In a win for the City of Santa Barbara, a judge this week dismissed a lawsuit filed by property owners over the city’s temporary rent freeze.
Judge Sherilyn Peace Garnett of the U.S. District Court for the Central District of California issued the ruling in the lawsuit that alleged that the city’s temporary rent freeze that went into effect in February was “unconstitutional” and violated due process.
The judge also dismissed the Santa Barbara City Council as defendants in the case, leaving only the City of Santa Barbara.
However, the case may not be over. The Santa Barbara Rental Property Association, represented by Barry Cappello, a former city attorney, has an opportunity to file an amended complaint with more details to support its claims.
The association is considering filing an amended complaint in early August, according to Cappello.
“The lawsuit against the city is ongoing and is not over,” Cappello said. “The key legal claims in the complaint remain. For example, the core dispute over whether the Rent Stabilization Ordinance amounts to an unconstitutional taking, as applied to individual residential rental properties, has not yet been decided on the merits.”
The original complaint, filed in April, alleged that the City Council abused its discretion to pass the ordinance and failed to comply with the city charter.
The lawsuit specifically named council members Meagan Harmon, Wendy Santamaria, Kristen Sneddon and Oscar Gutierrez — who voted in favor of the ordinance — and claimed that they “recklessly hastened the legislative process.”
City Attorney John Doimas said the ruling affirms that local governments have the authority to adopt reasonable economic regulations to address housing affordability and tenant displacement.
He added that if an amended complaint is filed, the City Attorney’s Office will continue to defend the city’s actions and protect the city’s legal interests. If an amended complaint is not filed, then the case ends.
Cappello was the city attorney from 1971-77. He is now part of the law firm Cappello & Noël LLP.
The lawsuit centers on four property owners: Teresa Patiño; JKRK L.P., which lists Robert Kooyman as an agent; 3442 Richland LLC, run by Michael Cheng; and 1501 SB LLC, which is registered to John Youngson.
The complaint alleged that property owners had to wait to repair units because they couldn’t raise rents.
The temporary moratorium on rent increases for some properties went into effect at the end of February and is set to expire on Dec. 31.
The ordinance freezes the base rent for certain units and prevents the landlord from increasing it.
Base rent is defined in the ordinance as the rental amount in effect on Dec. 16, 2025, for rental agreements existing on or before that date, or the rent established upon initial occupancy for tenancies that started after that date.
The freeze does not apply to units built after 1995; single-family homes; most condos; transient occupancies; institutional and government housing; and units subject to a rent affordability covenant or the Section 8 Housing Choice Voucher Program.
