Oscar Gutierrez
Santa Barbara City Councilman Oscar Gutierrez is supporting Mayor Cathy Murillo’s proposal for a 2% cap on annual rent increases. “I am just trying to make sure it’s more affordable here for the people who don’t own property, who don’t own anything, our workforce that is trying to keep the city going,” he says. (Joshua Molina / Noozhawk photo)

In a simultaneously bold and bizarre move, Santa Barbara Mayor Cathy Murillo and City Councilman Oscar Gutierrez have proposed to cap housing rental increases in the city at 2%.

The council will take up the proposal Tuesday, the second-to-last meeting for Murillo, who was overwhelmingly voted out of office last month.

“Ever since I ran for office, the residents on the Westside have been asking me to do something like this, to be able to control the increase in rents,” said Gutierrez, whose own term is up in 2024.

“And now that Cathy’s on her way, I think this is her last promise that she wants to fulfill before she is out of office, and I told her I would help her with that.”

Murillo and Gutierrez put the item on Tuesday’s council agenda through a two-member memo. Murillo did not respond to Noozhawk’s requests for comment.

The proposal has run afoul with real estate and property management professionals.

“Why now?” asked Brian Johnson, board president of the Santa Barbara Association of Realtors. “Why so Draconian? It feels like this is being rushed through. It doesn’t seem like a lot of stakeholders were contacted.”

Information about the proposal is scant.

Murillo and Gutierrez released a four-paragraph memo under the subject title “advancing tenants’ protections.”

“Our City Council is responsible for the well-being and housing security of our residents, many of whom are our rents [sic],” the memo states. “The General Plan’s Housing Element defines goals related to protecting housing stock and residents who rent their homes.”

According to the memo, Murillo and Gutierrez want to “discuss the best ways to protect renters in the city, take actions on various initiatives, direct staff to return with options, and commit to continuing to take action regarding the city’s challenging housing market.”

Current state law limits rent increases to no more than 5% a year plus cost of living, for no more than 10% annually.

The real estate community has rallied against the proposal, which also establishes a rental registry. A call to action on the SBAOR website makes it simple to express opposition to the proposal.

“Please tell the City Council you have had enough of rising prices and oppose the government adding even more to the cost of living,” the statement says.

Johnson said a flat 2% with no consumer price index adjusment means that tenants will get hurt the most. He said landlords won’t have the same amount of reserves set aside for repairs on their properties.

According to Johnson, a rental agreement should really be a business decision between tenant and landlord, without government getting involved.

Should the rent cap pass, he noted, it could lead to property owners, particularly those who own just a few apartment buildings around town, selling to out-of-town corporate investors.

This type of government intrusion, he said, ultimately hurts affordable housing, which often is subsidized by market-rate units.

“We need more housing units,” Johnson said. “We have a housing shortage. We need more units of all types. It’s a little baffling right now.”

Mayor-elect Randy Rowse told Noozhawk he was trying to stay out of the way of the current council to let them finish things up before he is sworn in in January.

“It’s not something I would probably favor, as you would imagine,” he said.

For Gutierrez, the issue is about affordability for renters.

“I am just trying to make sure it’s more affordable here for the people who don’t own property, who don’t own anything, our workforce that is trying to keep the city going,” Gutierrez said.

“I know that it is hard and I know that it is going to be controversial, but it is something the people are asking me to do. I am trying to do something that the people in my district are asking for.”

Noozhawk staff writer Joshua Molina can be reached at jmolina@noozhawk.com. Follow Noozhawk on Twitter: @noozhawk, @NoozhawkNews and @NoozhawkBiz. Connect with Noozhawk on Facebook.