Prop. 33, Rent Caps, and Santa Barbara’s City Council Races

As rental prices continue to rise across the state, the contentious debate over “rent control” ramps up for California residents and policymakers ahead of the 2024 General Election on November 5. Here in Santa Barbara, the topic has factored heavily in the city council races; and at the state level, voters will have a chance to decide on Proposition 33, which would grant cities the ability to pass even stronger rent caps.

Prop. 33 would “expand local governments’ authority to enact rent control on residential property” by repealing the Costa-Hawkins Act, a 1995 law that protects landlords’ ability to raise their rents to market rates when new tenants move in. Specifically, Costa-Hawkins covers single-family homes and apartments built after 1995.

While nearly a dozen cities have some form of rent control, if Prop. 33 passes in November, cities would be able to expand local ordinances to limit rent hikes on all units, including those previously covered by Costa-Hawkins.

Tenant advocates have pushed to overturn Costa-Hawkins for years, most recently with failed ballot measures in 2018 and 2020. Lawmakers have made their own unsuccessful attempts at addressing the issue, and in 2019 Governor Gavin Newsom signed a state law restricting annual rent increases to 5 percent plus inflation (a number that started around 10 percent and currently stands at 8.8 percent).

Supporters of the measure — including the California Democratic Party, California Nurses Association, and Coalition for Humane Immigrant Rights — have raised more than $26 million. Advocates argue that passing Prop. 33 would put a stop to people currently being displaced while also allowing local governments to tailor their ordinances to their communities’ needs.

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

In Santa Barbara, rent control has become one of the obvious differences between candidates in both the District 1 (Eastside) and District 3 (Westside) City Council elections — races that could flip the current 4-3 council split against rent control. During the first candidate forum, hosted on August 28 by Newsmakers’ Jerry Roberts and Santa Barbara Talks’ Josh Molina, the four leading candidates made their positions known to city voters.

In District 1, incumbent councilmember Alejandra Gutierrez — who is looking to regain her seat again after winning by a narrow eight-vote margin in 2019 — reaffirmed her long-held opposition to a localized rent cap.

“I’m definitely against it,” she said. “Especially when I really want to protect those individuals that have been sacrificing a lot to live here and be able to own a property.”

Gutierrez said that she worried about “mom-and-pop landlords” — those who rent just a few units — being included in a catch-all rent control ordinance. She said she doesn’t support anything more restrictive than the current statewide caps.

Her opponent, tenant advocate and union organizer Wendy Santamaria, explained her support for Prop. 33 and her plan to carve out exemptions for small landlords in the city.

“The reason why I would vote yes on Prop. 33 is because we can locally still create exemptions for our mom-and-pops,” Santamaria said. “We need to make sure that’s possible because we need to be flexible.”

She said that her proposed housing reform package includes a “rent board” that would work with mom-and-pop landlords who could prove they needed to raise rents higher than the local cap.

In District 3, the candidates were similarly split on the issue. Incumbent councilmember Oscar Gutierrez — who said that the phrase “rent control” is “radioactive” and prefers to use the term “rent cap” — stood firmly in support of Prop. 33, saying that he has tried for years to get his fellow councilmembers to support a localized cap and that he is in support of any policy that helps maintain affordability.

“I’ve tried to pass a 2 percent rent cap in the past,” he said. “I didn’t have enough support for it then. I’m hoping now that some years have passed, my colleagues will see that it’s needed.”

His challenger (and his former martial arts instructor) Tony Becerra, a business-minded candidate and owner of Koei-Kan Karate-Do, was hesitant to explicitly voice his opposition, though in his comments he said he worried that repealing Costa-Hawkins would “make it less attractive for new builders to come in” and that even the mention of rent control can force prices to go up.

For more info, including recent polling data on Prop. 33, visit the CalMatters Voter Guide.