Two Studies Draw Opposite Pictures of Rent Control

Santa Monica apartment owners, who are collecting signatures in support of a ballot measure that would radically alter the city’s rent control law, have produced a survey blaming rent control for causing “significant” changes in the city’s population.

Apartment owner Geoffrey S. Strand said the survey, conducted by the Apartment Assn. of Greater Los Angeles, showed that most owners are renting to newly arrived young professionals with high incomes. He said families, low-income people and the elderly, who are supposed to benefit from rent control, are being shut out.

Opposite Findings

At the same time, however, the Santa Monica Rent Control Board has released a study showing just the opposite. The author of the one-month survey concluded that rent control has had little effect on the makeup of the city’s population.

Daniel M. Barber, a public administration professor at California State University, Long Beach, conducted the board’s study. He said the shift toward higher-income residents and fewer families is taking place throughout Southern California. “The data we had would seem to say that the city has remained remarkably the same,” Barber said.

Both surveys surfaced during recent hearings on a state law that would weaken local rent controls. And both address the city’s demographics in the nearly seven years since the passage of rent control. Neither study addresses the percentage of turnover since 1979, but landlords have estimated that the turnover rate of the city’s 30,000 apartment units is about 8% per year.

The apartment association’s study was conducted by Davis Market Research Inc. of Calabasas and was based on a survey of 150 Santa Monica landlords’ records and their recollections of the ages and incomes of their tenants since 1979.

Barber said the rent board’s study examined demographic data contained in public records of the city of Santa Monica.

No other demographic studies of Santa Monica have been done since the 1980 census.

The studies and their contradictory findings will probably be widely discussed. The rent board is expected to announce the full results of Barber’s study later this month. And landlords said they will use their survey in the promotion of a June initiative that would substantially change rent control.

Unlimited Rents

The apartment owner plan, known as the Tenant Incentive Program, would allow landlords to charge unlimited rents on vacant apartments in return for sharing their profits with tenants.

City law prohibits rent increases on vacant apartments. Under the Tenant Incentive Program a landlord who raised the rent on a vacant unit by $400 a month would multiply his profits by 10 and divide the $4,000 equally among his tenants one time. The apartment owner would not be allowed to raise the rents if a vacancy had been created by an eviction, according to Strand.

Landlords, who need 6,000 signatures by late February to qualify for the June ballot, started gathering them this weekend. In a written analysis of the Tenant Incentive Program, apartment owners argue that the plan offers “light at the end of the tunnel” for landlords who are frustrated by rent control. They add that it allows tenants to share in the profits.

Strand said the measure is the result of landlord anger over nearly seven years of low rents. Most city officials said they oppose the incentive program, but Strand said the landlord survey proves that the current rent control is causing the “Yuppification” of Santa Monica. He said that based on the survey, the association concluded that apartment owners are renting to young professionals who will pay for their own repairs and renovation work.

The apartment association’s survey found that the average age of renters had decreased slightly--from about 40 in 1979, when rent control was introduced, to about 39 in 1985.

But it also found that 63% of tenants made more than $25,000 a year in 1985, compared to 20% in 1979. Those with annual incomes below $25,000 fell from 81% to 37% during that period, according to the study.

Results Called Reliable

Craig Mordoh, legal affairs director for the apartment association, said it “may not be the most scientific survey conducted,” but he maintained that the results are reliable.

“I think the results indicate what almost everyone has been able to see,” Mordoh said, “that tenants have become younger, more affluent. . . . I think it has confirmed what people knew (about rent control) in the past.”

But Barber, who conducted the rent board study, said there is nothing in the public figures that are available to indicate that rent control has caused changes in the city’s population. Barber said Social Security statistics and other public records show that Santa Monica’s population has remained basically the same since 1979.

Barber said he found that the number of people in each age group had remained about the same since the passage of rent control. The number of single-person households remained unchanged, according to Barber. And the average income increased only slightly.

Preliminary Effort

Barber called his survey a pilot study. He said further study is needed to fully understand the effects of rent control. He recommended that the board compare Santa Monica with other rent-controlled cities, establish a data base for measuring quarterly changes in the population and develop a special questionnaire for owners and managers of apartment buildings.

Rent Board Commissioner David Finkel agreed that further study is needed. But Finkel claimed that the report indicates that rent control is working in Santa Monica.

“I now know that a substantial percentage of our population consists of moderate-income and fixed-income people and that it’s wrong for our opponents to say that we’re a bunch of Yuppies driving around in Mercedes Benzes,” Finkel said. “This preliminary study is telling (us that) there are no dramatic changes. (Rent control) hasn’t turned the city inside out.”