Realtors represent both tenants and landlords, and we are very concerned about the unintended consequences of pushing forward with another level of regulation regarding rental property.
Most recently in effect is the statewide rent cap of 5 percent plus CPI (consumer price index); locally, implemented last fall, are just cause and the requirement to offer a mandatory year lease renewal (for tenants in the property more than one year) — all very big changes within the last six months.
Rent caps and the like are artificial market constraints, put in place with the intention of “tenant protection.” Likewise, the local (city of Santa Barbara) requirement for landlords to “offer” a mandatory one-year lease, intended to provide security and continuity for a tenant, beyond the mutually agreed upon timeframe in heretofore reliable contracts.
At this time, local government is considering whether to take action to further tighten the tenant-landlord laws beyond those already in place, before we have even seen the effects of the recent laws and ordinances.
Unfortunately, many landlords already are considering selling their rentals, and adding another layer of regulation might just be the straw that breaks the camel’s back. This will further decrease the availability of rental housing, which would hurt those most in need.
If this occurs, in a market already suffering from lack of inventory, these units will be gobbled up by pent-up buyer demand, most likely owner-occupants, and not investors. There would be even less rental inventory to choose from, increasing competition, and leaving those out with marginal credit and fewer options.
Property owners who remain in the business of providing housing will be even more selective to whom they rent, and we already are seeing new leases with built-in rent increases (another unintended consequence of the statewide rent cap). Those tenants who have lived peacefully without frequent rent increases can now expect this unintended consequence.
With so many new regulations in place, Realtors urge our elected officials to first measure the effects of the new legislation, participate in educating both tenants and landlords about the new laws, and then evaluate whether the current legislation has accomplished what it set out to do before adding anything further to dissuade property owners from providing housing and unintentionally harming those who desperately need it.
For more information, call your local Realtor or visit the Santa Barbara Association of Realtors websit, sbaor.org.
— Staci Caplan is the president of the Santa Barbara Association of Realtors. Contact her at stacicaplan@gmail.com.