Sacramento City Council approves rent control measure. New cap on increases takes effect soon

The Sacramento City Council approved a rent control and tenant protection measure Tuesday – and moved up the date it will take effect in an attempt to prevent landlords from evicting tenants before the new regulations are implemented.

After roughly two hours of testimony from tenants groups and landlords, the council voted 7-1 to pass the Sacramento Tenant Protection and Relief Act. Councilman Allen Warren voted against the measure, while Councilman Larry Carr abstained.

The act will create a set of renter protections for tenants who live in housing built prior to Feb. 1, 1995. The ordinance will cap the amount that landlords can increase rent each year at 6 percent plus inflation, prohibit landlords from evicting tenants without a reason and create a process where tenants can report landlords who violate the act.

“As we look at how we protect people who are vulnerable, this is the most significant thing that any Central Valley city has done to stabilize the housing market,” said Councilman Steve Hansen.

The council moved up the date the act will take effect from Oct. 12 to Sept. 12. The rent increase cap of 6 percent plus inflation will apply to rents that tenants were paying on July 1.

“I just want to make sure we send a very clear message that while these protections are retroactive, we don’t have anyone taking advantage of this window of opportunity,” Hansen said.

Hansen, who led the negotiations for the version of the act that passed, presented it as a compromise that will avoid what likely would have been a multi-million dollar political campaign next year. The proponents of a more strict rent control ballot measure – which was approved for the March 3, 2020 ballot after it received 44,000 signatures – agreed not to pursue the ballot measure, said Margarita Maldonado, a member of Housing4Sacramento.

“We are here today because we know this agreement will help thousands of people,” said Yvonne Walker, president of SEIU Local 1000 and housing coalition member. “It will help people who suffer severe sunburn or die of dehydration and thirst in 100 degree weather. It will help victims of domestic violence escape their abusers. And it will protect children who face losing a home just because of their parents’ ancestry, sexual preference or their own skin color.”

The act will prohibit landlords from raising rent more than 6 percent plus inflation, based on the “consumer price index” percentage for the West Region per year. The U.S. Bureau of Labor Statistics releases a new “consumer price index” figure each month for the region. As of July 2019 the CPI was 2.7 percent. That means landlords will be prohibited from raising rent more than 8.7 percent from the previous year’s rent, based on the July figure. The figure in April 2020 will be used for the ordinance.

Landlords will never be able to increase rent more than 10 percent, even if the CPI exceeds 4 percent, the ordinance says. The CPI hit 3.6 percent in the summer of 2018, but has fluctuated between 2.4 and 2.9 percent during the first half of this year, according to federal data. The ordinance will also prohibit landlords from evicting tenants, unless tenants stop paying rent, are criminally charged, are illegally selling drugs, fail to give landlords access to the unit, or otherwise violate their leases.

The act will apply to tenants who signed leases that are month-to-month or longer, those who live in apartments, mobile home parks and single room occupancy hotels. The act cannot legally apply to tenants renting single-family homes, unless they have been converted in to multiple units.

Other activists and organizations groups rejected the city’s version, and instead favor the ballot measure.

The ballot measure would prohibit a rent increase of more than 5 percent, with inflation not factored in. It would also create an elected rental housing board that would operate independently of the city. That board would have the power to determine the annual rent adjustment. It also would require a landlord to pay rental assistance of at least $5,500 to relocate a tenant if the owner wants to do substantial repairs, move in, take the unit off the housing market or demolish it.

Despite the compromise at City Hall, the measure might still be on the ballot.

The state constitution does not allow a charter amendment measure to be removed from the ballot. A state bill proposed by Sen. Henry Stern, D-Canoga Park, would make it possible.

That bill, SB 681, would not take effect until Jan. 1, 2020, but if an “urgency clause” is added, it could take effect sooner. An urgency clause is being considered as an addition. If the governor signs the bill by Oct. 13, it would take effect in time for the Sacramento rent control ballot measure to be removed.

The ballot measure’s three proponents would need to sign a letter to the city to remove it from the ballot. The letter has not yet been submitted, said Maldonado, who was one of the proponents.

Members of Alliance of Californians for Community Empowerment, the Sacramento Tenants Union, and SEIU 1021 Service Employees International Union testified against the city’s rent control act and in favor of the ballot measure.

Robyn Mutchler, who lives in midtown with her son, said an ordinance that would still allow landlords to charge 6 percent plus inflation will not go far enough to help.

“Six percent doesn’t work for me,” said Mutchler, who said she was recently laid off from Martin Luther King Jr. K-8 School.

Her landlord increased her rent from $880 to $1,000 in four years, she said.

Rick Stevenson, of watchdog group Eye on Sacramento, criticized the city for rushing the ordinance through. The city’s proposal became public Thursday afternoon, and the council approved it at its meeting at 2p.m. Tuesday after giving an hour each to hear supporters and opposition.

“This process spits in the face of open government and transparent government,” Stevenson said. “It should be rejected by council in favor of an open process.”

Carr said he abstained from the vote because he would have liked more time to research the proposal, which he said he received Thursday afternoon.

Warren, who voted against the act, said he would be more inclined to support the ballot measure.

“I do not believe that the ordinance as written is going to produce the desired result,” Warren said. “I also believe when you tell private capital what they can do with their money, it turns them off.”

Hansen said the ordinance could be amended in the future and encouraged the activists to help in that process.

“Six percent plus CPI, maybe that’s not the right number but that’s a fair number to start from, I believe,” Hansen said. “This is not the end of the story this is a continuation.”

Mayor Darrell Steinberg, who said he has been working on local rent control for a year an a half, agreed.

“It’s good,” Steinberg said. “It’s more than good. It helps a lot of people without killing the economic future of our city.”

Related stories from Sacramento Bee

Theresa Clift covers Sacramento City Hall. Before joining The Bee in 2018, she worked as a local government reporter for the Pittsburgh Tribune-Review, the Daily Press in Virginia and the Wausau Daily Herald in Wisconsin. She grew up in Michigan and graduated from Central Michigan University.