Santa Rosa temporary rent cap takes effect June 16

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Starting June 16, many owners of  multifamily housing in Santa Rosa will face a 3 percent cap on rent increases.

The council preliminarily approved the 45-day measure May 10 and ratified it May 17, despite fierce opposition from the California Apartment Association North Coast.

Hundreds of rental owners opposed the measure through letters, emails and phone calls. Members and staff testified against the moratorium at council meetings, saying it would hurt small businesses and drive a wedge between property owners and the city. Click here to see video of testimony against the moratorium.

Renter advocates said it will  keep rents in check as the city drafts a permanent rent control and just-cause eviction ordinance, a process that could take several months.

The council can renew the 45-day moratorium until the ordinance is ready.

Both the moratorium and any permanent rent control would apply to multifamily units built before Feb. 1, 1995. Single-family homes and condominiums would be exempt, as would owner-occupied triplexes, and all duplexes.

The moratorium’s 3 percent rent cap applies cumulatively over a 12-month period. During the moratorium, a rental owner who’s already increased rent by 3 percent or more during the prior year won’t be able to raise it again. This also applies to property owners who’ve provided notice that a rent increase would take effect during the moratorium.

To read the interim ordinance, click here. Below are some frequently asked questions and answers produced by the city of Santa Rosa.

FAQs

What rental units are exempt under the rent moratorium ordinance?
State law, the Costa-Hawkins Rental Housing Act, passed in 1995 prevents the City from regulating and exempts the following units from rent control: (California Civil Code Section 1954.50-1954.535)

  • Units with a certificate of occupancy issued after February 1, 1995
  • Single family homes
  • Condominium units sold separately to a purchaser for value
  • Properties subject to governmental regulation or subsidy

Additionally, duplexes and “owner occupied” triplexes are exempt at the request of Council.
The Santa Rosa City Attorney has clarified the definition of “owner occupied” to mean the owner must live in the property. If the owner is a partnership, corporation or some other form of business entity one of the partners or owners of the business entity must live in the unit for it to be exempt. The moratorium does not specify a specific percentage of ownership.

If a rent increase notice was served prior to the enactment of the moratorium that exceeds 3%, yet the notice takes effect after the moratorium has become effective, does that notice become void?
Once the moratorium becomes effective, a landlord may not increase rent more than 3% in a cumulative 12 month period, this would include time prior to the effective date of the moratorium. For example, if a landlord had increased the rent in January by 3%, no further increases would be authorized for 12 months unless approved by the rent control board as an exception. If a notice was served prior to the effective date for greater than 3%, the landlord assuming no prior increase in the 12 month period would be limited to a 3% increase. In such a case, it is recommended that the landlord notify the tenant in writing that in compliance with the City’s ordinance the rent will only be increased by 3%.

What happens to rent increases above 3% that have been issued? 
The landlord is only allowed to increase rent by 3% in a cumulative 12 month period after the effective date of the ordinance. If the rent increase was noticed for a greater amount and has not become effective, the landlord is only allowed to increase by 3% (or less if there was an increase within the 12 month period prior to the effective date).

Rents that were already in effect prior to the effective date of the moratorium would not be changed at this point but the landlord would not be allowed to further increases if the increase was in the past 12 months. When the Rent Stabilization Ordinance becomes effective, the Council has indicated an intent to reset rates to rents in effect as of January 1, 2016 (a “rent rollback”). This ordinance has not yet been drafted or adopted by the Council.

How will the City enforce the rent moratorium ordinance?
The moratorium provides that it can be raised as a defense in court to an eviction proceeding based on non- payment of rent which is charged in excess of the amount set in the moratorium. If a notice is received in violation of the moratorium, the tenant can advise the landlord of the moratorium.

Who will be the primary contact at the City for answering case-by-case questions about this ordinance?
At this time, staffing has not been assigned to this project. Please send emails to CMOffice@srcity.org for questions related to the rent moratorium, rent stabilization, and just cause for eviction.

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