At the city of Santa Monica’s annual State of the City address Wednesday, Mayor Kevin McKeown praised the growth of Santa Monica’s technology sector while pointing out that the influx of highly paid workers is straining the city’s limited housing supply.
At the Economic Sustainability Summit hosted by the Santa Monica Chamber of Commerce, McKeown said there are now more than 31,000 tech jobs in Santa Monica and 3,000 tech companies. The total tech payroll in Santa Monica is more than $5 billion, well over half of the total annual payroll in the entire city.
That new money is in competition for the city’s limited housing, McKeown said.
The online real estate database Zillow recently reported that the median home in Santa Monica now exceeds $1.5 million, and the median rent for new tenancies in a one-bedroom Santa Monica apartment last year was $2,450. Almost a quarter of renter households in Santa Monica pay more than half of their income for rent, McKeown said.
“The influx of the tech industry has truly been a gamechanger,” he said. “Of course, there can be a problem with changing games. New winners can, without meaning to, make life harder for others.”
McKeown said the city has taken several steps over the last year to ensure that economic success does not displace longtime residents, with the expansion of the Preserving Our Diversity program, which provides rental subsidies for low-income seniors, and its continued financial support for Community Corporation of Santa Monica to acquire and build affordable housing.
The city’s home-sharing ordinance, which was upheld in court last year following a legal challenge from Airbnb, has returned about 500 units to the residential market over the past five years, McKeown said.
He also said the city has encouraged the production of new housing downtown, along transit boulevards and in formerly industrial areas to try to keep new housing from gentrifying existing neighborhoods.
McKeown asked business leaders to contemplate what they can do to help cover the cost of new affordable housing in anticipation of a forthcoming state mandate for Santa Monica to build more than 9,000 new units of housing over the next eight years, about half of which would have to be affordable.
“I think we can all understand why no one wants to be forced out of Santa Monica,” he said. “Working together, we have created a truly wonderful place to live and work. We will continue to be – and we want to be – a promising place for investment, entrepreneurship and innovation.”
McKeown said the rate of Part One crimes dropped 16% in 2019 after four years of significant increases. Last year was the lowest in five years for rape, burglary, both residential and commercial, and bike theft. Aggregated assaults, which had increased over the prior two years, were down 18% last year.
“We still have work to do: grand theft auto is still rising, by 5%, and shoplifting was the highest in five years,” he said. “Overall, though, the downward trend in crime seems well established, and is continuing with the tentative figures we’ve seen so far this year.”
McKeown highlighted measures the city has taken to reduce homelessness over the past year, including the addition of hospitality ambassadors to Reed Park, social workers in the city’s libraries and plans to convert Parking Structure 3 to 150 units of supportive affordable housing.
He said Santa Monica’s greenhouse gas footprint fell 17% last year as the city switched from electricity created using fossil fuels to 100% renewably sourced electricity from the new regional Clean Power Alliance. Over the past decade, 3,100 net new trees were planted in the city.
Looking to the year ahead, McKeown said City Hall East, the Santa Monica Early Childhood Lab School and the downtown fire station will all open this spring.
He also urged residents to the Santa Monica 2050 survey, which is part of a two-year study that will result in the release of a long-term economic sustainability strategy later this year. The survey can be found online at santamonica.gov/2050economy.
“Understanding the global trends, we can identify our particular local strengths and make the most of them,” McKeown said. “The Santa Monica 2050 process will, this year, outline actions and targets so we can all prepare not only to weather economic trends, but to benefit from them.”