Council narrows renoviction loophole: adds rent cap on return, contractor verification and one‑year cooling period

The Santa Barbara City Council voted April 22 to amend the city’s just‑cause eviction chapter (SBMC Chapter 26.5) to add three changes intended to reduce so‑called “renovictions”: a limit on rent increases for a returning tenant, independent verification when owners claim a remodel requires tenant relocation, and a one‑year cooling‑off period following a change of ownership before a no‑fault eviction for demolition or substantial remodel may begin.

Assistant City Attorney Dan Henschke told the council the ordinance change is narrow: it would not apply to newly constructed units (a rolling 15‑year exemption), owner‑occupied single‑family residences that rent two or fewer units, hotels, dormitories operated by educational institutions or deed‑restricted affordable housing. “What the proposed amendment would do is limit the rent that could be charged to a tenant upon exercising the right of first refusal,” Henschke said. Under staff’s draft, the return rent would be the preexisting rent increased by the change in the consumer price index (CPI) plus 5 percent, capped at a 10 percent increase.

Key changes approved

- Cap on return rent: If a tenant is displaced for a substantial remodel and then exercises a right of first refusal to return, the rent charged on return would be no more than the prior rent increased by CPI plus 5% or 10%, whichever is lower. Henschke said the language borrows the state’s CPI definition to reduce ambiguity.

- Independent verification: For an owner to evict a tenant for a remodel that requires the tenant to vacate for more than 30 days, the owner must provide an independent written verification from a licensed construction professional (A, B or B2 classification as applicable) executed under penalty of perjury stating the work cannot reasonably be done with the tenant in place and requires at least a 30‑day vacancy. The report cannot be from the contractor who will perform the work or a party with a financial interest in the work.

- One‑year cooling‑off period: An owner who acquires a property containing five or more rental units may not commence a no‑fault eviction for demolition or a substantial remodel for one year after acquisition.

Election of the measure and council vote

Council Member Santa Maria moved the measures; Council Member Harmon seconded. The motion also added three uncodified intent statements from an earlier January 2024 ordinance record back into the ordinance documentation and directed staff to research an appeals process for owners or tenants, returning with a proposal later. The motion passed 4–2 on roll call: yes—Harmon, Santa Maria, Sneddon and Gutierrez; no—Jordan and Mayor Randy Rouse; Council Member Friedman was absent.

What supporters said

Speakers representing tenant organizations, community groups and service providers urged adoption of the measures to protect long‑term residents, seniors and lower‑wage workers from displacement. Jacqueline Inda of Casa de la Raza said the organization serves families who “come in with situations with regard to rental evictions and fears” and urged the council to “fill those loopholes.” Legal aid advocates and tenant coalition members urged the rent cap on return as the essential protection to prevent landlords from rehousing returned tenants at substantially higher rents.

Opponents’ concerns

Property owner representatives and several landlords told the council the amendments would make routine renovations or financing difficult and could deter investment in the city’s aging housing stock. Betty Jeppesen of the Santa Barbara Rental Property Association warned that the independent verification requirement could be “virtually impossible” to satisfy because it would require a second licensed contractor willing to sign a statement under penalty of perjury.

Staff follow‑up and process

Henschke and other staff said they will return with the redlined ordinance and the uncodified intent language at the next consent calendar meeting (April 29) and will research an appeals process as directed by council. The council’s action introduces and authorizes reading of the ordinance by title only; final codification and any technical edits will appear in a subsequent adoption step.

Votes at a glance

- Item 16 (Amendments to Chapter 26.5 – just cause/renovictions): Motion by Council Member Santa Maria, seconded by Council Member Harmon. Roll call: Harmon—Yes; Santa Maria—Yes; Sneddon—Yes; Gutierrez—Yes; Jordan—No; Mayor Randy Rouse—No; Friedman—Absent. Outcome: approved, 4–2.

Why it matters: Council members who supported the motion said the changes close a narrow but consequential loophole that has produced displacement in Santa Barbara; opponents said the changes risk discouraging needed maintenance and rehabilitation of rental housing and could raise legal and financing complications for owners.