The Santa Barbara Rental Property Association and four property owners filed a federal lawsuit on April 3 challenging the city of Santa Barbara’s temporary moratorium on rent increases and seeking an injunction to stop the enforcement of eviction restrictions, in the latest bid opposing the city’s long-term plan for a permanent rent stabilization ordinance.
The property owners — represented by Santa Barbara attorney Barry Cappello, managing partner of Cappello & Noël — argue that the City Council “failed to conduct adequate due diligence” before deciding to adopt the temporary tenant protections. The lawsuit further alleges that the city “dismissed legitimate concerns about the long-term effects of rent control.”
In the 31-page complaint, filed in the Western Division of the federal court for the Central District of California, the property owners allege that the current ordinance as adopted by the city “violates the takings clause of the Fifth Amendment of the United States Constitution,” and that approval was rushed due to what Cappello described as a process “rife with personal and political bias.”
“The complaint demonstrates a wide range of constitutional violations,” Cappello said. “It shows how arbitrary and capricious, and how rushed this ordinance process was, providing proof of its unconstitutionality.”
Cappello said the SBRPA represents more than 1,000 individuals and entities who own and manage more than 23,000 units of rental housing within the City of Santa Barbara. The complaint argues that the affected property owners — who already deal with inflation, property taxes, rising insurance rates, and unpredictable policies — have no recourse for relief under the current ordinances adopted by the city.
The property owners are seeking a writ of mandate striking down the temporary ordinance or ordering the city to rescind its decision, along with potential compensation for each individual plaintiff. The four property owners who joined the lawsuit with SBRPA include Teresa Patiño and three private entities, JKRK, LP (registered by Robert Kooyman, manager of Hoppy Toad Land Company); 3442 RICHLAND, LLC. (run by Michael and Linda Cheng of Santa Barbara), and 1501 SB, LLC. (registered to real estate investors John and James Youngson).
“The individual property owners who filed suit are standing for all other Santa Barbara property owners,” Cappello said. “These residential rental property owners and the SBRPA had no other choice but to take legal action.”
Santa Barbara City Administrator Kelly McAdoo said the city has not had time to review the entire filing as of Monday morning. McAdoo could not comment on the specifics of the lawsuit, but said the rent freeze would remain in effect while the legal challenges proceed. The city will continue planning for a permanent rent stabilization ordinance over the next few months.
“We are continuing to move forward with the drafting of the permanent ordinance per the schedule that has previously been circulated,” McAdoo said.
The City Council will hear an update on the planning process for the permanent rent stabilization on April 7, where the council is expected to hear reports from focus group meetings and confirm the workplan to adopt a finalized ordinance in July 2026 in preparation for a full launch in early 2027.
Housing advocates with the Santa Barbara Tenants Union and Central Coast Alliance United for A Sustainable Economy (CAUSE) are urging tenants and community organizers to show up to the April 7 council meeting to “demand decisive action on rent stabilization.”
CAUSE Policy Advocate Ana Arce said the lawsuit filed by property owners challenging the temporary rent increase moratoriu only serves to “heightened the urgency” for a permanent ordinance.
“This lawsuit is a desperate attempt to block progress that communities across the country have already achieved,” Arce said. “Rent stabilization isn’t radical — it exists in cities nationwide, and here, voters have made their support clear by electing a pro-tenant majority to the city council.”
“Corporate landlords are attempting to pressure the city to not represent the will of the people, and instead they want to force taxpayers to foot the bill to defend this lawsuit,” Arce continued. “We commend the council for advancing a rent stabilization work plan — but let’s be clear: plans alone won’t protect families. The moment demands decisive action now.”
