Updated Aug. 9, 4:41 p.m.
Rent control could be coming soon to Sacramento.
City Council announced a proposed new renter protection law on Thursday that, if approved during next week’s meeting, would prompt backers to drop support of a competing rent control initiative.
The groups behind that measure had garnered enough signatures last year to qualify for the 2020 ballot.
The city’s new proposal, called the Tenant Protection and Relief Act, would limit annual rent increases to 10 percent. It also includes additional eviction protections for renters. The ballot initiative had proposed a maximum 5 percent increase.
Mayor Darrell Steinberg, who helped negotiate the compromise and had referred to the rent control ballot measure as “a threat,” called the new deal “not perfect” but “a very important step in the right direction.”
“This will provide them [tenants] an increase in protection to ensure that they’re not evicted for unfair reasons, and that any rental increase is not so high that it forces them out,” Steinberg said.
City Councilman Steve Hansen also helped forge the deal and says the new plan’s goal is to eliminate the types of rent increases that have driven tenants out of their homes.
He says it would also provide an affordable, easy way to appeal evictions through the city’s existing Housing Code Advisory and Appeals Board.
"They will not have to pay to use the [appeal] process,” Hansen said, “and if a landlord violates the law here, the tenant can appeal to the city.” If the board deems the rent increase unfair, “the landlord will have to rescind that rent increase, or if it's an eviction, rescind the eviction,” he added.
Under the compromise, property owners would also be required to provide 120 days notice if they want to move back into a property, let a family member move into a unit or take a property off the rental market. State law currently requires only 60 days.
Advocates with Housing4Sacramento, the group that backed the ballot measure, had pushed for rules that would require property owners to pay relocation assistance to those evicted without cause. The group’s primary benefactor is Service Employees International Union 1000. The group also wanted to establish an elected housing commission to review and recommend policy.
Margarita Maldonado, one of the coalition’s leaders, said the deal still accomplishes the group’s goals.
“I think it’s important that we provide immediate relief for renters. It’s far overdue,” she said. “The ideal situation that this kind of ordinance would have been put in place far before us ever seeking to move to gather signatures.”
She also expressed gratitude that the city would establish an expanded rental registry, which would include information on the amounts people pay for rent, evictions, and cause for lease terminations.
With the compromise comes a promise that the group will not pursue a ballot initiative.
Regardless, the California Apartment Association says it is opposed to any rent control, though it agrees more housing is needed in the region.
“Let’s not play a 'lesser of two evils' game,” said Jim Lofgren with the CAA. “The bottom line is that rent control is a failed policy. If brought to Sacramento, it will worsen the city’s housing shortage."
The group also opposes "just cause" restrictions, which require landlords to provide justifications for an eviction. Lofgren says the policies “...require that landlords not only list a specific cause for eviction but be prepared to prove the cause in court,” which would make it difficult to evict problem tenants.
Hansen says the proposal allows landlords to evict tenants for criminal or nuisance activity, failure to provide access, breach of the lease agreement, or non-payment of rent.
Fabrizio Sasso, with the Sacramento Central Labor Council, helped negotiate the deal and says it will help tenants in the short term.
“Long term, we need to fight more to increase the housing stock that's available. We need to build more, and that will help alleviate some of the housing problems here in our area and … across the state of California,” Sasso said.
Hansen says he is working on a bond proposal to fund more affordable housing. But he says other places in the Sacramento region need to develop more affordable housing, too.
“Sacramento is really the only one building multi-family housing,” he said. “Others treat multi-family housing as if it’s being inflicted on them. We believe new apartments, new communities add to the quality of life in our city.”
New housing construction in Sacramento has increased overall, but is actually decreasing for the middle class, according to the city’s annual housing progress report.
In 2017, there were three permits issued for low- or very-low income housing projects. Last year, that number increased to 80. And while “above moderate income” housing permits increased by 69 percent, “moderate income” housing permits decreased by 77 percent.
Gov. Gavin Newsom, who has said he wants to see more tenant protections, announced on Wednesday that he would sign a proposed bill by Assemblyman David Chiu of San Francisco, which would limit annual rent increases at 7 percent plus inflation.
If the full council agrees to the new city proposal on Tuesday, annual rent increases would be set at 6 percent, plus the Consumer Price Index for middle-sized West Coast cities, which has varied between 1 and 3 percent since 2009. The total rent increase would be capped at 10 percent; Hansen says the number was chosen based on a study by the Terner Institute.
The CAA is calling on its members to attend the meeting in opposition. Housing4Sacramento is calling on its supporters to call council members.
A landlord could appeal for a larger increase if they were to make “significant improvements” to a property, according to a statement from the city.
A per-unit fee would be assessed on landlords to pay for increased costs to the city. The city manager may decide if an additional employee would have to be hired.
Under state law, the city’s rent control plan would only apply to multi-unit apartment properties built before 1995.
The city’s proposal would go into effect in 60 days upon passing and expire in five years.
Nick Miller contributed to this report.