Prop. 33, rent caps and the Santa Barbara City Council elections

As rent prices continue to rise across the state, the contentious debate over “rent control” is heating up for California residents and politicians ahead of the 2024 general election on November 5. Here in Santa Barbara, the issue played a major role in the City Council elections; and at the state level, voters have the opportunity to vote on Proposition 33, which would give cities the ability to enact even stricter rent caps.

Prop. 33 would “expand the authority of local governments to impose rent controls on residential properties” by repealing the Costa-Hawkins Act, a 1995 law that allows landlords to raise their rents to market rates when new tenants move in. Costa-Hawkins specifically applies to single-family homes and apartments built after 1995.

Nearly a dozen cities already have some form of rent control, but if Prop. 33 passes in November, cities could expand their local ordinances to limit rent increases for all housing units, including those previously covered by the Costa-Hawkins Act.

Tenant advocates have been pushing to overturn the Costa-Hawkins law for years, most recently with failed votes in 2018 and 2020. Lawmakers have also tried unsuccessfully to address the issue, and in 2019 Governor Gavin Newsom signed a state law capping annual rent increases at 5 percent plus the rate of inflation (a level that started at about 10 percent and is currently at 8.8 percent).

Supporters of the measure — including the California Democratic Party, the California Nurses Association and the Coalition for Humane Immigrant Rights — have raised more than $26 million. Proponents argue that passage of Prop. 33 would stop the current displacement of people while allowing local governments to tailor their ordinances to the needs of their communities.

Opponents of Prop. 33 include the California Republican Party and several business and real estate groups, such as the Apartment Association of Greater Los Angeles, the California Apartment Association and the California Business Roundtable. Opponents argue that rent control would have a negative impact by discouraging new construction and driving up prices even further. These groups have dug deep into their pockets to raise a reported $45.7 million to keep Costa-Hawkins in office.

In Santa Barbara, rent control has become one of the obvious differences between the candidates in the City Council elections for District 1 (Eastside) and District 3 (Westside) – races that could turn the current 4-3 split on the City Council against rent control. During the first candidate forum, held on August 28 by Newsmaker“Jerry Roberts and Lectures in Santa Barbara“Josh Molina, the four leading candidates, have made their positions known to the city’s voters.

In District 1, incumbent Council President Alejandra Gutierrez – who is seeking to reclaim her seat after winning by a narrow eight-vote margin in 2019 – reiterated her longstanding opposition to a local rent cap.

“I am definitely against it,” she said. “Especially because I want to protect the people who have sacrificed a lot to be able to live here and own property.”

Gutierrez said she was concerned about “small family landlords” – those who rent only a few units – being included in a general rent control ordinance. She said she does not support regulations more restrictive than the current statewide caps.

Her opponent, tenant advocate and union organizer Wendy Santamaria, explained her support for Proposition 33 and her plan to create exceptions for small landlords in the city.

“The reason I would vote for Proposition 33 is because we can still create exceptions locally for our small family businesses,” Santamaria said. “We need to make sure that's possible because we need to be flexible.”

She said her proposed housing reform package included a “rent commission” that would work with small landlords who could demonstrate a need to raise rent above the local maximum.

In the Third District, candidates were also split on the issue. Incumbent Councilman Oscar Gutierrez — who called the phrase “rent control” “radioactive” and preferred to use the term “rent cap” — strongly supported Proposition 33, saying he had spent years trying to get his council colleagues to support a local cap and he supports any policy that helps maintain rent affordability.

“I have tried to push for a rent cap of two percent in the past,” he said. “I didn't have enough support for it at the time. I hope that now that a few years have passed, my colleagues will realize that it is necessary.”

His challenger (and former martial arts instructor) Tony Becerra, a business-minded candidate and owner of Koei-Kan Karate-Do, was hesitant to explicitly state his opposition, but in his comments he expressed concern that repealing the Costa-Hawkins Act would “make the site less attractive to new developers” and that even the mention of rent control could lead to price increases.

For more information, including current polling data on Prop. 33, visit the CalMatters Voter Guide.