In her second-to-last meeting, Santa Barbara Mayor Cathy Murillo scored a significant rent control policy victory Tuesday night, but it’s unclear if it will hold up once mayor-elect Randy Rowse takes office on Jan. 11.
The City Council voted 4-3 to kickstart an ordinance that would cap annual residential rent increases at 2% for apartments, plus an annual consumer price index adjustment.
Current state law limits residential rent increases to 5%, plus the percentage change in the cost of living, over a 12-month period, or 10%, whichever is lower.
The proposed city ordinance would not apply to duplexes or single-family homes.
Murillo was joined by council members Oscar Gutierrez, Meagan Harmon and Kristen Sneddon in support of the rent increase cap. Council members Eric Friedman, Alejandra Gutierrez and Mike Jordan were opposed.
The vote directed city staff to prepare a temporary ordinance, create a rental registry that documents the number and location of rental units in the city, and conduct a longer-term fiscal and policy analysis, which will require the hiring of an outside consultant.
The timeline for all of this was foggy Tuesday night, in a meeting that lasted nearly four hours and approached the midnight hour. City Attorney Ariel Calonne said the matter would need to return to the Ordinance Committee for more discussion.
Murillo lost her mayoral re-election bid last month and her final meeting on the City Council is Dec. 14. Rowse, a former council member, takes office as the new mayor on Jan. 11, the first meeting of 2022.
The ordinance approval requires four votes, and Rowse, a political centrist, has indicated he’s not in support of a rent control law.
But for now, Murillo successfully flexed her political muscle and delivered on a campaign promise.
“We’re bringing it forward at a time that our city and our state are experiencing a housing shortage, we’re seeing an increase in homelessness, and we have many residents living with very high rental rates in the city,” Murillo said. “Some of these residents are low-income earners or they are working class and they struggle to live here. Rents have been on an increase.”
Murillo and Councilman Oscar Gutierrez sprung the proposal on the public formally last week, in a the form of a one-page, four-paragraph memo attached to Tuesday’s meeting agenda.
The information was scant, a fact that muddled Tuesday night’s meeting. Typically when the council votes on policy, it involves a staff report, with a draft ordinance. None of that was available.
Murillo and Oscar Gutierrez said the issue was not new, and that they were actually building off a similar memo a year ago from council members Harmon and Sneddon.
But some property owners, community members and even members of the council who commented Tuesday night said they were caught flat-footed, alleging that Murillo was rushing the ordinance as a final gesture toward her political opponents and supporters.
More than 40 people spoke during public comment at the meeting.
Among them was Hillary Blackerby, who said the time to act is now.
“It’s way past time,” Blackerby said. “It’s not rushed. You don’t need a study. It’s clear as day what is going on this city. It’s been clear. It is not an equal relationship between landlord and tenant. They have all the cards.”
Blackerby said it’s government’s job to help and protect vulnerable people in the community.
“I understand why you are bringing up CPI (Consumer Price Index), but let me tell you my landlord does not spend a dime on me, so I don’t know what costs exactly they are incurring,” she said.
“They do absolutely everything to spend nothing on me. I am glad someone brought up property managers because they are the front lines of being heartless and not helping people out and trying to keep from doing repairs. It is their job to maximize the profit of the person who owns the building, and they do a tremendous job of it, and they make it kind of miserable to live in their properties and they are certainly not alone.”
The proposal was met with fierce opposition from property owners. They said holding rents down through government interference is unfair, and that it will ultimately hurt renters the most.
“Small housing providers have been giving up and will continue to give up and will sell their rental properties, which means less rental housing in our city,” said Brian Johnson, president of the Santa Barbara Assocation of Realtors, who noted that he is a renter.
“This will translate to higher rents for tenants already struggling with a lack of supply of rental housing and it comes down to supply.”
“I am not convinced people will be selling off their properties,” she said.
Murillo and Oscar Gutierrez pushed hard for the 2% annual rent increase cap throughout the meeting. Gutierrez said more than 60% of Santa Barbara residents are renters. and that the city has seen an exodus of Mexican-American families in recent years.
At one point, he pulled up the website for the Santa Barbara Association of Realtors and read from a page that boasted of the number of sales of single family homes and the hot residential real estate market.
He said the ordinance is needed for working families.
“This is intended to make this city more livable for everyone and protect the families that are facing hard times here,” Gutierrez said. “There’s record number of families, particularly those of color, leaving the city. There’s a record number of homeless.”
Frank Rodriguez, executive director of CAUSE, pushed for the council to approve a rental-increase limit.
“Housing instability amplifies the intersection of injustices of poverty, immigration, injustices and other barriers that has led to the displacement of so many in our community, including my family,” Rodriguez said.
The council members who opposed the new rent-increase cap said they supported tenants but that they needed more concrete information before taking decisive action.
“I do think there’s a need for data,” Jordan said.
He said the answer is likely in building more housing, rather than creating laws that regulate rent increases.
“I believe it is a supply issue more than a dollar amount issues,” Jordan said.
City Attorney Calonne said the next step is to “come back to the ordinance committee with options comparing different models.”
Sneddon said the issue has reached a crisis point in the community.
“This is an idea whose time has come,” Sneddon said. “I personally know multiple people who pay $6,000 or $7,000 a month.”
Sneddon said too many people can’t afford to live in Santa Barbara anymore.
“We’re losing good people,” Sneddon said.
But even Sneddon wanted to see data and a detailed report before approving a policy change.
“While I am in support of this in some form, I think we need to look at how it can be implemented and look at various models to make sure we are doing the very best for our particular community. I am not comfortable today without any written documentation in front of me.”
Santa Barbara’s 2021 rent report showed the median rent for a two-bedroom housing unit increased from $2,000 to $2,800 between 2012 and 2021 for the South Coast region.
One-bedrooms rose from $1,470 to $2,000.
The median rent for a two-bedroom apartment in the city was $2,688 in 2021 (which is $32,256 per year), and the median rent for a three-bedroom unit was $3,800 (which is $45,600 per year), according to the city report.
Paying 30% of gross income on housing is considered “affordable” under housing policy.