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I grew up in Santa Monica, mostly in the 80s and 90s. North of Montana/Wilshire too.
LA is a terrible place to raise kids. But Santa Monica, particularly North of Montana (but Ocean Park too) are still one of the few decent areas left. I'd say there, the Palisades, and Brentwood are the only decent areas to raise a kid.
As others said tourists are usually south of Wilshire by the 3rd street promenade or Main St. On Montana Ave, for example, its all locals and its about as family friendly (and soccer mom friendly) as it gets.
The area is extremely safe, very quiet, moderate traffic (as long as you're not trying to go east), and the public elementary and middle schools are among the best in the nation. If you can afford private school, you may consider a private high school since Santa Monica High is not that great. Walkable, beautiful, friendly (sort of).
I think you'll like it there - it will fit your needs.
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