SANTA BARBARA, Calif. (KEYT) The city of Santa Barbara's temporary rent freeze has led to a lawsuit.
Members of the Santa Barbara Rental Property Association and former city attorney Barry Cappello of Cappello & Noël LLP made an announcement on the steps of city hall on Tuesday.
They call the rent freeze ordinance illegal and released the following:
"The Santa Barbara City Council voted at its January 13, 2026 meeting to enact a TemporaryRent Increase Moratorium Ordinance. The rent freeze began 30 days following the second CityCouncil reading, and went into effect on February 26. The city also directed its staff to draft apermanent “rent stabilization” program that would go into effect by the end of the year.The SBRPA contends that the rent freeze and proposed rent stabilization program represent anunconstitutional taking and violate the due process and equal protection clauses, as well asunlawfully interfering with private contracts prohibited by the Contracts Clause.SBRPA retained Cappello & Noël to pursue legal recourse to invalidate the temporary freeze, aswell as halt work on the permanent ordinance.According to a statement by the SBRPA: “In an astonishing display of constitutional disregard,the Santa Barbara City Council proposed in October rent control with a rent cap tied to just 60%of CPI—a policy that represents nothing less than the unconditional surrender of property rights.In addition, the City Council then passed, on a 4-3 vote, a rent freeze that deprives landlords ofa Fair Market Return on investments. Wrapped in the language of ‘rent stabilization,’ theproposals directly violate established law, ignore economic reality, and mislead tenant advocacygroups into believing the city has authority it simply does not possess.”“Rising taxes, insurance and maintenance costs are hitting property owners hard,” says BarryCappello, Cappello & Noël managing partner. “Rent stabilization is bad economics. Ownersneed a return on their investment even as costs rise and must keep their property in a first-rateand safe condition. Rent control has proven over the years that when housing stock is notmaintained, housing conditions for the tenants worsen.”Cappello says, “We intend to follow this process through to the end and make sure either theCity Council rights this wrong or a court with proper jurisdiction orders it stricken.”
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