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The Santa Cruz Rent Control and Tenant Protection Act

November 2018 Ballot initiative

This petition for a modification to the city charter proposes ‘just cause for eviction’ laws on every single residential property in Santa Cruz.  It also resets rents to October 2017 and limits rent increases to no more than increases in the Consumer Price Index.  While the intent is good, harmful side-effects outweigh benefits.  Here is the full text of the Ballot Initiative, key portions are discussed below.

Just Cause for Eviction 

The just cause for eviction section (Section 5) establishes Just Cause Eviction laws that will be applied to every residential and apartment property in the City of Santa Cruz.  There are no exemptions.  Section 5 details and defines “just causes” to terminate a tenancy with a standard list with one big exception - the end of a lease is excluded, and therefore no longer a valid reason to give tenants notice to move.

Additionally, housing providers must provide at least six times the then current fair market rent as relocation assistance to affected Tenant households if one of the following “just causes” is present:

·       Vacating an unpermitted rental unit (one missing one or more City building permits)

·       The owner wants to move in

·       Necessary and substantial repairs requiring temporary vacancy

·       Withdrawal of the unit permanently from rental market (requires 120 day notice)

If the household includes qualified tenants (62 or older, or disabled), the relocation assistance increases to seven months.  With qualified tenants a landlord cannot displace tenants and move in at all unless the landlord is similarly qualified or legally removes the unit from the rental market for ten years, in which case 12 months notice is required.  A Rent Board can also arbitrarily define other penalties.  6 months relocation fees are also due if renters receive a rent increase 10% or greater due to repairs or improvement and find it unaffordable.   Fair market rent is determined by the U.S. Department of Housing and Urban Development.

Uncontrolled Subleases

Section 5(a)(2)(A) severely limits the ability to limit subleasing and specifies that lack of creditworthiness can not be a reason for rejecting a sublease.  Section 5a(2)(A)iii further removes all ability to limit subleasing to family members, relatives, or their partners and the ability to limit the maximum occupancy of a unit below the California Department of Fair Employment and Housing guideline. 

This California guideline in turns specifies section 503(b) of the Uniform Housing Code which sets the minimum size for a dwelling by number of residents. Each dwelling must have at least one room measuring at least 120 square feet; and all other habitable rooms excluding kitchens must be at least 70 square feet. The size determines the maximum occupancy rate. Two people can occupy a minimum-sized dwelling. For each additional occupant, the minimum must increase by 50 square feet.   This means the limit for an average three bedroom house is around 16 people.  Along with attendant cars and trash.  This will result in significantly increased numbers of renters per house and further impact neighborhoods.

Rent Price “Stabilization”

In Section 6 of the ballot initiative, the rents will be rolled back to the rent in effect on October 19, 2017.  Future rent-increases will be limited to an amount equal to the Consumer Price Index and cannot exceed 5 percent annually.

Santa Cruz Rent Board

Section 10 establishes a Rent Board with 7 appointed members replaced by 5 elected members in following years.

·       Board members determine their own salaries and can both tax rents and demand city money and resources.

·       The Rent Stabilization board does not report to the city. There is no mechanism for appropriate oversight.

·       The Rent Board has the power to raise relocation fees beyond 6 months fair market rent, without outside approval.

·       The Rent Board can create new penalties, as they wish, without city or voter input.

·       Initial members are appointed, future members are elected.  Unlike a court, there is no requirement for impartiality. 

·       As a measure, the similar City of Mountain view recently passed rent control - their Rent Board has requested a $2.5 million annual budget

Exclusions

Because of the state level Costa-Hawkins act, single family residences and apartments built after 1995 are excluded from the rent control portions of the Initiative.  Also because of  Costa-Hawkins the following are excluded from the rent price stabilization laws but they are still subject to just cause eviction laws, the Rent Board, and the rest of the initiative.

·       Single Family Residential Homes

·       ADUs

·       Condominiums (with some restrictions)

·       Units built after 1995.

There is going to be a parallel state level initiative on the ballot in November to repeal Costa-Hawkins, in which case these exclusions would no longer apply.

Regardless of Costa-Hawkins both short-term vacation rentals and rental units in which the tenant shares a bathroom or kitchen with the landlord if the house is the primary residence of the landlord are exempt from both the proposed rent control and just cause for eviction laws.