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San Diego Eviction Ban: What It Means For Rental Property Owners

San Diego recently passed an eviction ban ordinance that will cap rent increases, void notices to vacate, and ban almost all evictions in the county.

On May 4, 2021, the San Diego County Board of Supervisors passed an ordinance that will affect rental property owners throughout the county. When this ordinance takes effect, most evictions will be temporarily banned, notices to vacate will be invalid, and rent increases will be capped.

What does this ordinance do?

This new ordinance does three things. First, it prevents property owners from giving a Notice to Vacate to their tenant and voids all previously delivered notices. This means that if your tenant’s lease was coming due, you have no option but to renew the lease.

Second, it halts most evictions. You can no longer evict a tenant for any of the just cause reasons. The only exception is if there is an imminent threat to health or safety. The County has not yet specifically outlined what this means but we can expect more details in the coming weeks.

Third, the ordinance places rent caps on some properties across the county. The cap is tied to the Consumer Price Index from April 2020 to April 2021, placing it at around 4%. There will likely be more explanation on this as the date of implementation gets closer.

When does this ordinance take effect?

This ordinance will take effect in early June. It is set to expire 60 days after Governor Newsom lifts all COVID-19 related stay-at-home and work-at-home orders. Based on his statements, he plans to open the state on June 15, 2021, meaning the earliest the law can expire would be August 15, 2021.

How was the ordinance passed?

The ordinance was proposed by Supervisor Nora Vargas (District 1) under the guise of preserving housing stability for San Diego residents. The ordinance was not popular with many San Diego residents, with about 75% of e-comments and calls being against the measure. There were over 700 comments and over 400 calls from people wanting to give their opinions and concerns on the measure.

Reasons for opposition were mainly that the measure is too strict and unnecessary. We are on our way out of the pandemic and this ordinance will not benefit the vast majority of San Diego residents. AB 3088, SB 91, and the CDC eviction moratorium already protect tenants across the state. This new ordinance does not even require proof of hardship due to COVID-19. Unlike previous ordinances, this one severely limits a landlord’s ability to manage their rental property.

The ordinance passed 3-2, with Nora Vargas, Nathan Fletcher, and Terra Lawson-Remer voting in favor of passing and Jim Desmond and Joel Anderson voting against the measure.

How does this ordiance impact tenants and landlords?

There is no denying that tenants that were financially affected by COVID-19 should receive aid. However, those tenants were already receiving protections and aid via previous ordinances. If a landlord does take advantage of a tenant, there should be protections in place (enter SB 91). Not only are the courts extremely friendly to tenants in California, there are millions in state funds to defend tenants free of charge.

Small landlords argue that all of the previous ordinances have already made it difficult to collect rent from their tenants, which in turn makes paying their mortgages a challenge. This latest law may force them out of the rental market. Without any rental income coming in, they are struggling.

Perhaps the most frustrating part of this ordinance for rental property owners is the lack of control and agency over their property. If they want to move back into their home, they can’t. If they want to sell it, they can’t. It makes it nearly impossible to get rid of a tenant unless they are a threat to health or safety. This means tenants that commit lease violations or are a nuisance are able to stay in the property.

Because of this, many rental property owners may strongly consider selling the home the second they are allowed to. They may lose trust in the government and question why owning a rental property is worth it anymore. There is also fear that the housing crisis will get worse, leading the government to step in and attempt to fix a problem they helped create.

However, staying in the rental game will prove worth it in the long run. Property values are only going up in San Diego and by extension, rental rates. Supply is tight and there is a surplus of renters looking for homes.

For all the latest updates on this ordinance and other tips on how to better manage you property, subscribe to our blog!

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Olivia

Content Marketing Manager at Good Life Property Management

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On May 4th, 2021, the San Diego County Board of Supervisors passed an ordinance that temporarily bans evictions and limits the amount you can raise rent on your rental property. How my name’s Steve Welty, I’m CEO of Good Life Property Management. Our mission is to make owning rental property easy for you. And in today’s video, I’m going to give you the breakdown on what’s up with this eviction ban, what it’s all about, how it came to pass, and ultimately how it’s going to impact you. So essentially this new ordinance does three things. The first thing it does is it prevents you from giving your tenant notice to vacate. So let’s say the lease is coming due and you give your tenant a six-day notice, that notice is no longer valid and you can’t give them a new notice while this ordinance is in effect. The second thing it does is it bans evictions. So the only exception they give is for immediate threats to health and safety. There isn’t a clear definition at this point what that means. So we anticipate judges will be very strict and only you know major serious offences are going to qualify. And the third thing it does is it limits the amount you can raise rent and it ties it to the consumer price index which last year was 4%. So that’s the cap on residential rent increases for the time being. And this ordinance it applies throughout the county. And so if you’re like me you might be wondering well what about the cities like I’m in the city of San Diego. So this shouldn’t apply to me right, because cities make their own rules. Apparently the county use something called the police power which they have in emergency situations which makes this ordinance sweeping for all areas of San Diego County. So this ordinance it takes effect June 3rd and it lasts for 60 days until after the governor lifts the emergency order which he has said he plans to do that hopefully around June 15th. That would put this ordinance to expire 60 days after that or about August 15th at the earliest but don’t be surprised if it gets extended past that. So how did this get passed? Okay so supervisor Nora Vargas proposed this ordinance. And when the word got out it was wildly unpopular. In fact they had four hours of public testimony for people 4N against the bill. They had over 700 e-comments and I was one of the people waiting in line to for my one minute to tell the county why I thought this was a bad idea. And I would gauge the support at about 25% and the opposition was about 75%. So for those of us that oppose this bill most of us just felt like number one it was unnecessary. There’s already a complex legal web of laws. AB 3088 SB 91 the CDC eviction moratorium that has protections for tenants and rightly so this just was an unnecessary layer that we didn’t need. Not to mention you know California is already a very tenant friendly state there’s already tons of unused money for tenants that can’t pay rent which makes me believe that the problem is less severe than maybe the state thinks or local government thinks. And you know it just infringed on private property rights. You know owners should have the ability to control what they do with their property and under this ordinance you know if they want to sell they can’t they want to move back in they can if they want to you know remodel the property they can’t so it just went too far in that regard. So the proponents of this bill they argued hey it’s just temporary just for a few months but think about it in context like if this was done with a different industry let’s say they said to restaurant owners hey you can’t enforce a code of conduct in your restaurant and in fact if the person’s unable to pay you can’t make them pay you know just wouldn’t make any sense and mom pa landlords who make up the vast majority of rental property owners in San Diego we’re on the forefront of providing stable housing for people and there’s already an inventory crisis and what this ultimately is going to do is going to take people out of the game who are just going to say hey I don’t have trust in my local government my state government they’re making it too difficult on us landlords I’m just going to sell my investment and I’m going to go into something else and it’s just going to take another house off the rental market and that’s not what we need at this time. So surprisingly this ordinance passed passed three two it was supported by Nora Vargas who introduced the legislation who’s voted for by Nathan Fletcher and by Tara Lawson-Ramer I will give kudos to Jim Dezmond and Joel Anderson who voted against this ordinance. So I came out against this ordinance because I feel it’s bad for tenants owners and our community. So first tenants there’s already a complex legal patchwork of laws to protect their interests and rightly so but ultimately it’s going to hurt them because it’s going to take additional inventory off the market because owners are going to be impacted and many of them are just going to say hey I don’t trust my local state government you know I feel they don’t have our interests at heart I’m going to sell my rental property and I’m just going to go do something else and it’s going to take another house off the rental market which we so desperately need in this tight you know housing market already and you know the community is just going to suffer because they lose faith in their elected officials to have their back and you know private property rights it’s a bedrock of our you know democracy of our constitution and it should only be infringed upon when there’s overwhelming public support which there definitely was definitely was not and when it’s completely unavoidable otherwise which it definitely does not meet that bar because we’re coming out of the pandemic right now. So here’s the good news though if you’re a rental property owner and you stay in the game your property is going to go up in value and your rental value is going to go up because areas with the strictest rent control traditionally like New York, Los Angeles, San Francisco have the highest property values and the highest rent amounts because although this legislation often is well intended I think the supervisors did have good intentions it’s ultimately going to cause more problems by taking supply off the market and having those other impacts I talked about and then they’ll come back into the picture and try to create another solution to a problem that they help create so that’s my two cents I hope this video is helpful if you like what you heard please subscribe to our channel we’re going to keep you updated on local law changes and things you need to know to make only rental property easy for you in San Diego thanks for watching.