Study finds: Santa Monica is bad for business
Santa Monica is the most expensive city to conduct business in, according to a recent study performed by Claremont McKenna College’s Rose Institute. The study analyzed a set of cost-related factors in 216 cities all across the nation. There were seven sections of the study- business license fee, utility tax, sales tax, minimum wage, average community rent, crime index and housing affordability index. Each city was ranked on a scale and Santa Monica placed the worst within every section of the study.
There are over 9,000 businesses in Santa Monica, with more than 80,000 employees. This includes the families of many Samo students, who may see these negative effects reflected in their home lives.
Fransisco Bejarano (’26), who’s mother owns a small local plant nursery named Just Filo, has personally witnessed this struggle. Bejarano believes that these smaller businesses are struggling due to a noticeable lack of people wandering on the streets, possibly caused by an increase in homelessness and people feeling endangered if they pass by. In fact, his mother’s business has had days where no one was walking to the shop.
“She preps up her shop, spending all that time, for no one to walk in,” Bejarano said. “It’s such a shame because she spends a lot of time and if just one person walks in, I think it makes her day brighter because it makes it seem like they walked in for a reason… and it makes her happy that she could help.”
Francisco Bejarano / Contributor
Francisco Bejarano’s (’26) mother’s local plant nursery, Just Filo, is located on 16th and Montana Ave.
Bejarano has also commented on how his mother’s struggling business affects him. He sees his mother feel worn down and unhappy due to the lack of customers. The study noted that the housing crisis is one of the major contributing factors to the high business costs. Businesses have higher wage expectations for any workers so that they can meet the demand of living in the city.
However, high labor costs might not be the only problem that comes from the housing crisis. In 2023, the Westside Current published an article written by Jennifer Rush- who owns a restaurant Blue Plate Oysterette, which resides in downtown Santa Monica. Rush discussed the problematic situation her business has faced with the homeless population in Santa Monica. She talked about her experiences with them, from people sleeping on their patios to getting told that someone was going to kill them.
“We invite you to come and spend the day with us working outside,” Rush said. “Seeing the daily challenges we are having interacting with people on the street who are scaring locals, tourists and staff away from Downtown, Santa Monica.”
Rush believes she is losing business as people don’t want to go to downtown Santa Monica due to the unhoused living there. She also mentioned how, simultaneously as Santa Monica loses business, the City is charging more for outdoor dining, along with raising rents, raising the minimum wage and the required PTO, as well as health and other costly benefits.
Rush is concerned with the lack of change in laws to attempt to fix these issues—specifically how she’d gone to multiple city council meetings, only to leave with none of the issues she was there for being addressed. She believes that not enough people, especially those who are against the changing of the current situation, have borne witness to the chaotic experience of owning a business in Santa Monica; particularly when compared to other parts of Los Angeles.
“In speaking to many of my colleagues who own restaurants in other parts of Los Angeles, they are not having the same problems,” Rush said. “I am only sharing this as I have heard many rumblings of business owners fed up and wanting to leave Santa Monica to safer communities. As I said [on the incidents with homeless people discussed prior], this is no longer a random occurrence, it is every day in Downtown Santa Monica.”
Tess Sloan (’25) is the president of the business club. From what she has seen, the property tax on business is exceptionally high—so high, these businesses cannot function. The business club is attempting to combat the issues that arise with business, especially within Santa Monica. The club teaches financial responsibility for upcoming entrepreneurs, which can help when attempting to set up a business.
“As a club, we try to support people that are interested in business, industry and market,” Sloan said. “If they come up with businesses [we].... try to raise money for those businesses and help them through the process and teach them about the process and being financially responsible.”
In the end, Santa Monica businesses are struggling to stay afloat. Homelessness, inflation, wages and more are all problems that people who own businesses must find a way to balance. But, it’s not proving to be easy.