The tale of Whitey Bulger provides many lessons – how to finally capture a fugitive on the lam, it's only a matter of time before you get caught – but this week we learned a lesson that hits closer to home for many Southern California residents: The dramatic effect of someone leaving a rent-controlled apartment.
Bulger's rent was criminally low for a Santa Monica two-bedroom on a leafy street two blocks from the ocean, just $1,145 a month, per The Wall Street Journal. Now, according to Curbed, the same place – minus the storage space for guns and money in the wall – is going for $2,972 a month.
The reason for the $1827 jump is that Bulger's apartment was rent-controlled, but only as long as he lived there. As I explained earlier this month, since 1999, after a tenant leaves their rent-controlled apartment in California, the landlord can usually charge whatever they want because of a 1995 state law, the Costa-Hawkins Rental Housing Act.
Bulger is typical of renters who lived under the benefit of rent control because he held onto his place as long as he could. Last year, just 493 units that used to be occupied by long‐term tenants were rented at market rates for the first time in Santa Monica. Since 1999, about two‐thirds of Santa Monica’s controlled 28,102 rental units reverted to market rates, usually after someone like Bulger moved out.
Depending on your point of view, Bulger's apartment either illustrates why rent control is important or why it's misguided. The $1827 increase could be viewed as exorbitantly high, tough for many tenants to afford. On the other hand, Bulger was hardly destitute. He had $800,000 in cash stashed in his apartment walls. As critics of rent control point out, many people hoard their cheap apartments, whether they need to be getting a break on rent or not.
Soon after FBI agents raided Bulger's apartment, the manager of the apartment building where he lived, Mark Verge, told The Wall Street Journal he received hundreds of calls from interested renters. He said he would be charging a "Bulger Premium" for the new tenant;
"The smart rent on [Mr. Bulger's] place is $1,700 or $1,800," says Mr. Verge, who describes the units in the Princess Eugenia, a three-story, cream-colored stucco box, as "decent at best." "But I'm going to put it on the market for $2,100. Somebody will pay a premium to live in this place."
That was 2011. Three years later, with rents skyrocketing, Bulger's place is going for $2,972 a month. That could be called a bargain, because the average two-bedroom in Santa Monica is $4,350 a month, according to Zillow.