Through the 1940s and 1950s Santa Monica was isolated by distance from downtown Los Angeles. In the early 60s the Santa Monica Freeway was built. This marked the beginning of great change. Santa Monica's beach atmosphere, and desirable weather became accessible to high income professionals who would pay upper middle class rent. An enormous apartment construction boom began in about 1963 and roared forward for the next ten years.

In the early 70s there was a kind of rebellion by the local homeowner constituency, who objected to the seemingly endless stream of apartments being built. They started a campaign for growth control upon a platform pleading for maintenance of their "quality of life." They successfully passed a number of ordinances which restricted the number of apartments that could be built on a given lot. Construction of new apartment buildings in Santa Monica became economically unfeasible. The only thing that feasibly could be built was expensive condominiums.

By 1977 a constituency of retirees became vocal, fearing that rents would be increased. Local progressive leaders, largely renters who had moved to Santa Monica, formed an alliance between this faction and the growing population of renters, and brought the rent control issue before the local voters. The renters by the late 1970s made up about 70 percent of the city’s population. With the backing of this majority, the rent control issue passed in 1979.

The rent control ordinance was very strict. Apartment owners consider the law a confiscation of their rights and revenue. Renters, organized by local leaders, saw the law as a protection against unreasonable and uncontrolled rent raises. There was a fear factor that propelled the issue into municipal law. There began a political and courtroom battle between apartment owners and tenants that continued until the repeal of rent control for new tenants as of January 1999.

Santa Monica’s experience with rent control shows that it can become addictive for renters--once they've had it, tenants are not about to give up what amounts to a great bargain. The local "renters' rights" political faction tended to be led by intellectuals and social advocates who were little concerned with traditional economic views of a fair return. Under rent control, tenants in Santa Monica had a rent rate bonanza. For ten years, rent control has allowed annual rental increases that are only two-thirds of actual inflation.

During the Santa Monica rent control heyday, the local rent control power structure was successful in placing people supportive of their cause in almost all of the key city political offices. Santa Monica city government today is still controlled by people supportive of rent control.

The city council in the late 80s, in response to the emerging trend of growth controls, has downzoned the entire city. There is a desire to preserve the small community feeling of Santa Monica and curb any more large developments.

Under rent control, apartment owners had an enormous incentive to rent to single, high income professional people who would make their own repairs and pay for their own interior improvements. This type of renter is quite the opposite of the "average working person" at whom rent control is aimed. In this sense, the ordinance failed to reach its goal.

When rent control was enacted in 1979 there were about 38,000 rental units in the city. By 1991, there were only about 28,000 rental units. About twenty-six percent of the rental units in the city had been lost because of rent control. At that time, about 1,800 of the units were owner occupied. It goes without saying that, until quite recently, the economic climate in Santa Monica has been hostile to apartment investment.