Rental increases put squeeze on families
By CORTNEY FIELDING Special to the Daily Press
CITY HALL — Rents in Santa Monica have increased by more than 50 percent over the last six years, squeezing many lower-and middle-income renters out of the market, a recent City Hall study shows.
The most drastic price hikes occurred in the city’s three-bedroom units, where rents have risen more than 83 percent since landlords were granted permission to rent their properties at market rate in 1999. The units now rent for an average of $2,150 per month.
While the going rate for studio apartments is 49 percent higher than it was in 1999 — close to $1,000 per month — one-bedroom apartments currently average more than $1,200, 76 percent higher than in previous years, according to the study. Two-bedroom apartments jumped 82 percent, now averaging $1,625 a month.
It takes between an extra $17,000 and $36,000 in annual income to afford the new rents, according to the study. And as a result of the high market rates, it keeps many lower-and middle-income families from renting in Santa Monica, said Rent Control spokeswoman Tracy Condon, who works in City Hall.
“They are definitely not moving in,” she said.
The study, conducted by Condon and her staff, included a full inventory of all rental properties. The report was commissioned by City Hall’s rent control division to detail the impact the state-wide market rate vacancy decontrol act — known as Costa- Hawkins — has had on the city since its inception in 1999.
Previous regulation had required landlords in Santa Monica with buildings built before 1979 to keep their rent prices fixed.
Since Costa-Hawkins passed, 44 percent of the city’s rental units have been rented at market rate, while more than half are still inhabited by their rent-controlled tenants, according to the study.
While some long-time lower-and middle-income renters living in rent-controlled units may still be able to make ends meet, increases in rent throughout the city provide a daunting challenge for those now looking to rent in Santa Monica, Condon said.
According to the report, only 12 percent of rentals in Santa Monica are affordable to low-income households, averaging $35,700 a year or less, compared to 80 percent in 1999.
Rental options for middle-income families also have shrunk. Six years ago, a family with a $55,000 annual income — the average for a family of four in Los Angeles County — could afford a three-bedroom unit in Santa Monica with money to spare. The same family in 2005 would only be able to afford a studio apartment without taking on a financial burden.
While the statistics are discouraging, they are not atypical in Los Angeles County, said Raphael Bostic, director of USC’s real estate development program, who studies rent control in the state. As demand for housing continues to increase throughout the county, so do rent prices.
As a result, some lower-and middle-income families move to less expensive cities, while others take on bigger financial burdens, Bostic said.
Some bring in more renters into the apartment in order to stay in more expensive areas. According to Condon, there is anecdotal evidence in Santa Monica that occupants are sharing apartments, oftentimes doubling and tripling up in order to pay the rent.
While rents are on the rise, waiting lists for subsidized housing in Santa Monica have stalled out, said Peter Mezza, housing administrator for city Section 8 housing. Section 8 is a federal government-funded program that provides affordable housing to residents through the use of housing vouchers. The waiting list is closed and “the realities of funding means no vouchers in the foreseeable future,” Mezza said.
At affordable housing provider Community Corp. of Santa Monica, executive director Joan Ling said very few new applicants this year will get one of her organization’s units. Waiting lists are too long to accommodate a fraction of the city’s affordable housing, and have been for years.
When presented with the study’s findings at last week’s Rent Control Board meeting, members said they worried about gentrification becoming a side effect of increased rents.
“We are in grave danger of losing our eclectic and inclusionary characteristics,” if the trend continues, said board chairman Alan Toy.
It’s almost certain that minority populations and low-income families leave the city as rents increase, said Bostic.
While the percentage of blacks and Latinos in Santa Monica did decline slightly between the 1990 and 2000 censuses, no reasons were attributed to the drop.
“Santa Monica was already ‘lily-white’ before Costa-Hawkins,” said Rosario Perry, an attorney who represents Action Apartment Association, and also a landlords’ rights advocate.
“What they don’t tell you is that owners did not rent to poor people,” when rents were regulated, he said, because only wealthy tenants could afford to fix what he said owners did not have the money for without collecting market rates.
“Why would anyone rent to a poor person when someone else is willing to redo the floors and pay for new paint?” Perry asked rhetorically.
Perry filed a lawsuit against the city on behalf of a group of Santa Monica landlords in federal court in January calling for the elimination of rent control. The group called the practice unconstitutional because it “regulates land use, but fails to substantially advance a legitimate municipal interest.”
The lawsuit was not designed to raise the rent on poor tenants, only wealthy ones, Perry said, adding a judge could create some sort of scale where income would be weighed against the right to rent-control protection.
City Hall has filed a motion with the court to have the case thrown out, but the court has not yet ruled on the issue.
Perry also has suggested setting one-third of a building’s units aside for “truly low income” renters, while eliminating rent control for everyone else.
The Rent Control Board plans to send the results of the study to Sacramento. While not intended to go to the state, Toy said he wanted Gov. Arnold Schwarz-enegger and every state senator to get a look at the findings.
“Hopefully, the state legislature will see the effects and have some compassion,” said board member Jeffrey Sklar.
Originally published in the Santa Monica Daily Press print edition on March 9, 2005. Read the original PDF.