Editor's note: The following letter was sent to the City Council on Tuesday by Northeast Neighbors Chair Tricia Crane.

On New Year’s Day a second State Density Bonus Law (AB 1287) went into effect, doubling the size of housing projects that can be built in California.

The very next day in Santa Monica, land use lawyers for developers began pulling and resubmitting housing project plans to the City in order to take advantage of the huge increases in size allowed by the new law.

Three of the first such projects to be resubmitted so far in Santa Monica include:

• 601 Colorado was 10 stories and is now proposed to be 20 stories.
  
  
• 1435 - 5th Street was 8 stories and has been resubmitted for 16 stories.

Under this second Density Bonus law, a 100-unit project that qualified under the first Density Bonus maximum to grow to 150 units is now eligible to build 200 units.

This stacked Density Bonus law is a massive acceleration of densification that can be applied by developers to ALL affordable inclusionary projects in the city. Nothing of this density multiplying impact has been included in the environmental impact report (EIR) submitted by the City of Santa Monica to the State for the Housing Element.

We request that the City Manager require that staff rerun the EIR to reflect how we can expect the roughly 15% inclusionary rate economic outcome of AB 1287 to increase infrastructure, services and resource demands that will be generated by this potential 60%+ increase in total city housing.

It's important to note that the City’s EIR was already defective before the Jan. 1 implementation of this second Density Bonus.

While Santa Monica was mandated by the State to build 8,895 new units of housing (plus a buffer that boosted the number to 11,025 new units), according to the trends in the City’s November 23rd progress report, our city was on track to add 33,400 units to satisfy the State’s affordable requirement. That includes 10x the number of the State housing mandate for market rate units!

The city has submitted an EIR with only 11,025 units, only one third of what we are facing if the State mandated housing is to be met with current city building trends.

We ask that the City Council direct the City Manager to immediately require staff to address the environmental impact of AB 1287 together with the FULL unit outcomes from the current affordable unit inclusion trends resulting from the State mandated housing.

Supercharged Densification

This sort of developer subsidy feature has long been a staple of state housing laws. Such laws have been a means by which the State can generate more affordable housing without providing any direct subsidies to cities for that housing.

Because the entire state affordable housing mandate is effectively unfunded, there are huge costs to the community that result from unreported increases in the production of luxury market rate units through densification.

According to the author of this bill, San Diego Assemblymember David Alvarez "AB 1287 creates a new incentive that can only be used when a project maximizes the production of Very Low-, Low-, or Moderate-Income units, as allowed by current Density Bonus Law. When those maximums are met and a project deed-restricts an additional set of Moderate-Income units, a second density bonus becomes available.”

Given developer profitability targets, we can expect under this new law that over 80% of the new units in qualifying projects will be luxury market rate units.

To meet the State’s original mandate that Santa Monica build 8,895 units, progress through November 2023 indicated that this framework could be expected to create around 33,400 total units. If the City satisfied all of the state affordable housing unit goals, luxury market rate unit production would be 1,000% (10x) MORE than the 2,727-market rate (luxury) units the state required.

This means the actual development process generates between 6 and 9 market rate units for each affordable unit. The huge increase is not captured in any City plan, analysis or document.

Unaccounted Environmental Impact

Because our City’s Environmental Impact Report (EIR) is based on the 8,895-unit mandate (plus a 24% buffer, for a total of 11,025 units), less than 20% of the total luxury market rate units enabled by the state mandates have been included in any environmental or financial impact analysis.

Over 80% of the luxury market rate units that are the outcome of the state process in meeting the state affordable housing mandates are simply not accounted for.

If this new law is allowed to proceed without any acknowledgment of the real impending impacts to the city, we can expect to see a rolling environmental and financial train wreck.

How will our population increase given the denser, taller buildings we can expect to result from the implementation of AB 1287?

In May of 2023, the state pegged the ending 2022 number of persons per occupied housing unit in Santa Monica at 1.86. Based on that 1.86 persons per unit, we can expect an increase of 62,124 new residents.

That is a 67% increase over the current population. In contrast, at the EIR assumption of 11,025 total units, a population increase of “only” 20,506, or 22% would have been included using the 1.86 persons per housing unit.

Where will new residents park their cars?

Given the state mandate that new housing projects can offer "unbundled parking," residents of the new housing projects can choose not to pay for parking onsite and instead park their cars on city streets.

The City of Santa Monica currently maintains that these new residents will be eligible to purchase preferential parking permits to park their cars on the streets of adjacent neighborhoods.

Who will pay for new upgraded infrastructure, including water and sewer lines?

We will. There are no provisions in AB 1287, or any other state housing bill, to provide assistance to cities in meeting increased infrastructure, services and resource demands from all of the additional housing being created.

Call to Action

The City Manager should immediately direct staff to rerun the Housing Element’s EIR analyses assuming the city meets the state’s affordable housing obligation using existing city housing production trends.

This should have been done at the commencement of the new State housing cycle in 2021, regardless of the minimum state submission requirement, which is what the current report is based on.