New calls for rent control in Sonoma County’s tight housing market

The wildfires of October fueled calls to greatly increase the supply of affordable housing in Sonoma County.

Now the disaster also may factor into a new ballot measure that aims to provide greater protection for renters in Santa Rosa, even as voters across California may consider a related effort.

It is the latest rent control measure to emerge in Sonoma County, where rents have jumped sharply since the end of the Great Recession and vacant apartments are hard to find.

Rents soared nearly 50 percent from 2011 to 2016, and have risen to new heights since October, when the North Bay was hit with the most destructive wildfires in state history.

“The wildfires certainly hit an area that already had a tight housing market,” said Chris Salviati, an economist with Apartment List, a rental listing website based in San Francisco. “Whatever can be done to promote new housing and to replace what was lost is really crucial at this point.”

In the North Bay, the wildfires claimed 40 lives and destroyed more than? 6,000 homes. The disaster quickly created a scramble of fire survivors seeking replacement housing.

It also led to a state order that aims to combat price gouging, and more recently it prompted local officials to propose a new tax to support affordable housing projects.

Now a year after Santa Rosa voters removed a rent control law enacted by the City Council, a new effort is underway to put a similar measure on city ballots this November.

“We are working and gathering signatures to pass a rent stabilization and just-cause eviction ballot initiative,” said Davin Cárdenas, co-director of the North Bay Organizing Project.

Cárdenas said the push for a law to protect renters “is the direct result of the fires,” though he acknowledged renters’ advocates around the state are calling for similar laws.

“Renters were feeling the pinch before the fires,” he said. “And after the fires the necessity has skyrocketed” for such a measure.

The organizing project’s effort comes as rent control proponents statewide this spring turned in enough signatures to qualify a ballot initiative that would allow stronger rent control measures in California cities.

The measure, which Secretary of State Alex Padilla said Friday had qualified for the Nov. 6 ballot, would ask state voters to repeal a law that prohibits local rent control laws from regulating single-family homes and condominiums or any unit built after 1995.

In the county, renters occupy 40 percent of roughly 190,000 housing units, according to 2016 Census data.

They live in large apartment complexes, as well as in condominium developments and single-family neighborhoods.

The data collected on rents is limited and typically comes from rents charged new tenants at larger apartment complexes, often with more than 50 units.

Apartment List reports the median two-bedroom apartment in Santa Rosa rented in May for $1,974 a month, an increase of 3.4 percent from a year earlier. RentCafe, another online rental site, reports the average May rent for Santa Rosa at $1,916, an increase of 5.9 percent.

Vacant apartments are scarce. Surveys by the Santa Barbara-based apartment information service Yardi Matrix found occupancy rates of apartments in east Santa Rosa in March at 97.1 percent. West of Highway 101 the rate was 97.6 percent.

Many experts consider either rate as essentially full occupancy.

Locals on opposite sites of the rent control divide offered different views on what has occurred with rents this year.

Cárdenas said he hears from many renters who say landlords raised rents the maximum ?10 percent allowed under the governor’s order to prevent price gouging.

“If they could raise rents more,” he said, “they definitely would.”

But Scott Gerber, managing director of Bradley Commercial Real Estate in San Rafael, said most Santa Rosa landlords made “a very concerted effort” to limit rents this year.

His annual spring rent survey of apartment complexes with 30 or more units concluded that rents rose just 1.9 percent in Santa Rosa from a year earlier - and only 3.4 percent for the entire county.

Keith Becker, president of DeDe’s Rentals in Santa Rosa, said he advised his client owners of rental houses and apartments to limit rent hikes to 5 percent, which he called “fair to everyone.”

He noted signs of change this spring for both renters and landlords. While the market remains relatively tight, those looking for units have more choices, he said.

“The number of properties available is increasing,” Becker said.

At the same time, some landlords are looking to sell local properties. Of 28 houses Dede’s manages where tenants are moving out, 10 will be put up for sale, he said.

Gerber maintained that more apartments have become available in the county. Some renters are moving to San Francisco, where an increase in building has provided more options. Also, he acknowledged, some renters are leaving the North Bay for places with cheaper housing costs.

Patty Goodwin, property manager and chief financial officer for the Santa Rosa property management company Pine Creek Properties, also noted an upswing in outmigration.

“We are seeing people moving out of the area,” she said. She sees less demand now for one-bedroom apartments, but said renters still have few choices for two- and three-bedroom units.

Nationally rent increases have slowed to about 2 percent this year, the smallest annual growth since 2010, according to RentCafe. Some experts highlight the change as providing relief for renters.

But the respite is likely to be temporary, said Doug Ressler, senior analyst and director of business intelligence at Yardi Matrix. He predicted rents will increase in the latter part of year.

“Rents are going up because the supply is just not there,” said Ressler, whose company supplied data for RentCafe’s rent survey. Metropolitan areas across the nation aren’t providing enough new housing projects to meet the demand.

The earlier Santa Rosa rent control law, known as Measure C, was defeated in June 2017 by a margin of 51.2 percent to 48.8 percent - a difference of fewer than 800 votes among over 33,000 cast.

If a local rent measure again makes the ballot, voters can expect a resumption of the debate over what hardships renters now endure and which ones landlords would face if the law gets approved.

A new state initiative that on Friday qualified for the November ballot adds new uncertainty to the landscape: reconciling how state and local measures together would affect efforts to build thousands of new housing units in the county.

County supervisors earlier this year floated a goal of building as many as 30,000 units here in the next five years.

And last week those same officials considered backing a new sales tax that could raise $9 million a year for affordable housing developments, mostly in Santa Rosa.

A question likely to be debated both here and around California is whether the state rent control initiative, which seeks to repeal the 1995-era Costa-Hawkins Rental Housing Act, would dampen construction of market-rate rental housing by allowing rent control to be placed on such projects.

Cárdenas dismissed the question, saying it amounted to another attempt by apartment owners into “scaring the populace.”

But Gerber said the prospect of both rent control and potential financial payments tied to evicting tenants would cause developers of new apartment projects to look outside California to communities without such regulations.

Instead of rent control, he said, elected leaders, city planners and builders should work together to increase the supply of rental housing in the county. Given the support elected leaders recently have voiced for such projects, Gerber predicted that 10,000 apartment units could be built here in the next five years.

“The more housing we can create,” he said, “the lower rents will be.”

You can reach Staff Writer Robert Digitale at 707-521-5285.

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