Rent Control Board Statistics Reveal Seismic Shift in Market

Carolanne Sudderth
Mirror Staff Writer

To liberally paraphrase an old rock and roll tune, Cash flow ... Where did all those low and median income apartments go?
   According to statistics published by the Rent Control Board on May 20 of this year, they’re vanishing. At least, their numbers are shrinking. Latest information supports the Rent Control’s projection that by the end of 1999, 2359 units available at 80% of median income last year will have been lost to tenants willing to pay higher rents. The loss of units is not exclusive to that bracket and increase petitions are being filed that would raise rents beyond the reach of those in the 50%, 60% and 100% brackets as well.
   The big change came the first of this year with the full implementation of the Costa-Hawkins Act, which took the rent control ceiling off the rates that could be charged for vacant previously rent-controlled units.
   Prior to January 1, the maximum allowable rent (MAR) remained attached to each unit, occupied or not Although rent control still exists, the MAR is now attached to the tenant, set by property owners as each vacancy is filled, and up for grabs again whenever a tenant moves out. The only governing factor is economic, i.e. the housing market and what Santa Monica renters are willing to bear. Statistics on the changes in available properties and the costs thereof during the first three months of vacancy de-control were published by the Rent Control Board on March 31. A follow-up report was issued on May 15 of this year.
   According to the later report, 1,433 requests for increases were filed with rent control between January, 1999 and May, 1999. Of these, 1,344 were processed and approved.
   Although affordable units have been lost at every bedroom level, the percentage of increase petitions filed for smaller apartments are disproportionate. Singles and one-bedrooms account for 55.6% of the rental units in Santa Monica. However, the 69% of the increase petitions filed were for these apartments.
   The staff report speculates that this variance may be the result of higher turnover of smaller units, or that the rates being sought for larger apartments are higher than Santa Monica renters are willing to pay. 
   Figures for units for which increase petitions had been granted were available only in the March 31 staff report. These were as follows: 114 no-bedroom units, 410 one-bedroom units, 254 two-bedroom units, and 32 units with three-or-more bedrooms.
   Prior to Dec. 31, 1998, the median rent citywide for a single or bachelor unit was $504. The median MARS on apartments for which rent raises were granted was $548 prior to the increase, and $775 afterwards. The median change was $227 or 41%.
   For one-bedroom apartments, the citywide median rent was $586. The median pre-increase on those apartments for which petitions were granted was $633; post-increase was $995, for a median change of $362 or 57%.
   City-wide medians were $750 for two-bedroom apartments on Dec. 31, 1998. Apartments for which petitions were granted had a pre-increase median of $772 and a post-increase median of $1350. Dollar amount of the change was a median $578, or 75%.
   The most marked increase is in those apartments containing three or more bedrooms. Citywide medians on Dec. 31, were $930. The median rent for those apartments for which increases were filed rose from $991 to $1800, a difference of $829, or 85%.