By George Balanis Santa Monica
Tremendous attention is paid at City Hall to the production of low-income housing, but not much discussion is devoted to the consequences on the future of this city.
The large amounts of low-income housing advocated by the party ruling this city will destroy the middle class, evaporate support for schools and dramatically increase taxation. The city intends that 30 percent of all new housing to be low income and, therefore, Santa Monica envisions becoming a city where about one in three citizens is low income. Changing the city demographics to include such a large number of low-income residents will not decrease city services but will most certainly increase the tax burden on the remaining residents. When each resident makes a contribution, a group of three residents will give 33 cents per member in order to make a $1 contribution to the city coffers. If one of the three members of the group is low income and makes zero contribution, then each of the other group members must make an additional 17 cents contribution. So, the non-low income residents will suffer a 50 percent increase in taxes in order to support the non-paying low income residents. Such a substantial increase in taxation will create a heavy burden and much resentment among middle-class residents who struggle to make a living and see their hard-earned dollars going to provide free benefits to other residents.
Support for Santa Monica institutions such as schools that are perceived to provide services at great cost for the benefit of non-paying residents will surely diminish. Businesses will find it more difficult to make a living in a city where a large number of customers has little disposable income. Policies that result in the reduction in available land for housing due to its use for low-income housing; the prohibition of condominium conversions that can provide low-cost housing opportunities to middle class buyers; and more taxation on market rate housing to pay for low-incoming housing, such as the $24-per-square-foot tax on new housing that needs a minimum $200 extra rent for a 1,000-square-foot apartment or the required uncompensated construction of a substantial number of low-income units — based on an amendment to be discussed on April 26; 20 percent to 40 percent of the new units must be dedicated to low income in order to be allowed to build new condominiums — will increase even more market rents and purchase prices and thus accelerate the exodus of the middle class. Eventually, unless the quality of life in Santa Monica significantly decreases, only very rich and very poor will be able to reside in this city.
Originally published in the Santa Monica Daily Press print edition on March 22, 2006. Read the original PDF.