City of Santa Cruz Rent Control & Just Cause for Eviction Ordinance: FAQ

What is the ordinance?

A three-part stabilization and protection plan for Santa Cruz, modeled after a similar law passed by voters in Richmond, CA in 2016.
1. Rent control policies limit yearly rent increases in protected rental units (multi-unit properties built before 1995). Fair rent increases would be tied to the cost of living (consumer price index) for the SF Bay Area.

2. Just cause for eviction regulation strengthens tenants’ right to remain in their rental unit. Tenants may only be evicted for certain reasons.The burden of proof will be on the landlord to show just cause exists. A new lease may not be denied for no reason. For tenants forced to move due to no fault of their own, relocation support will help them through their displacement period.

3. A rent board provides guidelines for rent increases each year according to the cost of living,handles appeals for rent increases/reductions, and educates tenants on their rights. Its initial wage and fee structure will be set by appointees of the city council. Thereafter, like the current city council and rent boards across the Bay Area, it will be directly accountable to the electorate.

Why does Santa Cruz need rent control now?

According to a study of housing markets in eight countries, Santa Cruz is the least affordable housing market in the United States.¹ Median rents in the city of Santa Cruz increased almost three times faster than median household income between 2011 and 2016 – rents rose from $2,224 to$3,172 per month², a 42.6% increase, while income only went up by 16.4% in that period of time.³Today, 68% of renters in SC spend over 30% of their income on housing,⁴ meaning they suffer from “rent burden” by federal definitions. And according to a recent poll, 60% of California voters support rent control.⁵

How will renter protections affect our community?

Renter protections will make our neighborhoods more stable. The 57% of our town that currently rent their homes⁶ will be able to grow roots here. This will allow tenants to participate, volunteer, and be active in their neighborhoods. It will insulate our most vulnerable community members from displacement, help kids maintain their peer groups at school, and allow seniors to age in place.When you know your neighbors, your neighborhood is safer and more of a community.We know Santa Cruz’s housing crisis doesn’t have a simple fix, but rent control is one crucial element, and the only one that will have an immediate and lasting impact on current renters.Renter protections will mean our streets are safer,and our schools, neighborhood groups, and local businesses will be better supported and better able to care for each other.

Does rent control work?

Yes – rent control will give economic relief to many vulnerable residents,providing them with stability, and protecting them from the unpredictable fluctuations of the housing market. It will defend social and economic diversity in Santa Cruz. The form of rent control that is being proposed is not the “price ceiling”policy from Economics 101 textbooks – it is a carefully designed set of policies that will counteract market failures and provide real relief for thousands of renters in our city.⁷

What effect will this have on commuter traffic and the environment?

Right now, working people are fleeing the high rents in our city. But their jobs are still here. If people could afford to live close to where they work, it would cut down on car traffic and carbon emissions. Rent control is ecological.How many renters will be helped by renter protections?

A rough estimate is that 34,000 people would benefit, a huge effect on a city of more than 60,000. The Costa-Hawkins Act of 1995,a California state law supported by developers and landlords, limits rent control to multifamily units built before 1995. However, even under Costa-Hawkins, about 6,000 Santa Cruz units would be covered both by rent control and just-cause eviction protections. Thousands more people live in rentals covered by just-cause. The people most protected will be the people most in need: low income renters who are disproportionately people of color.

What effect will this have on homelessness?

High rents, low wages, and lack of stability are primary factors that lead to homelessness. It’s notan accident that the city of Santa Cruz is the least affordable housing market in the United States¹and also has over 1,200 people without homes.⁸This ordinance will make more housing available for more people who otherwise could not afford it.

How will renter protections affect the local economy?

Renter protections boost the local economy by leaving tenants with more disposable income. Low-income people tend to spend locally rather than invest far away. Tenants with rent control can budget better for their futures, since their costs change more predictably. This is important for locally owned small businesses,which today are hard-pressed to retain good employees in the unstable rental market.

How would the ordinance affect landlords?

The ordinance provides that landlords will be guaranteed a fair return on their investments as defined by law.

Would renter protections slow investment in housing? In a city as attractive as Santa Cruz?
This is very unlikely. Other cities, such as LA and Berkeley, have rent control and have not seen slowed growth.⁹ ¹⁰ Further, current law makes new building exempt from rent control.

Landlords say rent control leads to increased poverty and crime. Is that true?

No, it isn’t. As far as crime is concerned, the ordinance allows landlords to evict tenants who are using their unit for an illegal purpose. Rent control protections do tend to apply more in less affluent areas, which may give the false impression that they are a cause of poverty. In fact it’s the other way around:poverty leads to the need for rent control, and rent control in turn helps bolster community stability and encourages mutual aid. When you know your neighbors, your neighborhood is safer.

Would this increase animosity between landlords and tenants?

No, it would simply provide a structured and transparent method for dealing with conflicts and avoiding future ones. It would regulate two of the major sources of landlord/tenant conflict: rent increases and arbitrary evictions.

How is a rent freeze different from rent control?

With rent control in the air, landlords often raise rents and evict tenants to get out ahead of the ordinance. Most cities enact a temporary freeze on rents and no-cause evictions to counter this until a rent control ordinance is decided on by the voters.

References

1. Demographia International, 14th Annual HousingAffordability Survey 2018
2. Zillow, www.zillow.com/santa-cruz-ca/home-values
3. US Census Bureau, American Community Survey
4. UC Santa Cruz, No Place Like Home Report 20175. UC Berkeley Institute of Governmental Studies.Survey: “Half say housing affordability an ‘extreme lyserious’ problem in their area…”, Table 5 (9/19/2017)
6. Gumz, Jondi. “Santa Cruz County median rent:$2,914 a month and rising”. Santa Cruz Sentinel(10/12/2016)
7. Diamond, R., McQuade, T., & Qian, F. (2017). The Effects of Rent Control Expansion on Tenants,Landlords, and Inequality: Evidence from SanFrancisco
8. Applied Survey Research, Santa Cruz CountyHomeless Census & Survey 2017
9. Chiland, Elijah. “Report: LA Apartment Construction is up 61 Percent”. Curbed Los Angeles (8/30/2017)
10.Bromwich, Jonah E. “California Today: The Housing Crisis Hits Berkeley”. New York Times (6/15/2017)