SANTA CRUZ >> Low-income residents of the St. George Apartments in downtown Santa Cruz who were facing substantial upcoming rent increases can breathe easier after the Santa Cruz City Council voted to extend protections to tenants in units with expiring affordable housing rental restrictions — an effort championed by Santa Cruz City Councilmember Scott Newsome.

“It was brought to my attention that 71 of my constituents at the St. George residences, many of whom are seniors who live on a fixed income with some also being disabled, that they were facing very steep rent hikes of up to 100% or more by Nov. 1 due to a loophole in state law,” said Newsome to the Sentinel. “And as a result, were facing the prospect of being displaced and becoming homeless.”Newsome referred to AB 1482 or the Tenant Protection Act of 2019, which went into effect in 2020 and ensures numerous protections for renters in the state, including just-cause eviction protections. The act also capped annual rent increases for existing tenants in a building at no more than 5% plus the percentage change in the cost of living or 10%, whichever is lower.

However, under the law, the same annual rent increase cap doesn’t apply to government-assisted housing developments when a time-limited affordability rental restriction expires on a property.

The St. George Apartments ownership had a 30-year agreement with the city of Santa Cruz to keep 71 units affordable in the building, which expired in 2021 and was extended to 2023, when low-income residents were given one year’s notice that the monthly rent would more than double in some cases because the cap didn’t apply.

According to the meeting’s agenda report, with the tight rental market in Santa Cruz and the prospect of displacing longtime, low-income city residents, the City Council and city attorney created an ordinance that would apply the rent increase cap to the residents’ current rental costs.

“My colleagues and I worked closely with our City Attorney’s Office, who had also been contacted by certain community organizations that had also taken an interest in this issue, to find a solution to this issue,” said Newsome. “Once we crafted the ordinance that was passed on Tuesday, I with the help of Councilmember Kalantari-Johnson and Councilmember Brown brought it to council.”

The agenda report states that “The ordinance proposed here would close the aforementioned loophole and would eliminate the exemption in AB 1482’s rental increase restrictions for tenants in formerly rent-protected units where those protections are expiring. As drafted, the ordinance would apply only to tenants who resided in their units before the 12-month notice of expiration of rental restrictions is provided, thus ensuring that any tenant that occupies a unit after the 12-month notice is provided does not unfairly benefit.”

At the meeting Tuesday, St. George residents such as Kevin Cummings, who also submitted a letter that was included in the agenda packet, spoke to the steep rental increases that would go into effect for low-income tenants of the building and mentioned that the increase he was facing was about 255%.

“That would be a lot of upheaval for my wife and I,” said Cummings at the meeting. “I’m here today to ask for your support and to codify this solution into law.”

Support for the loophole-closing ordinance was also voiced by Eli Holliday, a representative of Communities Organized for Relational Power in Action (COPA), a nonprofit composed of numerous regional organizations and faith institutions that advocate for affordable housing among other issues.

“We want to congratulate you on your work on this ordinance and stress that we think this ordinance is a huge win,” said Holliday at the meeting.

After the public comment period ended and the City Council discussed the item, the motion to establish the ordinance passed in a unanimous vote, but it will go before the City Council again Sept. 24 for a second reading.

“I felt ecstatic for my constituents at the St. George,” said Newsome “They have been through a great deal of stress with this ordeal, so it was wonderful to see them smiling and relieved at the end of the meeting.”

When asked about the prospect of blowback from the real estate sector regarding the passage of the ordinance, Newsome said that it is possible, but that he wasn’t too worried about it.

“Anyone can sue the city for almost any reason,” said Newsome. “But our City Attorney’s Office feels that a lawsuit would not be viable and are confident we can successfully defend the ordinance.”

To watch the meeting, visit cityofsantacruz.com.