On September 22, 2026, the Santa Barbara City Council approved the first reading of its permanent rent stabilization ordinance in a 4-3 vote, putting the city on track to replace its temporary rent freeze with a permanent program on January 1, 2027. If you own rental property in the City of Santa Barbara, here is what passed, what changed, and the dates you need to know.
What Passed on September 22
- The ordinance: Approved 4-3 as recommended by staff, with Council members Harmon, Santamaria, Sneddon and Gutierrez voting yes and Mayor Rowse and Council members Friedman and Jordan voting no.
- Rent cap: Annual increases limited to 60% of CPI or 3%, whichever is lower.
- New affordable housing exemptions: In a separate 4-3 vote (Harmon, Friedman, Jordan and Sneddon in favor), the Council exempted units managed by the Housing Authority and deed-restricted Section 8 voucher units. Any unit that rises above affordability standards automatically becomes subject to the ordinance.
- Rent board: At least one member of the rent board must be a senior tenant.
- Corporate owners: The ordinance includes restrictions on corporate-owned properties.
- Privacy: Staff were directed not to collect tenants' personal information or the number of tenants in the rental registry.
- What failed: A proposed petition process for habitability concerns in exempt units failed 3-4.
Key Dates for Rental Property Owners
- September 29, 2026: Second reading, when the Council is scheduled to formally adopt the ordinance and the new exemptions
- December 15, 2026: Rental registry fee expected to be finalized
- January 1, 2027: Temporary rent freeze ends and the permanent program launches
- April 2027: Registration deadline for covered units
- October 2027: Registration deadline for all other rental units
- 2028: Enforcement begins
What the Program Will Cost
The city projects seven staff members and $2 million to $2.5 million a year to run the program. The Council approved $500,000 from the Measure I Flexible Housing and Homelessness Fund for startup, and registry fees are expected to cover roughly 80% of ongoing costs. In practice, that means owners of registered units will carry most of the program's cost through annual fees.
How We Got Here: The April 7 Meeting
The September vote follows a landmark April 7 session that set the policy direction for the permanent ordinance, coming just days after landlords filed a federal lawsuit against the city's temporary rent freeze. The Council passed more than a dozen motions in narrow 4-3 votes, with Mayor Randy Rowse and Council members Eric Friedman and Mike Jordan consistently dissenting:
- Rent cap formula: Annual increases limited to 60% of CPI, with a hard maximum of 3%
- One increase per year: Landlords may only raise rent once per 12-month period
- No rent banking: Unused increases cannot be carried over to future years
- Exemptions: Costa-Hawkins exemptions apply: single-family homes and newly built units
- Petition framework: Includes "fair return," capital improvement, and tenant violation petitions
- Enhanced tenant protections: Standardized disclosures and notice requirements beyond state minimums
- RSG Inc. contract: $65,105 approved to support drafting the permanent ordinance
The Landlord Lawsuit
On April 3, the Santa Barbara Rental Property Association and four property owners filed a federal lawsuit challenging the temporary rent freeze. Represented by attorney Barry Cappello, the suit alleges the Council "failed to conduct adequate due diligence" and that the freeze violates the Constitution. The city has moved ahead with the permanent ordinance while the case continues.
What It Means for Property Owners
Since the temporary freeze took effect February 26, enforcement has been murky, with landlords and tenant advocates disagreeing over whether increase notices served before that date remain valid. The permanent ordinance is expected to bring clearer rules, along with new registration requirements and annual fees.
If you own rental property in the City of Santa Barbara, or you are weighing an income property purchase, these rules can affect cash flow, valuation and your exit strategy. Single-family homes and newer construction remain exempt under Costa-Hawkins, which may make them more attractive to investors. Call or text me at (805) 607-9709 and I'll walk you through how the ordinance applies to your property.
