To afford anything larger than a one-bedroom rental unit in Santa Monica requires a household annual income of $100,000.
This was one of the findings in a report issued by the Rent Control Board that found the city's rental market became less affordable in 2015 than in any previous year.
When a rent-controlled unit is vacated, the owner can raise the rent to the market rate for the next tenant. The median rate for new tenants in 2015 was up in all categories, according to the report.
The median rent for a studio apartment was $1,600, a 10.5 percent increase from 2014. For a one-bedroom, it was $2,050 (8.6 percent increase), and it was $2,750 for a two-bedroom (10 percent increase) and $3,595 for a three-bedroom (10.6 percent increase).
More than 83 percent of units were affordable only to households considered higher-income, earning at least 110 percent of the area median income (AMI) of $63,000.
“This creates a challenge for all but the wealthy to find housing in Santa Monica,” the report states.
Households earning the lowest income (30 percent of AMI or lower) face the toughest challenges with only three units being affordable.
“The housing crisis is acute for middle-income households as well,” the report states. “With a median household income, a family cannot even afford a studio-sized apartment here.
“For a median-income household to live in Santa Monica, sacrifices would likely have to be made – increasing the number of occupants per unit, becoming rent-burdened by spending more income on housing than is recommended or by spending less on other items to make the rent.”
The City is making efforts to slow the trend, the report states, through efforts such as increasing affordable housing, raising workers’ incomes and helping Santa Monicans stay in their homes.
The report covers 27,542 units covered by the City’s rent control law. Of those units, just under 8,000 are occupied by people who lived in them before January 1999, when the Costa-Hawkins Act Rental Housing Act went into full effect.
Costa-Hawkins is a State law that allowed landowners to increase the rents to market rate after a vacancy. Prior to that, the rent for rent-controlled units in Santa Monica could only go up each year by increases authorized by the Rent Control Board regardless of whether there was a recent vacancy
“The records maintained by the Rent Control Agency reveal dramatic escalation of rental housing costs in Santa Monica since Costa-Hawkins took effect,” the report states.
It continues, “Rental housing costs in Santa Monica are now some of the highest in the Los Angeles basin.”
In 1998, one year before implementation of Costa-Hawkins, just 4 percent of the units in Santa Monica were affordable only to the highest income earners, according to the report.
Most units were affordable to households designated as low income (80 percent of AMI) and lower. More than 1,100 units were affordable to households designated as extremely low income.
The report will be presented to the Rent Control Board at its meeting on Thursday.