Rent control goes before Santa Rosa voters next week

Santa Rosans begin voting next week to determine whether the city should implement rent control in a special election that is shaping up to be the most divisive and expensive in the city’s history.

A sharply split City Council passed the controversial policy last fall, seeking to address soaring rents and a spike in evictions. In response, local landlords and the statewide organizations that support them funded a petition drive that suspended the law and forced a referendum on the issue.

Now voters will decide the fate of Measure C in a citywide special election that is shattering all spending records and putting Santa Rosa on the front lines of a statewide debate over how cities can best address the housing crisis.

If approved, rent increases would be capped at 3 percent annually for about 11,100 apartments built in Santa Rosa before Feb. 1, 1995. Measure C would also require landlords to give a reason for evicting tenants, and in some cases require them to pay relocation expenses.

Voting by mail begins Monday, and residents go to the polls on June 6.

Councilwoman Julie Combs, a staunch advocate of rent control and just-cause eviction rules, said Measure C has an excellent chance of passing because voters are turned off by the influx of outside cash, much of which has come from outside real estate groups.

“I am really proud of our residents. They get we have a housing crisis,” Combs said. “Neighborhood stability is important to people in Santa Rosa and I trust them to make the right choice.”

She thinks the housing crisis is so pervasive that even people who wouldn’t be directly affected by rent control, such as owners or renters of single-family homes, have seen its disruptive effects on adult children, friends or coworkers.

“We are bleeding out our seniors, families, teachers, nurses, students, hotel and restaurant workers, and your employees,” Combs said recently in remarks to the Sonoma County Alliance, a local business group. “They deserve to live here as much as anyone.”

But rent control foes are making a forceful case against the controversial policy.

Councilman Tom Schwedhelm, a steady critic of rent control, argues that it could actually exacerbate the housing shortage, create unnecessary additional bureaucracy and distract the city from the real solution of increasing housing inventory.

“Government does not need to artificially manipulate the system, it needs to get out of the way and encourage more housing development,” Schwedhelm said.

The city’s former police chief said he thinks rent control will scare off potential developers and investors at the precise time the city needs to be partnering with them, and will discourage existing property owners from maintaining their buildings if the city makes it harder to recoup their investment.

He also says the policy will affect “very few” Santa Rosa residents, doesn’t ensure those who would benefit from rent control really need the help, and may make it harder to convince existing landlords to rent to a formerly homeless person or tenants whose rent payments are federally subsidized.

“Those who are seeking affordable housing or are experiencing homelessness are on the outside looking in,” Schwedhelm said.

1 of 3 ballot measures

Measure C isn’t the only issue on the June 6 ballot. It’s paired with a city tax on cannabis businesses, known as Measure D. But there is so little opposition to the cannabis tax, which allows for taxes of up to 8 percent but rolls out with far lower rates, that no one even submitted a ballot argument against it.

Which means all eyes are on Measure C, not just in Santa Rosa but around the state.

In November, six Bay Area cities had ballot measures asking voters to either implement new rent control measures or update existing ones. They passed in Richmond, Oakland and Mountain View, but failed in Alameda, Burlingame and San Mateo. The mixed results expanded to about 15 the number of cities in the state with some form of rent control.

Santa Rosa is the only city in the state considering rent control on June 6, however, which explains why the race is attracting so much money from statewide landlord groups, said Terry Price, chairman of the Yes on C campaign.

They worry the spread of rent control policies from big cities like San Francisco, Oakland and Los Angeles, which have had them for decades, to medium-sized cities like Santa Rosa could help rent control take root across the state.

“I think you are going to see supervisors and city council members emboldened by a win in Santa Rosa,” Price said. “That’s why so much is at stake, not so much for the mom-and-pop owners, but for the out-of-county corporate owners.”

As of April 22, the latest campaign finance reporting period, a total of $604,000 had been raised by the campaigns for and against the measure, with opponents pulling in four times as much as supporters.

Opponents, buoyed by a $280,000 contribution from the political action committee of the California Association of Realtors, have to date reported raising $481,491. Their campaign is called Citizens for Fair and Equitable Housing: Rental Housing Providers and Real Estate Professionals Opposing Measure C.

That doesn’t include about $87,500 donated by similar groups to a committee that sought unsuccessfully to get landlord and rent control opponent Don Taylor elected to the council.

Supporters of rent control meanwhile have raised $122,281 as of the last filing deadline, the single largest donation being $65,000 from labor union SEIU. The group is calling itself Fair and Affordable Housing - Yes on C.

The lopsided funding levels have been evident in the size and amount of mailers voters have received to date. Opponents have funded at least six mailers, many of them oversized, and most of which focused on all the things rent control won’t do. They point out that it won’t build new housing, lower rents, solve homelessness or cover all renters. The law exempts anyone living in single-family homes, duplexes, or owner-occupied triplexes.

One flyer features several current city council members and past mayors and suggests that “they know best” for the city. Another has images of homeless people and encampments and the message that Measure C “will not alleviate homelessness.”

Price calls the claims that Measure C won’t solve homelessness a “specious argument” because many people are homeless precisely because they’ve been unable to afford sharp rent increases.

Tight rental market

Supporters have sent out just two mailers so far, one of which encourages voters to “put yourself in a renter’s shoes,” describing how rents have gone up 50 percent in five years and the city’s 1 percent vacancy rate.

The rent for the average two-bedroom, two-bath apartment in Sonoma County has increased 49  percent in five years to $2,122 a month, according to Real Answers, a Novato company that tracks data from large rental complexes.

The tight rental market means renters who get evicted or cannot afford a sharp rent increase have little choice but to leave the community, which should concern not just renters but also the business community that relies on a stable workforce, Combs said.

“With a vacancy rate of about 1 percent, we may as well hang a ‘No Vacancy’ sign at our city limits,” Combs said.

Advocates for rent control contend that landlords are evicting tenants before the election to ensure they can increase rents to market levels. Davin Cardenas, a lead organizer with the North Bay Organizing Project, said his canvassers have come across numerous victims of what he calls “predatory renovations.”

He claims landlords that would previously upgrade units one at a time are now emptying entire complexes to update them. He suspects landlords are making superficial improvements and increasing rents sharply now in case rent control prevents them from doing so in the future.

“It’s just a weird period we’re in because we’ve got this frozen policy and a vote on it coming up in June,” Cardenas said. “I think some landlords are taking advantage of that, particularly in the Roseland area.”

Climbing costs

Perry Angle and his wife, Sharyl, both 72, moved to Santa Rosa in 2013 from Contra Costa County to be closer to their grandchildren. The Army veteran and retired health insurance account manager had little savings largely because of financial hits they took during the recession.

They moved into a 60-year-old, 600-square-foot apartment in a locally owned complex near Coddingtown Mall for which they paid $925 per month, including a parking space and most utilities.

The following year the complex was sold to a Walnut Creek real estate investment firm, which increased rents and charged $75 for parking and $55 for utilities. All told, their $1,250 monthly payment has increased 35 percent in three years.

If rent control doesn’t pass, Angle worries the increases will only continue. Before signing the lease he has now, the landlord had proposed increasing rent and other costs to $1,505 before reversing course. Such an increase would have been a 62 percent hike over his original monthly payment - and consume about 50 percent of their income, most of which comes from Social Security, plus a bit extra from his job at Target.

“It’s going to mean leaving Santa Rosa, where to God only knows,” Angle said. “If rent control doesn’t pass, then I’ve got to face another major upheaval in my life.”

That’s not the property owner’s fault, said Rob Muelrath, whose public affairs firm is running the No on C campaign.

He predicted rent control would reduce turnover in existing rental stock by making it highly unlikely that anyone in a rent-controlled unit would ever leave, increasing competition for market-rate units.

“Do you think these people are going to move? They’re on the gravy train now,” Muelrath said.

Muelrath said he knows millionaires who own rent-controlled units in San Francisco but don’t live in them anymore, instead subletting them to someone who sublets to someone else.

Instead of hoping for rent control to pass, Muelrath said Angle and others like him should tell City Council members to get serious about building housing, not just talk about it for political gain or to make themselves feel better.

“They’re not even putting a Band-Aid on the problem. They are creating one,” he said.

Angle said he hears the argument about building more units, but doesn’t see much evidence of it or much chance of it happening soon enough to help him and his wife.

“We know they are trying, but in the meantime, how much damage are they going to allow?”

You can reach Staff Writer Kevin McCallum at 707-521-5207 or kevin.mccallum@pressdemocrat.com. On Twitter ?@srcitybeat.