Editorial: State embraces rent control – will Sonoma press further?

'You must pay the rent!' – Snidely Whiplash

Last week, the California legislature passed the state's first rent control bill, which caps increases in most rental units at 5 percent, plus inflation, annually. Gov. Gavin Newsom, a vocal proponent of the bill, is expected to sign it into law soon.

In force through 2030, it's the state equivalent of criminalizing rent gouging – essentially doubling down on former-Gov. Brown's 2018 temporary executive order banning rent increases over 10 percent in the months after fires ravaged much of the state, including the October 2017 wildfires in Sonoma.

Rent control has supporters and detractors in probably equal numbers.

In cities like San Francisco and Los Angeles, it's protected longtime modest-income renters who would otherwise be pushed out of their increasingly high-priced homes and cities. At the same time, rent control can potentially diminish stock as fewer bargain apartments become available and development is dis-incentivized over a lack of market-rate profits.

But a statewide rent control is different. Where developers before could simply look elsewhere for available real estate in a non-rent-controlled city – which was most cities – that's not so easy when an entire state operates under a pricing regulation. Are landlords really going to avoid all of California, the most desirable state in the country, based on a business plan of regularly hiking rents 6 percent or more? No one will pay that in most other states, anyway.

Such bottom-up approaches to the housing crisis are increasingly easy to achieve in the Democrat-dominated state legislature, where a majority of seats are safely occupied by progressives from districts made up of college-graduate, middle-class voters who justifiably fear their kids, let alone themselves, being priced out of the state at some point in the near future.

That said, the state legislature may find it easy to pass such laws because they ultimately lack bite: Critics of the new state rent control are as likely to argue it doesn't curb rents enough. Ronit Rubinoff, executive director of Sonoma County Legal Aid, told the Press Democrat earlier this summer that the average statewide rent increase is only 3 to 5 percent a year anyway.

But things are different in the North Bay. According to the North Bay Business Journal, rents in the area rose nearly 50 percent from 2011 to 2016 – and that was before inventory took a beating thanks to the wildfires. As of last spring, the average rent for a one-bedroom, one-bath apartment in Sonoma County was $1,780; and $2,258 for a two-bedroom, two-bathroom unit, according to a PD story from March.

Ironically, it's at the local level where achieving such supposedly desirable long-view affordability goals tends to be derailed by, well, pick your short-view poison: neighborhood opposition groups; CEQA lawsuits; flaky cabals of re-election-seeking decision makers.

However, a model might be forming that allows local city councils to push through even stronger legislation than the state, with less opposition.

Take, for instance, the Sonoma City Council, which recently approved a city-wide minimum wage that will require businesses to pay employees $16 to $17 an hour by 2023. That bump in pay would have been inconceivable five years ago. But thanks to the state legislature approving its own schedule of state-wide minimum wage hikes beginning in 2017, Sonoma's slight acceleration of the wages – to reflect the higher cost of living in town – saw little opposition outside of the local restaurant industry, which traditionally keeps wages low due its servers' income being subsidized by customer tips.

Think of it as – the state delivers the bad news/good news – depending on whether one supports the legislation – and the city councils tack on a little extra, but it's no big deal because the state had made it an inevitability either way.

With Sonoma's rents rising at an alarming rate, one wonders if the state's new rent control legislation could act as a trigger for the city council to strike. Sonoma City Councilmember Rachel Hundley has repeatedly voiced concern over rental prices ever since she came on the council more than four years ago. First-year Councilmember Logan Harvey campaigned last year on a platform that included considering forms of rent control.

Amy Harrington has made cost of living a central focus of her year as mayor.

If the high cost of living in Sonoma warranted an acceleration of the state minimum wage hike – does the high cost of living in Sonoma also warrant a more renter-friendly cap on rent hikes?

If the state is already going to limit annual rent increases to 5 percent, is 4 percent in Sonoma reasonable? Or 3 or 2 percent?

In 'The Wealth of Nations,' 18th century economist Adam Smith's tome to free-market capitalism, the author blasts landlords who over charge for living space.

'As soon as the land of any country has all become private property,' Smith writes, 'the landlords… love to reap where they have never sowed, and demand a rent even for its natural produce.'

Smith further decries saddling renters with 'additional price(s) fixed against them.'

And that's coming from the Pied Piper of free market principles.

As it did with the minimum wage, the state legislature is taking modest action on rents. What, if anything, will Sonoma do?

Email Jason at jason.walsh@sonomanews.com.