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Op-Ed: Why Supervisors Should Defer Action on New Rent Law -- and Include the Public in the Process

By Lanny Ebenstein

The proposed county ordinance revisions to landlord-tenant relations, scheduled to be heard by the Board of Supervisors next Tuesday, July 11, would critically harm low-income renters.

Although clearly not purposeful, an unintended consequence of the proposed ordinance would be removal from the rental housing market of hundreds, perhaps thousands, of units over time for low-income county residents.

Supervisors deserve credit and appreciation for their attempt to improve the circumstances of renters in the county; however, the sweeping ordinance before the Board will, if adopted, be approved after a virtually non-existent public process.

There apparently has been little, if any, input from property owners, rental management companies, or landlords in the drafting of ordinance changes. The proposed legislation was only released to the public on Friday, June 23; the Board adopted it for first reading on Tuesday, June 27 (on a 3-to-2 vote, with Supervisors Bob Nelson and Steve Lavagnino opposed), and now is set to consider and adopt the ordinance for second and final reading next week.

For such a significant revision to county policy, this represents one of the most unsatisfactory public participation processes in recent memory, and one that would set a damaging precedent for the future.

Devil in the details. Of course it can be argued that rental issues have been before the community and Board of Supervisors for months and even years now.

But ideas are always in the air and the consequence in legislation is found in the details, not concepts.

One purpose of the legislative process is to provide sharp definition to concepts – which must involve the public in the process. This has not occurred in this matter.

The key point is not whether landlord-renter policies should be reviewed and modified – of course they should; rather it is the substance and meaningfulness of the process for developing such extensive and far-reaching new policies, and whether their development includes -- and benefits from -- participation by all stakeholders. At their July 11 meeting, the Board of Supervisors should establish a task force to review, with broad input from the community, existing county landlord-renter policies and to develop a new ordinance. The task force should be required to submit recommendations to the Board within 60 days – the same amount of time before the existing proposed ordinance would take effect, in any event.

Here's why:

Unintended Consequences. In part because the proposed ordinance has not been developed by a broad cross-section of the community, and with participation of all stakeholders, the legislation in its current form would be all but certain to remove rentals, especially those affordable for low-income tenants, from the county housing market.

Housing issues are invariably complex, nowhere more so than in California.

The most crucial variable affecting the price of rental housing in Santa Barbara County, as elsewhere, is supply and demand. Policies that would be most effective in stabilizing rents are those that will lead to more rental housing units.

How would the proposed ordinance advance and facilitate construction of more rental units?

Particularly in the vital area of housing units and rooms for low-income renters in single-family residences, the proposed ordinance would have a deleterious effect.

Rentals in single-family residences are different than rentals in apartment complexes, and to apply the same policies to both would be a profound error.

It is crucial to consider that rentals in single-family residences are less formal than in apartment complexes: landlords are not renting to large numbers of renters, but only to a few.

Placing a cap of two units or rooms that could be rented in single-family residences before the provisions of the proposed new county ordinance would apply, means that hundreds of rentals in single-family residences would be lost to the long-term rental housing market or turned into vacation rentals (the latter of which are specifically exempted from the proposed ordinance). What would the influence of the proposed new county ordinance be on the transition of existing low-income housing in single-family residences to vacation rentals? This is an issue worth exploring.

Many landlords in single-family residents would rent only two units or rooms, or fewer, under the proposed county ordinance requiring them to a) re-rent to former renters for up to two years and b) offer to rent on at least a one-year basis - before they could rent out more than two units or rooms in the residence.

Long-term effects. This would likely remove hundreds of rental units and rooms in single-family residences, which are among the lowest priced rental units and rooms in the county, from the market in the next two years.

Simply put, the proposed ordinance would reduce the number of rental units economically accessible to those on low incomes.

It gets worse.

Not only would the proposed ordinance remove existing single-family residence rental units or rooms from the rental housing market, it also would result in fewer auxiliary dwelling units (ADUs) and “junior” ADUs from being built.

The impetus for the proposed ordinance has been the controversial conversion of several large apartment complexes in Isla Vista from low-income to high-income rentals.

But rentals in single-family residences have nothing to do with such complexes – nothing at all. Expansion of ADUs and junior ADUs is the most feasible and effective way to increase the number of rental units for low-income renters in the county. ADUs and junior ADUs should be encouraged by county policy, not discouraged.

They cost far less to build than other rental housing, and the housing developed is spread throughout the community without the many environmental and other issues that emerge with high-density development. In addition, ADUs and junior ADUs often benefit relatively homeowners with relatively modest incomes.

Bottom line. County government has set forth virtually no information nor evidence that demonstrates how or why the proposed changes would benefit renters, what any downsides might be, or how proposed changes have, or have not, worked elsewhere. It is merely presumed the ordinance would have positive outcomes.

But hope is not a strategy. Argument is the pith of good policy making, which benefits from the clash of ideas. Regardless of ideological perspective, policy making without argument results in poor policy.

Rather than adopting the proposed landlord-tenant relations ordinance, the Board of Supervisors should establish a broad-based task force with a 60-day deadline to review and recommend changes to the ordinance in its present form. Alternatively or in addition, the Board should remove all reference to single-family residences from the proposed ordinance.

It is commendable that the supervisors wish to act on behalf of low-income renters. But meaningful solutions cannot be developed without robust public processes that include representation from all stakeholders.

Economist Lanny Ebenstein is President of the California Center for Public Policy.

Image: Middlesex

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