San Diego council hears major debate over proposed cap and transparency rules for rental 'junk' fees

San Diego City Council spent much of its June 30 meeting considering a draft ordinance aimed at limiting and disclosing so-called rental “junk” fees, an item authors described as a response to rising housing costs and repeated complaints from renters.

Councilmember Elo (Ilo) Rivera introduced the informational presentation, arguing the proposal is rooted in complaints heard by a select committee on cost of living: "What I think we need to make clear is who the city is actually working for," he said, urging protections for renters facing unexpected charges on top of rent. Staffer Jeffrey Nguyen, presenting the draft on behalf of Rivera’s office, said the measure would require landlords to disclose all fees in listings, accept a reusable applicant screening report for up to 30 days, cap recurring fees at a cumulative 5% of monthly rent and limit late fees to 2% with a seven‑day grace period.

Nguyen summarized local context and examples: per his presentation, the average May 2026 rent in San Diego was roughly $3,027 and many tenants report repeated application and monthly fees that compound cost burdens. "A landlord shall not charge a tenant recurring fees in a cumulative amount greater than 5% of monthly rent," he said while outlining the draft’s core limits.

Hundreds of members of the public and representatives of industry groups spoke during a lengthy public-comment period that split largely along tenant/advocate and owner/industry lines. Tenant advocates and legal‑aid lawyers urged strong protections and enforcement. Joni Halpern, an attorney who represents immigrant workers, told the council: "This ordinance is a good start at reining in these fees," describing cases where families lost housing after being hit with undisclosed charges.

Opponents — including the California Apartment Association, the Southern California Rental Housing Association and many individual small landlords — warned the draft’s price restrictions and some operational provisions could backfire. Melanie Butts of the California Apartment Association said the association was "strongly opposed to the ordinance before you today," arguing that arbitrary caps could force providers to wrap costs into base rent, reduce optional services such as reserved parking or pet amenities, or hurt small, family-owned landlords.

Council members said they broadly supported the transparency aspects of the draft but asked staff to study possible unintended consequences of the proposed caps and to return with more analysis and stakeholder engagement. Councilmember Joe LaCava (presiding) and others raised particular concerns about how fee caps would interact with state rules and local requirements that already unbundle certain charges such as parking.

The item was presented as informational; no vote was taken on the ordinance itself. Multiple councilmembers said they expect the measure to return for additional refinement in the fall after further outreach to tenants, small landlords, industry stakeholders and legal advisors. Councilmember Chris Foster, who coauthored the county city collaboration mentioned in the presentation, said he will convene additional stakeholder meetings and examine fraud‑prevention mechanisms for reusable screening reports.

Next steps: staff will continue to refine the draft language, address clarifying legal questions identified by the city attorney’s office, and conduct further outreach before the council considers the ordinance for formal action.