By Jorge Casuso

Rents in Santa Monica have risen in a new free market -- with 1,746 units receiving sharp increases in the first six months of the year --, but prices seem to have leveled off, according to a new study released by the rent board.

Between Jan. 1 - when a state law went into full effect allowing vacated rent-controlled units to fetch what the market would bear - and June 30, rents in Santa Monica have risen dramatically for every bedroom size. But perhaps due to a glut in the rental market, prices have failed to show a steady rise, as tenant advocates had feared.

The new figures virtually mirror the increases during the first three months of "vacancy decontrol," when hundreds, if not thousands of apartments suddenly hit the market. Under the state law, landlords can charge what the market will bear if a rent-controlled unit is voluntarily vacated or the tenant is evicted for non payment of rent.

According to the new six-month update, single units rose from a median of $556 a month under rent control to $775; one bedrooms rose from $641 to $995; two bedrooms nearly doubled from $782 to $1,385 and three or more bedroom units jumped from $1,009 to $1,800.

The increases represented a 39 percent drop in the number of units affordable to very low income households, from 10,920 to 6,558, according to the study.

"What we continue to see are rapidly escalating rates and a decrease in affordable units," rent board administrator Mary Ann Yourkanis told the board last week.

Rent board commissioners compared the rising prices to a gold rush, as landlords scramble to cash.

"This is one of the biggest land grabs in the last 100 years in this country," said rent board commissioner Alan Toy. "The thing that's distressing is that the more people make, commensurate and at a much greater rate the rents are going up.

"It's almost like the gold miners," Toy added. "Who benefited the most? The people that sold them the tents. People are turning over vast sums of money to landlords who are exploiting them for all they can get."

"It's the most depressing report I've read in a long time," said commissioner Bruria Finkel. "It's really shocking."

Landlords counter that the market, which has been artificially depressed by rent control over the past 20 years, is simply reflecting the true cost of housing, which is increasing everywhere.

They also note that although units affordable to low income tenants are dwindling, it doesn't necessarily mean that the tenants who vacated the units were low income.

"The assumption is that the people who moved out were low and moderate income tenants," said Robert Sullivan, whose company manages 1,100 units in 100 buildings in Santa Monica. "We've rented about 20 apartments in the last month, and about half of the tenants who moved out are buying houses and condos."

Many tenants are moving because they changed jobs or they've saved enough to own property, agreed Gwen Wunder, the executive director of ACTION Apartment Association, which represents many of the city's mom and pop landlords.

"These people are moving on up," she said.

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