Community Stabilization Means Capping Population Not Rents

by Randy Alcorn, Noozhawk Columnist

The Santa Barbara City Council is considering an ordinance that would restrict annual rent increases to 2% plus an annual Consumer Price Index adjustment. The proposed ordinance, first introduced as The Community Stabilization Initiative, would outdo California’s cap of 5% plus CPI.

The proponents of this kind of market meddling argue that it’s necessary to keep rents low enough for people who might otherwise have to relocate to a more affordable community or be forced onto the streets.

Because price controls typically shrink supply by discouraging investment, rent caps are likely to deter increasing rental housing. Who wants to make the costly investment in constructing rental housing if returns will be arbitrarily limited?

Meanwhile, owners of existing rental apartments might prefer to convert them to condos for sale.

Ironically then, the only good reason to support rent caps may be that by discouraging the construction of more rental housing they inhibit population growth.

Rent-control proponents condemn landlords as being greedy for renting at market rates — but the people who want to force landlords to rent to them at below market rates are not? Greed can be found anywhere along the wealth continuum.

The crux of the local housing issue is not greedy landlords or covetous tenants, it is demand exceeding supply.

Proponents of increasing supply argue that the local economy will collapse if what is called “workforce housing” is not ample and affordable.

These Cassandras have chronically claimed that the community’s “critical workforce” — police, firefighters, medical staff, et al — will abandon Santa Barbara for places where housing is less expensive, and that recruiting their replacements will be stymied by the pricey housing here.

Before succumbing to this canard, consider several observations.

First, providing more housing — “workforce” or otherwise — has never lowered housing prices here, but it has increased the population, which then requires an increased workforce, which then requires more housing.

Satisfying housing demand becomes as futile as a dog chasing its tail.

But, a town that caps its population at a certain level will only need to attract and retain a critical workforce sufficient for that level. That, to borrow a euphemism, would be “community stabilization.”

Second, regardless of occupation — cardiologist or waiter — those whose priority is a bigger, better house rather than where it is will always be loose leaves on any workforce tree.

What attracts and holds most residents here is the singular beauty, cultural ambience and delightful climate — not the housing stock. That’s why people will pay $2 million for a modest Mesa bungalow and feel fortunate to have a home here.

Third, those of us who have lived here quite a while have heard Cassandras wailing the same warnings about housing shortages for many decades now.

Some of you may have read the transcript of a 1940s City Council meeting at which there was much hand-wringing over the lack of housing and prophecies of dire economic consequences that would befall the city.

Economies calibrate to their markets. Santa Barbara’s economy was vibrant when the population was half of what it is today. It was not on the verge of collapse.

That is because most economic activity is recurrent and not jeopardized by a static population. A small town will have fewer plumbers, lawyers, doctors and retailers, etc. than a bigger town, but neither’s economy will be on the verge of collapse if its population isn’t increasing.

The reality is that for a place like Santa Barbara there will never be enough housing for everyone who wants to live here. In that respect, Santa Barbara is no different than many of the other highly desirable places on the planet that the vast majority of people can only visit.

Attempting to accommodate the endless demand for housing can only result in the degradation of what makes this place so desirable — sadly, a process well underway.

Let’s, for a moment, indulge the Cassandras and contemplate what might happen if no more housing is built here, and rents and home prices continue to escalate.

Housing is affordable here, but not for everyone. Do not conflate desire with deserve. Housing becomes unaffordable only when no one can or will pay the asking price. How much housing for sale or rent lingers on the market here?

Would those who can afford a home in Santa Barbara have to do without critical workforce services or would they pay enough to have them?

It would be the latter — as it always has been.

The local economy scales up to a level that ensures the necessary workforce. A dentist, plumber or mechanic in Santa Barbara charges more than those in Saginaw, Michigan. As well, Santa Barbara’s police and firefighters are paid more than their counterparts in Saginaw.

Consequently, the cost of living here is considerably higher.

And, yes, there is an obvious homeless population here. There has been for decades. People stubbornly cling to this attractive place even though housing here is well beyond their means. But subsidized housing won’t end homelessness here anymore than sugar ends ants.

There are critical environmental concerns with adding housing and thus more population here. Chief among them are limited water resources and increased susceptibility to wildfires — both growing more severe with climate change.

Making the case for protecting this extraordinary place from the ravages of overpopulation invariably elicits indictments of elitist NIMBYism.

But such indictments aren’t a cogent refutation of the case being made. They are a feeble attempt to dismiss the realities of the argument by discrediting those making it.

The reality is that Santa Barbara’s superlative singularity is being steadily diminished by the persistent packing-in of more residents.

There are already plenty of places in California overrun with population, congested with cheek-to-jowl housing, choked with traffic, and plagued with all the other soul-sucking tribulations of urban mass. Santa Barbara doesn’t need to be another one of them.

As a nation we have created national and state parks to preserve and protect special places for current and future generations. Places like Santa Barbara are worth preserving for the same reasons.

That won’t happen if these places are allowed to be packed with people.

In the recent past, wiser city councils placed a cap on Santa Barbara’s population. Given California’s misguided mandates overruling local zoning ordinances, that is more difficult to do, but the response to such short-sighted, destructive government mandates is to resist, resist, resist.

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The original column appeared in Noozhawk.  The opinions expressed are the author’s own.