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# City playing with investors’livelihoods
- URL: https://www.smdp.com/city-playing-with-investorslivelihoods-editor/
- Published: 2006-06-29T15:00:00.000Z
- Updated: 2026-10-23T18:38:25.000Z
- Author: Guest Author
- Tags: Opinion, Santa Monica, #archive-import

*By Scott Baron Venice*

I grew up in Santa Monica and watched it transform from a sleepy little beach town to a thriving social hot spot. I find it amazing that certain policies are still in place in the same form as when they were drafted over 25 years ago. When rent control first appeared, my father actually jokingly brought up a point at the city meeting. He said it was a great idea to limit the return on real estate investments to only a few percent. In fact the city should limit returns on all investments to 3 percent and give the rest to the underprivileged so as to serve the needy better. The outburst of “you can’t do that, it’s my money/stock/investment” and the like from the same city officials regulating other people’s money drove home the point. Rent control is basically robbing an investor of their return. Stocks, bonds, gold, oil, real estate, all are forms of investment but only landlording in a rent-controlled environment guarantees a ceiling to your returns, a limit enforced by the city.

Not much of an incentive to provide housing. I have been a landlord for many years, and despite losing thousands of dollars a month due to rent control, I do see the value of a policy which protects the underprivileged. It’s almost a forced Karma thing. However, when you have someone making $90,000 a year benefiting from a program designed for the elderly and poor, well something is wrong with the system. I know one landlord who has two lawyers as tenants in a two-bedroom apartment. They earn over $400,000 collectively yet pay only $900 in rent. That is basically forcing the property owner to subsidize the rent of an otherwise capable and well-off individual. Why would anyone want to become a landlord in these conditions? You can be sure if the city owned all the housing in the area they wouldn’t limit its return to only 3 percent.

What I think might make sense would be to simply adjust the policy to better reflect the economic climate of the city. Far more reasonable would be instituting an economic review of units in question. If an individual earns more than $75,000 a year, they can certainly afford to pay market rents. Same for a family earning $130,000 or more a year. Protection is one thing, a harmful fiscal policy is another. I think the $4.5 million budget for the Rent Control Board could easily cover the cost of an accountant for a review, especially since they are funded by the property taxes from the owners in the first place.

Protect the poor, protect the infirm, protect the elderly, but do not fleece owners who are providing a needed service (housing) to the point where they would rather Ellis a property than lose more money on it. There must be a logical and reasonable middle ground.

*Originally published in the Santa Monica Daily Press print edition on June 29, 2006.* [Read the original PDF.](https://s3.us-east-1.amazonaws.com/smdp%5Fbackissues/062906.pdf?ref=smdp.com)