An Orange County landlord group is seeking to overturn the protections against rent increases and evictions enacted by Santa Ana, Calif., in 2021.
The Apartment Association of Orange County—who filed a complaint in the Orange County Superior Court against the city on Feb. 14—called the city’s rent control ordinance “unconstitutional” in a statement.
“The city’s establishment of a rental housing board ... is by design unconstitutionally biased against property owners in the city,” the Feb. 14 statement read. “Furthermore ... the city’s rent control scheme [will] necessarily deprive property owners of a fair return on their investments – a standard that the United States and California Supreme Courts have consistently held to be a constitutional guarantee.”
Under the city’s law, landlords can’t raise rents by more than 3 percent per year.
For example, when inflation is 1 percent, a maximum of 0.8 percent rent increase is allowed. When inflation is 10 percent, property owners can raise rents by 3 percent.
“The ordinance’s rent control scheme is most pernicious in years where the need to raise rents is the highest for property owners,” the complaint stated. “But even if inflation is low, property owners will never be able to increase rents commensurate with inflation.”
Chip Ahlswede, vice president of External Affairs for the Apartment Association of OC, told The Epoch Times the group has tried and failed to work with the city prior to the law’s adoption.
Additionally, he said, the limitations make it hard for landlords to profit as utility prices skyrocket.
Under current rules, some gas and electricity cost increases can be passed on to renters, but increases in utilities like trash and water cannot, causing an additional burden on landlords, Ahlswede said.
Despite this, the city has offered several alternate options for property owners.
Landlords may petition to raise the rent beyond the 3-percent limit if they prove they can’t get a “fair and reasonable return” on their properties.
Additionally, come July, landlords can petition to pass their apartment’s renovation and installation expenses onto tenants.
The complaint is also challenging the Rental Housing Board, which was created by the city in the fall to enforce rent control policies and oversee disputes between landlords and tenants.
City officials have not yet appointed any members, but said three seats would be reserved for renters, two for landlords, and the remaining two would be filled by councilors.
Ahlswede said it’s unfair that renters will be better represented on the board than landlords.
He also said the board is something that should have been formed long before the ordinance was passed.
Moving forward, though, Ahlswede said he hopes his group can work with the city and the board to talk about how landlords and tenants can work together to create solutions that help them both.
“We’re open to figuring out equitable ways to help everyone—not just tenants,” he said.
A spokesperson for Santa Ana was not immediately available for comment.
