Updated September 28, 2026
Written September 2026. A market view carries a date because it stops being true.
Santa Monica is completely surrounded by the City of Los Angeles on its three land sides and governed by none of its rules. That is the single most important fact for an owner trying to work out whether 2026 is the year to sell, because most of what's dominating the conversation for LA City owners this year simply does not reach a Santa Monica address.
The December 2025 LA City rent-cap rewrite, effective July 2026, is the dominant story for owners a few blocks east. Santa Monica runs its own rent control — in place since 1979, administered by an elected Rent Control Board with a registered Maximum Allowable Rent for every unit — and the LA formula change has no bearing on it.
Measure ULA. A City of Los Angeles transfer tax. Santa Monica is a separate city and does not owe it, period, regardless of sale price.
The LA soft-story retrofit ordinance. City of Los Angeles Ordinance 183893. Santa Monica operates its own seismic retrofit program on its own timetable — exemption from the LA program is not exemption from an obligation, and the answer comes only from the city, never from an LA-trained default.
The full breakdown is in the Los Angeles rules that do not reach Santa Monica.
Insurance. Renewals across Southern California multifamily have run substantially higher over the past two years, with shorter perils lists and, for some owners, non-renewal. It lands on net operating income the same way regardless of which city's rent board you answer to, and buyers underwrite your next premium rather than your last one.
The cost of debt. Also indifferent to city lines, and the main reason per-door figures moved across every submarket in this record between 2022 and 2024 — Santa Monica included.
Your own city's transfer tax — the one most owners forget to check. No ULA does not mean no transfer tax. Santa Monica levies its own real property transfer tax, and at the price levels this market produces, it is a genuine number, not a rounding error. Confirm the current city rate for your specific price band before you model net proceeds.
Your own city's Rent Control Board, which is strict and not going anywhere. That is not a 2026 development — it's the permanent operating condition here, and it has been since 1979. An owner waiting for regulatory relief in Santa Monica is waiting for something a tenant-majority city built specifically to preserve rent control is not going to deliver.
Santa Monica maintains a registered Maximum Allowable Rent for every unit, and when your rent roll disagrees with that register, the register wins — not the number you've been collecting. A buyer's diligence team checks this before almost anything else, because in Santa Monica the register is the income a buyer can lawfully underwrite. On a long-held building, reconciling your rent roll against the MAR is the single highest-return piece of preparation available to you, and it should happen before the valuation conversation, not after an offer arrives. See the elected board that sets your rent.
This desk has closed 8 Santa Monica buildings across a decade — 100 units, $62.5 million in aggregate, the smallest deal count and unit total of any submarket in this build, which is itself the point. Closings appear in 2016 and 2017, then nothing from 2018 through 2021, then a resumption in 2022 and closings in most years since, most recently a 27-unit building at $9,500,000 in July 2026.
A thin record here is not a signal about Santa Monica's desirability — it is what a supply-constrained, high-value, heavily regulated coastal city produces. Buildings trade rarely because they are held for decades by owners who are not watching the calendar, and the buyer pool that shows up when one finally comes to market is narrow, sophisticated, and prepared to pay for it: this desk's Santa Monica record carries the highest per-door pricing of any of the ten submarkets it covers. Fewer transactions and the strongest pricing are the same fact seen from two directions.
The largest closing in the record, 1025 Ocean Ave, a 21-unit building at $22,756,000 in May 2016, puts a real number on what "highest per-door pricing" means in practice — north of a million dollars a unit, on a building that would be an outlier almost anywhere else in this build. It's also a reminder of scale: a sale at that level draws a genuinely small pool of qualified buyers, and running a real process among them, rather than accepting the first credible offer, is most of what a broker fee funds in this market.
Santa Monica does not draw the same buyer as a Valley or Westside LA City submarket. Fewer 1031 exchangers chasing yield, more long-horizon capital — family offices, coastal-market specialists, and operators who already hold in the city and understand the MAR system well enough not to be surprised by it. That buyer prices the strict rent-control regime into a purchase from day one rather than discovering it in escrow, which is part of why well-prepared Santa Monica sales tend to hold their pricing better than a first-time seller might expect walking in.
Not "is 2026 a good year to sell in Santa Monica" — the macro forces reshaping LA City owners' calculus this year mostly don't touch you. The real question is: is your MAR record clean, is your seismic obligation confirmed with the city rather than assumed, and are you prepared for a sale process built around finding the small number of buyers who actually operate at Santa Monica values, rather than a broad market listing?
Hold if you're willing to operate a strict, elected-board-governed building and you value the compensation that comes with it — no transfer tax comparable to ULA, a supply-constrained market that isn't expanding, and pricing that has held at the top of this record.
Sell if the operating demands of an elected rent board and a strict MAR regime have outgrown your appetite, or if your seismic obligation is unresolved and you'd rather price that uncertainty into a sale than resolve it yourself. In a thin market bought by sophisticated local operators, a building with an unclear MAR record or an unconfirmed retrofit status loses serious buyers outright rather than losing a few percentage points.
If the numbers point to selling, how to sell an apartment building in Los Angeles walks through pricing, rent law and the timeline from listing to close.
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Does the 2026 LA RSO rewrite affect Santa Monica buildings?
No. Santa Monica runs its own rent control program, in place since 1979 and administered by its own elected Rent Control Board — the LA City formula change has no bearing on it.
Do I owe Measure ULA if I sell my Santa Monica building?
No. ULA is a City of Los Angeles transfer tax and Santa Monica is a separate city. Santa Monica does levy its own real property transfer tax, which owners sometimes forget to check once they've confirmed ULA doesn't apply.
Why are there so few Santa Monica sales in this record compared to other submarkets?
Santa Monica multifamily is held long, by owners who aren't watching the market calendar, in a supply-constrained city that isn't adding inventory. Fewer transactions and the highest per-door pricing in this desk's record are the same underlying fact.
What should I check before listing a Santa Monica building?
Start with the Maximum Allowable Rent register for every unit and reconcile it against your actual rent roll — where the two disagree, the register governs what a buyer can underwrite. Then confirm your seismic retrofit status directly with the city rather than assuming LA exemption covers you.
Michael Sterman is Senior Managing Director Investments at Marcus & Millichap, specializing in Los Angeles multifamily transactions along the coast.
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