PD Editorial: Rent gouging rules are still necessary

The first reports of rent gouging surfaced less than a week after the North Bay wildfires broke out on Oct. 8, 2017.

As a result of emergency declarations by local authorities and by Gov. Jerry Brown soon after the fires, annual rent increases have been capped at 10 percent, coupled with some added protection for tenants. The price cap also applies to hotel rooms, food, fuel, medicine and other essential supplies during a declared emergency.

Prosecutors have charged several people with rent gouging, including a case in Marin County where a property owner allegedly raised the rent on a Novato house by 58 percent in the days immediately after the 2017 wildfires.

Most landlords appear to be complying with the rent and eviction restrictions.

But the emergency regulations are scheduled to expire on Dec. 4.

That's too soon. They should be extended until more of the 5,300 homes lost last year in Sonoma County are rebuilt or replaced.

It's possible, even likely, that Brown will extend the state of emergency for at least six more months, especially after this month's wildfires in Butte, Los Angeles and Ventura counties, which will put even more pressure on California's tight housing market.

A staff report submitted to the City Council last week notes that the vacancy rate was about 1 percent before the fires, which “increased the rental housing shortage by several orders of magnitude and severely reduced the number of owner- occupied housing units in the city.”

Fourteen months later, 70 homes have been rebuilt, with 1,221 others are under construction, 405 permits issued and 403 permits pending, according to data compiled for the Rebuild Sonoma section in today's paper. That's a good start, but it's less than half of the housing units lost in the Tubbs and Nuns fires.

And, the staff report notes, “city officials continue to be alerted to the threat of price gouging by persons offering housing for rent in Santa Rosa and continue to receive complaints of associated tenant evictions.”

The price-gouging issue arises less than a month after California voters rejected Proposition 10, which would have allowed cities and counties to enact broad-based rent control. We opposed Proposition 10 and a 2017 proposal to impose narrower rent controls in Santa Rosa. It may seem contradictory to support the emergency regulations, but there are important distinctions.

Sonoma County - and California - desperately need more housing, all kinds of housing, to meet market demand and bring prices into equilibrium. There's ample research proving that rent control is a disincentive to building new housing.

But the unanticipated loss of thousands of houses, apartments and condominiums at a time when the vacancy rate already was approaching zero required emergency action. The willingness of insurance companies to pay enormous sums to rent homes for policyholders raises the possibility of unscrupulous landlords evicting tenants to make more money.

Finally, the restrictions will expire when the emergency declarations are lifted. The governor has typically imposed them about six months at a time. That's about right.

The proposal in front of the City Council this week would leave Santa Rosa's restrictions in place until City Manager Sean McGlynn lifts the state of emergency. We would prefer to see the council review the emergency ordinance on a fixed schedule, probably every six months. But, for now, the rent gouging rules are necessary for the community's recovery.

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