Why Housing Providers Have Again Sued the City

By: Christopher M. Harding & Kenneth L. Kutcher

Last week two pro-housing organizations -- the Santa Monica Housing Council and California Housing Council -- sued the City of Santa Monica for the fourth time in the past decade to secure City compliance with state housing law. Having succeeded in its three prior lawsuits against the City, this time the two groups are seeking City compliance with state law that essentially requires cities to honor their own zoning rules when reviewing housing projects.

This hardly appears to be an extreme or threatening idea. But those familiar with Santa Monica's zoning and housing wars will instantly appreciate its sensitivity and potentially far-reaching implications.

For two decades, Santa Monica decision-makers have frequently engaged in highly subjective and often arbitrary decision-making in reviewing new projects. Project applicants have no confidence of obtaining City approval even if they meet all of the City's many zoning regulations. Although project denial is the exception rather than the norm, it has been and remains a significant risk. This risk strongly discourages knowledgeable builders from attempting projects in Santa Monica.

This City practice has proven especially problematic for new housing projects. During the past two decades, Santa Monica has generated only a small percentage of its need for new housing as determined in accordance with state law by the Southern California Association of Governments ("SCAG").

Since 1980, Santa Monica's residential population has actually declined by about 5 percent, even as Santa Monica has experienced a commercial development boom and as residential populations in the region and state have grown substantially. Santa Monica, once more of a bedroom community, has become an employment center with many more jobs than housing for those employed here. This imbalance between jobs and housing, in turn, contributes to increased traffic congestion and other environmental problems.

The Santa Monica Housing Council and California Housing Council's latest lawsuit is intended to fix this problem by requiring the City to honor its own rules in reviewing new housing projects. As mandated by state housing law, proposed housing projects that meet the City's zoning laws should be approved, absent health and safety problems that can only be fixed by project denial or reductions in project size. This lawsuit, if successful, will achieve this result.

In response, Santa Monica claims the right to deny projects or reduce their size solely for reasons of neighborhood compatibility. The City's response misses the point entirely, both with respect to the objectives of this lawsuit and also concerning sensible housing policy.

In particular, the City ignores that if the Santa Monica Housing Council and California Housing Council are successful in this lawsuit, the City will continue to have broad authority to consider neighborhood compatibility. This lawsuit will simply mandate that the City consider neighborhood compatibility in a principled, objective fashion rather than in accordance with its current highly arbitrary and subjective practices.

Above all, the City will retain the power to establish zoning standards designed to ensure new housing projects are compatible with existing neighborhoods. Nothing in this lawsuit seeks to limit the City's freedom to establish or change the height, density, setback, design, open space, parking and other standards for new housing.

Generally, these standards reflect the City Council's sense of the proper size and scale of new buildings to ensure neighborhood compatibility. This lawsuit will leave these standards unchanged. Rather, this lawsuit merely asks the City to honor its own rules in reviewing new housing.

Moreover, all new housing projects (except single family homes) are subject to architectural design review by the City's Architectural Review Board (and occasionally the Planning Commission on appeal from the ARB). In the context of architectural design review, the ARB and Planning Commission have ample discretion to ensure that project design is compatible with existing neighborhoods.

Indeed, the City Council recently acknowledged this when faced with objections from neighbors of a proposed affordable housing project on Main Street in the Ocean Park neighborhood. Neighbors of this project complained that the City Council has voluntarily limited its review of affordable housing projects containing less than 50 units to code compliance and architectural design only.

In response, the City Council pointed out the City's architectural review process provides ample opportunities for community participation to ensure the neighborhood compatibility of affordable housing projects. Santa Monica Housing Council and California Housing Council supported the City Council on this issue, and believe the same point holds true for all housing.

The issue of City compliance with its own zoning rules in reviewing housing projects is especially important given recent changes in City law. Until recently, nearly all new apartment projects were entitled to automatic approval if they met the City's many standards, subject to architectural design review.

During the past two years, however, the City Council has intervened. Now, the vast majority of new apartment projects will be subject to the City's highly discretionary development review process and run the risk of project denial (often after 2 to 3 years of permit processing) even if they comply with all City zoning laws. This dramatic change in City practice will dissuade prudent housing builders from even attempting a project in Santa Monica absent a City commitment to comply with state housing law and its own zoning rules.

This lawsuit is also important because our community, region and state all suffer from a severe shortage of housing, which causes escalating housing prices and hardship especially for low-income families. Any serious affordable housing strategy requires both action to encourage price-controlled affordable housing (where Santa Monica has a positive track record) and healthy housing markets buttressed by City procedures that encourage new market-rate housing (where the City has been and is very deficient).

Instead of once again resisting compliance with state housing law in court (where during the past decade the City has generally lost and been ordered to pay a combined $1 million in legal fees for noncompliance with state housing law), Santa Monica should quickly agree to comply with state housing law and spare the taxpayers the additional and unnecessary financial burden of this litigation.

Also at stake in this litigation is Santa Monica's reputation as a progressive city with respect to housing matters, which has been tarnished in the past several years. Just last year, Santa Monica joined with reactionary cities throughout California to block state legislation (Senate Bill 498) designed to improve compliance by cities with state housing law.

Senate Bill 498 was co-authored by State Senator Sheila Kuehl and supported by the Sierra Club, the Congress of California Seniors, the Western Center on Law and Poverty, and other progressive organizations throughout the state along with affordable housing groups, housing builders, business organizations and labor unions.

Although most cities opposed this bill, notable exceptions included San Francisco, Oakland, Sacramento and Berkeley. Santa Monica's reputation as a progressive, pro-housing city is ill-served by its shortsighted opposition to progressive, housing legislation such as SB 498.

State housing law is intended to assure housing builders that cities will act responsibly by honoring their own zoning rules in reviewing new housing. By adding a strong element of predictability to housing project review, state housing law is intended to encourage housing in a state with a severe housing shortage.

The City's refusal to honor this important provision of state law, combined with the City's efforts to block Senate Bill 498, poorly serves the City's residents or the "smart growth" planning values the City claims to favor.

In short, the City should promptly reverse course, agree to comply with state housing law, and reconsider its opposition to legislation such as Senate Bill 498. This approach will better address the housing needs of Santa Monica, while sparing the taxpayers the needless cost of the pending lawsuit.

Editors note: Christopher M. Harding and Kenneth L. Kutcher are partners in the law firm of Harding, Larmore, Kutcher & Kozal ("HLKK") a Santa Monica-based firm which serves as counsel for Santa Monica Housing Council and California Housing Council in this lawsuit.