CITYWIDE — Santa Monica market rate rents in 2013 were the highest in the city’s history, according to the Rent Control Board’s Annual Report.
In 1998, 83 percent of rent controlled units in the city by the sea were affordable to households making 80 percent or less of the area median income. Today, only 5 percent are. This is due in part to what is called vacancy decontrol, the result of a 1995 state law that lifted rent-level restrictions. The law allows landlords to raise rents to market rates whenever a tenant moves out.
There’s been a 50 percent increase in the number of market-rate tenants who moved in within the past five years and the average market rate rental shot up 6 percent in 2013.
There are currently about 28,000 rent controlled units in the bay city. Two-thirds of those have been rented at market-rate since the 1995 law went into effect. Only 9,430 units are long-term rentals that have not been subject to market rate rent increases. Last year, nearly 500 long-term tenants moved out.
Another 8,000 units are not subject to rent control for a variety of reasons.
“One challenge that we did not face over the past year was any material reduction in the number of controlled units,” the report said. “That number remained relatively constant at a little over 28,000. While 14 units were withdrawn from the rental market under the Ellis Act, 30 previously withdrawn units were returned to the market.”
In 1998 there were 824 market-rate units affordable to those who made 30 percent of the median income, according to the report. Today, there are only four.
The median maximum allowable rent for a three-bedroom apartment without vacancy increases would be $1,380 per month but with the vacancy increase it jumps to $2,802.
Nearly half of Santa Monica renters spend more than 30 percent of their income on rent — a percentage that is considered unaffordable by the U.S. Department of Housing and Urban Development.
“As housing that is affordable vanishes for new households with moderate incomes, it is becoming increasingly difficult for many people to find housing they can afford in Santa Monica,” the report stated.
Some low-income households can still find a place to stay thanks to the city’s relatively high quantity of affordable housing units but, with the dissolution of the Redevelopment Agency and all of the money that came along with it, newly constructed or purchased affordable units are growing scarce.
“With the state’s elimination of redevelopment agencies and the impact of vacancy decontrol, Santa Monica appears to be heading toward a future where the population will be made up of fewer and fewer middle income residents,” the report said.