RAND's Santa Monica Snapshot Part III: Costs Rising Beyond Reach

By Jorge Casuso

Some Santa Monicans are getting wealthier, but the rising cost of living is beyond reach for many residents as housing costs steeply rise.

Those were among the major conclusions of an 87-page RAND report that snaps a picture of Santa Monica at the turn of the millennium using the latest available data from a variety of sources, including updates of the 1990 Census.

According to the report by researcher Lee Mizell, Santa Monica's median household income increased from $35,997 to $48,934 between 1990 and 1998, with those making more than $100,000 showing the steepest rise.

Incomes will likely continue to rise to keep up with the escalating cost of housing under the Coasta-Hawkins rental act, which on Jan. 1, 1999 began allowing landlords of voluntarily vacated rent-controlled units to raise rents to what the market would bear.

Between January 1 and September 30, 1999, 2,610 of the approximately 30,000 rental units in the city received vacancy increases, according to the Santa Monica Rent Control Board.

"Depending on the size of the rental unit, the household income needed to afford the 'new' median rent in Santa Monica is between $13,000 and $26,900 higher than the income needed to afford the 'old' median rent," Mizell wrote.

According to the report, "data suggest that Santa Monica is likely to experience decontrol in an additional 1,500 to 2,000 units in 2000."

The study -- which is based on data from the city, the county, the school district, the police department, the Rent Control Board and the United Way - found that.

• The number of high-income households increased between 1990 and 1998, with the number of households earning more than $100,000 a year rising from 5,492 (12 percent of all households) to 8,365 (19 percent). Households earning between $50,000 and $99,999 also increased, from 10,265 (23 percent) to 12,514 (28 percent).

There also has been a corresponding decline in the number of households making less than $50,000, from 29,368 (65 percent) to 23,457 (53 percent). The largest decline was in households making between $15,000 and $34,999, where the number dipped from 13,283 (29 percent) to 10,098 (23 percent). Households making less than $15,000 dropped from 8,594 (19 percent) to 6,876 (16 percent).

"This shift in the income distribution in Santa Monica is consistent with an increase in median household income that began in the early 1980s," Mizell wrote.

• Approximately 13 percent of Santa Monica residents live in poverty. This mirrors the national average despite Santa Monica's higher median income. (In 1998, a family of four with two children under the age of 18 must have earned $16,530 per year or less to be in poverty.)

The report concluded that the variation in poverty rates by neighborhood is "striking." Only 6.6 percent of the residents north of Montana live in poverty, while 22 percent of the residents in the census tract that includes the Pico Neighborhood live in poverty. In the downtown area, 16.7 percent of the residents live in poverty. The poverty rates in the downtown and Pico areas exceed the national poverty rate.

• Santa Monica's Latinos and African American residents experience a higher poverty level that either Whites or Asians, reflecting a countywide and nationwide trend. Nearly 29 percent of Latinos and 24 percent of African Americans live in poverty, compared to nine percent of whites and 10 percent of Asians.

"In Santa Monica the poverty rate for each of these racial/ethnic groups is far lower than for similar groups in Los Angeles County - which has rates that exceed the nation for all racial/ethnic groups," according to the report. The poverty rate for Whites and Latinos, the study noted, exceeds that national rate for those groups.

Among age groups, seniors experience the lowest rate of poverty in Santa Monica, while young adults (those 20 to 24) experience the highest rate.

• According to a 1995 tenant survey conducted by the City, 53 percent of the households in rent-controlled units were low and very low income. The median income for tenants of rent-controlled units was $27,500, compared to $42,500 for tenants of market-rate units. Head of households also tended to be older (41 years) and had a longer length of stay in the unit (5 years versus 1.5 years).

The survey also indicates that17 percent of the City's rent-controlled apartments were occupied by seniors over the age of 62, 61 percent of whom were low and very low income.

"While households in controlled units were just as likely to be of Latino origin as those in uncontrolled units, they were less likely to be of another racial minority, such as Asian or African American," according to the report.

This concludes a series of three articles summarizing the findings of RAND's Santa Monica Community Profile.