'People's Republic' continues its oceanfront evolution.

WITH its clean sands and cool ocean breeze, Santa Monica has long held a strong allure.

The 1920s saw movie stars building beach homes in Santa Monica, some of which later became clubs. The city quickly expanded, with Douglas Aircraft (later McDonnell-Douglas Corp.) becoming a major industrial complex by the late 1930s and staying so until it shut down in 1974.

But it was the 1970s that put Santa Monica on a path to becoming known worldwide as the "People's Republic of Santa Monica."

It started when residents began to recognize the problems of escalating rent, homelessness and property loss as serious threats to their lifestyle. Renters constituted nearly 70 percent of the city' at the time.

Starting in 1978, Santa Monicans for Renters" Rights (pronounced "smur") led the fight to put a rigid rent controls on the ballot.

"People were going door to door," said former Mayor Judy Abdo. "'They were making phone calls, trying to explain to renters that this would stabilize or lower their rent."

The coalition consisted of both older residents on fixed income and younger activists. Political strategist Parke Skelton and former Santa Monica Mayor Denny Zane, then organizers of Tom Hayden's Campaign for Economic Democracy, joined the effort. Hayden, married at the time to actress Jane Fonda, went on to a career in the state Legislature.

Passage of the nation's strongest rent control policy in 1979, and SMRR's subsequent efforts to defend the law, created a sea change in Santa Monica's political sphere and attracted international notoriety.

The ordinance survived numerous legal challenges.

With the City Council dominated by' SMRR-backed candidates, city 17 government began [o take on left-of-center causes. Santa Monica pioneered the use of alternate fuel transportation rind placed low-cost housing at the top of its agenda. High-rise developments, previously allowed tip to 13 stories, were restricted to four. Attention was placed on the city's homeless.

The group encountered a speed bump in 1984 when the party was forced out of power by the death of one of its own members in office and the failure of another to qualify for the ballot.

From 1984 to 1988, Santa Monica granted permission to commercialize tit least 5 million square feet of land, including the Water Garden, the Arboretum and several new beachfront hotels.

In 1988, SMRR came back to power, ushering in construction of the open-air Third Street Promenade as an alternative to the boxy Santa Monica Place. The stretch of small shops and restaurants was closed to vehicular traffic, giving shoppers room to stroll freely.

As mayor, Zane sponsored ordinances that banned movie theaters from opening elsewhere in the city, forcing them onto the Promenade.

"The philosophy was prosperity without bulldozing the community," says Zane, "Without victims and without losing sense of community."

The Promenade project was achieved with little new construction and the reuse of existing buildings. But while Third Street has thrived, success has brought a corresponding increase in homeless residents and traffic congestion --leading the city to raise money locally for everything from parks to affordable housing. Another fallout: skyrocketing rents that have forced out most of the local merchants and brought in national chains.

Vacancy decontrol regulations have brought other changes. Thousands of housing I units are being torn down in favor of condos. The number of homeless has shot past 1,000 and low-income residents are being forced out to other affordable cities.

"People came here because they liked the progressive social attitude, but it is becoming more affluent for basically all the wrong reasons, in the wrong ways," Zane said.