60% of Santa Barbara residents are renters. Please join CAUSE in helping to protect them from Unfair Rent Increases by asking the Santa Barbara City Council to pass a strong Community Stabilization Initiative.

Petition: The Community Stabilization Ordinance

Rent burden shouldered by Santa Barbara tenants is a pandemic. A report produced by CAUSE (Central Coast Alliance United for a Sustainable Economy) in December of 2019 found more than half of Santa Barbara tenants are cost-burdened, meaning they spend more than 30% of their income on housing, making Santa Barbara the sixth most cost-burdened county in California.[1] The first of the month rent payments – incredibly challenging and stressful for many Santa Barbara families during the best of times – have intensified as a result of the COVID-19 pandemic. In addition, Santa Barbara tenants are not immune from the economic devastation wrought by the global pandemic which resulted in 20 and 40 million Americans without jobs.

In order to support Santa Barbara renters and to responsibly, meaningfully address the soaring rental housing costs in our community over the long term and immediate needs, we suggest including a rent stabilization and vacancy decontrol policy within our City’s just cause eviction regime: The Community Stabilization Initiative.

Under this proposal, we based them on the policies in the cities of Beverly Hills and Oakland,[2] covered units will be subject to the following regulations:

• Rent may only be increased one time within any 12 month period by a maximum of 2% or the annual Consumer Price Index (CPI) for the Santa Barbara Area, whichever is greater.

• In the event of a decrease in CPI in any given year, no rent increase is allowable in that year.

• As California’s Costa-Hawkins Rental Housing Act dictates, if the unit is voluntarily vacated by the tenant or there is a legal, for-cause termination of the tenancy,the landlord may re-let the unit at market rate (i.e., any amount agreed upon by the landlord and the new tenant).  

Background and Context

There is clear desire from the community to find ways to ease the housing burden for Santa Barbara’s families. Efforts to produce rental housing units, while necessary and commendable, have not resulted in the lowering of rental housing costs in our community. And, in this already difficult context for renters, has come the COVID-19 pandemic, which continues to wreak economic havoc on our community. Financial assistance from the federal government has sustained some through the pandemic thus far, though enhanced unemployment benefits meant to carry our families during this difficult period came to an end on July 31st. Presenting a further challenge, economists predict an avalanche of evictions following the expiration of moratoriums across the country, and the same can be expected in Santa Barbara.

With so many in our community already on the edge of housing loss due to the high cost of housing, it is incumbent on the members of the Santa Barbara City Council to make every effort to preserve and increase housing security in our community. We believe it is our responsibility to prioritize residential stability in our community.

The Community Stabilization Initiative is a reasonable and constrained, but ultimately profoundly impactful step on the path to solving the rental housing affordability crisis in Santa Barbara. It has never been more necessary than in this time of extreme economic stress and uncertainty to promote stability in housing.

Recommendation

In response to the community’s clarion call for creative housing affordability solutions, we suggest an addition to the City’s just cause eviction regime: the Community Stabilization Initiative.

The Community Stabilization Initiative is a rent stabilization/vacancy decontrol measure which applies to all multiple residential dwellings of two or more units, except the following: (i) rental housing with a certificate of occupancy issued less than 15 years ago; (ii) duplexes where the owner lives on site in the other unit (including ADUs); (iii) deed-restricted affordable housing or government subsidized housing; (iv) rental units within a single-family home or condominium; (v) other units determined ineligible under State law.

Allowable Rent Increase

A landlord may increase rent one time within any 12 -month period. The rent may be increased a maximum of 2% or the annual Consumer Price Index (CPI) for the Santa Barbara Area, whichever is greater. In the event of a decrease in CPI in any given year, no rent increase is allowable in that year.

The rent may be raised more than the allowable amount in any given year if the landlord is making allowable capital improvements to the unit. However, in no event can the rent be raised by more than 10% in any 12-month period or by more than a total of 30% over a 5-year period.

Vacancy Decontrol

As dictated by California’s Costa-Hawkins Rental Housing Act, if the unit is voluntarily vacated by the tenant or there is a legal, for-cause termination of the tenancy, the landlord may re-let the space at market rate (i.e., any amount agreed upon by the landlord and the new tenant). The City Council may separately pursue vacancy control measures in specific areas of the City, e.g., mobile home parks.

Fiscal and Budgetary Impact

There is little to no long-term budgetary impact on the City of Santa Barbara’s budget. There will be an initial investment in the form of staff time to develop this policy into an enforceable ordinance. The City will also need to develop a registration system for non-exempt units. Non-exempt units must be re-registered following each vacancy and re-letting. The development of an oversight system is necessary to effectuate the stabilizing effects of this policy.[3]

Projected Community Impact

Significant. The cost of rental housing has long been an incredible challenge for and burden on our community’s working families. With the advent of COVID-19, the ramifications of ever-increasing housing costs are as of yet unknowable, but they are undoubtedly extreme. By coupling rent stabilization with vacancy decontrol as we have, we are facilitating much needed stability for our community’s families, while respecting the right of landlords to price their units in accordance with market forces.

Risk Assessment

The proposed Community Stabilization Initiative does pose some risk. The landscape of state legislation related to rental housing is changing rapidly and additional layers of regulation at the municipal level may prove to be a challenge for landlords and tenants alike to navigate. However, by producing a clear, concise FAQ page in English and in Spanish, as has been done for other housing initiatives, we believe we can successfully mitigate any such risk.

Limitations and Barriers

There are no immediately obvious legal prohibitions against the local rent stabilization/vacancy decontrol measure proposed herein. State law allows a maximum yearly rent increase of 5% plus inflation. Local jurisdictions may enact more protective rent stabilization measures, so long as those initiatives are in compliance with the Costa-Hawkins Rental Housing Act.

Conclusion

The Community Stabilization Initiative is a reasonable and constrained, but ultimately profoundly impactful step on the path toward solving the rental housing affordability crisis in Santa Barbara and efforts to promote community stability have never been more critical than they are today.

[1] https://www.independent.com/2019/12/11/new-report-details-housing-woes/

[2]http://www.beverlyhills.org/cbhfiles/storage/files/9708601281239969590/Chapter6FAQ(revisedMay2017).pdf; http://www.oaklandtenantsunion.org/know-your-rights.html

[3] The City of Santa Barbara may wish to explore the creation of a Rent Stabilization Committee to oversee the implementation of the Community Stabilization Initiative. The general concept of this Committee includes an eviction protection component, as the concepts of eviction and stabilization are indelibly linked. One function of this committee is as follows: housing providers must file an eviction notice with the Committee, who will undertake a checklist review for basic notice and ordinance compliance. This will provide a modicum of protection against default dispossession for tenants and provide basic legal information to those landlords who might not be fully informed of the ongoing legal changes. Most importantly, the Committee will provide a central community hub for transparent and equitable community engagement with the housing crisis and rent pricing. The creation of this Committee would require a more significant outlay of funds and staff time.