Santa Barbara needs more housing, not more decrees
Rent control is a bad idea politicians just can’t let go of. From Santa Monica to New York City, cities have discovered time and again that government decree is no guarantee of housing affordability. But that hasn’t stopped California cities like Pasadena, Santa Ana and Santa Barbara from making moves to demonstrate for themselves that rent control doesn’t work.
The most recent entrant into this is the coastal city of Santa Barbara. In October, the council voted 4-3 to direct city staff to craft a work plan to develop a rent stabilization ordinance. After a series of meetings in December and January, the council again voted 4-3 to impose a rent increase moratorium potentially through the end of the year as they develop a formal rent stabilization ordinance. They also further tightened “just cause” eviction rules. On April 7, the council approved the final ordinance.
These meetings were spectacles of poorly formed arguments and buzzwords from proponents of rent control.
“This is a big moment, certainly one to remember in the arc of our shared journey toward a more just, more stable, more resilient Santa Barbara,” said Council member Meagan Harmon at the public meeting. Harmon then proceeded to proudly read a statement of hers from five years prior. “I said, and I quote, ‘Rent stabilization is a reasonable and constrained but ultimately profoundly impactful step on the path towards solving the rental affordability crisis in Santa Barbara. Efforts to promote community stability have never been more critical than they are today.’”
This sentiment was echoed by Council member Wendy Santamaria, who argued, “It is in fact because we have left it mostly up to the market that we are in the situation that we are in.”
Such assertions were immune to straightforward examples that rent controls don’t work and the straightforward reality that government restrictions, not an unhampered free market, are behind the shortage of homes and the higher housing prices that result from such shortages.
Perhaps the most damning response to the push for rent control came from Chris Agnoli, who recently served as president of the Santa Barbara Association of Realtors and served on the city’s rental housing mediation task force.
“What’s frustrating for me about this serious issue is that I’ve come to the realization that this council just completely ignores facts and data that are provided to you,” he said at the January 13 meeting. “You can make a chart with the place that you rented and how that property’s gone up in value and think that you’re an expert in housing, but you’re not. You know who is an expert? The UCSB executive director for the department of economics, Dr. Peter Rupert. He has a bachelor of science degree and a PhD. Has offered his advice and data and told you these restrictions don’t work. But instead you make jokes about him.”
Indeed, Rupert has encouraged the council to consider the real-world example of how Minneapolis and St. Paul, Minn., tackled the housing issue since the pandemic. While St. Paul imposed rent control in 2021, Minneapolis pursued sweeping zoning reforms. The result? Rents actually rose at a faster rate in rent-controlled St. Paul versus Minneapolis and the latter saw a surge in permits while the former saw plummeting construction. St. Paul has since reversed itself.
“This is real-world stuff,” Rupert advised. “Don’t let your hopes and dreams get in the way of clear thinking. There are better solutions.” Instead, Rupert’s warnings were dismissed by the council majority, with Council member Oscar Gutierrez ripping him for basically being like every other economist without addressing his point: “He’s also against a minimum wage. So put that in your pipe and smoke it if you want to think about that. So uh so yeah, you might agree with some of the things and want to quote him as if it’s gospel, but don’t ignore the other stuff he also believes in. So, um, yeah, with that, let’s just… I’m waiting for the motion so I can support it.”
At the January 13 meeting, businessman Monte Wilson suggested the council focus on increasing the supply of housing through regulatory reform: “Everybody that we’ve heard from tonight, you know, is going to bring up a lot of the same issues, but isn’t the root cause problem the one we should focus on? And that’s the shortage of housing. Perhaps, just think for a second, what if we had an emergency ordinance on how we create a fast-track process to build more housing?”
This practical suggestion likewise fell on deaf ears.
There were, fortunately, some members of the council who understood the problem. “We’re not going to progress with rent control because if you can show me the community where it has helped, great. Show it to me. I haven’t seen it,” said Mayor Randy Rowse.
The council’s tunnel vision threatens to offset some of the pro-housing policies it has recently enacted. This includes an adaptive reuse policy that allows downtown conversions of non-residential buildings into housing without being subject to inclusionary zoning requirements. The city has also embraced accessory dwelling units (ADUs). But there’s only so much such moves can change in the near-term after decades of anti-development policies in the city.
If Santa Barbara wants to provide true stabilization, it should lean into supply side solutions.
Rent freezes and rent control policies might provide some relief to those in impacted units, but the evidence is clear that the deleterious impact of such behavior is to deter property owners from offering rental units and properly maintaining existing ones.
In the long-run, Santa Barbara City Hall is doing no one any favors but perhaps the short-term political interests of those cheering on a well-intentioned but counterproductive policy.