Santa Barbara Council Approves Temporary Rent Increase Moratorium

The Santa Barbara City Council initiated formal discussions regarding a Rent Stabilization Program on December 16, 2025. During this session, officials proposed a temporary moratorium to prevent a surge in housing costs while permanent regulations were being drafted. The council formally reviewed the ordinance on January 13, 2026.

The measure passed with a 4-3 majority for standard adoption, though it fell short of the five votes required for immediate emergency implementation. Consequently, the ordinance is expected to take effect in mid-February 2026, roughly 30 days after final approval. City leaders intend for this pause to maintain current housing conditions while staff and consultants analyze long-term economic data. This moratorium is scheduled to remain in effect through December 31, 2026, or until a permanent stabilization program is adopted.

Understanding the Rent Moratorium

A rent moratorium is a temporary government mandate that pauses the ability of property owners to increase rental rates for a specific timeframe. This policy does not waive residents' obligation to pay their monthly rent, but it fixes the price at a specific base level. In Santa Barbara, this base rate is defined as the rent that was in effect on December 16, 2025.

Effects on Landlords and Property Owners

Housing providers in Santa Barbara are navigating substantial increases in operational expenses, including utilities, labor, and property insurance. At the public hearing, several independent owners testified that their insurance premiums have risen by over 40% in the last year alone.

Freezing rental income while these mandatory costs continue to climb creates a financial challenge for those responsible for building upkeep. Critics of the policy suggested that a lengthy freeze could impact the long-term quality of the housing supply by narrowing margins for preventative maintenance.

• Challenges in offsetting the rising costs of property insurance and taxes.

• Potential for a reduction in elective property upgrades and renovations.

• Decreased incentives for new reinvestment in older building stock.

Maintaining a balance between sustainable property management and community affordability remains a primary concern for local stakeholders.

Impact of the Ordinance on Tenants

According to a 2025 data dashboard from the Santa Barbara County Association of Governments, approximately 24% of renters in the city are severely rent-burdened. During public testimony in January 2026, several residents stated that their housing expenses exceed half of their income, which limits their ability to cover other essential costs. The ordinance seeks to provide stability for those concerned about potential displacement while the city completes a comprehensive housing study.

• Immediate protection against significant rent hikes during the city's planning phase.

• Increased financial predictability for households currently living in eligible units.

• A reduction in the immediate pressure for residents to relocate due to cost.

This temporary measure is intended to serve as a bridge until the city completes its comprehensive housing study in the summer of 2026.

Santa Barbara Housing Market and Current Environment

The Santa Barbara real estate market began 2026 with a median single-family home price near $2.4 million and a persistent shortage of available inventory. Low vacancy rates continue to drive high demand for rental units as the city remains one of the most expensive coastal regions in the state.

Market analysts observe that while sales volume has stabilized, the limited geography and strict zoning laws keep upward pressure on property values. This legislative action represents a significant local effort to manage these cost pressures while the broader market adapts to evolving economic conditions.

Navigating Exemptions and Compliance

It is essential for both residents and owners to understand which properties are subject to this new rule. Based on the city attorney’s report and the California Costa-Hawkins Rental Housing Act, the temporary rent freeze does not apply to the following:

• Units built within the last 30 years (specifically those with a certificate of occupancy issued after February 1, 1995).

• Single-family homes and the majority of condominiums.

• Temporary lodgings such as hotels and motels.

• Housing provided by the government or educational institutions.

• Units already governed by affordability covenants or Federal Section 8 programs.

Ensuring compliance requires a clear understanding of these specific categories to protect the rights and responsibilities of all parties involved.

Community Guidance and Updates

As Santa Barbara navigates this transitional period, staying informed is the best way for both housing providers and residents to prepare for upcoming changes. We will continue to monitor the development of the permanent Rent Stabilization Program as the City Council reviews new economic data and community feedback throughout the year. Our team is committed to providing you with the latest updates to help you make confident decisions in our local real estate market.