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T U E SDAY, M A RC H 21, 2 023
Banks in crisis
Emergency ordinance covers evictions Santa Barbara City Council to consider proposal to protect tenants
Residents react with a mix of apprehension and hope during State St. interviews
By NEIL HARTSTEIN NEWS-PRESS STAFF WRITER
KENNETH SONG / NEWS-PRESS
First Republic Bank operates a branch at 1200 State St. in Santa Barbara. The San Francisco-based bank saw its credit rating downgraded to “B-plus” from “BB-plus” Sunday by the S&P Global Ratings.
By ANNIKA BAHNSEN NEWS-PRESS CORRESPONDENT
“I don’t really have another option other than to trust my bank,” explained resident Sarah Duff in response to the recent crashes of banks here in the United States, including California. She and other concerned residents talked to the NewsPress in front of the First Republic Bank branch at 1200 State St. Santa Clara-based Silicon Valley Bank and San Franciscobased First Republic Bank have been the main West Coast banks in the crisis. The Federal Deposit Insurance Corp. took over Silicon Valley Bank. On Thursday, 11 of the nation’s biggest banks said they were providing a $30 billion rescue package to keep First Republic Bank afloat, but the bank’s problems remain. S&P Global Ratings announced Sunday that it cut First Republic’s credit rating to “B-plus” from “BB-plus.”
On March 10, Silicon Valley Bank failed and was closed by the California Department of Financial Protection and Innovation. This was the largest bank to fail since the 2008 financial crisis. As of Monday, regional banks across the country had share drops. First Republic Bank, the most prominent of these, had shares drop 47%, nearly 90% down since March 8. This led the New York Stock Exchange to halt trading 11 separate times Monday. This scare within the banking system has trickled down to other banks, and it has customers worried about the future of the country’s financial system. As a result, many people have been pulling their accounts and money from their banks. Jorge Torres, a resident of Los Angeles, shared his thoughts during News-Press interviews in front of First Republic Bank’s State Street branch. “The big banks will be fine because they are backed by the
government. If the government collapses, though, we have a problem.” Recently the FDIC announced a “systemic risk exception,” which would allow the government to pay back uninsured depositors to prevent consequences for the failure of the bank. Additionally, with approval from the U.S. Treasury department, the Federal Reserve said it would set up an emergency lending program to eligible banks so they can meet the needs of their account holders. Jenna Wheeler, a San Luis Obispo resident and Santa Barbara City College student, shared her thoughts regarding the bank issues. “I personally have confidence in my bank because it is smaller, and my family has used this bank for years. We never have had an issue, and I project there not to be one, even with all of this happening. I also know my bank is fairly stingy with loans so that makes me feel better.” Many customers have looked
into their own banks and its history, seeing if this crisis could come to them in the near future. “I know my specific bank has had some scandals, but I feel like it is big enough to be OK,” Malibu resident Reagan Phillips told the News-Press. “I guess I have never really known enough about the banking system to have active confidence in it or not. It has been more of passive confidence.” President Joe Biden tried to share some relief for the country over Twitter on March 14 by saying “because of actions that our regulators have already taken, every American should feel confident their deposits will be there if and when they need them.” As the banking crisis continues, people are reacting with a mix of apprehension and hope. “It definitely scares me a bit, but I trust that things will work out,” local resident Jill Hurin told the News-Press. “Easier to not worry about it!”
Santa Barbara City Council members vowed two weeks ago to aid longtime Santa Barbara tenants who pleaded with them for help in fighting what they claimed were unjust evictions by landlords who wanted them out so they could raise the rent. The council members meant what they said. At their meeting today, council members will consider passing an emergency ordinance to tighten the current definition of “nofault just cause” when it comes to residential evictions. It would close loopholes in the existing law, require landlords to show good faith and make them apply for work permits for any substantial renovations they want to make. The council will meet at 2 p.m. at City Hall, 735 Anacapa St. “Public testimony has provided evidence that some landlords are reading the existing code language as having loopholes,” staff said in its report to the council. “This ordinance addresses an urgent need to protect tenants from evictions, particularly evictions by owners using apparent loopholes in existing regulations to exploit and displace tenants.” Tenants who spoke before the council said their landlords would tell them they have to leave so they could make “safety” or “habitability” repairs, when, in fact, the repairs they make, if any, are often just “cosmetic” in nature. One speaker, Wendy Santamaria, an organizer with the Central Coast Alliance United for a Sustainable Economy, urged the council to help the tenants, who are afraid of ending up homeless on the street or being displaced and having to move away. “I want to appeal to your heart,” she said. “These are real people, not just those in this room but
SB City Council committee tackles illegal housing rentals
email: abahnsen@newspress.com
By NEIL HARTSTEIN
Newsom announces San Quentin Prison revamp to emphasize rehabilitating inmates By TOM JOYCE THE CENTER SQUARE CONTRIBUTOR
(The Center Square) – California Gov. Gavin Newsom is planning to overhaul the state’s prison system. Gov. Newsom visited San Quentin State Prison and announced his plan to make the San Francisco bay prison serve a different purpose. He wants the prison to serve as a center for lower-risk prisoners to receive education, job training, and rehabilitation for substance abuse. Under Gov. Newsom’s plan announced Friday, the facility would receive a name change: the San Quentin Rehabilitation Center. The inmates serving prison sentences there would be moved to other prisons in the state penitentiary system. Touting his plan, Gov. Newsom pointed to the state’s high recidivism rate. He said its current criminal justice model is not working,
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so the state must change to ensure ex-inmates avoid recidivism. “We are as dumb as we want to be,” Gov. Newsom said at the event. “Two-thirds of folks, the senator says, coming out of the prison every single year, or at least within three years, violate probation or commit another damn crime? I mean, two-thirds? And we perpetuate that system, and we call that system somehow public safety oriented? Where’s the public safety in that?” Gov. Newsom will allocate $20 million to enact this plan. Assemblymember Mia Bonta, D-Oakland, praised Newsom for what she sees as a commitment to public safety by putting a greater emphasis on rehabilitation programs. She noted that she wants to see inmates grow stronger ties to the communities where they live in hopes that they will commit fewer crimes in the future. “Opening prisons to more programming by CBOs (community-based organizations)
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NEWS-PRESS STAFF WRITER
The city has long wanted to do something about the increasing number of illegal short-term housing rentals operating in Santa Barbara, and the City Council Finance Committee could begin the crackdown today when it considers authorizing a 12-month pilot program aimed at enforcement. Staff is recommending the committee adopt a resolution to appropriate funds for the development of a short-term rental enforcement pilot program directed by the City Attorney’s Office and the Finance Department. The Finance Committee will meet in the David Gebhard public meeting room, 630 Garden St., starting at noon. The overall objective of the year-long pilot program is to gather accurate data on the number, location and seasonality of short-term vacation rentals operating in the city, staff said. Once accurate data is obtained,
the effort shifts to that of gaining compliance with the city’s zoning laws through investigation and, if necessary, prosecution of people operating illegal rentals in the inland areas of the city and in the Coastal Zone in response to nuisance-based complaints, staff said. “The true magnitude and accompanying costs of that enforcement effort cannot be determined until accurate information is ascertained,” staff said. While short term rentals are not permitted in most areas of Santa Barbara, they have nonetheless become a new form of visitor lodging in the city within the past decade. STRs constitute the rental of any dwelling unit to any person for exclusive transient use of less than 30 days. “While an informal market may have existed in years past, hosts can now make a spare room or an entire apartment or house available to potential Please see RENTALS on A2
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not only shifts the culture in the prisons, it helps to forge a connection in the community that people will return to,” Assemblymember Bonta said. “And let’s be clear: 95% of our people who are in prison will be coming home to us and will be rejoining us as neighbors. Ask yourself: what condition do you want them in to rejoin our community?” Assemblymember Damon Connolly, DSan Rafael, praised Gov. Newsom for what he thinks will be an effective approach to reducing crime and incarceration. “The truth is in our system as things stand most people released from prison are likely to end up back behind bars,” Assemblymember Connolly said. “Today, I’m proud to join our governor and my legislative colleagues to say that this will no longer be California’s reality. We must do better and we will.” San Quentin State Prison is the only prison in California that can legally carry out executions. However, the state has not executed anyone since 2006.
hundreds of others who could not be here. Do something with the power you have.” The emergency ordinance is the council’s response. The proposed ordinance would close loopholes in the law “by making it clear that any action to recover a rental unit requires good faith on the part of the landlord,” staff said. That’s exactly what Councilmember Meagan Harmon said should be done in a previous interview with the News-Press. “I do believe that the council should move forward to close the ‘renovation loophole’ — the intention behind our ordinance was to ensure that unjust evictions are stopped. If that intention is not being honored under the ordinance as written, if loopholes in the law are being exploited to circumvent its purpose, it is incumbent on our council to revise the ordinance so it is effective.” Santa Barbara already has a tenant protection law on the books intended to be more protective than statewide regulations, staff said. This emergency ordinance would amend that law as it pertains to just cause for residential evictions. Grounds for no-fault just cause eviction include: recovery of a rental unit for the owner’s personal or family residence; removal of the property from the rental market; compliance with a governmental order that requires vacating a rental unit; and demolition or substantial remodel of a rental unit. Nevertheless, “the City Council has received numerous reports of actions by owners seeking to exploit apparent loopholes in the ordinance,” staff repeated in its report. Councilmember Kristen Sneddon told the News-Press previously that changes could be made to make the threshold higher to justify an eviction, Please see EVICTIONS on A4
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