New Ordinance Prohibits Charges for Utilities Not Separately Metered

Published on July 08, 2026

The Alameda City Council on July 7, 2026, adopted Ordinance 3407(PDF, 12MB), amending the Rent Ordinance and making significant changes to how landlords of fully regulated units are permitted to charge tenants for utilities.

The changes apply to rental units that are not exempt from rent control under state law, i.e. generally properties with two or more dwelling units built prior to February 1995.

For new tenancies starting on or after August 6, 2026, landlords are prohibited from charging tenants for utilities that are not separately metered, including (i) utility charges that vary month-to-month by allocating utility charges among rental units (known as a Ratio Utility Billing System or RUBS) and (ii) flat monthly utility charges separate from the rent.

For tenancies existing before August 6, 2026, landlords are not yet required to change how they impose utility charges. However, if a property has both tenancies that began before August 6, 2026, and tenancies that began on or after August 6, 2026, the landlord may not allocate utility charges to the tenancies existing before August 6, 2026, the utility charges associated with those units that began on or after August 6, 2026.

EXAMPLE: Assume that a landlord of a four-unit apartment building with a single water meter has been charging each tenant 1/4 of the most recent monthly water bill in addition to the tenant’s monthly rent. Further assume that units A, B, and C are rented to longtime tenants, and Unit D is being rented to a new tenant whose tenancy will begin August 15, 2026. For Unit D, the utility charge for water must be included within the rent and the landlord is prohibited from charging that tenant a separate charge for water. For now, the landlord may continue to charge the tenants in units A, B, and C for water but may not charge each tenant more than 1/4 of the water bill.

For those landlords who are currently charging tenants for utilities that are not separately metered, Rent Program staff is developing a petition process that will allow such landlord to come into compliance with the new regulations. These landlords will have an opportunity to submit documentation of average utility charges and receive a corresponding, one-time adjustment to the rent. The Rent Program will provide more information in the coming months on the petition process as forms, procedures, and deadlines are finalized.

In light of these changes, staff is also reviewing the Rent Program’s existing process for landlord petitions based on the constitutional right of fair return on property. A landlord who can demonstrate that expenses, such as increased utility costs, are impacting the property’s net operating income may be entitled to an additional rent adjustment.

The new regulations will not affect rental units that are exempt from rent control under state law, nor units where each utility is either separately metered and/or is currently included in the tenant’s rent. However, landlords are reminded that local law since 2016 has prohibited “unbundling” of utilities, i.e. beginning to charge tenants for utilities or other housing services that were previously included within the tenant’s rent. 

For more information on the new regulations, see the agenda report and presentation prepared by staff for the June 16, 2026, City Council meeting.