Geoforum 43 (2012) 453–463

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Geoforum

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The actualization of neoliberal space and the loss of housing affordabilityin Santa Monica, California

Nabil KamelSchool of Geographical Sciences and Urban Planning, Arizona State University, Tempe, AZ 85287-2005, USA

a r t i c l e i n f o

Article history:Received 24 September 2010Received in revised form 21 August 2011Available online 1 November 2011

Keywords:Uneven developmentGentrificationRent controlCosta-Hawkins ActDisasterNorthridge earthquakeUrban planning

0016-7185/$ - see front matter � 2011 Elsevier Ltd. Adoi:10.1016/j.geoforum.2011.10.005

E-mail address: nkamel@asu.edu

a b s t r a c t

This paper reveals the contingent aspect associated with the actualization of a neoliberal space. The paperexamines the material, institutional, and economic conditions necessary for a neoliberal agenda to trans-form its urban policy objectives into a material reality. The study follows changes in housing conditionsin Santa Monica, California from 1990 to 2008. During this period, the confluence of three sets of eventsled to the actualization of a neoliberal space. First, housing damage from the 1994 Northridge earthquakeremoved ‘‘dead capital’’ from the housing sector. Second, subsequent administrative actions at the locallevel and more importantly deregulation legislation at the state level eliminated rent control regulationsand created market incentives that favored upscale development. Finally, the state’s economic recoverygenerated a substantial flow of private investments into the real estate market. These combined factorsled not only to the dismantling of affordable housing in Santa Monica, but also to the erosion of residents’and local authorities’ ability to manage housing choices and, consequently, to a historic restructuring ofSanta Monica’s physical and social space. These changes had a disproportionately and negative effect onlow-income and minority renters.

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1. Introduction 2008; Springer, 2009, 2008; Miraftab, 2004). This paper contributes

This paper supports the proposition that the actualization ofneoliberalism (i.e. the materialization of neoliberal policies) is afragile, ad hoc, and contingent process that requires the concur-rence of multiple factors (Hackworth and Moriah, 2006; Barnett,2005; Wilson, 2004; Macleod and Goodwin, 1999). This processis documented by following long-term changes in housing condi-tions in the City of Santa Monica, California, starting with localresponses to housing demolitions in the late 1970s until the lat-est real estate bubble that ended in 2007–2008. The paper alsohighlights the uneven social and material outcomes associatedwith the actualization of neoliberal housing policies in SantaMonica. Lessons drawn from this study are particularly relevantas the current economic recession, instability of the lending sec-tor, and high energy costs are likely to alter significantly the pro-file of homeowners and to drive demand for housing choicesalternative to owner-occupied single-family homes in the yearsto come.

In recent years, a number of studies examined the effects of neo-liberal policies on public space, neighborhood change, gentrifica-tion, and other forms of uneven development (Newman andAshton, 2004; Lees, 2003; Hackworth and Smith, 2001). Similarly,scholars have examined forms of resistance to neoliberal policiesin cities across the world (Das and Takahashi, 2009; Walker et al.,

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to this body of work by detailing how neoliberalism actualizes in thehousing sector in Santa Monica – i.e. how neoliberalism transitionsfrom a political stance into a material reality – and by contextual-izing critical junctures and sources of frictions associated with suchactualization. The analysis is based on a longitudinal case study andsuggests that neoliberal policies took hold and had a transformativeeffect on the housing sector following three main events: (1) the ad-vent of the Northridge earthquake and the ensuing removal of ‘‘deadcapital’’ locked in existing real estate properties, (2) the adoption ofstate and local regulatory instruments that maximize profits fromnew investments, and (3) the flow of massive private capital (realand speculative) in the housing sector. The paper also shows thatthe adoption of neoliberal policies diminished Santa Monica’s abil-ity to govern, preserve, and deliver affordable housing. This resultedin demographic changes that transformed Santa Monica from a citythat provided a quality urban environment to diverse social groupsto a more exclusive and gentrified city. These changes had a dispro-portionately negative effect on residents that were low-incomeminority renters.

2. The production of neoliberal urban space

2.1. The neoliberal project

The term neoliberalism refers to a range of positions on socialand economic policy with roots in the work of Milton Friedman

454 N. Kamel / Geoforum 43 (2012) 453–463

and Friedrich von Hayek.1 In a purely theoretical form, neoliberal-ism advocates limited state intervention in the economy as well asin all areas of social organization (Hayek, 1960). At its ideologicalcore, neoliberalism advances that free market mechanisms are supe-rior to other means not only in allocating society’s resources for pro-ductive uses, but also in achieving political freedom and democracy(Friedman, 1982). In principle, the neoliberal agenda is to restructuresociety’s formal and informal institutions in order to allow marketmechanisms to operate unhindered by regulatory restraints. Themain role of the state is to provide and maintain an institutionalstructure suited to that purpose (Harvey, 2005; Duménil and Lévy,2004).

In the United States, and starting from the late 1960s, socialwelfare regulations and policies came under systematic attackand were gradually dismantled as neoliberal ideology gained trac-tion. The rise of corporate power and influence further entrenchedthe ideals of neoliberalism in US society, which increasingly be-came the basis of mainstream state of mind. In the following dec-ades, neoliberalism gained political momentum particularly underthe Reagan administration in the United States and Thatcher inBritain (Harvey, 2005; Pierson, 1994; Peck and Tickell, 1992).

Initially, deregulation policies coincided with economic growthand low unemployment rates but also with greater inequalitiesand new forms of uneven urban development (Springer, 2008;Harvey, 2005). However, deregulation policies also resulted inthe rapid and systematic dismantling of basic institutions of collec-tive social welfare, from education to affordable housing (Giroux,2002; Crump, 2002). Reductions in federal spending on inner-cityprograms, shift of private investments to suburban areas, and theloss of manufacturing employment instigated rounds of fiscal cri-ses in major US cities (Weber, 2002; Beauregard, 2001; Mollenkopfand Castells, 1991). Faced with limited and declining revenues,municipal governments engaged in fierce inter-urban competitionfor private investments and promoted bouts of privatization andderegulation of public infrastructure and services, such as trans-portation, utilities, security, and health care (Pierson, 1994; Har-vey, 1989).

Two points are worth recalling here. First, while neoliberal prin-ciples of individualism, free market, and competition are used toroll back state welfare provisions and to limit state regulation ofmarket transactions, the neoliberal project ‘‘also involves enhancedstate intervention to roll forward new forms of governance’’ (Jes-sop, 2002, p. 454). The expansion of various forms of governmentsubsidy of private investment, from cash incentives and tax credits,land acquisition and assembly, to direct partnerships, as well as theexpansion of state surveillance and social control programs arecrucial to actualize neoliberal policies and to manage economicand social stresses they generate (Harvey, 2005; Brenner and The-odore, 2002). Second, and despite state-capital alliances, the actu-alization of neoliberal policies remains a contingent, ad hoc, andirregular process. These processes are tactically opportunistic, tak-ing advantage of moments of crisis, context-dependent, and con-tingent on local disruptions and conditions (Klein, 2007; Peck,2006; Wilson, 2004). Multiple modes of articulation, scales ofadoption, and sources of friction render neoliberalization processes‘‘temporally discontinuous and spatially heterogeneous’’ (Brenneret al., 2010, p. 208). Nevertheless, neoliberalism remains also anideological hegemonic project (Springer, 2010; Hull, 2006). Class-based alliances of dominant social groups generate and dissemi-nate consistent and redundant definitions of global, national, andurban problems and solutions that allow them to project a

1 For an extended genealogy of neoliberal thought, see The Road from Mont Pèlerin:The Making of the Neoliberal Thought Collective, edited by Mirowski and Plehwe (2009).Also see Neoliberal Hegemony: A Global Critique edited by Plehwe et al. (2006) for arange of global perspectives on neoliberalism as a political hegemony project.

worldview in which their interests represent the normal and desir-able state (Ward and England, 2007).

2.2. Neoliberalism and housing

The neoliberal push influenced not only the delivery of publicservices, but also affected housing conditions, the meaning of thebuilt environment, and more broadly the experience of everydayurban life. Since the early 1970s, the US witnessed a steady dis-mantling of public housing projects and replacing them with mar-ket-oriented solutions such as Section 8 rental assistance vouchersand Hope VI housing renewal projects. However, these programssuffered funding deficits from their inception and subsequentreductions in federal housing spending amplified unmet housingneeds (Popkin et al., 2004; Malpass, 2003). A significant segmentof low-income households, especially inner-city minorities, re-mained trapped in substandard, overcrowded, and over-pricedhousing (HUD, 2007, 1993).

The effect of neoliberal ideology manifested itself also at the lo-cal scale. Neoliberalism at the urban scale was contingent upon‘‘situated political forces, political cultures, active resistances, andinstitutional legacies’’ (Wilson, 2004, p. 773). Municipal responsesvaried across the nation depending on the balance of interestsamong different constituencies (Elwood, 2002). Where pro-growthand free-market ideologies prevailed, cities replaced public hous-ing with market-rate or mixed-income housing, commercial devel-opment, sports arenas, entertainment and recreation complexes,and other market-oriented projects (Fainstein, 2009; Angotti,2008; Smith, 2002). This approach was promoted as a fiscal rem-edy for boosting city revenues through sales taxes and develop-ment fees. This approach further increased the reliance ofmunicipal governments on private investments and led cities intobidding wars through various forms of incentives (Leitner andSheppard, 1998). In such cases, local provisions for affordablehousing were relegated to various forms of subsidies and incen-tives, yet remained ad hoc depending on historical patternsdevelopment.

Where local resistance to market-driven housing policies wasstrong, the realization of a neoliberal housing agenda was also con-tingent upon situated institutional arrangements. In a small num-ber of US cities, local resistance led to more regulation of thehousing market, especially rental housing. Personal interests of el-derly, retirees, renters, and fixed-income households coalescedaround a progressive housing agenda to adopt stringent controlswith the goal of retaining affordable rental housing in their munic-ipalities (Newman and Wyly, 2006; Dreier, 1997; Clavel, 1986; He-skin, 1983). As discussed in detail further below, Santa Monica wasone of those municipalities where a progressive political cultureemerged to resist rental housing deregulation.

In addition to housing affordability regulations, the implemen-tation of a neoliberal agenda has to contend with two additionalsources of friction. One major source of friction is between theneed for freeing spaces for new investments and existing invest-ments locked in the housing stock. The long life span of housingstructures and the capital embedded in them amounts to ‘‘deadcapital’’ that limits opportunities for new investment and profit(Weber, 2002; Harvey, 1982). One of the ways by which this spatialinertia can be overcome is through a dual process of destructionand creation: the removal of existing structures that represent bar-riers to the circulation of fresh capital and the subsequent con-struction of new profit-generating built assets (Harvey, 2007;Arrighi, 2006). This process is facilitated when new developmentcan externalize the costs of removing existing structures and ac-cess development subsidies. Disinvestment in inner-cities, shiftof new investments to suburbs, designating areas as blighted,and post-disaster reconstruction have justified the clearance of

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‘‘slummed’’ neighborhoods, subsidizing private real estate invest-ments, and the demolition of public housing (Angotti, 2008; Klein,2007; Crump, 2002; Mollenkopf, 1983).

Another source of friction for the actualization of a neoliberalhousing agenda lies in availability of private capital and the abilityof the housing sector to channel private investments into real estatedevelopment. Without private investments directed to the housingsector, and notwithstanding the removal of dead capital locked inthe housing stock and a deregulated investment environment, aneoliberal housing agenda could stall or remain unfulfilled. Invest-ments in real estate have traditionally been a function of severalexogenous supra-urban factors and often occur independently of lo-cal markets dynamics. For example, investment in the housing sec-tor is linked to demand for and profitability from particular housingproducts (Meyers and Ryu, 2008). Such demand and profit areshaped by the rate of economic growth as well as by labor forceand employment characteristics, such as wages, skills, contractualrelations, and the like, which reach well beyond municipal bound-aries (Rothenberg et al., 1991). Similarly, investments in the housingreflect broad market cycles and fluctuations that channel capital inor out of the real estate market as a function of their profitability,real and speculative, relative to other sectors (Leitner, 1994; Teitz,1989). When profits in the housing sector exceed that of other sec-tors, or when other sectors become stagnant or saturated with sur-plus capital, new investments are likely to be directed to real estatemarkets (Feagin, 1987; Harvey, 1982; Smith, 1979). More broadly,large scale investments in the housing sector fluctuate based onthe general availability of surplus capital at the regional, national,and international scales. In a shrinking economy, all sectors, includ-ing real estate and construction, experience a contraction of invest-ments (Saulsbury and Curry, 1997). Likewise, in periods of economicexpansion, there is a surplus of capital seeking opportunities forinvestment and promising real estate and housing markets havetraditionally attracted consumers and developers alike with short-and long-term investment goals (Coakley, 1994).

2 A building is red-tagged when structural damage renders it unsafe and itsoccupants must be evacuated. Yellow-tagged buildings are those that sustainedstructural damage and need further assessment to ascertain their safety. Occupants ofa yellow-tagged structure are allowed limited access but are required to vacate thebuilding until repairs are made. Green-tagged buildings sustained non-structuraldamage and remain useable.

3 Addresses that were not located seem to be the result of data entry duplicates anderrors since address numbers did not correspond to street number ranges.

3. Methodology and data sources

The analysis of housing changes in Santa Monica follows a lon-gitudinal case study research design and relies on repeated obser-vations from primary and secondary sources. The analysisintegrates quantitative and qualitative methods and data sourcesto address the following questions:

� What were the main changes in housing conditions inSanta Monica during the last 20 years?

� How did material, institutional, and economic factors affecthousing conditions in Santa Monica?

� What were the effects of housing changes on Santa Monicasocio-demographic characteristics?

The quantitative component of the study is conducted by com-piling and analyzing a data set of housing and demographic charac-teristics for Santa Monica and Los Angeles County for the periodfrom 1990 to 2008. The housing data set includes number of saletransactions, average sale price, and square footage by housingtype. This data is collected by the California Association of Realtorsand DataQuick News and published by RAND California (2009). Thehousing data set also includes monthly number of housing permitsfrom the State of the Cities Data Systems released by US Depart-ment of Housing and Urban Development (HUD, 2010), city con-struction data by RAND (2009a), and the number of rentcontrolled units and rent prices in Santa Monica published by theSanta Monica Rent Control Board annual reports. Demographic dataincludes race, ethnicity, income, tenure, and employment variables

for Santa Monica and Los Angeles County from the decennial cen-suses 1990 and 2000 and from the American Community Survey(ACS) 2006–2008 3-year Census. For the analysis of the effect ofthe Northridge earthquake on Santa Monica’s housing stock weuse data published by EQE International and the Geographic Infor-mation Systems Group of the Governor’s Office of Emergency Ser-vices (1995). The data includes zip code aggregates for damage bytype of property, estimated costs of repairs, and insurance pay-ments (OES, 1997). This data is complemented by the Office ofEmergency Services inspection database that included individualrecords of inspection and damage estimates for all properties af-fected by the Northridge earthquake. Values for the Gross DomesticProduct for the nation and the state of California are used to assessthe state’s overall economic performance. Where appropriate, LosAngeles County data is used to benchmark housing and demo-graphic changes in Santa Monica. Two additional constructs pro-vide an assessment of housing affordability in Santa Monica atvarious points in time:

� Rent affordability: Rent is considered affordable when a house-hold pays less than 30% of its income on Gross Rent.� Homeownership affordability: Two measurements are used to

assess homeownership affordability. The first calculates ownercosts as percentage of household income for owner-occupiedunits with a mortgage. Homeownership is considered afford-able when owner costs are less than 30% of household income.The second, the ‘‘Santa Monica Premium’’, measures the differ-ence in the average price per square foot of housing betweenSanta Monica and Los Angeles County for single-family andmultifamily units.

The qualitative element of this study includes policy analysis oflocal and state regulatory actions related to housing in Santa Mon-ica. Sources of evidence consist of interviews, surveys of propertieswith severe earthquake damage, and archival information fromCalifornia legislative reports, City of Santa Monica documentsand plans, and newspaper accounts. Twelve in-depth semi-struc-tured interviews with residents, developers, city officials, and localcommunity-based organizations were conducted in 2001 and werefollowed-up with six additional interviews with developers andresidents in 2008. The first set of interviews focused on the effectof the Northridge earthquake and institutional arrangements onhousing conditions in Santa Monica, while the second set of inter-views focused on the effect of the housing boom. For the surveys ofresidential structures damaged by the Northridge earthquake, weuse the OES (1997) building inspection database. We extractedand mapped addresses for all red- and yellow-tagged2 residentialproperties in Santa Monica. We were able to locate 62 of the 64 ad-dresses of red-tagged structures listed in the OES database.3 All 62addresses were surveyed in 2001 and in 2008 to assess the extentand quality of reconstruction and the effect of housing policies onnew construction in Santa Monica.

4. Context and pre-conditions: Santa Monica as contested space

Santa Monica is strategically located at the western edge of LosAngeles County and constitutes a terminal node on the prestigious

456 N. Kamel / Geoforum 43 (2012) 453–463

commercial Wilshire corridor that runs East–West from downtownLos Angeles to the Pacific Ocean. Not unlike other parts of SouthernCalifornia, real estate development has been a driving force in San-ta Monica’s social and political life since the establishment of thecity in the late 19th century. In the more recent history, however,a distinct shift in Santa Monica politics took place around the late1970s and early 1980s. As California began its recovery from theeconomic recession of the 1970s, the real estate market in South-ern California experienced a significant boom that strained therelationship between landlords and renters. Landlords soughthigher returns on their investments by converting rentalapartments into condominiums or increasing rents (Dreier, 1997;Heskin, 1983). These tensions became more bellicose when, inthe late 1970s owners started to demolish apartment buildingswith rental units in what came to be known as the ‘‘demolitionderby’’. About 1300 residential rental units were demolished in a15-month period. With additional units converted into condomin-iums, the city estimated that 5% of its residents were displaced dueto these actions (City of Santa Monica, 1999). Santa Monica ten-ants, who in 1978 constituted about 80% of the city’s population,mobilized to deal with the threats of eviction and higher rents(Levine et al., 1990; Clavel, 1986). This mobilization was the resultof a joint effort between neighborhood groups and local politicalorganizations that acted under the banners of the Santa MonicaFair Housing Alliance (SMFHA) and the newly formed coalition ofSanta Monica for Renters’ Rights (SMRR). A series of legal andpolitical battles ensued between renter and consumer groupsrepresented by SMRR on one end and, at the other end, property-rights advocates backed by homeowner and real estate associa-tions and conservative forces at the city and state levels (Capekand Gilderbloom, 1992). In 1979, renter and consumer coalitionswon a major face-off as the City of Santa Monica passed Proposi-tion A. This strong rent control law required establishing a rentcontrol board elected by the residents of Santa Monica, controlledannual rent adjustments and included just cause eviction require-ments. The most significant and controversial elements of theproposition were provisions that removed vacancy decontrols4

and banned the demolition of rental units or their conversion to con-dominiums Landlords counter propositions were defeated and, forthe first time, three renter advocates were elected to the seven-member city council.

Attempts at reversing Santa Monica provisions for controllingrents and demolitions extended beyond city limits. At the state le-vel, a coalition of property-rights advocates, construction unions,real estate developers, and landlords repeatedly failed to pass rentdecontrol propositions. Santa Monica rent controls were then chal-lenged all the way to the California Supreme Court, which returneda verdict supporting the city’s regulation. The Court asserted in the1984 landmark ruling of Nash v. City of Santa Monica that ‘‘theprovision by protecting existing tenants from eviction and thescarce supply of residential housing in Santa Monica against fur-ther erosion, clearly serves an important public objective.’’ In orderto override the California Supreme Court decision, State Senator El-lis, with support from the real estate lobby, introduced SB 505,known as the ‘‘Ellis Act’’ (Official California Legislative Information,2009). The Ellis Act was adopted in 1985 (Government Code Sec-tion 7060 et seq.) and enabled landlords who wanted to get outof the rental business to evict all tenants and turn their units toother uses or convert them into condominiums.5 The impact of

4 Vacancy decontrol means that when a rental property is vacated, the landlord ofthat property can rent it at market rate.

5 Owner can evict tenants from their properties as long as all units are converted tocondominiums (for sale) or other non-residential rental uses. Owner are required tocompensate tenants up to $8050. Ellised units cannot be re-rented withoutreoccupation permits and penalties were imposed for reported infractions.

the Ellis Act was deeply controversial. On one hand, it promotedcommunity stabilization by facilitating homeownership. On theother hand, homeownership was contingent upon demand anderoded affordable rental housing. In fact, the city estimates that, be-tween 1986 and 1993, over 880 units were removed from the rentalmarket (City of Santa Monica, 2003). As a response, in 1990 the cityadopted proposition R, which required 30% of all new multifamilyhousing built in the city to be affordable to low- and moderate-in-come households.6 The tug of war continued between landlordsand tenants over rental housing regulations. However, the real estatebust that followed the Savings and Loans debacle and high mortgagerates slowed redevelopment activities and discouraged further evic-tions in Santa Monica during the first half of the 1990s.

5. Seismic shocks: the Northridge earthquake and housingdamage

On the morning of the Martin Luther King Junior holiday, Janu-ary 17, 1994, at 4:31 A.M. a moderate but damaging earthquake hitthe Los Angeles basin. The epicenter of this 6.7 magnitude earth-quake was located beneath the San Fernando Valley, in Northridge,about 25 km (15 miles) north of Santa Monica (EQE, 1995). In SantaMonica alone, 3000–4000 residents had to be evacuated due toearthquake damage to their homes (Comerio et al., 1996; City ofSanta Monica, 1994). More than 2300 residential units in 281structures were severely damaged and were tagged with eitherred or yellow tags (Fig. 1). These severely damaged units repre-sented almost 4% of Santa Monica’s total housing stock. About96% of these units were rent controlled and 90% were affordableto households below Los Angeles County median income (City ofSanta Monica, 1994). The extensive damage to affordable andrent-controlled housing units was in part a function of the largeshare of affordable renter-occupied units in multifamily structuresin the city. Also, a significant number of these multifamily struc-tures were built over tuck-under parking, commonly referred toas ‘‘soft-story’’, and this type of structures incurred the highestdamage.

The widespread damage from the earthquake and the politicaland economic importance of the Los Angeles region generated amassive institutional response to address a wide range of needs.In terms of housing reconstruction, federal assistance and insur-ance payments were the primary sources of assistance and weresupplemented by municipal programs that targeted unmet localneeds. The main role of federal programs for post-disaster housingreconstruction policy is to provide temporary assistance for emer-gency relief (Bolin and Stanford, 1998; Comerio et al., 1996). Mar-ket forces, expressed in the form of risk assessment, propertyvalues, private investments, and insurance premiums and coveragewere, and remain, the main regulatory mechanism for pre- andpost-disaster management (Kamel and Loukaitou-Sideris, 2004;Comerio, 1998). However, the private sector in Santa Monica, asin several other parts of Southern California, was not ready to as-sume this role. Despite its prime location and the destruction ofover $500 million in housing assets, reconstruction in Santa Mon-ica proved to be a complex, slow, and contentious process.

Two sets of factors contributed to the slow pace of housingreconstruction in Santa Monica: macro or exogenous factors re-lated to the state and national economies, and local factors derivedfrom political and regulatory conditions in Santa Monica. At themacro-level, the Northridge earthquake occurred at a time whenthe housing market in Southern California was relatively stagnant.

6 The implementation of renter protections and affordability measures wasproblematic in both the Ellis Act and Proposition R. Some landlords chose to re-rent Ellised properties and pay the fine if reported. The 30% affordable units requiredby Proposition R was seldom reached as developers opted for the in-lieu fee option.

Fig. 1. Red- and yellow-tagged residential properties in Santa Monica and population and housing changes. Source: Office of Emergency Services of the State of California,1997, US Census, 1990, 2000.

N. Kamel / Geoforum 43 (2012) 453–463 457

A round of real estate speculation in the 1980s effectively thwartedfuture investments in the housing market (State of CaliforniaDepartment of Finance, 1995). As the financial crisis that resultedfrom the deregulation of thrift institutions (Savings and Loans)unraveled, California experienced its worst recession since the1930s. Private investments in housing, construction, and real es-tate were curbed for several years and the state’s economy contin-ued to lag behind the nation in recovering from the 1990srecession (BEA, 2009).

At the local level, rental properties in Santa Monica were sub-ject to regulations that capped rents, restricted their demolition,and prevented their conversion to condominiums. These regula-tions reduced the appeal of rehabilitating occupied rental housingunits. Similarly, the price of owner-occupied housing units had notadjusted along with the correction that occurred in the regionalhousing market and remained priced much higher than the re-gion’s median value. In 1994, the average residential sale priceper square foot in Santa Monica was $134 higher than that of LosAngeles County (see Fig. 2). As a result, for sale properties werealso not attractive investments. A Santa Monica developer men-tioned that, in the first months after the earthquake: ‘‘you couldbuy a damaged condo for [as low as] $50,000 in Santa Monica[. . .] and get some FEMA money to fix it [. . .] but only few peopledid. No one was sure what was going to happen (personal inter-view with developer, 2001).’’ Nevertheless, pressure on city offi-cials to expedite housing reconstruction created an opportunityfor landlords to assert the need for loosening rent controls as ameans to facilitate the flow of investments and accelerate recon-struction (Rackham, 1994).

6. Institutional aftershocks: Costa-Hawkins’ and other acts ofderegulation

The extensive damage to Santa Monica’s multifamily rentalapartments presented significant reconstruction challenges. Unlikesingle-family owner-occupied homes, federal assistance programstreated rental units as businesses. Therefore, owners of multifamilyunits did not qualify for federal assistance programs or grantsother than SBA business loans, which had a limit of $1,500,000per project. The limited reconstruction funding along with the ci-ty’s extensive damage to housing stock, the region’s stagnant realestate market, and the state’s lingering recession generated consid-erable concern among residents, landlords, and city officials. Par-ticularly concerned were renters who feared that the extensivedamage to multifamily units would lead to a permanent loss ofaffordable housing in the city if damaged buildings were not re-built in a timely fashion. This concern was exacerbated when justdays after the earthquake, landlords and deregulation advocatesstarted a campaign claiming that rent controls were impedingreconstruction. A Los Angeles Times editorial suggested that: ‘‘Evenwith low- or no-interest federal disaster loans, the money to amortizethe loans will have to come from somewhere. A rent increase wouldseem the obvious source. [. . .] If Santa Monica [. . .] and other quake-damaged cities are to be repaired and rebuilt, they are going to needlandlords. Political rhetoric won’t pay the bills (Kaplan, 1994, p. B-7).’’ Furthermore, if rent-controlled apartments went unrepairedand their renters were forced to leave Santa Monica, elected offi-cials in favor of rent control would lose a significant share of theirconstituents. The Outlook, a Santa Monica newspaper, predicted

$100

$150

$200

$250

$300

$350

$400

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

SM Premium $

200

400

600

800

1,000

1,200

1,400SM # of Transactions

SM Premium $/sq ft All Homes SM Residential Sales

CA Economic Recovery

Costa-Hawkins Act

Northridge Earthquake

Destruction

DeregulationActualization Displacement

Fig. 2. Santa Monica premium and residential sales, 1992–2008. Source: RAND, 2009.

458 N. Kamel / Geoforum 43 (2012) 453–463

that reverberations would continue through the following fall 1995elections and that landlords would not be terribly eager to keeprenters in the city (Seeley, 1994). This point was not missed bythe Executive Vice President of the Apartment Association ofGreater Los Angeles, Charles Isham. He noted that rent controladvocates typically won elections by a margin of 3000–4000 votesand that if the 2218 rent controlled units damaged by the earth-quake ‘‘remained uninhabitable or were ultimately destroyed [bythe election date], [SMRR’s] electoral plurality would disappear alongwith the units (Gillespie, 1994).’’ In fact, the pro-rent control coali-tion found itself in a difficult position. If they supported rent in-creases, they could lose their political base. However, withoutrent increases, fewer owners may rebuild and a significant numberof tenants may not return to Santa Monica in time for the elections,also jeopardizing their political base.

It did not take city officials a long time to decide on the courseof action to follow. As early as 10 days after the earthquake, and inresponse to requests by landlords, the Rent Control Board of SantaMonica adopted Regulation 4113 – also know as the ‘‘Q-Petition:Increase for Earthquake-Related Damage.’’ The main purpose ofthe regulation was to encourage owners to quickly repair theirproperties and minimize the loss of residential rental housing unitsand displacement of tenants (personal interview with City of SantaMonica Official, 2001). The Q-petition allowed owners to passthrough to tenants the costs of repairing earthquake-related dam-age. The cost of repairs, including financing costs, was amortizedover a period of five, 10 or 20 years – depending on the type of re-pair – and was passed onto renters as rent increases. By June 30,1997, when all petitions submitted by the deadline had been re-viewed, 1017 decisions had been issued for both completed andproposed repairs and 9738 units were afforded rent increases (Cityof Santa Monica, 1997, 1998).

In order to address unmet funding needs for the reconstructionof multifamily buildings, the city pooled federal funds and createdthe Multifamily Earthquake Repair Loan (MERL) Program – a loansprogram for the repair of multifamily rental or condominium prop-erties. MERL loans were subsidized by the city and HUD with termsranging from 10 to 55 years (City of Santa Monica, 1996). Personal

interviews in 2001 with a local developer, a CDC representative,and City of Santa Monica officials, indicate that, by and large, MERLwas the lender of last resort after a borrower was denied conven-tional or SBA Business loans. However, reluctance to invest in reha-bilitating rent controlled units, eligibility constraints, uncertaintiesregarding housing market prospects, and a lagging economy lim-ited the appeal of MERL and SBA loans. By the end of 1996, only41 borrowers had received MERL funds, less than half of whichwere for rehabilitating affordable housing (City of Santa Monica,1996, 2001). It was more financially rewarding for landlords if theirrent controlled units were vacated, taken off the rental market, andsold as condominiums. This presented a clear financial incentive todelay reconstruction until tenants had relocated, especially giventhat landlords were required to make repaired units available totheir pre-disaster tenants at the same rent.

The rebuilding of damaged properties faced additional barriersdespite an expedited process, reductions in parking requirements,and waived zoning stipulations. A large number of damaged struc-tures were walk-ups with outdated layouts. More than 75% ofexisting condominiums in the city were built before 1970 andlacked marketable amenities such as elevators, gated parking,security systems, central heating and cooling, and other contempo-rary features. This meant that if landlords were to build accordingto prevailing market trends, they could not take advantage of theexpedited process, which required restoring the original building’sfootprint and layout (personal interview with developer, 2008).

Delays in reconstruction and loss of affordable housing fromearthquake damage, rent increases, and removals from the rentalmarket, prompted the City of Santa Monica to engage in direct pro-duction of affordable housing. The city designated the CommunityCorporation of Santa Monica (CCSM) as a housing developmentcorporation and authorized the agency to receive HOME Invest-ment Partnerships Program set-aside funds to develop affordablehousing units. By 1997, about new 200 affordable housing unitswere produced in Santa Monica (City of Santa Monica, 1997,1998). However, the production of new affordable housing was along-term strategy to increase the affordable housing stock andlagged behind the steady losses in affordable units. As a result,

N. Kamel / Geoforum 43 (2012) 453–463 459

the combined set of measures that were enacted by the city neitherappeased homeowner groups nor provided sufficient affordablehousing for low-income renters. This was reflected in the first localelection following the earthquake when, in November 1994, SMRRsupporters lost two out of three City Council seats (Hill-Holtzman,1994).

As mentioned previously, the battle over rent control–decontrolwas not confined to Santa Monica politics and predated the North-ridge earthquake. Between 1976 and 1995, ten rent decontrol billswere introduced at the state level and were backed by the Califor-nia Housing Coalition, California Association of Realtors, CaliforniaApartment Association, and California Building Industry Associa-tion. These bills consistently failed to gain sufficient votes in thelegislature to pass (Dreier, 1997). However, as Capek and Gilder-bloom (1992) had rightly predicted, blocking these bills rested onprecarious legislative tactics and it was only a matter of time be-fore the bill would pass. When in 1995 Senator Costa introducedhis annual rent decontrol bill, conservative influence in California’spolitics had experienced a slight upsurge and influential SenatorDavid Roberti, a main opponent of rent deregulation, had retired.As a result, the bill passed with a 48-18 vote. The bill allowed rentsto go to market rate once a rental unit was vacated. A 3-year freezeperiod was built into the bill, during which if an existing rental unitwas vacated the new rental agreement would be at the same rateas the terminated agreement. Newly constructed units were notsubject to the freeze. While the intent of the 3-year freeze was tocurb a rush of evictions, the result was that some landlords of va-cated rental units kept them off the market for the duration of therent freeze, which further limited the supply of rental units duringthat time (personal interviews with residents and tenants organi-zation, 2001). The Costa Hawkins Act also made it more profitablefor landlords to ‘‘Ellis’’ their buildings (taking it off the rental mar-ket) only to re-rent it a year later. The bill allowed landlords to paya relatively small fine if they violated the waiting period and only ifrenters filed complaints with the city.

The result of municipal and state actions was a major loss ofaffordable housing units without significant acceleration of resi-dential reconstruction. Up until 1997, permits for new buildingsand residential completions were still below pre-disaster levels de-spite the added earthquake reconstruction needs. Furthermore, thenumber of affordable rental units had decreased significantly. Thenumber of rental housing units affordable to ‘‘very low income’’households (50% of median) was reduced from 11,220 in 1994 to8820 units in 1997 – a drop of 21%.

8 These are conservative estimates compared to Santa Monica Rent Control Boardfigures. In the 2 years of 1999 and 2000, the city reported a loss of 3635 units

7. The actualization of neoliberal space: market gains andcommunity losses (1998–2009)

Despite the deregulation of the rental housing market and theneed for replacing earthquake-damaged homes, Santa Monica didnot attract sufficient investments to replenish its housing stock,let alone to increase housing choices as deregulation advocateshad claimed (Tucker, 1991). A statewide recession meant that pri-vate investments could not leverage available opportunities in thenewly deregulated housing market. It was not until the secondquarter of 1997 that California showed strong signs of recovery,and for the first time since 1990, the state’s economy grew fasterthan the nation’s (BEA, 2009).7 Private capital – real and speculative– became more readily available throughout the state and real estateand construction sectors, historically major sectors in California’seconomy, captured their share of investments. In Santa Monica,the inflow of capital enabled the actual reconfiguration of the

7 GDP growth posted by California in 1995 was a reflection of the billions of federalfunds made available for earthquake assistance and reconstruction.

housing profile. With properties devalued by the earthquake andwith rent controls dispensed of, Santa Monica became a favored re-cipient of real estate investments. By 1998, residential constructionand sales reached record highs (Fig. 2). About 1500 new residentialpermits were issued between 1998 and 2000, more than the totalnumber of permits issued since 1990, with 90% of new constructiondedicated to multifamily housing (HUD, 2010).

These new investments, however, did not restore Santa Mon-ica’s housing stock to pre-earthquake levels and in fact, the cityregistered a slight decline in population. Significant changes weretaking place nevertheless. Our 2001 survey of red-tagged residen-tial properties showed that, 7 years after the earthquake, 18% ofthese severely damaged properties had not been restored. Of all62 red-tagged residential properties, eight (13%) had been demol-ished and left vacant and three (5%) were converted to non-residential uses. In fact, the majority of new investments went intoreplacing existing housing units with newer, smaller, and moreexpensive units (interview with developer, 2001). Between 1990and 2000, the city lost 2600 units with 3–5 rooms, which are typ-ically sought after by mid-size families. In contrast, the number ofsmaller units (two rooms or less) grew by over 2500 units. In thisreconfiguration, the city lost 1300 rental units and added 942 own-er-occupied and 473 vacant units (US Census, 1990, 2000). Thisreconfiguration also reduced housing affordability as Santa Monicalost 5213 rental units affordable to households earning up to themedian income for Los Angeles County.8 As rents increased, thenumber of households paying 30% or more of their income on hous-ing increased by 1300 households (13%) (Table 1). Homeownershipalso became more exclusive in Santa Monica. In 2000, new homebu-yers paid on average a premium of $272 more per square foot for asingle-family home in Santa Monica than in Los Angeles County.Condominiums in Santa Monica commanded a $129 per square footpremium. These premiums had increased by 92% and 104% fromtheir 1994 levels for single-family and multifamily homes respec-tively (RAND, 2009).

The premiums and changes varied considerably across the San-ta Monica. For example, in zip code 90404, the premium went fromjust $6 over the Los Angeles County average in 1993 to $64 in 2000and $186 in 2009. In 1990, this zip code included most of theaffordable units and more than half of its rental units were rentedat or below Los Angeles County median Gross Rent. With 29% of itspopulation Hispanic and 10% African American, it was also themost diverse part of Santa Monica. By 2000, this zip code had12% fewer Hispanics and 35% fewer African Americans. It also lost16% of its low-income households and 10% of its rental units. Onthe other hand, in the most prestigious area north of Montana ave-nue that corresponds to zip codes 90402, the square foot premiumincreased from an already high $174 over Los Angeles County in1994 to $360 in 2001 and $656 by 2008 (RAND, 2009). As rents alsoincreased, this zip code lost 24% of its population. In all of SantaMonica, gentrification was the most acute here as the zip code lost36% of its rental units and 46% of households with income belowLos Angeles County median (US Census, 1990, 2000).

The new housing profile in Santa Monica fit a specific class ofresidents and led to significant changes in the city’s demographiccomposition. Between 1990 and 2000, when the Los AngelesCounty population increased by 7%, Santa Monica lost 3% of itsresidents. Significant declines were registered among AfricanAmericans (�23%), Hispanics9 (�4%), people over 60 years of age

affordable to households earning up to 80% of the County Median Income, including2269 units affordable to households earning up to 60% of the County Median Income(City of Santa Monica, 2001).

9 During this decade the Hispanic population grew by 28% in Los Angeles County.

Table 1Santa Monica housing and populations comparisons 1990, 2000, and 2006–2008. Source: US Decennial Censuses, 1990, 2000; 3-year American Community Survey, 2006–2008.

Census 1990 Census 2000 ACS 2006–2008

Total population 86,905 84,084 87,935% Hispanic population 13.6% 13.5% 11.8%% Black not hispanic population 4.4% 3.5% 3.8%% Population 65 and over 16.8% 14.3% 14.7%Santa Monica household median income as% of LAC median income 103.0% 120.2% 122.4%% of Santa Monica households at or below LAC median household income 48.4% 42.4% 42.0%Total housing units 47,753 47,863 49,566% Renter-occupied units 68.1% 65.2% 65.7%% of Occupied units affordable to households earning up to the los Angeles county median income 65.0% 53.7% 41.7%% of Households in renter-occupied units paying 30% or more of their income on housing costs 32.4% 38.5% 46.4%% of Households in mortgaged owner-occupied paying 30% or more of their income on housing costs 27.4% 31.1% 46.9%

460 N. Kamel / Geoforum 43 (2012) 453–463

(�19%), households earning below the county median income(�16%), and residents in service occupations (�13%). These changes,along with a surge in the number of professionals and a 40% increasein the city’s median household income, double the increase for LosAngeles County, meant that a more integrated, white collar, youngerand affluent class of residents was replacing existing minority, work-ing class, elderly tenants in Santa Monica (Table 1).

As real estate prices started to recover in 2001 and then reachnew record highs, massive investments started to flow into Califor-nia’s real estate market. Investors were drawn by analysts’ reassur-ances that there was no risk of a housing market collapse even ifthe general economy faltered (Strickland, 2002) and by 26% annualincreases in home prices in Los Angeles County (RAND, 2009; Har-ris, 2003). This self-reinforcing cycle of speculation and investmentgenerated higher than normal profits in real estate and signifi-cantly higher than profits in other investment sectors (Leamer,2002). Santa Monica was no exception. Between 2000 and 2005,the average price of a single-family home increased by 94% andcondominiums by 61%. By 2007, the average home price in SantaMonica had increased by more than 200% from its 1995 level(RAND, 2009).

While rents also increased, the rental market in Santa Monicawas split into two groups of renters. One group consisted of adeclining number of long-time renters who saw 3% and 6% annualrent increases as mandated by the rent control board. In 2005, themedian rent for a two-bedroom apartment for this group was$946. The second group consisted of new renters that paid marketrate rents. The median rent of a two-bedroom apartment for thisgroup was $1748 or 85% more than legacy rent controlled units(City of Santa Monica, 2006, 2009a). By 2008, the difference in rentbetween the two groups reached $981 – a 97% increase for newrenters (City of Santa Monica, 2009). This difference in rent fueledtensions between landlords and renters. Landlords of legacy rentcontrolled units saw their apartment buildings as idle capital andfelt excluded from benefiting from the historic profits in the hous-ing sector. Tenant harassments, evictions, and further loss of rentalunits raised concerns among consumer and renter groups (Wood,2003). In 2002, with the support of tenant advocates, the citypassed a number of ballot measures that strengthened tenant pro-tections and made available construction funding for affordablehousing. Measure FF, supported by the rent control board, ex-tended protection from eviction to domestic partners, roommates,spouses, and children of renters who die or become incapacitated.Also supported by the rent control board was Measure KK, whichprovided increased flexibility in the way tax revenues from rentalconversions could be spent for the production of affordable hous-ing. Measure II was opposed by the rent control board and itsaim was to facilitate the conversion of rental housing to condomin-iums and to give existing tenants the opportunity to purchase theirconverted units. This measure was defeated by a small margin(City of Santa Monica, 2002). With more funding available, the City

of Santa Monica engaged in the production of new affordable hous-ing more aggressively. This was achieved either by directly com-missioning the Community Corporation of Santa Monica (CCSM)to develop low- and moderate-income housing or by providingdevelopers with various financial and building standardsincentives.

While Santa Monica’s response seemed sensible and necessaryto abate the loss of affordable housing, these measures were notsufficient to counter the combined effects of the housing boom thatdrew massive investments to high-end housing and of the deregu-lation of rental housing that facilitate ownership turnover and rentincreases. Additionally, the production of new affordable housingfaced the following challenges:

� Property values were growing rapidly and it became increas-ingly expensive for the city to directly acquire, finance, and pro-duce new affordable housing.� The booming housing market, the availability of private capital,

and the appeal of Santa Monica to wealthy professionals meantthat most developers were not interested in incentives for theinclusion of affordable housing.� Developers of high-end luxury apartments considered the

inclusion of affordable units as compromising the marketabilityof their investments.� New multifamily private developments in Santa Monica tar-

geted primarily homeowners and offered few units for rent,and even fewer affordable rentals.

In fact, new private development that made use of affordabilityincentives and included affordable rentals tended to producesmall-sized units better suited to artists, students, and young pro-fessionals than to working class families (interview with devel-oper, 2008). For example, the Colorado Court was a laudably‘‘green’’ development with 44 affordable units. However, thesewere 375 square feet ‘‘single room occupancy’’ units (Sturak,2000). Another example, the ‘‘Olympic Studios’’, heralded as amodel for new and ‘‘trendy’’ affordable development, included100 affordable units. However, these units were 365–420 squarefeet efficiency and loft units with granite countertops and built-in furniture. The rent for these ‘‘micro-apartments’’ ranged be-tween $1061 to $1327 a month (Hsin, 2009; Hayes, 2009). In addi-tion to being tailored for single non-claustrophobic occupants,when considered on a per square foot basis, the rent on these unitswas similar to that of a luxury unit.

By 2008, the city’s housing profile had been transformed signif-icantly. While the city recovered its housing stock size with newconstruction that took place during the period from 2000 to2008, the number of affordable units decreased significantly (Cityof Santa Monica, 2009a). During this 9 years period, the city lostan additional 10,675 units affordable to households earning up to80% of Los Angeles County median income (City of Santa Monica,

N. Kamel / Geoforum 43 (2012) 453–463 461

2010). Homeownership in Santa Monica also became even moreexclusive as prices reached record highs in 2007 and 2008. In2008, the Santa Monica Premium – the difference in price betweenSanta Monica and Los Angeles County – reached $638 per squarefoot for a single-family unit and $308 for a condominium. This ex-plains why the vast majority of developers in Santa Monica optedto pay in-lieu fees to the city rather than to include affordable units(City of Santa Monica, 2009, 2010). Rising real estate prices also in-creased demand for commercial space. Our 2008 follow-up surveyof residential properties damaged by the 1994 earthquake showedthat the number of red-tagged properties rebuilt remained thesame: 51 properties. However, five of the eight properties thatwere vacant lots in 2001 had been converted to non-residentialuses, such as educational, health care, and commercial facilities.In total, 18% of the housing stock destroyed or severely damagedby the Northridge earthquake had been permanently lost.

The new housing conditions were paralleled by similar demo-graphic and socio-economic transformation of the city. Especiallyaffected were low-income households and Hispanics, which con-tinued to experience a decline in their numbers. Also negatively af-fected were African Americans and over 65 years old populations(Table 1).

8. Conclusion

The dominant neoliberal ethos, the ascendancy of propertyrights over collective rights to the city, and the obsession withmarket efficiency have drastically restructured the social andmaterial space of Santa Monica. While it remains a city of renters,Santa Monica’s demographic and class composition changed signif-icantly from those of the early 1990s. What used to be a city ofblue-collar working class, fixed-income retirees, and lower- tomoderate-income households, is now a city catering to youngerprofessionals and higher income households. The population is lessdiverse as minority households have been priced out of the hous-ing market. A new housing typology reflects changes in demo-graphics and class composition. While the housing stock remainslargely made up of rental units, its characteristics have changedfrom affordable and suited to working families to large luxuryunits and trendy micro-apartments. This was the case on an almostuniform basis throughout Santa Monica. The wealthiest parts ofSanta Monica, such as north of Montana, experienced a significantloss of rental units and minority and low-income households. Themore affordable and working class areas, such as the ‘‘Midtown’’area north of Interstate 10 and Santa Monica’s downtown, arewhere thousands of affordable units were lost and where SantaMonica’s new type of affordable housing – green, trendy, andminuscule – emerged.

While neoliberal ideology and policies were responsible forthese changes, the process of material transformation remains pre-carious and contingent upon a number of factors. In the case ofSanta Monica, the actualization of neoliberal policies was madepossible due to the coincidence of several factors: (1) removal ofdead capital, (2) removal of controls or deregulation, and (3) avail-ability of fresh capital to bankroll new rounds of development.While Santa Monica’s housing may have been neoliberalized evenwithout the Northridge earthquake or the Costa-Hawkins Act, itwould have definitely taken longer, been less extensive, and facedstiffer resistance. In fact, the paper draws attention to the verydynamics by which neoliberalism advances at critical juncturesthrough opportunistic tactics and multi-scalar strategies. The suc-cess of neoliberal advocates reflects their ability to capitalize onunforeseen, random, or external events, such as the Northridgeearthquake and the sluggish housing market, and frame the dis-course in terms favorable to their interests. The relentless recital

of well-known neoliberal mantras linking growth, freedom, andmarket deregulation was used repeatedly to obfuscate and margin-alize alternative proposals. The repeated attempts to pass deregu-lation measures at the local scale did not abate the fervor to passstate initiatives that abolished rent control. Even after the passingof the Costa-Hawkins Act, neoliberal forces continue to push forfurther deregulation of rental housing and the elimination of allrent stabilization provisions statewide.

The case of Santa Monica also highlights the maturity of theneoliberal project and its influence on the collective urban con-sciousness and imagination. These changes in the political econ-omy of urbanization are reflected in the contrasting outcomesfrom two attempts at restructuring the rental housing market atdifferent periods in Santa Monica. The 1970s ‘‘demolition derby’’and the systematic destruction of affordable housing units in SantaMonica were met by a swift, organized, and aggressive response bya coalition of renter and consumer groups in the city. By electingrepresentatives that were supportive of rent control, these groupsresisted further elimination of affordable units and asserted theirright to the city. By contrast, the 1990s more extensive removalof affordable housing failed to generate a similar mobilizationand resulted in a dramatic restructuring of the city’s social andmaterial landscape. There were several reasons for such differentoutcomes. Opponents of rent regulation used the advent of the1994 Northridge earthquake during a period of economic recessionto promote a rhetoric that tied housing reconstruction with the re-moval of rent controls. Most importantly, the struggle for rent con-trol and housing affordability was lost at the state level where localresistance to rent deregulation was bypassed and where neoliberalgoals had stronger support. Finally, California’s economic revival inthe late 1990s, and the ensuing housing boom and speculation, fur-ther incentivized landlords to evict longtime tenants and convertrental properties to condominiums.

There were also several shortcomings with the way politicalalliances sought to preserve housing affordability in Santa Monica.At the supra-urban level, instead of building a vertically integratedcoalition of diverse interest groups, rent control advocates reliedmostly on state legislative maneuvers to repeatedly dodge votingon rent deregulation bills. Without a broad and effective politicalbase, this tactic of last resort ultimately gave way. At the urban le-vel, Santa Monica lacked a truly progressive housing plan that tookinto consideration emerging political economic realities, the needto expand and upgrade the aging housing stock, and the changingdemographic profile of Santa Monica residents. Instead, housingaffordability rested almost entirely with the election of pro-rentcontrol officials that upheld rent regulations and kept rents belowmarket rate. The city did not aggressively engage in the productionof affordable housing, proactively establish working alliances witha broad group of local developers and not-for-profit organizations,or create affordable housing preservation programs with adequateincentives for landlords. While the city adopted some of thesestrategies in the aftermath of the Northridge earthquake, thesewere reactions to crisis conditions, adopted in an ad hoc incremen-tal manner, and lacked sufficient funding. Moreover, relief to land-lords came at the expense of renters and not from an affordablehousing program fund financed by tax increments or from rezon-ing and density incentives. This contributed to the attrition ofaffordable units and to the acrimony between the two groups.The production of new affordable housing was plagued by limitedresources – both when the housing market was slow due to limitedmunicipal revenues as well as when the market was booming be-cause development costs were rising too fast for the city to be ableto participate in housing production. The case of Santa Monica alsoshows that, once the gentrification process had started, in-lieu feesor cash, zoning, and density bonuses did not lead to the productionof sufficient affordable units.

462 N. Kamel / Geoforum 43 (2012) 453–463

In conclusion, the case of Santa Monica shows that abandoningaspirations for a collective project of social and human welfare andattempting to adapt to an urban order where market efficiency isthe dominant – if not the only – value, has destroyed the socialand material fabric of the city and has sanctioned the marginaliza-tion of socially disadvantaged groups. It has also resulted in rede-fining the boundaries of legitimate municipal action. Withneoliberal forces dominating political and legislative bodies atthe state and national scales, municipal governments face legalbarriers that prevent them from defining and implementing alter-natives to strict market fundamentalism. In that respect, strugglesfor the ‘‘right to the city’’ can no longer be confined to a strictly ur-ban territory but need to scale-up nationally and internationallyand to join coalitions with a wider range of objectives. As urbanand regional politics continue to shift from debates about whatconstitutes a good society to one concerned primarily about mini-mizing frictions to the free flow of private capital and maximizingmarket profits, a progressive agenda for urban research and prac-tice will need to remain ever more focused on social and economicjustice dimensions of the contemporary urban order.

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