Anonymous
Source: Office of California Governor Gavin Newsom
Supporting ongoing wildfire recovery efforts, Governor Gavin Newsom [last week] proclaimed a state of emergency in Santa Barbara County due to the impacts of the Alisal Fire and in Monterey County due to Colorado Fire impacts. The Governor also signed an executive order extending various prohibitions on price gouging in Butte, El Dorado and Plumas counties through September 30, 2022.
The emergency proclamations enable Caltrans to request immediate federal assistance for highway repairs or reconstruction in Santa Barbara and Monterey counties. The emergency proclamation for Santa Barbara County directs the Office of Emergency Services to assist recovery efforts in the county pursuant to the California Disaster Assistance Act, and includes a provision to ease access to unemployment benefits for those unemployed as a result of the Alisal Fire.
Copies of the emergency proclamations and executive order can be found below:
Santa Barbara County emergency proclamation here.
Monterey County emergency proclamation here.
Price gouging executive order here.
With the Biden economy, it is vital that rents go UP!
CHIP – that makes sense and I appreciate your even-keeled responses. I’m thinking of the many overpriced and grubby homes/apartments. Our local middle class is barely able to afford these now. I’m talking about $2000 studios for 1 person or $4000 for a tiny 2 bedroom in a bad neighborhood near bad schools with no yard. If you raise the rent more on those, then who is going to rent them? Anyone who can afford that rent will want something much nicer. A single, wealthy family paying more than that for an undesirable property seems farfetched. Many doctors and lawyers have left town for just that reason. When you have attained a certain level of wealth, you want your home to represent it. I guess I just don’t see who would be renting the SFHs if the rent increased even more. Kids of movie producers? Young doctors?
Sac, I agree with you. The rents seem extremely high. I too wonder who is willing to pay so much for so little, and how they can afford to pay it. In most of our country, one could buy a very nice family home for less than the cost of rent in Santa Barbara. However, even the types of rental units you describe seem to be in high demand and they rent quickly even at these prices.
Chillin, I am inclined to agree with your point that we have socialism for the wealthy and individualism for the poor. The fed has given a tremendous gift to property owners by artificially lowering interest rates and subsidizing the mortgage business. This allowed property owners to benefit from inflated prices and to lock in below market interest rates on their mortgages. I think it is disgraceful that the government helped wealthy people lock in 30 year mortgage rates below 3% while simultaneously charging people with student debt well over 5% on their 10 year duration loans. This is a tremendous injustice perpetrated by our government.
I agree with you SBO. But why should the fed intervene to reduce the interest on mortgages and drive up the price of real estate? I just don’t understand the justification for it. The fed has effectively given property owner’s a windfall by devaluing the people’s money.
Stanford, MIT, Cal and other top universities offer a lot of course online, for free. You will find the answers to your questions as well as find new ones over there…
I think what the “affordable housing crusaders” here and elsewhere fail to realize is Economics 101 – it’s called supply and demand. Following me? Ok, let’s stay with it here…Demand. Demand is very very high in SB. You’ve seen them, haven’t you? The youngsters driving around in nicer cars than you (Sacjon cmon chime in here) and yet they can afford to live here while the men and women who are working 1 or 2 jobs, supporting kids maybe – can’t keep up. They cannot possible keep up monetarily with the deluge of cash happy young players streaming in from all parts of the globe. You build it, they will get will come, and “they” are those who have the most money.
Sac, what makes you think prices are far above free market prices?
They’re not? A 1,100 sq ft, 3 bd/2bath tract home priced at $1.4 million is not above the market price? Well, maybe not local market, but I’m talking about the state (that’s what this article is about) and the average is about $800K in CA. So, are SB/Goleta/Carp homes not above market price? I would think they are. Then again, depends how you define “market price.”
But, we’re talking about rent, not home prices. So, are you really saying the average local rental cost is not above the state average? That’s all I mean by saying “above free market prices.” Call it what you want, but that’s what I’m talking about.
Sac, I think Santa Barbara has home prices and rents well above the state average, no doubt about that. However, I think our home sale and rental markets are priced on the free market. Willing buyer, willing seller and willing renter, willing landlord. I would be curious if anyone has good historical data on how home prices and rents in Santa Barbara compared to the state average over the years. I suspect our local market diverged from the state average starting around the 1970s when new construction was curtailed.
The idea that current prices are not “market” prices is double-speak. Yes, the government sets market conditions (most centrally but not only its indirect control of rates), but after that the market is the market. As others have said here, it’s Econ 101… You may not like Econ 101, but that’s akin to not liking that water flows downhill.
Price fixing and rent control regulatory schemes have been a failure and resulted in artificially low supply and unnaturally high prices almost everywhere it has been attempted. There’s like 60 years of data and research on this by now. Price-suppressing intervention does help the currently in-place renters from being gentrified out. It also has a variety of well-studied negative unintended consequences. But the core issue is just the simple one above — it blunts the natural incentive for supply-creation and ends up raising prices for those who aren’t those first lucky few, achieving exactly the opposite of its intent.
And remember, price gouging cuts both ways. Positively no raises exceeding 10%! Asking for more is a crime.
Yup
Yet they still allow and protect people living in illegal camps in the bushes setting camp fires.
Here an idea with the surplus that Newsom keeps touting. Use it to house those oriole in remote read with medical treatment and away from dangers of fires and drugs.
COASTWATCH – honestly curious, why would rents need to go up? I’m assuming you think the economy is bad under Biden (it’s not great), so how would higher rents help the economy? Again, not here to argue, just curious how that works.
When the market is free to set prices, a balance is struck between supply and demand. When the government sets a ceiling on the price of a good or service that is lower than the free market price, that good or service ceases to be available. Think empty shelves in a store. With respect to the rental market, the 10% cap is high enough that it does not interfere with free market pricing (although it will of inflation goes any higher). This means rent may be expensive, but there are plenty of rentals available for those who are willing and able to pay. However, if the government were to lower the cap then the government mandated rent would start to fall below the market rate. As soon as that occurs, we would see a housing shortage where rent is below market but no rentals are available. Interfering in the free market pricing of the rental market (balancing between supply and demand)will only make things worse. I believe doing so is also an unconstitutional taking from the property owner, and I anticipate the courts may soon put a stop to rent control or force the state to pay the difference between rent controlled and market rent.
CHIP – good points, but… the rental prices in this town are already FAR above “free market price” aren’t they? If so, wouldn’t a 10% increase cap do nothing but make it just as (im)possible for the local middle class to afford rent? Allowing rent to go up even more, especially in this town, would leave many of our middle class homeless, or at least unable to live anywhere near their place of employment/kids’ schools, etc. So, if the result is the obliteration of a local middle (and definitely lower) class, what good would a bunch of overpriced, dirty studios and busted up little homes do for our economy as they sit here empty with no income for the landlord to cover his/her property taxes, insurance, mortgage payments, etc?
No, Sac, prices are generally not above market rate. If a unit is priced too high, it won’t rent. In some cases, units are listed too high and the landlord has to lower the rent in order to find a renter. Here is a simple way to look at it. If the rent is too high there are no renters, and if the rent is too low there are no rental units. The free market will set the rent to maintain the balance between supply and demand. Rents will not rise so far that units remain vacant in a free market, there absolutely is an upper limit to free market rent.
The amount of funding to combat homelessness that has been mismanaged in this town and in this state is appalling. Apparently no one has ever thought to sensibly create areas where these individuals can get help they need and also remove any potential for nuisance.
Shelters don’t do a thing for the overall problem as most of the people who would disturb the peace will not go within a mile of one.
Buying a hotel won’t do a thing but create a drug den in a populated area.
It can’t be illegal to be homeless but it should not be legal to cause a disturbance on the streets and get a simple talking to or booked then released. We need proactive action and we need to consolidate and assess the problem as a whole while removing the detriment to the public. This is exactly what we pay taxes for, and what the PD should be tasked with when they aren’t camped out at the beach or at Chic-Fil-A. Our social services department should hear more responsibility and develop plans centered around isolating and treating the issue.
What makes you think prices are far above free market prices? Particularly with residential vacancy rates so low.
A consequence of capped increases is landlords increasing rents at or near the cap when they might have kept it flat or nominal knowing their ability to raise rents in the future is limited. Especially when there are also limitations on reasons they can retenant and amount they can market vacated units above the previous price.
It’s nice he finally got this done before he went to vacation in Montana…you know , one of the states he blacklisted state employee’s business travel to. Isn’t the Gov on biz 24/7…..
Rules for you but not for thee…..
The problem with rent control is that the income is capped at a certain level, but the expenses are not capped but instead keep going up and up. Research what has happened in other parts of the country under rent control (I have), such as in New York. There, once rent control was enacted, landlords couldn’t cover increasing expenses with less and less rental income. Their rental properties became slums. Who did that hurt? Everyone.
I remember back in the 70’s and 80’s that so many of the homeless here in Santa Barbara were Vietnam vets who had lost their minds. Very little help then, very little help now for current vets. Private non-profits such as Tunnel to Towers, Paws for Purple Hearts, the Santa Barbara Rescue Mission, The Salvation Army, do so much better helping those who need it. Our local government needs to get a clue.
Lincoln, they don’t let facts and consequences get in the way of their feel good measures.
“So, are you really saying the average local rental cost is not above the state average? That’s all I mean by saying “above free market prices.” Call it what you want, but that’s what I’m talking about’”. ——— then you don’t know what your are talking about because average rental price in the state does not equal “free market price” in a given area. Holy cow by your logic a one bedroom apartment in Bakersfield should rent for the same price as one in Malibu.