Alameda’s Utility Fee Ban: How Landlords Protect Their Income

If you own or manage rental property in the City of Alameda, there is an important new law you need to know about. On July 7, 2026, the Alameda City Council passed Ordinance 3407. This law changes the rules on how landlords can charge tenants for utilities like water, gas, electricity, and trash.

What is the Big Change?

Starting August 6, 2026, landlords of rent-controlled units in Alameda can no longer charge separate fees for utilities unless those utilities are separately metered for each unit.  

This means two common practices are now banned for new tenancies:  

1. RUBS (Ratio Utility Billing Systems): Dividing up a master utility bill using a formula based on unit size, bedrooms, or the number of occupants.  
2. Flat Fees: Charging a set monthly utility fee on top of the base rent.  

Instead, you must bundle the estimated cost of unmetered utilities directly into the tenant’s base rent at the start of the lease.  

Does This Apply to Your Property?

The new rules only apply to “fully regulated” rental units. Here is a quick reference to see where your property stands:  

Property CategoryRegulatory StatusOrdinance 3407 RulesMulti-unit buildings built before Feb 1, 1995

Fully Regulated

Must comply. RUBS and flat fees are banned for new tenancies starting Aug 6, 2026.

Properties with separately metered utilities

Fully / Partially Regulated

No action required. Tenants continue paying the utility provider directly.

Single-family homes and condominiums

Partially Regulated

Exempt. Local utility restrictions do not apply.

Any rental housing built after Feb 1, 1995

Exempt from rent control

Exempt. Local utility restrictions do not apply.

New Leases vs. Existing Leases

How you handle utility charges depends on when your tenant’s lease started.  

For New Tenancies (Starting on or after August 6, 2026)

You cannot charge a separate utility fee. You must include unmetered utilities in the advertised base rent. For example, if rent is $2,000 and the average water bill is $50, you should market the unit for $2,050 with water included.  

For Existing Tenancies (Started before August 6, 2026)

You do not have to change how you collect utility bills right away. You can keep using RUBS or flat fees for now. However, the city is launching a transition process to eventually phase these out (more on this below).  

Watch Out for the “No-Shifting” Rule

If your building has a mix of old tenants (paying separate utility bills) and new tenants (utilities included in their rent), you cannot pass the new tenant’s share of the utility bill onto the old tenants.  

• Example: You have a 4-unit building with one water meter. Historically, you billed each unit 1/4 of the water bill.  
• Unit D becomes vacant and a new tenant moves in on August 15, 2026. You must include water in Unit D’s rent.  
• You can still charge Units A, B, and C their utility share, but you can only bill them for their original 1/4 share. You must absorb the 1/4 share for Unit D yourself unless you successfully factored it into Unit D’s new base rent.  

Transition Options for Landlords

To help housing providers adapt without losing money, the Alameda Rent Program has created two pathways:  

Option 1: The One-Time Utility Adjustment

If you are currently charging existing tenants for unmetered utilities, you will transition out of this billing method through a special petition process.  

1. You will submit a petition to the Rent Program showing 12 months of utility invoices for your property.  
2. Once the city verifies the average monthly cost, they will approve a one-time permanent increase to the tenant’s base rent to cover it (plus an inflation allowance).  
3. Deadlines for this petition will be staggered, with owners of larger properties required to file first.  
4. This new, consolidated base rent will become the new starting point for your future annual rent increases, which are limited by the Annual General Adjustment (AGA). For September 1, 2026, to August 31, 2027, the allowed AGA is 2.7%.  

Option 2: Install Submeters

The city wants to encourage landlords to install individual submeters so tenants pay for exactly what they use.  

• The city has made submeter installation an eligible Capital Improvement Plan (CIP) project.  
• This allows you to pass a portion of the installation costs through to your tenants over time.  
• Important Exception: While normal CIP pass-throughs are only available for properties with 2 to 24 units, the city has made a special exception for submetering—properties of any size can apply for this pass-through.  

Landlord Checklist: How to Stay Compliant

To protect your rental income and stay out of trouble, follow these simple steps:

• Step 1: Check your property type. Confirm whether your building is fully regulated under rent control (multi-unit, built before 1995).  
• Step 2: Update your new leases. If you are renting a vacant unit, make sure unmetered utilities are built into the base rent. Do not list separate utility charges.  
• Step 3: Keep perfect records. Gather a file of your last 12 months of utility bills. You will need these to apply for the one-time rent adjustment to cover utilities for your existing tenants.  
• Step 4: Audit your shared utility bills. If a tenant in a shared-meter building moves out, manually adjust the bills to ensure you aren’t shifting their utility costs to your remaining long-term tenants.  
• Step 5: Stay registered with the city. To file any petition (for utility adjustments, capital improvements, or fair return rent increases), your property must be fully registered with the Alameda Rent Program, and your annual fees must be paid.  

Have Questions?

Forms, filing procedures, and specific deadlines are currently being finalized by Rent Program staff. You can contact them directly for help:  

• Phone: 510-747-7520  
• Email:rentprogram@alamedaca.gov  
• Website:www.alamedarentprogram.org  
• Office: 2263 Santa Clara Avenue, Alameda, CA 94501