It’s hard to think of a better place to live in Santa Monica.

In a shaded neighborhood just one block between the beach to the west and Santa Monica’s Community Garden to the east, the rent controlled tenants at 122 Strand Street quietly took buy-outs and moved out over the last few years.

The new owners of the parcel are now moving forward with plans to demolish the four apartments and replace them with three condominiums that will likely sell for millions of dollars.

“It is something that should be a red flag across the city,” Commissioner Richard McKinnon said before the Planning Commission approved plans for the project Wednesday night.

McKinnon is concerned that the escalating cost of land in Santa Monica is putting pressure on rent-controlled buildings that have endured for decades. In the example on Strand, the new owners, Texas-based MAV Partners, LLC, purchased the 1950’s building for $2.3 million. Even after construction costs, when they are finished the high-priced beach condominiums will likely produce a tidy profit for MAV in McKinnon’s view.

“This is not a cyclical thing,” McKinnon said. “This is something here to stay. Santa Monica only has a certain amount of land going forward and this may be the canary in the coal mine.”

Along with McKinnon, Commissioners Jennifer Kennedy and Amy Anderson urged City staff to look into potential policy decisions that could curb the conversion of rent controlled buildings to condominiums. Over the years, the Ellis Act has effectively tied the hands of City leaders.

To the three commissioners, losing those four apartments will mean lasting demographic change in the neighborhood as renters lose another foothold in Santa Monica. City staff conceded it is a phenomenon they have noticed and attributed the market pressures to the strong economy.

A spokesman for MAV assured the commissioners the tenants in this case had not been living there for a long time, and were paying market rate to rent the space.

Still, McKinnon remained frustrated.

“This concerns me enormously and we don’t seem to have any tools here,” McKinnon said. “There’s nothing we can do here.”

“There’s obviously a lot of money to be made,” Commissioner Leslie Lambert said of the ongoing trend to demolish rent-controlled housing to build condominiums.  She added the only way to “take the pressure off the neighborhoods” is to build high density housing elsewhere in Santa Monica.

“We’ve argued that until we’re blue in the face but I think that is the most affirmative step we could take,” Lambert said.

Lambert then made a motion to approve the application for the condominium construction. All seven commissioners proceeded to vote “yes” and approve the new project.