If you’re wondering what’s happening with rent control in Santa Rosa, a rent stabilization ordinance is working its way through the city council. The proposed regulation has been approved on its first reading, which happened during a city council meeting on August 19, 2016. The second reading will be on August 30, 2016, and if passed, this ordinance will go into effect on September 29, 2016. Most importantly, the ordinance will only affect properties within Santa Rosa city limits. So if you have investment properties that are NOT in Santa Rosa, this will not affect you.
Santa Rosa Rent Control and Costa Hawkins
California has a state-wide law – The Costa Hawkins Act – which limits those properties that would be “protected” by the implementation for rent control. The only properties subject to rent control under Costa Hawkins are multi-family properties that were constructed before February 1, 1995. Our city council used that law as the guideline for our local ordinance, but they included certain allowances. For example, as written, Santa Rosa’s ordinance will not apply to single family residences, condominiums, duplexes, or triplexes when the owner is living in one of the three triplex units. Otherwise, triplexes, fourplexes and larger apartment complexes built before 1995 are affected.
This ordinance has many details, so I’ll give you a high level overview of the most significant impact.
- For affected properties, you can only raise rents by 3 percent per year.
- If you perform significant capital improvements, you may be able to pass those expenses on to the tenants, but there is a complicated formula for the pass-through, and your plan to pass costs on to tenants (as an additional rent increase) has to be approved by a program administrator.
- There are new restrictions covering when you can and cannot give notice to a tenant, asking them to vacate the unit. In some cases, if you ask them to vacate, you could be required to pay moving costs in the thousands of dollars.
- There will be an annual “administration cost” for this rent stabilization program; one half of the cost borne by property owners, the other half passed through to tenants as a nominal monthly fee.
There’s much more to tell you about this ordinance since, as they say: “the devil is in the details.” In this case, there are a lot of details.
I created another property management Santa Rosa blog with additional information. Please feel free to check that out, or you can contact me at DeDe’s Rentals. Santa Rosa property management is a complicated business, and never so much so as the present. We are here to make your life simpler.