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Will rent control solve Sacramento’s housing crisis?

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The state’s housing shortage is forcing people like Nancy Avalos, a Sacramento mother of three, out of their homes.

With Sacramento rent increases among the highest in the nation, activists filled the City Council chambers this week to demand rent control and organized a Thursday protest at a Mack Road apartment complex where they say tenants are getting forced out.

But they face a rent control skeptic in Mayor Darrell Steinberg.

The mayor told The Bee on Thursday he has “significant concerns” about rent control, saying the city should focus more on finding money for affordable housing and giving tenants additional notice when rents increase. Steinberg said he isn’t outright dismissing rent control, but he’s worried about the “unintended consequences” of discouraging developers from building housing.

Several recent reports have highlighted Sacramento’s rising rents, including one this week that said the 9.9 percent average increase in Sacramento over the past year was the highest in the nation. The city has a vacancy rate around 2 percent for rental properties, the mayor said, contributing to high demand.

Steinberg said much of the issue stems from the fact that Sacramento “is not building enough housing.”

“We need to change that and be very aggressive about it,” he said.

Tenants have complained that rents are increasing too quickly in many Sacramento neighborhoods, from North Natomas to Oak Park. The latest call is coming from Mack Road in south Sacramento, where rents at the Cedar Ridge and Stonegate apartments have reportedly increased quickly and the city has addressed various code violations.

Rent control proponents held a rally near the Mack Road apartments Thursday as part of a statewide day of action to demand rent control. Roughly three dozen protesters attended, with some carrying cutouts shaped like cockroaches and signs reading, “Stop corporate landlords, protect families, repeal restrictions on rent control.”

A heavy police presence responded to the apartment complexes and officers forced reporters to leave.

Local governments remain limited in their ability to control rent under a 1995 state law. The state prevents rent control on units built after Feb. 1, 1995, and any single-family homes. Affordable housing advocates want to repeal the 1995 law, but legislation stalled in the state Capitol this year.

Jovana Fajardo, a housing advocate working with tenants, said “conditions are better now” at the Cedar Ridge apartments, but some problems remain. She is helping tenants at an adjoining complex with the same owners where conditions are also troublesome. There, she said, bats are living in the roof space and mold is growing in apartments.

Angelica Amezcua, manager of the two properties, said she has been “cooperating with the city” to resolve issues. She said the properties have a weekly visit from a pest company and disputed that rent increases at the privately owned complexes have been as steep as some tenants claim. She declined to say what current rents are.

Councilman Larry Carr said the property owner has begun addressing a list of code issues, including leaking pipes, and has hired additional maintenance workers. He said the properties are in much better shape than they were when he campaigned there in 2014.

“It was bad, but it’s headed in the right direction,” Carr said.

Still, Carr said he was concerned with the recent rent increases at the facilities.

“It’s a hefty raise,” he said. “I would like to see a more gradual increase than what’s happened.”

Steinberg said, “What happened out at Cedar Ridge is just not right.”

Carr agrees with Steinberg that rent control could hinder new apartment development. Jim Lofgren, executive director of the Rental Housing Association, added that his organization and its state affiliate strongly oppose rent control, saying it would lead to an “economic disaster” that could curtail much-needed construction.

“What scares me is even the talk of rent control is giving developers second thoughts and that’s why we need our elected officials and others to take a strong stance against rent control so that prospective projects will go forward,” he said.

Steinberg has begun informal discussions with housing rights activists, real estate agents and business leaders to help residents struggling with Sacramento’s skyrocketing rental market.

The mayor said he may pursue a local ballot measure to raise money for affordable housing. He also is considering city legislation requiring landlords to give more notice before raising rents above a certain percentage. He wants the city to spend more on rental housing inspections.

“We have to match the excitement of this project with ensuring this is a city that’s for everyone,” the mayor said after a ceremonial groundbreaking for a new Major League Soccer stadium in the downtown railyard.

Steinberg added the city’s primary mechanism for subsidizing affordable housing – fees placed on new development – “is virtually nothing.” The city’s two funds have just over $1.3 million combined in money available to subsidize new low-income and affordable housing units, according to the most recent data provided by the Sacramento Housing and Redevelopment Agency.

The Bee’s Jacob Sweet contributed to this report. Ryan Lillis: 916-321-1085, @Ryan_Lillis

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