DRAMATIC SHIFT IN AFFORDABILITY LEVELS
IN SANTA MONICA’S RENTAL HOUSING

By Linda Sullivan, SMRR Steering Committee

SANTA MONICA, CA — Market rate rent increases permitted by Costa Hawkins over the past two years are driving low and moderate income tenants out of the City and undermining the historic stability of Santa Monica neighborhoods, according to a report authored by the Santa Monica Rent Control Board.

"The Impact of Market Rate Vacancy Increases – Two-Year Report," shows that a significant number of affordable units were lost at every affordability level and every bedroom size as a result of market rent increases since January 1, 1999. Moreover, there is a more than 20% chance the unit will receive a second rent increase in a relatively short period of time since once a unit is rented at market rate, the tenant has less incentive to stay in place. According to the Report, at the end of the second year, 1,144 apartments had experienced two market rate increases.

Tenants who vacated the 5,679 units affected by market rate increases during the two year study period would need annual incomes from $14,600 to $31,000 higher just to afford their former residences, the report states.

The report found that before market rate increases, 91% of the units or 5,192 residences were affordable to households at moderate-income levels – that’s $52,100 by federal standards in Los Angeles County for a four person household. The standard assumes 30% of a household’s gross income is used for rent. In reality, many households pay more.

"Clearly, Santa Monica demographics are changing; the diversity of our neighborhoods are changing," said Alan Toy, chair of the Santa Monica Rent Control Board. "Costa Hawkins has placed a bounty on every rent controlled unit. Landlords are resorting to ever more aggressive means to force people out."

The figures shown in the report are grim. Where once a person earning $32,457 annually could afford a single (0-bedroom) apartment in Santa Monica at a median rent of $568 per month, Costa Hawkins rent increases require an annual income of $47,086 to afford the new median – a maximum allowable rent of $824. That’s a 45 percent increase! But the re-rental jump is even worse for 1, 2 and 3-bedroom units. On average, a 1-bedroom unit jumped 69% from $645 to $1,095, a 2-bedroom unit jumped a whopping 87% from $818 to $1,528 and apartment rents for units with three or more bedrooms rose 79% from $1,061 to $1,900 per month.

Low-income families are especially hard hit. The report shows that 78 percent of the units studied had been affordable to families earning 80 percent of median income. Following market rate increases, "just 14% remain affordable at this income level."

"It’s depressing," said Toy. People need to feel secure in their homes. Not enough is being done to enforce tenant harassment protections. And even when claims are prosecuted, landlords receive nothing more than a slap on the wrist.

"An increase in the number of eviction threats and lawsuits brought against tenants without any valid basis has been observed by the City Attorney’s Office. Many judges are sympathetic to the claims of property owners. Tenants are losing their homes – we are loosing our friends and neighbors, and our children are loosing their schoolmates – because not enough is being done to discourage landlords from gambling that harassment and bogus claims against tenants will succeed," said the Rent Board Chair.

Toy said, "We have lost 10 percent of our total affordable housing in the City. The impact of Costa Hawkins has been devastating on our community."

Michael Tarbet, SMRR’s organizer, asks tenants who have experienced serious harassment problems to call the SMRR Tenant Hot Line at 394-0848.