EPS provides rigorous analysis and insightful solutions to address complex challenges in real estate development, land use policy, and local government finance. We are motivated by the role our work can play in shaping places where people live and we strive to create high-quality urban environments that advance the principles of diversity, resiliency, and shared prosperity.
EPS offers a wealth of experience, robust technical expertise, and the ability to offer insightful solutions to address the challenges and opportunities of urban development.
The Redwood City Council relied on economic findings from an EPS study to support approval of a Tenant Protections Ordinance (TPO) that includes “right of return” provisions for renters displaced due to a substantial renovation project. The EPS study found that the proposed “right of return” policy is unlikely to deter landlords from making necessary renovations to their properties so long as they can increase rents up to the maximum allowed under California’s Tenant Protection Act (up to 10 percent annually).
By a vote of 4-2 on Monday, October 13th, the City Council adopted the TPO after significant discussion on how the “right of return” provisions might affect the investment decisions of local landlords and developers. The TPO also includes provisions for relocation assistance, minimum lease terms, and other policies designed to support the City’s overall goal of protecting tenants while encouraging responsible reinvestment in existing housing.
The EPS study found that the rent increases allowed under the State Tenant Protection Act (TPA) far exceed actual market rent growth in Redwood City, which has remained largely flat over the past decade after adjusting for inflation. EPS also found that TPA allowable rent increases were more than sufficient to underwrite the cost of typical multi-family building renovations implied by an analysis of Redwood City building permit data. However, based on EPS recommendations, the City included provisions to give landlords the right to appeal in cases where the “right to return” policy will likely prevent a fair rate of return on a renovation project (e.g. due to very high remodel cost combined with low baseline rents).
EPS Study: link
EPS recently partnered with the Terner Center for Housing Innovation and SPUR on a new study examining how California’s construction defect liability laws affect condominium development. Our analysis found that insurance costs for condo projects are often three to four times higher than for comparable rental developments—adding an estimated 2 to 4 percent to project hard costs and creating a barrier to new supply.
The report draws on insights from industry experts and highlights how liability-related costs, litigation, and insurance practices discourage condo construction. It also outlines potential policy reforms that could make it easier to build condominiums—an important entry point to homeownership for many households.
Read the Terner Center blog post and access the full EPS report.
Report authored by: Moody, Jason and Thomas Gonzales
