UNINTENDED CONSEQUENCES

If the road to hell is paved with good intentions, Santa Monica’s political rulers of the last two decades will go down as lead contractors. They championed a rent control system ostensibly to keep rents affordable for the needy and to maintain a mix of disparate social classes in the community. While it did keep rents low for in-place renters, when they moved, as most have done, the low rent apartments that they vacated were rented to a homogeneous group of upwardly mobile, affluent yuppies. Due to artificially low rent payments, these rich young people spent freely at local businesses fueling a retail renaissance that transformed Santa Monica’s stores from a collection of low-key neighborhood serving concerns to an upscale mix of coffee houses, restaurants, boutiques, consumer goods and entertainment venues. This in turn fueled further gentrification in housing, as it became not only cheap but also trendy to live here.

Our leadership was always quick to condemn housing developers for greed and for the traffic impact of their proposed projects. Meanwhile, to accomplish its social agenda, the city’s political cabal needed more tax revenues. So, it encouraged hotel and commercial development. Now, Santa Monica’s evening population of some 80,000 swells to over 250,000 during the day, as we have become one of the regions key business centers. The traffic patters of prior decades have reversed with the strange spectacle of bumper-to-bumper traffic coming into Santa Monica in the morning and leaving in the evening with clear sailing downtown and back during the same periods. Meanwhile, local traffic congestion has become an annoying fact of life.

Now comes yet another chapter in the history of Santa Monica’s social engineering: the Living Wage Ordinance. Think of this as rent control on Viagra. Rent control was to keep rents down while the Living Wage Ordinance is to get wages up. Both are supposedly aimed to help the poor. Under this new legislation, affected businesses in the Coastal Zone would have to pay workers without health benefits at least $13 per hour instead of the current $6.25 per hour minimum wage.

But, governmental intervention in the market place inevitably has unintended consequences. The $13 per hour wage may be great for the current holders of low wage jobs. But what happens when they leave their current jobs, as most do, by moving up the economic ladder? Will other entry-level workers replace them? Not a chance. Just as, after rent control was imposed, cheap apartments weren’t rented to the poor, these jobs will go to people with more education and skills and/or connections than today’s low wage workers.

Next time you dine at one of the coastal hotels, don’t be surprised if you are greeted as follows: “Hi, my name is Biff and I’ll be your busboy.” Meanwhile, you wonder what became of Benito your previous busboy. Persons checking into their hotel room may be greeted with, “ Hi, I’m Megan. I’ll be you maid. Maria is no longer with us”.

© 2001, Action Apartment Association, Inc. Site designed by Chromawave Multimedia