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OPINION -- Rents in Santa Monica: The Other Side of the Coin
By Kip Dellinger
The Lookout’s article "Santa Monica’s Newer Renters Pay More than Double What Long-Time Tenants Pay" (April 1, 2019 ) based on the Rent Control Board’s annual report is interesting and informative.
However, the agency's report reads like an apologia for the use of government power to achieve the theft of what amounts to $4 billion a year in property value.
Of course, it is couched in language that implies that post-Costa Hawkins tenants are somehow victims of increased rents they willingly contracted to pay and which are, in fact, ‘controlled’ from that point on.
That approach preserves the Santa Monicans for Renters' Rights (SMRR) mantra that their thievery forcing property owners to subsidize renters is somehow a ‘moral undertaking,’ when it is in fact a display of the deadly sin of greed, disguised, as socialists so often do, as a check on the greed of others.
SMRR would have you believe the entirety of the City’s rental stock is owned by wealthy, greedy real estate entrepreneurs and entities.
But a considerable portion of our rental units are owned by individuals and small enterprises where the ownership represents a large portion of the owners' accumulated savings.
These savings are the result of their work efforts -- not some magical overnight wealth -- which they accumulated to provide a better life for their children and grandchildren.
SMRR has destroyed that wealth while passing it on to others -- that’s neither moral or charitable as SMRR and the rent control totalitarians would have us believe; it’s just theft to serve a political constituency.
Let’s look at those numbers in a different light. Take the Wilmont area of the City.
It had 4,491 of what are described as market rate units with a median rent of $2,068, compared to $854 paid by long-term tenants of 6,027 controlled units.
That’s a difference of roughly $1,200 per unit -- the amount that is not paid to the property owner -- for the 6,027 controlled units.
The total monthly amount is roughly $7.2 million a month that the owners are not receiving or somewhat in excess of $86 million a year.
Apartment buildings generally sell in the Westside-Los Angeles County area for 9 to 11 times annual rentals. Applying the low end of the multiple, Santa Monica’s rent control artificially -- through the force of government -- reduces the value of the owner’s properties by an amount in excess of $777,600,000.
When one would apply this across the board to Santa Monica rental units, the confiscation of wealth through rent control is somewhere north of $4 billion -- redistribution by government force taken from the owners of the properties and passed on to tenants.
While the Bleeding Hearts would have one believe this subsidy is moral because is provides for the needy, it ignores the financial punishment on the many owners of properties who scrimped and saved throughout their lifetime to acquire an apartment building with that savings to provide for themselves and their children and their grandchildren.
Meanwhile, it is doubtful that the actual beneficiaries are nearly as deserving as the Bleeding Hearts supporting rental control attempt to assert.
And, amusingly, a significant part of the SMRR leadership and the elitist support it receives from north of Montana and other ‘wealthy’ pockets in Santa Monica are single family property owners unaffected by the restrictions imposed on property values. They’ve fully enjoyed the enormous run up of housing values; for them, support of rent control is a wonderful vanity project.
In 1994, Santa Monica was seriously impacted by the Northridge Earthquake -- when the full force and effect of rent control was still in effect prior to the Costa Hawkins legislation.
Apartments across the City were impacted and particularly parking in and under buildings was an issue. So tenants were allowed to park elsewhere -- for example, on the San Vicente median in the north part of the City where a stretch of mostly ancient apartment buildings exist from Ocean Avenue to 7th Street on both the north and south sides.
It was entertaining to see the Mercedes, BMW and Acura autos and SUVs that filled that median -- the cars of those tenants in desperate need of a rent control subsidy.
There is little reason to believe that has changed for the better and much to believe otherwise.
The rent control advocates will continue to assert their moral superiority, but the truth is that there is nothing morally superior about their confiscation of the wealth of others -- often hard earned.
There’s only government power with the objective of creating a voter constituency to preserve their power -- Democratic Socialism hard at work.
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