTRATION DATABASE
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PROGRAM YEAR 1 RENTAL HOUSING DATA
Findings are based on self-reported data from approx. 7,653 of an estimated 11,939
total rental units in Palo Alto. Units on one - and two-unit properties are not included.
•Multi-family rental stock is composed of mostly smaller units
•Studios and one-bedroom units: 58.89%
•Two-bedroom units: 35.14%.
•Three-or -more-bedroom units: 5.97%
•Multi-family rental stock is comprised of mostly older buildings
•80.87% of units are in buildings built before 1995
•19.13% of units are in buildings constructed in or after 1995
•Most units had access to car and bike parking, laundry and shared outdoor space
•93.86% of units had access to onsite parking
•56.26% of units had access to shared outdoor space
•54.06% of units had access to bicycle parking
•51.21% of units had access to laundry
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PROGRAM YEAR 1 RENTAL MARKET DATA
Findings are based on self-reported data from approx. 7,653 of an estimated 11,939
total rental units in Palo Alto. Units on one - and two-unit properties are not included.
•94.79% of all units were occupied
•3.68% vacant – available for rent
•1.53% vacant – not available for rent
•26% of units were deed -restricted or subsidized
•20.41% were deed-restricted
•5.58% had rental assistance or subsidies
•19.5% Stanford University owned and managed
•1495 units, many offered at discounted rates for employees
•Median market rate rents (excluding rent discounts such as first month free)
•$2,095 for a studio
•$2,600 for one-bedrooms
•$3,295 for two-bedrooms
•$4,495 for three-bedrooms
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EXPANSION CONSIDERATIONS
•Council-directed expansion to include one- and two- unit properties
•Adds estimated 4,305 rental units across 4,210 properties
•Approx. 4,116 one-unit properties and 94 two-unit properties
•Key Considerations
•Still a new program that requires frequent staff troubleshooting as
technology, data quality and implementation issues arise
•Small property owners may be less familiar with reporting tools and
requirements and/or have less capacity to comply with the program
•Many small property owners may also be owner-occupiers and
therefore potentially exempt from the program fee
•At least one additional staff would be needed to provide participant
support (currently ~ 1 full-time employee)
•Current rental registry fee of $35 per unit would need to be
approximately doubled ($70 per unit)
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Rent Stabilization Analysis
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Costa-Hawkins:
State Limits on Local Rent Stabilization
•The Costa-Hawkins Rental Housing Act (1995) prevents local
governments from regulating the residential rent of:
o Single-family homes or condos
o Units built after Feb. 1, 1995
•Requires vacancy decontrol
•2018, 2020 and 2024 ballot initiatives to repeal Costa-Hawkins were
unsuccessful
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14
California’s Tenant Protection Act (TPA) of 2019 caps rent increases for many
renters but does not override Costa-Hawkins.
Does not apply to:
•buildings built in the last 15 years,
•restricted affordable housing units,
•single-family homes not owned by a corporation/trust, and more.
Cap is lower of:
•10% total, or
•5% plus the percentage change in the cost of living
Tenant Protection Act:
State-Wide Rent Stabilization
This law also covers
just cause eviction,
relocation assistance,
anti -harassment and
certain disclosure
notices.
14
15
Allowed Local Rent Stabilization Measures
Local governments like Palo Alto are allowed to intensify and expand
tenant protections in limited ways with new ordinances for multi-family
properties built before February 1, 1995:
1.Decrease the allowable annual rent increase
2.Apply a rent increase limit to owner-occupied duplexes
3.Allow tenants and landlords to petition to change allowable increase
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No existing state-level stabilization
Limited Room for Local Rent Stabilization by Building Age
Existing state-level rent stabilization for most units
Local rent stabilization
allowed for some units
Before 1995 1995 (15 years ago) Today
Buildings built…
Local rent stabilization not allowed
Only
opportunity
for local rent
regulations 16
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PALO ALTO RENT CHANGES & RENTER TENURE
Findings are based on self-reported Rental Registry Program (Year 1) data from
approx. 7,653 of an estimated 11,939 total rental units in Palo Alto. Units on one - and
two-unit properties are not included.
•Most market rate rental units experienced 0-5% rent increases
•62.85% of market rate units reported no change in rent
•25.57% experienced a rent increase between 0% and 5%
•10.94% experienced a rent increase above 5%
•Most rental units reported a current renter tenure under 4 years
•Up to 2 years: 41.05% of renter -occupied units
•2 to 4 years: 20.87% of renter-occupied units
•4 to 10 years: 19.96% of renter occupied units
•Over 10 years: 17.91% of renter -occupied units
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LOCAL RENT STABILIZATION PROGRAM EXAMPLES
Several Bay Area cities have local rent stabilization measures, including
Mountain View, Berkeley and Alameda and San Leandro.
Approx.
Number of
Regulated
Units
Budgeted
Program
Staff
Approx.
Annual
Program
Budget
Full or Partial
Cost
Recovery
Through Fees
Administrative Structure
Mountain
View
14,500
units
8 staff $2.6
million
Yes Housing Department & 5-
person rent board
Berkeley 40,000
units
29 staff $9 million Yes Berkeley Rent Board
Agency & 9-person rent
board
Alameda 16,500
units
5 staff $2 million Yes City Attorney’s Office &
hearing officers
San
Leandro
7,700 units 6 staff $2.2
million
Yes Community Development
Department & 5-person
rent board
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RESOURCE REQUIREMENT ESTIMATE
The resources required to create a rent stabilization program in Palo Alto
would depend on the complexity of the program, the level of customer
support provided to both renters and landlords, the potential use of
contracted services, enforcement procedures, and other factors.
Preliminary Resource Estimates
Staffing Level 6 full-time employees*
Annual Program Budget $2 million
Rental Registry Program Fee Needed
to Achieve Full Cost Recovery
> $300 per fully covered unit
* or more if rental registry program is also expanded to include one - and two-
unit properties
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ADDITIONAL CONSIDERATONS
Establishing a rent stabilization program would be a significant undertaking
requiring:
•Specialized functions, administrative procedures, adjudication, and
enforcement, including a landlord-initiated petition process
•Considerable staff time across several departments, including Planning and
Development Services, City Attorney’s Office and the City Manager’s Office
•General fund loans to support program until cost recovery could be
achieved through increased rental registry program fees (~2 -6 years)
•Significant landlord and renter outreach, education and support (often
lead by a dedicated housing or rent stabilization department or division)
•Potential creation of an elected or appointed rent board to resolve rent
stabilization related disputes
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STAFF RECOMMENDATION
Staff recommend that the Policy and Services Committee discuss
and provide feedback on the findings from the first year of the
rental registry program and the related rent stabilization analysis,
and recommend the Council defer indefinitely:
a)an expansion of the rental registry program to properties
with two and fewer units, and
b)further analysis or preparation of a draft ordinance related to
possible implementation of a local rent stabilization policy.
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REBECCA ATKINSON
Planner
rebecca.atkinson@paloalto.gov
rentalregistry@paloalto.gov
(650) 329-2596
JULIA KNIGHT
Senior Program Manager
julia.knight@paloalto.gov
650-838-2839