Vacancy decontrol makes SM rent less affordable
CITY HALL — Renters looking for an apartment in Santa Monica can expect to shell out more than $500 more a month today than they did five years ago, a recent study by City Hall shows.
Nearly 11,000 units have been leased at market rates since 1999, and another 16,500 are still occupied at rent-controlled rates, which were first set in the late 1970s. Landlords have been allowed to charge whatever they want for vacant units since January of 1999.
Average market-rate rents are $924 for studios, $1,231 for one-bedroom apartments, $1,641 for two-bedroom units and $2,109 for apartments with three bedrooms or more. That’s up, on average, between $298 and $952 over what was charged before 1999, according to the study.
Nearly half of all the apartments in Santa Monica are one-bedroom units. Another 10 percent are studios, 34 percent are two-bedroom apartments, and 8 percent have three bedrooms or more. For studio and one-bedroom apartments, about half are still being rented at original rent-controlled rates, and the other half are being rented at market rates. Sixty-three percent of two-bedroom units are still being rented at rent-controlled rates, as are 75 percent of units with three or more bedrooms.
The study also shows that once a unit has been rented at market rates, the tenant has less incentive to stay put. Forty-two percent of the units that have been raised to market rates have turned over more than once, and many of those have been rented two or three more times.
A spike in rents has contributed to the decline in affordable housing. Housing officials consider a family “rent burdened” if it spends more than 30 percent of its income on rent. The median income for 2003 was set at $55,100 by the U.S. Department of Housing and Urban Development.
With average rents up several hundred to a thousand dollars per unit, families need to earn considerably more to have their apartment considered affordable. For studios, families need to earn $17,000 more each year, $26,150 more for one-bedroom units, Nick Rath: 30 kids and a new kidney give life perspective “Affordable units have been lost at every affordability level and every bedroom size as a result of market rent increases since Jan. 1, 1999,” reads the report by the Rent Control Board. “Before the increases, 43 percent of the units had median rent levels affordable to very low income households. After the increases, less than 2 percent of the units remained affordable to these households.
“Before the increases, 79 percent of the units had median rent levels affordable to low-income households. After the increases, only 9 percent remained affordable at this income level.”
The study — which looked at the five-year period starting in January of 1999 and ending in December of 2003 — went on to say that 45 percent of the apartments in Santa Monica rented at market rates are considered affordable only to households earning more than $66,000.
Originally published in the Santa Monica Daily Press print edition on May 17, 2004. Read the original PDF.