Santa Monica Wants More Affordable Housing from Smaller Projects

February 14, 2013 -- The Santa Monica City Council voted 4 to1 Tuesday to amend an ordinance that allowed housing projects of fewer than 50 units to bypass the lengthy development agreement (DA) process as long as all the units being built were affordable to at least moderate income households.

The revision will require developments hoping to qualify as “100 percent Affordable Housing Projects” to have at least 25 percent of the units set aside for low-income families.

A three-person moderate income household makes $60,750, while a similar low income family makess $45,600, according to the City's definition of “low income” as 60 percent of the Area Mean Income.

The caveat made for these types of projects is “something special we are giving to very special projects,” said McKeown.

The ordinance being amended, McKeown added, was originally put in place to “make possible the production of truly affordable housing by nonprofits whose funding tends to be extremely fragile and very ephemeral.”

Allowing these projects to qualify for administrative approval was meant to prevent them from losing their funding while being stuck in the DA process.

However, private developers have made use of the caveat, according to McKeown.

“This requirement for deeper affordability makes it MORE difficult, not less, for developers to qualify for 'administrative approval,'” McKeown wrote in an email to the local press Wednesday.

A representative of NMS Properties, Inc., one of Santa Monica's biggest developers, told the Council Tuesday that the increased requirements would make such projects financially untenable and, therefore, make it harder to secure financing to build them.

The decision comes as the City faces a potential affordable housing drought.

In February 2012, California's Supreme Court upheld a law that ended Redevelopment Agencies (RDAs) throughout the State, and almost overnight, about 90 percent of the $15 million Santa Monica invested in affordable housing annually disappeared.

“The recent loss of redevelopment forces us more than ever to generate new affordable housing through requirements and incentives for market-rate developers,” McKeown said.

He added that the State's vacancy decontrol law, which allow landlords to raise rents on rent-controlled units after a tenant moves out, was also undermining affordable housing in Santa Monica.

Council member Ted Winterer added that Tuesday's decision to amend the ordinance was “making an adjustment to a temporary situation,” since the provision was part of the Interim Zoning Ordinance.

The Interim Zoning Ordinance will be replaced once the City adopts the new zoning ordinance in about a year.

Council member Bob Holbrook cast the only dissenting vote.