Santa Cruz Voters To Decide On Rent Control

Sep 20, 2018

Numbers out today show the median monthly rent in Santa Cruz is $3,149. That’s according to the real estate website Zillow.  This November, residents will vote on whether rent control is the answer to reining in rents.

A lavender “Yes on M” pin stands out on Stacey Falls’ sweater. She’s campaigning on a tree-lined street near downtown Santa Cruz. Falls is part of the Movement for Housing Justice group that’s asking people to vote yes on Measure M.  It’s a three part measure that seeks to slow rent increases and establish restrictions on evictions.

Falls approaches a large apartment complex.

“I've got a little piece of literature for you here. Can we count on your vote in November?” Falls asks.

Oh yeah definitely,” Tyler Starkman says.

Starkman leans against his apartment’s door frame. He says as his rent has increased over the years, he’s considered moving.  He plans to vote yes on Measure M.

“I wouldn't have to keep looking for better paying jobs just to stay here,” Starkman says.

The first thing Measure M would do is implement rent control. That would limit how much landlords can raise the rent. Measure M proposes tying it to the increase in the cost of living for the San-Francisco Bay area. According to the measure, that’s been under 4 percent since the '80s.

Next, Measure M would implement ‘just cause eviction’. That means landlords can only evict a tenant for certain reasons, like a tenant breaking the rental agreement. If that can’t be proven, landlords would have to pay for their tenants’ relocation. In some cases, like owner move-in, that relocation assistance would be six times the fair market rent for a similar rental.

Finally, Measure M would create a Rent Board to deal with any tenant-landlord disputes. Initially, the city’s general fund would finance the Board. Then, landlords would pay an annual, per-unit fee to finance it. Board members would set their own compensation rates.  

Walking down the street, Stacey Falls says this is all needed because average working people are leaving Santa Cruz.

“Our city depends on low and middle income workers. And when average people feel like they have to leave because they can't afford to keep the homes that they've lived in for years, that undermines our community,” Falls says.

The majority of residents in Santa Cruz are renters.  

“We’re a diverse, caring, compassionate community and I would hope that we would be able to protect the most vulnerable folks, our renters, our low and middle income renters,” she says.

On the other side of town, dozens of "No on M" yard signs are stacked on Lynn Renshaw’s front porch.

Renshaw is with Santa Cruz Together, the no on M campaign. What concerns her most is the just cause eviction part of the measure. Renshaw lives next to several rentals and is worried evicting problem tenants would be very difficult.

“So my neighbor could have a party house, it could have house with 10 people in it that are noisy, disruptive or even threatening and the owner wouldn't be able to do anything about it,” Renshaw says.

She’s also concerned about the part that says landlords can’t deny a family member from moving into the rental.   

Renshaw is a landlord. If Measure M passes, she plans to sell at least one of her single-family rentals. 

“I will most likely sell the property. All the properties around here are, on average, worth at least, you know, $1 million. So, if it's too much of a bother, I don't need to have the rental,” Renshaw says.

According to Professor of Economics Jesse Cunha, rent control would reduce the overall supply of rental units. I met him at University of California, Santa Cruz, where he’s a research associate.

“We'll have more owner-occupied homes and less renters. And that can just change the character of the community. It means that for current and future renters, it’s going to be much harder for them to find places to live,” Cunha says.

Walking across campus, Cunha says he plans to vote no. He says in the long-run, rents will only go up if Measure M passes.

“If the tenant leaves, the landlord is allowed to reset that rent to market rates. And in fact, under this ballot initiative, the landlord has every incentive to do just that,” Cunha says.

Exactly how Measure M would play out depends on how California voters vote on Proposition 10.  It’s also on the ballot this November.  Prop 10 aims to repeal Costa-Hawkins. That’s the state law that allows landlords to reset the rent back to market value when a tenant moves out; it’s called vacancy decontrol. Costa-Hawkins also bans rent control on single-family homes, condos and all rentals built after 1995. 

If Measure M passes, rent control would apply to about a quarter of Santa Cruz's rental stock. If both Measure M and Prop 10 pass, rent control would apply to all rentals in Santa Cruz. It would be up to the Rent Board to decide whether to get rid of vacancy decontrol.

Stacey Falls is hoping both Measure M and Prop 10 pass. The Santa Cruz High School chemistry teacher rents a single-family home with her husband and a roommate.

“I would like to see both Measure M and Proposition 10 passed. I mean, there are a lot of single-family homes in this community and I think it would be better if all renters were protected,” Falls says.

Measure M needs a majority vote to pass. As both campaigns gear up for the November 6 election, an independent analysis is underway to determine how much Measure M and the Rent Board would cost the city of Santa Cruz. The analysis will be public in October.

Clarification: An earlier version of this story stated that Lynn Renshaw owns a single-family rental in Santa Cruz. She owns multiple rentals, but plans to sell at least one single-family rental at this time.