By George Balanis Santa Monica
Housing policies in Santa Monica create constituents that are dependent and beholden to the city. The conversion of apartments into low-income units, or construction of new low-income units, generates a stream of residents that are dependent on city government for their housing. Such dependents have an extremely strong reason to make sure the ruling party stays in power. Accordingly, city government is secure and it is futile to question existing or proposed rules/regulations/policies. The idea is “we now have, and will always have, the votes, so go fly a kite.”
One policy that is not understood is that low-income housing costs the rest of Santa Monica plenty of money. Such housing is afforded a dramatic discount of property taxes, and the discount is estimated at more than $1 million a year. Normal housing pays property taxes at about 1.35 percent of assessed valuation but consider the following low income properties taken from http://assessormap.co.la.ca.us/mapping/viewer.asp: I 40 units at 2807 Lincoln Blvd. Tax ID 4285-012-037 (recent 1997 construction). Annual taxes: $2,233.34 at 0.073 percent of assessed valuation, (95 percent discount on property tax, 1.35-0.073) x100/1.35).
I 15 units at 1038 Second St. Tax ID 4292-027-009. Annual taxes: $1,167.86 at 0.09 percent of assessed valuation, (93 percent discount). I 36 units at 225 San Vicente Blvd. Tax ID 4293-002-017. Annual taxes: $31,401.44 at 0.57 percent of assessed valuation, (58 percent discount).
I 26 units at 1206 Pico Blvd. Tax ID 4284-017-013. Annual taxes: $3,128.18 at 0.307 percent of assessed valuation, (77 percent discount). It should be noted that the property tax discount is even more significant than it appears. The owner of low-income housing is permanent and properties do not get sold so that there is no possibility of market adjustment that would be available upon the sale or change of title. Furthermore, much more low-income housing is expected in order to satisfy requirements of existing city law. So, tax avoidance by low-income housing will dramatically increase as time passes by.
Low-income housing recipients not only get housing benefits but also use schools, police/fire departments and city government. The usage mentioned is traditionally paid via property taxes. The rest of Santa Monica should not have to pay more to cover the shortfall from property tax discounts given to low-income housing.
Originally published in the Santa Monica Daily Press print edition on February 20, 2006. Read the original PDF.