Thanks to the remnants of some very tenant-friendly rent control laws, Santa Monica has become known as a city where, amid multi-million dollar homes and countless luxury apartment buildings, it’s still possible to find longtime residents living it up in, say, an $837-a-month apartment blocks from the Third Street Promenade.
Notorious mobster Whitey Bulger, in fact, was caught in 2011 hiding out in a two-bedroom unit going for just $1,145. It later returned to the rental market with a nearly $3,000 monthly rent.
But the days of such enviable deals are slowly slipping away, as landlords take advantage of the 1985 Ellis Act to mass evict tenants in rent controlled buildings. As the Santa Monica Lookout reports, the latest casualty is a pair of modest, early 20th Century beachfront apartment buildings that until recently offered some of the best rental deals in all of California.
The two buildings were constructed in 1909 and hold 10 units between them—two of which were last rented at under $1,000. The least expensive unit had a rental price of just $550 per month. According to the Lookout, that was formerly the lowest price on Palisades Beach Road, where many of the structures from the street’s Gold Coast heyday have been torn down and replaced with high-end condos.
Tenants were evicted from the units when the former owner of the buildings claimed to be taking the apartments off the rental market—a requirement for landlords taking advantage of the provisions of the Ellis Act. Later, however, the city’s rent board discovered the units were being secretly re-rented. Before the board could respond, the now-vacant units had been sold to a new owner.
On Friday, that owner received an occupancy permit allowing him to rent the apartments at significantly higher rates. Meanwhile, the number of Ellis Act evictions in Santa Monica continues to accelerate even as the city struggles to meet a mandate to construct more affordable housing.
- Affordable Apartments Along Famed Santa Monica Boardwalk Bid Farewell [Santa Monica Lookout]
- Mass Rent-Control Evictions Are on the Rise in Santa Monica [Curbed LA]
- Touring an $837-a-Month Apartment in Santa Monica [Curbed LA]
Comments
Having worked with the Ellis Act, I know that, bad as it was, it was supposed to prevent this kind of rent gouging. I don’t understand how or why Santa Monica is allowing it.
By Parlorpink on 11.17.16 7:49pm
This isn’t "gouging".
This is market rent for beachfront property, somewhat elevated thanks to rent control.
By smartalex on 11.18.16 9:17am
You worked with the Ellis Act? Was he a hard worker? Dedicated to the job?
By LADude on 11.18.16 1:56pm
The Ellis Act is a state law, Parlorpink. Santa Monica can’t allow or not allow it. It would have to be addressed in the state legislature.
By lahope on 12.12.16 6:20pm
"Economists are virtually unanimous in their condemnation of rent control. In a survey of economists of the American Economic Association, fully 93 percent agreed that ‘a ceiling on rents reduces the quality and quantity of housing available.’"
http://www.nmhc.org/News/The-High-Cost-of-Rent-Control/
Short but insightful read.
By DJCRoy on 11.18.16 10:33am
When I first started informing myself about rent control – when I first found out about LAs draconian rent control laws – I thought it was amazing how every Economics 101 class uses rent control to show the negative effects of manipulating supply and demand. And you wonder why LA, with such a vast geographical area, could possibly have a housing shortage.
By LADude on 11.18.16 1:58pm
Santa Monica has a lot of issues. Parking, traffic, housing. It was a sleepy beach town that got greedy and overblown. IT has the benefit of being Malibu/Palisades adjacent. And we all know what "adjacent" means for rentals. $$$
By starlyn on 11.22.16 2:45pm
My first Santa Monica apartment was $140 per month in 1976. I thought that was a bit steep.
By Lord Kitchener on 11.23.16 3:52pm