Santa Barbara’s rental-stabilization ordinance passed by the skin of its teeth Tuesday night.

As the debate once again centered on expectations for Housing Authority of the City of Santa Barbara and Section 8 units, no one quite knew how the night would go.

In the end, the City Council voted 4-3 to adopt the ordinance and directed to staff to find pathways for Housing Authority and Section 8 tenants to bring forth habitability concerns.

Mayor Randy Rowse and Councilmen Eric Friedman and Mike Jordan voted against the ordinance. 

Councilwomen Meagan Harmon and Wendy Santamaria continued their debate from last week over exemptions for deed-restricted and Section 8 housing.

Harmon stood firm that the exemptions are needed, as she said there are not enough properties accepting Section 8 vouchers, and not exempting the units could discourage future participation. 

“As a result, the most vulnerable people in this community will be left with more of the same,” Harmon said. “More years of a thousand-plus-person waiting list. More years of nowhere near the number of Section 8 units that we need.”

She added that those units receive more inspections than typical units, while the city could make improvements and add more code enforcement. 

“Anything we do to discourage new or continued participation in Section 8 puts our most vulnerable tenants at a direct and substantial increased risk of losing their housing or not finding housing altogether,” Harmon said.

Santamaria argued that the Housing Authority’s systems to ensure habitability aren’t working.

She said that protections and pathways in the ordinance would give Housing Authority tenants another avenue to share habitability and health and safety concerns in case they can’t get in touch with the Housing Authority.

While she was willing to exempt deed-restricted and Section 8 housing from the rent increase cap, she still wanted ways for them to have access to the rent-stabilization board and other resources.

“Completely exempting the most vulnerable — our elders, our disabled, those with mobility issues — that is not something that I could sleep at night with,” Santamaria said.

When it looked like the ordinance was going to fail, Councilwoman Kristen Sneddon took issue with all of the changes the ordinance has gone through, saying it has become more complicated than the sample ordinance she and Santamaria presented nearly a year ago.

“Because there were the four votes needed, I have agreed to every additional iteration, every additional request,” Sneddon said. “Every time it comes back, the goal post moves, and moves, and moves.

“Now we’re at a place where I’m not going to get to pass this, after nine years of working on this.”

She added that she was disappointed that the ordinance was coming down to the specific exemption, and that changes could be made in the future if needed. 

“Yes, we want to protect all vulnerable tenants, everyone in the city,” Sneddon said, “but if we don’t have this passed at all, if this doesn’t even exist at all, not a single person is covered.”

In the end, they agreed to pass the ordinance, exempting deed-restricted and Section 8 housing, while directing staff to look into the best process for Housing Authority and Section 8 tenants to address habitability and health and safety concerns.

It’s likely to be addressed in amendments to the Just Cause Evictions Ordinance, which is set to go to the council in the coming weeks.

During public comment, numerous speakers advocated for Housing Authority tenants to be included in the ordinance, arguing that additional protections are needed.

Corina Svacina said that with federal cuts, Section 8 tenants need to be able to access the protections and a way to bring up habitability concerns.

“I don’t know about you, but I don’t think Section 8 tenants should have mold in their applesauce or mold in their home, but if we leave it in the hands of the free market or the federal government, they will,” Svacina said. 

Executive Director Rob Fredericks again argued that under the Housing Authority, rents are regularly reviewed and units undergo federal inspections and enforcement.

He said that if housing providers don’t adhere to habitability standards, the Housing Authority withholds the federal housing assistance payment to the owner or terminates their contract and helps the tenants move. 

“Every tenant deserves a safe home and a meaningful way to report concerns,” Fredericks said. “We do not oppose an additional city intake or referral pathway for habitability complaints to our agency. That separate issue does not justify duplicating rent regulation.”

The ordinance, set to take effect Jan. 1, will limit how much landlords can raise rents, create a rental-property registry and form a rent-stabilization board to oversee the program. 

Rent increases will be limited to once within a 12-month period at 60% of the rise in the Consumer Price Index (CPI), with a maximum of 3%, whichever is lower.

The ordinance won’t apply to units built after Feb. 1, 1995; single-family homes; condos and townhomes; mobile home parks; and government-owned and -operated units.

Under the ordinance, the city also will form a Rent Stabilization Board with seven members. At least four members on the board must be tenants, and the three other seats have no restrictions, meaning there are no designated seats for housing providers.

The rental registry will be a citywide program to track data around rental housing. All rental units, not just those covered under the ordinance, will have to be registered.

Along with adopting the ordinance, the council approved $500,000 from Measure I funds to go toward staffing, startup costs and the fee study.

The original $2 million estimate to run the program, and the $154 fee per unit, are expected to significantly increase, according to city staff. 

The results of the fee study are set to go to the council by the end of the year.