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Santa Monica has become amazingly expensive, but the town has rent control that is even more draconian than SF. For example, unless the lease prohibits adding a

Santa Monica has become amazingly expensive, but the town has rent control that is even more draconian than SF. For example, unless the lease prohibits adding additional occupants, rent controlled units can be passed from one resident to another without much restriction, as long as original lease is in effect. Ellis evictions require huge compensation sums. As the result, available rental stock is minuscule and prices are rivaling SF. Due to this supply restrictions, what little AirBNB activity goes on, it actually impacts the overall market substantially. Similar situation is in Venice (city of LA). As a condo owner, Santa Monica makes me very uneasy - if I fall on hard times, I may have no choice but to sell, or risk never being able to re-occupy my own home again or have to pay an extortion to do so...

jordanthoms 10y ago
That's a great example of how policies backfire - the 'renter-friendly' laws make it incredibly unattractive to rent places and reduce supply, hurting renters.
- aminok 10y ago
  Renter friendly laws also make it much less attractive to build new units, since they reduce the ROI in doing so.
- uola 10y ago
  If it wasn't for "renter-friendly" laws many renters would have had to move already or wouldn't have moved there in the first place. It's like saying that programming would be much better if we required everyone to have an engineering degree. It would, but it would also be a different set of programmers. People who got in to programming because it didn't necessarily require a degree wouldn't be very pleased.
twblalock 10y ago
Rent control is so bad that almost all economists are opposed to it, and they rarely agree so strongly about other topics.
- sologoub 10y ago
  The problem is made worse by unwillingness to grow the supply. The market is so distorted by NIMBYs and regulations, so you need some counterbalance, but Santa Monica has gone way too far. The NIMBYism also backfires spectacularly - the old papermate factory conversion debacle is prime example here in SM. Instead of getting a nice pedestrian street with more restaurants and a park, the factory is now being "renovated" and converted to half a million sq. ft. Of creative space (a.k.a. rows of desks packed like canned sardines) and will do more damage to traffic than the previous project and produce no new housing or affordable units, and absolutely zero utility for the surrounding communities. Source: http://www.santamonicanext.org/2015/03/new-plans-filed-for-papermate-site-in-santa-monica/ http://www.santamonicanext.org/2015/03/new-plans-filed-for-p...
  - themartorana 10y ago
    I don't know much about the paper factory, but unwillingness to grow supply feels like a pretty common issue amongst larger cities. Where I live it feels rather protectionist, I imagine that applies in this case, too.
  - legulere 10y ago
    > The market is so distorted by NIMBYs and regulations no regulation is just as bad as bad regulation. You want places where the population wants to live and can live. This is actually a very hard problem. And the free market won't solve it. The free market just creates investment objects to earn as much money as possible. High-rises are extremely expensive and don't lower rent prices. They might offer even lower population density. For example the Eixample district in Barcelona has a higher population density than manhattan. [1]: https://en.wikipedia.org/wiki/Eixample https://en.wikipedia.org/wiki/Eixample
    - CalRobert 10y ago
      Manhattan has systematically reduced density through legal manoeuvres. http://www.nytimes.com/interactive/2016/05/19/upshot/forty-percent-of-manhattans-buildings-could-not-be-built-today.html?_r=0 http://www.nytimes.com/interactive/2016/05/19/upshot/forty-p...
CPLX 10y ago
> As the result, available rental stock is minuscule Prove it. I see this argument all the time, the idea that somehow a massive global rise in the cost of residential real estate in important urban centers is "caused" by rent control, rather than a huge increase in inequality, the rise of a winner cities take all job market, or something else. I've lived in NYC for seventeen years, during which time rent stabilization policy has not changed much, but rental prices sure have. The (relatively tiny) core stock of regulated apartments is pretty similar to what it was when there were homeless encampments in Greenwich Village townhouses, yet people ignorantly shout "rent control" all the time. So we're sure rent control caused this? Is there rent control in London? What's happened there? Are you sure the problem isn't Snapchat payrolls, or rising film profits, or globally suppressed interest rates, or restrictions on Santa Monica building permits, or maybe even Airbnb listings? Why are you so sure? I have a degree in Economics and everything yet I'm quite a bit less certain.
- stuaxo 10y ago
  There is no rent control in London, rents have been going up and up. Only 10 year graph I could find is this: http://leftfootforward.org/images/2015/02/London-rents-and-wages.jpg http://leftfootforward.org/images/2015/02/London-rents-and-w... At the same time, lots of property is being built and left empty - https://www.theguardian.com/society/2016/feb/21/tens-thousands-london-homes-deemed-long-term-vacant https://www.theguardian.com/society/2016/feb/21/tens-thousan...
  - MagnumOpus 10y ago
    London is hemmed in by the "Metropolitan Green Belt" which restricts building, and inside the belt housebuilding is very hard due to planning policy. House building in London is barely keeping step with the usual deterioration of the housing stock - let alone with the population growing by more than a million people in a decade. > lots of property is being built and left empty 8,000 properties empty for more than 2 years is nothing in the big scheme of things. It is maybe 0.2-0.3% of the housing stock. In fact, this is amazingly low.
  - justincormack 10y ago

jordanthoms 10y ago

That's a great example of how policies backfire - the 'renter-friendly' laws make it incredibly unattractive to rent places and reduce supply, hurting renters.

aminok 10y ago
Renter friendly laws also make it much less attractive to build new units, since they reduce the ROI in doing so.
uola 10y ago
If it wasn't for "renter-friendly" laws many renters would have had to move already or wouldn't have moved there in the first place. It's like saying that programming would be much better if we required everyone to have an engineering degree. It would, but it would also be a different set of programmers. People who got in to programming because it didn't necessarily require a degree wouldn't be very pleased.

twblalock 10y ago

Rent control is so bad that almost all economists are opposed to it, and they rarely agree so strongly about other topics.

sologoub 10y ago
The problem is made worse by unwillingness to grow the supply. The market is so distorted by NIMBYs and regulations, so you need some counterbalance, but Santa Monica has gone way too far. The NIMBYism also backfires spectacularly - the old papermate factory conversion debacle is prime example here in SM. Instead of getting a nice pedestrian street with more restaurants and a park, the factory is now being "renovated" and converted to half a million sq. ft. Of creative space (a.k.a. rows of desks packed like canned sardines) and will do more damage to traffic than the previous project and produce no new housing or affordable units, and absolutely zero utility for the surrounding communities. Source: http://www.santamonicanext.org/2015/03/new-plans-filed-for-papermate-site-in-santa-monica/ http://www.santamonicanext.org/2015/03/new-plans-filed-for-p...
- themartorana 10y ago
  I don't know much about the paper factory, but unwillingness to grow supply feels like a pretty common issue amongst larger cities. Where I live it feels rather protectionist, I imagine that applies in this case, too.
- legulere 10y ago
  > The market is so distorted by NIMBYs and regulations no regulation is just as bad as bad regulation. You want places where the population wants to live and can live. This is actually a very hard problem. And the free market won't solve it. The free market just creates investment objects to earn as much money as possible. High-rises are extremely expensive and don't lower rent prices. They might offer even lower population density. For example the Eixample district in Barcelona has a higher population density than manhattan. [1]: https://en.wikipedia.org/wiki/Eixample https://en.wikipedia.org/wiki/Eixample
  - CalRobert 10y ago
    Manhattan has systematically reduced density through legal manoeuvres. http://www.nytimes.com/interactive/2016/05/19/upshot/forty-percent-of-manhattans-buildings-could-not-be-built-today.html?_r=0 http://www.nytimes.com/interactive/2016/05/19/upshot/forty-p...

CPLX 10y ago

> As the result, available rental stock is minuscule Prove it. I see this argument all the time, the idea that somehow a massive global rise in the cost of residential real estate in important urban centers is "caused" by rent control, rather than a huge increase in inequality, the rise of a winner cities take all job market, or something else. I've lived in NYC for seventeen years, during which time rent stabilization policy has not changed much, but rental prices sure have. The (relatively tiny) core stock of regulated apartments is pretty similar to what it was when there were homeless encampments in Greenwich Village townhouses, yet people ignorantly shout "rent control" all the time. So we're sure rent control caused this? Is there rent control in London? What's happened there? Are you sure the problem isn't Snapchat payrolls, or rising film profits, or globally suppressed interest rates, or restrictions on Santa Monica building permits, or maybe even Airbnb listings? Why are you so sure? I have a degree in Economics and everything yet I'm quite a bit less certain.

stuaxo 10y ago
There is no rent control in London, rents have been going up and up. Only 10 year graph I could find is this: http://leftfootforward.org/images/2015/02/London-rents-and-wages.jpg http://leftfootforward.org/images/2015/02/London-rents-and-w... At the same time, lots of property is being built and left empty - https://www.theguardian.com/society/2016/feb/21/tens-thousands-london-homes-deemed-long-term-vacant https://www.theguardian.com/society/2016/feb/21/tens-thousan...
- MagnumOpus 10y ago
  London is hemmed in by the "Metropolitan Green Belt" which restricts building, and inside the belt housebuilding is very hard due to planning policy. House building in London is barely keeping step with the usual deterioration of the housing stock - let alone with the population growing by more than a million people in a decade. > lots of property is being built and left empty 8,000 properties empty for more than 2 years is nothing in the big scheme of things. It is maybe 0.2-0.3% of the housing stock. In fact, this is amazingly low.
- justincormack 10y ago