NCPA - National Center for Policy Analysis

After Santa Monica Decontrolled Rents

April 28, 1999

Removing rent controls doesn't necessarily mean hefty rent increases, as landlords in Santa Monica, Calif., are finding out.

  • The city of Santa Monica enacted rent control in 1978 with the aim of creating affordable housing for elderly and low-income tenants.
  • Then last year the California state legislature removed controls on vacant units in four communities, effective January 1, 1999 -- the largest being Santa Monica.
  • Initially, rents climbed and vacancies soared -- then landlords scrambled to reduce their prices.
  • For example, one landlord initially asked $1,295 a month for an apartment which had rented for $850 -- but has since reduced his price to $995 rather than let it stand vacant.

To be sure, the California law does not completely end rent control. Rents cannot be raised on apartments which are occupied -- only on those which are vacated. This quirk in the law has led to reports by tenants of controlled apartments that they are being harassed by landlords who would like to see them move.

Many would-be renters are searching in nearby areas for apartments. Much of Santa Monica was developed some 50 years ago and is said to be falling apart. Rent controls no doubt played a hand in that.

Source: Stacy Kravetz, "In Santa Monica, Rent Decontrol Brings Surprises," Wall Street Journal, April 28, 1999.


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