Following rent control defeat, Santa Rosa City Council looks forward

The day after the defeat of Santa Rosa's controversial rent control measure, City Council members took stock and expressed hope the city would find other ways to solve its housing crunch.

Mayor Chris Coursey said the council majority that narrowly passed rent control and just-cause for eviction rules in August was trying to help people caught in a historic housing crunch, and was disappointed that effort has been blocked.

“This was not a philosophical debate for 11,000 renters in Santa Rosa. This was real-life stuff, and they are struggling,” Coursey said Wednesday morning. “And what worries me today is that we have let them down.”

Final returns Tuesday night showed 52.5 percent of the vote against Measure C compared to 47.5 percent in support.

There are another 3,200 vote-by-mail and provisional ballots to count, but given the vote percentages, those are not expected to change the results, given that the “no” votes enjoy a 1,409-vote lead.

The Sonoma County Registrar of Voters is expected to deliver final results later this month.

Now that the referendum has effectively forced repeal of the ordinance, the city is precluded by state election code from passing the same ordinance for a year after the June 6 election, according to City Clerk Daisy Gomez.

The city was prepared to respond however the vote went, said Dave Gouin, director of the city's Housing and Community Services department.

If Measure C had passed, a web page and hotline were ready to go live explaining the implications and requirements for renters and landlords.

Rent restrictions would have gone into effect immediately, with rents returning to no more than January 2016 levels. Rent adjustments of 3 percent could occur annually thereafter, Gouin said.

But administration of the program, including fielding complaints from renters and requests for higher rent increases from landlords making capital improvements, was unlikely to go into effect until September, he said.

Now that Measure C has failed, Gouin said city staff await direction from the council about future priorities.

The city spent more than $200,000 researching, crafting and passing the ordinance.

That includes $130,000 in staff and consultants' time this year, up to $25,000 contracting with an outside attorney to help the council craft the ordinance and about $21,000 in legal expenses addressing referendum related issues, according to Gouin and CFO Debbi Lauchner.

That doesn't include costs from the previous fiscal year, which involved substantial council analysis, nor the estimated $500,000 special election cost.

It's not clear whether the city could - or would even try to - pass a revised rent control ordinance anytime soon.

Coursey said he wasn't interested in second-guessing whether the ordinance could have passed in a different form or whether the Yes on C campaign could have done anything differently.

In his mind, the loss was directly related to the money spent by the real estate interests that raised more than $830,000 to block Measure C. By his count, they spent $57 per vote received. (By the time all votes are counted, the figure will likely be closer to $50 per vote.)

“I thought that Measure C in normal circumstances would be an easy win in Santa Rosa, but this was not normal circumstance,” Coursey said. “That's what $800,000 will do. It will skew things.”

It wasn't just the money, Coursey said, but the messaging, which he said was “cynical” and designed to mislead and confuse voters by highlighting all the things Measure C wouldn't do.

“Measure C won't solve homelessness,” Coursey said, quoting from a common No on C campaign message.

“You know what? It doesn't alleviate athlete's foot either, but that's not what it was supposed to do.”

Rent control was supposed to cap rents at 3 percent annually for about 11,100 apartments built in Santa Rosa before Feb. 1, 1995, all that state law allows.

The law also would have required landlords to give a reason for evicting tenants, and in some cases require them to pay relocation expenses.

The goal of all these rules was to preserve the city's existing stock of affordable housing, while chipping away at creating more affordable housing, like it did last month by appropriating $2.75 million to incentivize developers to build affordable units, Coursey said.

“We're going to continue to work on the things that we can work on,” Coursey said. “The priorities don't change; the needs don't change. They're still there.”

Councilman Tom Schwedhlem said he was pleased to see rent control defeated because he thinks it was not good for the city overall.

Now the city can focus on a rental inspection program, a renter and landlord education effort, and a risk mitigation fund designed to give landlords more incentive to rent to people with federal housing assistance vouchers, he said.

That last initiative would have been impossible with just-cause for eviction rules in place that he felt would have made it harder for landlords to evict problem tenants.

The city also needs to continue focusing on housing production, which is on the rise, he said.

There have been 70 new housing units completed so far this year, Schwedhelm said, citing figures from the city's Planning and Economic Development Department.

The report - which does not break down the units by type - shows 251 under construction, 80 ready to build and another 845 in the plan review pipeline, according to the department.

“We're on the right path and I'm encouraged by it,” Schwedhelm said.

What he doesn't think is right is to blame the loss on the campaign spending. More money may have been spent than for other campaigns, but voters are smart and can still make up their own minds on such issues, he said.

“I'm just willing to give the voters a heck of a lot more credit,” Schwedhelm said.

One of the efforts underway that may now get closer scrutiny is the committee Coursey established to explore floating a housing and infrastructure bond in 2018. Vice Mayor Jack Tibbetts sits on that ad hoc committee, whose meetings are not public.

Tibbetts thinks the inevitable result of rent control's defeat is that it will force the committee to lean more heavily on subsidizing affordable housing projects over other city infrastructure needs.

Even though he offered only qualified support for Measure C, Tibbetts said he was disappointed it didn't pass because it would have provided important rent predictability for people until market rate and affordable housing production can ramp up.

“This was the bridge that was supposed to get us there, and the bridge didn't get built,” Tibbetts said.

“Now we've got to try to cross the river and get to the funding.”

He has a number of ideas about how to achieve that.

These include the housing bond, setting aside money from the real estate transfer tax into a housing fund and establishing a downpayment assistance program to help first-time home buyers.

He also wants to explore giving priority to local renters who've been priced out of their units when new affordable units come on line.

Councilwoman Julie Combs said she's certain the city's rent control law would have passed in a regular November election, when turnout would have been much higher.

She said the special election with only one other issue on the ballot - a cannabis tax that was all but assured to pass - failed to get renters out to vote in sufficient numbers to offset the turnout by property owners.

Combs, the council's most ardent rent control advocate, isn't talking about trying it again anytime soon.

Her priorities are getting a rental inspection program up and running to ensure people aren't living in substandard conditions, funding legal services to protect tenants, focusing on the city's housing plan, floating a housing bond to support the construction of affordable housing and possibly instituting just-cause for eviction rules without rent control.

She's also not wondering whether a softer rent control law could have passed. She said she stood ready to negotiate with the industry over terms like the 3 percent cap, relocation expenses and sunset terms, but never got the chance.

“I would have been happy to negotiate most of the items, but my experience was that they believed they could squash it, and they did,” she said.

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