Santa Ana Becomes First Orange County City with Rent Control

On October 21, 2021, after a decade-long push from the Santa Ana community to find a solution for housing affordability, Rent Control has officially been implemented into law in the city of Santa Ana. Known as the “Just Cause Eviction and Rent Stabilization Ordinances,” the new rent control law became effective on November 19, 2021. While other jurisdictions in California like Inglewood, Los Angeles County, and Culver City have already passed similar tenant protection ordinances, Santa Ana is the first city in Orange County to implement just cause eviction measures and rent control. The general consensus is that neighboring cities may see similar laws passed in the next couple of years.

Opponents of the new law note that the law makes it challenging for landlords to see a reasonable return on their property and increase the cost of homeownership. However, proponents argue that residents in Santa Ana are struggling and are paying too much for rent, with the average renter dedicating 30% or more of their household income to their monthly rent.

What Does Rent Control Mean for Landlords and Property Managers in Santa Ana?

3% Limit on Rent Increase

The crux of the new rent control measures in Santa Ana ordered that landlords will be unable to raise their tenants’ rent more than 3% per year or 80% of the percent change in the Consumer Price Index (i.e., the indicator for inflation) over the most recent 12-month period. If the percentage change over a 12-month period is negative, then there will be no authorized rent increase for that year.

For 2021, the city of Santa Ann published the allowable increase on November 19, 2021. Thereafter, the city of Santa Ann will publish the allowable rent increases on or before June 30th of each year.

Stronger Eviction Protection and Just Cause Eviction Protection

The Just Cause Eviction Ordinance was implemented to shield tenants and their families from unjustified evictions. Specifically, the law states that renters cannot be evicted without just cause. Just causes to evict tenants include but are not limited to the nonpayment of rent, nuisance activity, criminal activity on the property, and material breach of the lease agreement. This prong of the law requires landlords to provide tenants with written notices stating the just cause for the eviction, as well as providing a grace period for the tenant to cure the breach(es) of the lease agreement.

The Just Cause eviction protections do not apply to certain classes of residential property, such as housing constructed in the last 15 years; transient and hotel occupancy; hospital and short-term and long-term care facilities; deed-restricted affordable housing; dormitories; and certain types of shared living rentals.

The new rent control laws still permit some limited no-fault evictions, such as when a landlord wants to move into the property or make the rental available for their family member, or in the event the landlord takes the property off the market for two years or more. In these cases, the landlord would be required to pay the tenant three months of relocation assistance or not charge the tenant rent in the last three months of their tenancy.

Additional Tenant Protections

Under the new law in Santa Ana, landlords and property managers can no longer prevent tenants from being added to lease agreements. Additionally, in order to evict tenants for criminal activity or similar allegations, there must be a prosecution of the individual for the alleged activity. The new law also prohibits landlords and property managers from evicting families that comprise students during the school year. Finally, the new law extends the just cause eviction laws to tenants on the 31st day of their occupancy, from 12 months.

Does the New Rent Control Apply to All Rentals in Santa Ana?

The new rent controls laws in Santa Ana do not apply to all rentals. Specifically, as it pertains to rent increases, only rental buildings were constructed on or before 2/1/1995. The new laws pertaining to rent increases also don’t apply to mobile home rentals placed on the market after January 1, 1990. Similarly, the Ordinance does not apply to property constructed within the past 15 years.

Can A Landlord Opt-Out of Rent Control?

Landlords can’t unilaterally opt-out of Santa Ana’s rent control ordinances; however, they may petition the city for an exemption from the 3% increase limit. Specifically, landlords must be able to show that the 3% limit causes the landlord to have a “fair and reasonable return” on their property. The City Manager, Kristine Ridge, will have the final discretion of whether to grant a landlord’s petition. However, the office has noted that a variety of factors may be considered when deciding whether a property should be exempt from the regulation. The city has also indicated that all petitions will be evaluated within 60 days after the City Manager receives the petition. The Petition template is available from the city of Santa Ana as of November 19, 2021.

For more information, a full copy of the Rent Stabilization and Just Cause Eviction Ordinances is available at www.santa-ana.org/renterprotections in English, Spanish, and Vietnamese.

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AllView Real Estate Management is Orange County’s premier property management and investment firm. We offer not only exceptional property management, but also real estate investment consulting and management. Call us at (949) 400-4275 or send us an email at info@allviewrealestate.com for real estate investment expertise.

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