On a clear Wednesday evening in late August, around 170 landlords and homeowners—and even a few renters—gathered at the Westside tasting room of Stockwell Cellars. Set amid rustic wine barrels and industrial-chic chandeliers, the event marked the launch of a campaign against Santa Cruz rent control initiative Measure M, which will be decided by local voters this fall after a recent wave of similar efforts in other California cities.
As the anti-rent-control kickoff went on inside, a small protest just outside the winery’s outdoor patio went live on Facebook. Young speakers who had organized a “Vigil for the Displaced of Santa Cruz” passed a bullhorn a few feet away from their opposition, separated only by a thin strip of gravel lined with drought-resistant plants.
“Oh, I’d love to give a story,” one rent-control opponent broke in, interrupting a protester mid-speech. “Can I give a story?”
“No!” the protestors replied. As the man walked away, one protestor yelled after him: “I hope you like the fart noise I left on your voicemail!”
While campaign mudslinging is par for the course, the battle over Measure M is getting particularly intense, as record housing prices collide with sharp generational divides and anxiety about widening economic inequality. The oddest part about the rent-control controversy: almost everyone agrees that rents do need some control as they climb precariously high.
“Most people don’t object to limiting rent increases,” said Lynn Renshaw, who owns multiple properties in Santa Cruz, and is a lead organizer of the anti-rent-control group Santa Cruz Together.
Renshaw says she would support a City Council draft ordinance that would limit rent increases to 10 percent a year, or 15 percent over two years. Measure M would limit annual rent increases to the rate of inflation of the Consumer Price Index, which rose about 2 percent each of the last two years.
The rent-control supporters who authored Measure M and collected more than 5,000 valid signatures to get it on the ballot argue that capping big, sudden rent hikes isn’t enough. “Unless there are protections against evictions without cause, a landlord can just evict somebody and jack the rents up to whatever they want,” says Zav Hershfield, a local renter and organizer with the Santa Cruz Tenant Organizing Committee.
Among the most controversial changes proposed in Measure M are new rules for “just-cause eviction,” which stipulate that a landlord can only kick tenants out for specific reasons like failure to pay rent, nuisance, or an owner move-in to the property. Though other recently approved rent control ordinances in Oakland, Mountain View and Richmond include similar rules, the Santa Cruz measure would require a larger-than-average relocation payment—the equivalent of six months of market-rate rent, well over $10,000 for larger units—from landlords who order tenants to leave for reasons unrelated to tenant conduct.
Hershfield draws from personal experience to explain the importance of such rules. He says he was evicted from an older house he shared with several roommates earlier this year with 120 days’ notice and no reason given.
“It was a scramble and a half to find something. We were looking for three months,” he says. “It’s stressful. I have to work.”
Rent control opponent Peter Cook, a real estate agent and property manager who oversees rentals to some 500 UCSC students, said red tape can already make it difficult and costly to evict tenants accused of illegal or dangerous behavior. Santa Cruz Together has seized on this idea to warn on its website that “Your neighborhood will deteriorate.”
Cook also questions who will benefit from rent control. In Santa Monica, he points out, a 2016 city report estimated that just 4 percent of rent-controlled units were occupied by working-class renters. The report adds that California’s Costa-Hawkins Act—which is up for repeal in November with the statewide Proposition 10—allows landlords to reset rents each time a tenant moves out, raising the prices of rent-controlled units over time.
“If I have a line of people, I’m not going to take a chance on a low-income person,” Cook says of the many choices landlords currently have in popular areas like Santa Cruz. “There’s a few lucky ones who will be, you know, dug in an apartment until their death.”
“I got really excited about Bernie Sanders’ campaign,” says Jeffrey Smedberg, a retired Santa Cruz County recycling coordinator and rent-control advocate, remembering what inspired him to become politically active.
Answering Sanders’ call to stay involved locally after the 2016 presidential election was a driving force behind Smedberg getting involved first in a challenge to the city’s camping ban impacting homeless residents and now rent control. Though Smedberg owns a home with a group of co-owners, he supports rent control because “homeowners really have the bulk of the power” in the city.
Renshaw, who works in software marketing, also cites 2016 as a turning point in her political activism. “I really got engaged as an activist after Trump’s election,” she says. “Working on local politics, you can tell you’re actually moving the needle.”
For Renshaw, the brand of further-left politics espoused by pro-rent control campaigners at events like the winery protest come off as “weak.” Cook, a Santa Cruz Together board member, frames rent control as one front in a broader local culture war.
“These folks are really trying to establish their vision of social justice on our city and California by forcing rent control,” Cook says. He’s critical of the role statewide tenant groups like San Francisco-based Tenants Together have had in shaping Measure M.
Hershfield says that while the campaign sought legal advice from Bay Area-based attorneys to craft the specifics of Measure M, it’s “hilarious” to characterize the pro-rent control campaign as a well-heeled political machine. Instead, he points to the $60,000 his opponents have raised so far, as well as to the outsized role realtor associations and the California Apartment Association have played in other rent-control races, pouring hundreds of thousands of dollars into 2016 elections in Mountain View, Burlingame and elsewhere.
While the campaigns for Measure M, a $140 million county affordable housing bond, and the statewide Proposition 10 play out this fall, one question is whether housing prices will increase, decrease or stay at their current level near historic highs in the meantime.
Santa Cruz, like many area cities, has failed to meet its state-ordered number of new housing units for much of the last few decades, creating a scenario where demand is high and supply is low. Realtor.com lists a total of 336 properties for sale in Santa Cruz at a median $995,000 as of early September. The cheapest non-mobile-home or non-senior housing listed is a $419,500, one-bedroom condo on River Street. Those who do buy a house are purchasing them for an average 130 percent of the list price.
While Cook says rent control would not “crater the housing market” due to strong demand from reliable groups like Silicon Valley retirees, he said some landlords are already considering selling off rental units. It might not make for the catchiest campaign slogan, but the San Francisco native points to his hometown—currently one of the most expensive markets in the world—to argue that rent control is a bridge too far.
“My chant is like, ‘It’s better to have an expensive rental than no rental,’” he says. “That’s the unfortunate reality right now.”
What’s in Measure M?
– Maximum annual rent increase: Equal to annual increase in inflation (Consumer Price Index), which rose about 2 percent each of the last two years.
– Rent rollback: Baseline rents would revert to Oct. 19, 2017.
– Evictions: New “just cause” eviction rule would prohibit landlords from making tenants leave without a specific reason, including: failure to pay rent, nuisance, need for substantial repairs, owner move-ins, or to remove property from the rental market.
– Relocation fees: In the event of an eviction unrelated to tenant’s conduct, landlord would pay a minimum of six months rent for relocation assistance.
– Subleases and additional tenants: Landlords would not be allowed to evict tenants for subleasing rental units, so long as the primary tenant remains in the unit and the new tenant replaces an existing tenant. Landlords would also be barred from evicting tenants for moving in a spouse or partner, a child, a parent, a grandchild, a grandparent, a sibling, or those relatives’ spouses, so long as housing code limits on occupancy are not exceeded.
– Types of properties exempted: Hospitals, transient occupancies and room rentals where tenant shares kitchen and bathroom. Single-family homes, condos and new units built after 1995 would also be exempt from rent limits (but not just-cause eviction rules), unless state Proposition 10 passes and repeals the longstanding Costa-Hawkins Rental Housing Act.
– Oversight: New rent board, initially appointed by the city and then elected, would settle petitions or disputes. Measure would be an amendment to city charter, requiring voter approval for repeal or future amendments.
Full ballot measure: votescount.com.