Rent control now exists within Orange County as elected officials in Santa Ana have voted the idea into law, the first city in the county to do so after a decades-long push by community activists in town and staunch objections from landlords and industry groups.
The split decision by the Santa Ana City Council on Tuesday night means landlords can’t hike rent on tenants by more than 3% per year and those renters get stronger protections against getting evicted from their unit.
The rules take effect on Nov. 19.
Landlords will also have to notify their tenants of the new law — and those tenants’ legal rights — at the start of their lease or as part of any rent increase notice.
Those in favor of the law were City Council members Thai Viet Phan, Jonathan Ryan Hernandez, Jessie Lopez, and Mayor Vicente Sarmiento.
Dissenting votes came from council members David Penaloza, Phil Bacerra, and Nelida Mendoza, who at a prior, Oct. 5 meeting all walked out of the council meeting chambers at City Hall when the issue last came up for a procedural reading and vote.
This week’s council decision delivered on a key hope among activists that — with the election of a more progressive council majority back in November 2020 — such a policy was due after failed ballot measure attempts and a City Council historically filled with members opposed to the idea.
Rent increases will be restricted to no more than 3% per year or 80% of the percent change in the Consumer Price Index — the indicator for inflation — over the most recent 12-month period. If the percent change is negative, no rent increase is allowed under the new law.
The city will specify the allowable rent increases for each year, starting in November, at this city webpage.
The law’s passage didn’t come without final pushback by those on the council and critics in public comments who argued the measure doesn’t solve the problem of housing affordability but instead, as Penaloza put it that night, perpetuates fiscal irresponsibility.
He said that enacting such a policy would mean more staff time — and thus millions of more taxpayer dollars — dedicated to overseeing the law and its enforcement.
Penaloza also said residents are already “getting squeezed” out of “every nickel and dime,” pointing to the fact Santa Ana has the highest sales tax rate in Orange County.
“Why can’t our residents afford to live here? Well, if we stopped screwing them over every chance we got, they would be able to afford to live here,” Penaloza said.
Later that night, council member Lopez — on the other side of the rent control issue — went back to Penaloza’s comments.
On the issue of “screwing residents over,” Lopez said, “You have done that to us in the past.”
She referred to the fact that after city voters passed the Measure X sales tax increase in 2018, a police union-backed council majority — which included Penaloza — voted in 2019 to approve what was then estimated to be tens of millions in pay raises for Santa Ana police officers over the following several years.
A major justification for the pay raises, voiced by the council majority at the time, was that City Hall would see an influx of new sales tax dollars due to Measure X, although the sales tax was designed to expire in 2030.
“Frankly I’m disappointed with some of the comments made that believe that if one of us doesn’t support this ordinance, it means that we don’t care about residents — that’s absolutely ridiculous,” said Bacerra before the vote.
He added: “It’s because I believe this policy does not solve the issue that was stated as a reason for bringing this proposal forward, and it only attempts to help some of our residents.”
The rent control law doesn’t apply to residential buildings constructed after Feb. 1, 1995, or to mobile home spaces offered for rent after Jan. 1, 1990.
Landlords can still petition for an exemption from the law if they can prove that hiking rent on people beyond the allowable amount will provide a “fair and reasonable return” on their property.
Ultimate discretion on those petitions will be left to City Manager Kristine Ridge, who will consider petitions within 60 days of receiving a completed application. Landlords can access the petition template when the law takes effect.
“I know rent control doesn’t prevent rent hikes, and I know that just-cause evictions (ordinances) aren’t going to stop evictions, but we are trying to have a process in place that is going to be fair for everyone,” Lopez said.
Phan agreed that the “cure-all” for the housing affordability crisis isn’t rent control or tighter eviction protections. She said the actual solution lies in the region’s housing stock.
Thus, she pointed to landlords and developers who spoke out against the law to other cities in Orange County that aren’t as open to the idea of zoning for higher housing density and more construction — where they may stand to profit from those cities opening up to more apartments and multi-family homes.
“Go ahead and go to Buena Park, and Seal Beach, and San Clemente and some of these other cities that refuse to build anything,” Phan said. “Go to Costa Mesa and ask them to build at the ballot box.”