Hayward landlords who have treated the city’s business license tax as a once-a-year formality—or who have never paid it at all—are about to find out whether that era is ending. On November 3, 2026, voters will decide Measure CC, the first rewrite of the Hayward Business License Tax since July 11, 1978. The measure would scrap the old flat-fee and employee-count structure and replace it with a progressive gross-receipts tax. City documents project roughly $12 million in new annual revenue. For owners of one-to-four-unit rentals that currently pay little or nothing, the change is not abstract. It is a new line item that arrives in January 2027 if the measure passes.
The current tax is a relic. Established nearly half a century ago, it generates about $3.3–$3.7 million a year from roughly 10,000 license holders. Many small residential rental operators fall outside meaningful taxation under the old rules. Measure CC would impose a $60 minimum and rates ranging from 30 cents to $3.75 per $1,000 of gross receipts, with higher rates applied to higher-grossing businesses. Residential and non-residential rental activity is explicitly placed in its own classification. The ballot language describes the revenue as supporting neighborhood police protection, firefighting, 911 response, libraries, and pothole repair. Because it is a general tax, the money can be spent on any legitimate municipal purpose once collected.
What the new math looks like for a typical Hayward rental
Consider a four-unit property generating $180,000 in annual gross rents. Under the proposed schedule, that owner would owe a business-license tax calculated on the full gross-receipts figure, not a flat $60 or a token employee-based fee. At the higher end of the published range the bill is no longer negligible; at the lower end it is still material once multiplied across a portfolio of several small buildings. Owners who have multiple properties must aggregate gross receipts carefully. The city’s own materials note that the new structure is designed to be progressive: higher-grossing operations pay more per thousand dollars. A single-family rental that clears $36,000 a year sits near the $60 floor; a 12-unit building clearing $400,000 moves well into the graduated brackets.
The half-fee pass-through rules that apply to Hayward’s $66 annual rent-review fee do not automatically transfer to this tax. Business-license taxes are generally not passable to tenants under local rent-stabilization rules the way certain program fees are. Owners should treat the new amount as a pure operating cost until counsel confirms otherwise. The Residential Rental Inspection Program fee ($88 per year for one-to-four-unit properties) and the rent-review fee remain separate. Measure CC simply stacks another annual obligation on top of those existing charges.
Who is newly exposed
The groups most likely to feel the change are:
- Owners of one-to-four-unit buildings who currently pay nothing or only a minimal flat fee.
- Out-of-area investors who hold Hayward property through LLCs or trusts and have never registered a local business license.
- Operators who manage their own properties and have treated the license as optional because enforcement has been light.
- Mixed-use owners whose ground-floor retail or commercial space already pays a license but whose residential units have not been fully captured.
Single-family homes and condos that are exempt from Hayward’s 5 percent rent-increase cap under Costa-Hawkins are not automatically exempt from the business-license tax. The tax looks at the activity of renting, not at the rent-control status of the unit. Owners who have relied on the “I only own one rental” assumption should verify their current license status with the Revenue Division before the election.
Timeline if the measure passes
A simple majority is required. If Measure CC is approved on November 3, the ordinance is scheduled to take effect in January 2027. The city has indicated it will return to council in December for budget discussions that incorporate the anticipated revenue. License renewals that currently follow the calendar year would shift to the new gross-receipts calculation for the 2027 license year. Owners who miss the new filing or under-report gross receipts face the usual penalties plus the risk that the city treats non-payment as a compliance defect when a tenant later challenges a rent increase or a no-fault termination.
The one-month relocation payment required on no-fault terminations in Hayward is unaffected by Measure CC, but the cumulative cost of doing business rises. A landlord who has banked a rent increase under the 5 percent / 10 percent banking rules must now decide whether the net cash after the new tax still justifies the increase, especially once the half-pass-through on the rent-review fee is calculated.
Practical steps before and after November 3
- Pull your current Hayward business-license account and confirm whether any of your rental addresses are already registered. The city’s portal (hayward.hdlgov.com) allows searches and renewals.
- Calculate last year’s actual gross rents for every Hayward unit you own. Use the same numbers you report for Schedule E or your property-management software. Do not estimate.
- Run the proposed rates against that figure at both the low and high ends of the published range so you know the range of possible new cost.
- Decide whether any units should be placed under professional management before January if the measure passes; a management company that already holds a license may simplify the filing, but the tax is still owed on the gross receipts.
- If you have a pending no-fault termination or a capital-improvement petition, finish the paperwork under current rules. The new tax does not retroactively change those procedures, but it does change the net economics.
- After the election, watch for the city’s implementation notice. Expect updated application forms and a gross-receipts worksheet. Keep the worksheet with your annual rent-review and inspection records so all three filings stay synchronized.
Why this is not just another fee
Hayward already layers a $66 rent-review fee (half passable if paid on time), an $88 inspection fee for smaller properties, and just-cause plus relocation rules. Measure CC is different because it is not a housing-program fee; it is a general business tax applied to the activity of renting. That distinction matters when owners later try to recover costs through a fair-return petition or when they sell. Buyers will underwrite the new tax as a permanent operating expense, which can affect the price they will pay for a small multifamily property in downtown or the flatlands.
The city’s own messaging emphasizes that the 1978 structure no longer matches the local economy. That is true. It is also true that many of the smallest rental operators have never been fully inside the system. Measure CC would bring them inside. Whether the additional $12 million is spent on the services listed on the ballot or on other general-fund needs is a political question voters will answer. For the owner who receives a new bill in early 2027, the political question is secondary to the cash-flow question.
Bottom line for Hayward rental owners
If Measure CC passes, every rental property that generates gross receipts in Hayward will face a new annual calculation starting in January 2027. The old “I don’t really have a business license” posture becomes riskier. The safe course is to quantify the exposure now, confirm current registration status, and treat the potential new tax as a line item that must be covered by rent or by reserves. Owners who wait until the first invoice arrives will be reacting instead of planning.
SLPM Property Management tracks Hayward’s rent-review database, inspection program, and just-cause rules for the properties we manage. If you own rentals in Hayward and want the new business-license calculation, the existing fee stack, and the 5 percent cap modeled against your actual rents before the election, contact us. We will run the numbers on your specific units so the November 3 result is a known quantity rather than a surprise invoice.
