Santa Barbara faces possible litigation over rent freeze and State Street plan

The city of Santa Barbara received a letter threatening litigation if the city council voted to extend a rent increase moratorium, leading the city administrator to remove the issue from the agenda, KEYT reported.

Critics of rent stabilization have gathered thousands of signatures for a special election ballot, though these still need validation. Meanwhile, the city attorney noted litigation risks related to maintaining the current State Street configuration as another referendum is anticipated.

The city council voted 5-0 on an urgency ordinance to continue Title 31 State Street regulations pending voter action, with the mayor and a mayoral candidate abstaining. Staff advised that transitioning State Street before a vote would be costly and confusing.

The State Street Master Plan aims to make downtown more inviting but requires funding. The mayor noted that a special election would provide a clear public poll despite the cost, with both referendums possibly appearing on the same ballot in early 2027.

The mayoral race remains close, with candidates holding differing views on rent stabilization and State Street closures. One candidate supports rent stabilization and full closure of State Street, while another favors a shorter closure and believes rent stabilization could hinder affordable housing development.