Long-term renters in Santa Monica are staying in their apartments but a new tenant would need to earn $91,200 per year to afford a studio, according to a new annual report on the city’s rent control system.

The city is also showing modest gains in its rent-controlled housing supply. 70 apartments and houses in Santa Monica became subject to rent control in 2018, a little more than the number of rent-controlled units that were taken off the market through the Ellis Act, a state law that allows property owners to evict tenants if they want to exit the rental business. The Rent Control Board will discuss the report at its meeting Thursday.

“People know the value of staying in place. They can’t leave these affordable units and find something comparable, particularly in Santa Monica,” said Tracy Condon, the board’s executive director. “There are fewer people in rent-controlled housing than there were 20 years ago, but they’re staying as long as they possibly can.”

More units were taken off the market in central and northeast Santa Monica, but the activity was spread out relatively evenly across the city, said Daniel Costello, the board’s public information manager. Condon said she thinks the area between Wilshire Boulevard and Colorado Avenue has been seeing a lot of property sales and developers may see it as an area ripe for redevelopment.

“Although there’s a lot of concern about gentrification in Pico, relative to the number of units in that area, we actually see lowest amount of Ellis activity and the lowest percentage of units rented at market rates,” he said.

The small gain in rent-controlled units was not enough to slow the city’s deepening housing affordability crisis.

Median rents for rent-controlled units rose more steeply in 2018 than in 2017 – renters paid $75 more for a two-bedroom from 2016 to 2017 and $150 more from 2017 to 2018, on average – and renters now have to make at least $100,000 to afford an one-bedroom apartment subject to rent control but rented at market rate. (The 1995 Costa-Hawkins Act allows landlords to rent a rent-controlled unit at market rate when a tenant leaves.)

“Obviously Santa Monica is a very desirable place to live and the market rates are speaking for themselves,” Costello said. “Property owners can demand these high prices and get them.”

The median income for a four-person household in the greater Los Angeles area increased from $64,800 in 2017 to $69,300 in 2018, according to the California Department of Housing and Community Development. Federal standards stipulate that housing is affordable if no more than 30 percent of a household’s income is spent on rent or a mortgage.

Not even a studio in Santa Monica is affordable to a household making the area’s median income, according to the report. If Costa-Hawkins had not been enacted, however, a family making the median income would be able to afford a three-bedroom apartment.

In 1998, one year before the city enacted vacancy decontrol under Costa-Hawkins, market-rate rent-controlled units were affordable to a range of income levels, with 84 percent affordable to low-income households. Today, such households can afford just four percent of units, many of which are affordable only because they are on properties required by government agencies to provide low-income housing.

“Given the lack of affordable housing options, it is not surprising that long-term tenants are not moving from their current residences,” Costello wrote in the report.

The Rent Control Board will meet Thursday at 7 p.m. in City Hall, 1685 Main St.

madeleine@smdp.com

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2 Comments

  1. Rent control is an unfair system. It helps the rich just like the poor. Every 5 years the tenants should be means tested, and it they make too much they should have to give the apartment to someone in need.

    I guess Santa Monica just wants to help the wealthy!

    Over time rent controlled units go to people with higher income. If you owned a building wouldn’t you lease your vacancies to the most qualified tenant? That’s the ones with the highest income!

    I bet if you allowed owners out of rent control in exchange for making 30% of the building low-mod they would do it!

    The owners might make a little more to get this done, but on 30% of the units we helping those in need. Not just saving money for everyone, saving money for people that need help!

    But, that’s not the way! We all vote for what helps ourselves. We don’t concern ourselves with people in need. It’s just too bad!

    The old politicians were just too short sighted! The good news, if anyone is lessening, there is still time to make the change! That is if anyone wants to really help our fellow residents.

  2. Rent Control is vital for the health of the economy. It balances the injustices of avaricious landlords.

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