April 12, 2010 --The cost to rent an apartment in Santa Monica went down from 2008 to 2009. This marked the first decrease since before 1999, the year the state law allowing landlords to charge market rate rents for most new tenants went into full effect.

The information was presented to the Rent Control Board last week as part of a report on the effects of the state law known as the Costa-Hawkins Rental Housing Act. The report stresses that although rent costs are down due to the poor economy, market-rate apartments in Santa Monica remain unaffordable to low- and even most moderate-income families.

“It appears likely that, for much of the workforce, establishing an affordable new tenancy in Santa Monica has become out of reach,” the report states. The median rent for a new tenant is down for all types of units this year, including studios ($1,295 to $1,223), one bedrooms ($1,631 to $1,542), two bedrooms ($2,200 to $2,095) and three bedrooms or more ($2,987 to $2,795).

These 2009 first-time rental charges represent a far higher amount than a landlord would have received had Costa-Hawkins not gone into effect. Under the law, a landlord can increase the rent once the home is vacated. According to the report, the median cost for a studio rented pre-Costa Hawkins is $799. That studio would go up in cost to $1,141 for the next tenant. The cost for an apartment with three or more rooms more than doubles upon vacancy from $1,299 to $2,643

Since Costa-Hawkins’s went into full effect, 15,955 of Santa Monica’s 27,507 rent-controlled units (58%) have been rented at market rate.

The U.S. Department of Housing and Urban Development says that no more than 30 percent of a household’s gross income should go toward rent before the household becomes what is considered rent-burdened. By this standard, a family of four earning the county median income of $62,100 cannot even afford a studio in Santa Monica without being rent-burdened.

“But a household of four cannot realistically live comfortably in a single, which is more appropriate for a single person,” the report states.

The report goes on to give a drastic statistic of what a minimum wage worker would have to do to afford a studio without being rent-burdened. The person would have to work 24.3 hours per day, seven days a week, 52 weeks a year, with no unpaid time off.

“Although these data are suggestive, the unavailability of hard facts makes it impossible to know whether, or in what ways, the increased cost and decreased supply of affordable housing have affected the diversity of Santa Monica’s population,” the report states. “With the release of 2010 census data later this year, this should become easier to determine and will be addressed in next year’s report.”

The report does declare that “neighborhood stability” has been negatively affected by Costa-Hawkins. Of those units that have been rented at market rate, most have turned over at least twice since 1999. Nearly a quarter of those have been re-rented four or more times at the market rate.