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Governor's Veto Frustrates Santa Monica's Affordable Housing Advocates

Santa Monica Real Estate Company, Roque and Mark


Harding Larmore Kutcher & Kozal, LLP  law firm
Harding, Larmore Kutcher & Kozal, LLP

By Jason Islas
Staff Writer

October 15, 2013 -- Governor Jerry Brown vetoed legislation Monday that Santa Monica's affordable housing advocates had hoped would help increase the number of low-rent units in the increasingly costly bayside city.

The inclusionary housing bill -- as AB 1229 was known -- was an effort by State legislators to assure that cities had the right to require developers to build low-income housing as part of their zoning codes, a practice currently prohibited by State legislation designed to give property owners relief from stringent rent control laws.

“I'm very unhappy with the Governor's veto,” State Assemblymember Richard Bloom told The Lookout Monday.

In May, the former Santa Monica mayor and affordable housing advocate voted in favor of the bill, introduced in February by his colleague Assemblymember Toni Atkins of San Diego.

“I am already speaking with housing advocates to determine what our strategy will be,” said Bloom, who represents Santa Monica in the State Assembly. “We have a severe housing shortage in California and solutions must be found.”

Brown, in his veto statement, wrote that he believed the bill would potentially make that shortage worse, recalling his own experience in Oakland, where he served as mayor from 1999 to 2007.

“I saw how difficult it can be to attract development to low and middle income communities,” Brown wrote in the statement dated October 13.

“Requiring developers to include below-market units in their projects can exacerbate these challenges, even while not meaningfully increasing the amount of affordable housing in a given community,” he wrote.

But for Santa Monica City Councilmember Kevin McKeown, who vocally supported the bill along with the Santa Monica Democratic Club in September, Brown's statement “illustrates why land use policy should stay in the hands of local jurisdictions. (“Santa Monica Affordable Housing Advocates Back Senate Bill,” September 4)

“In Santa Monica we have literally thousands of new housing units in the pipeline, and our challenge is matching affordability to the needs of working families lest our community gentrify beyond recognition," he told The Lookout Monday in an emai.

Atkins hoped the bill would supersede a 2009 ruling by California courts that cities requiring developers to include housing priced below market rates were in violation of the Costa-Hawkins Rental Housing Act.

Passed in 1995, the Act gives property owners discretion over rent levels in new developments, which severely eroded Santa Monica's 1979 rent control law, one of the strongest in California.

Opponents of the bill said that in order for there to be any change, the Act would itself have to be amended.

In recent years, Santa Monica had leaned heavily on tax revenue from its former redevelopment agency to invest in affordable housing developed by the nonprofit Community Corporation of Santa Monica, the city's biggest producer of subsidized housing.

That all came to an end in February 2012, however, when a State law closed down California's 400 redevelopment agencies (RDAs). Santa Monica no longer could rely on the tens of millions of dollars -- an increment of the property taxes within its redevelopment district -- each year to pay for housing.

In the last year, Santa Monica has had to look increasingly to private developers to help build affordable housing. While the Cost-Hawkins Act prohibits the City from imposing rent limits on developers building projects within height and density limits, larger projects are another story.

Since developers who want to build larger projects must negotiate discretionary development agreements (DA), the City can require a number of community benefits in the process.

But, because developers can always walk away from the negotiations and opt to build within the City's zoning standards without having to meet affordable housing requirements, DAs don't violate the Costa Hawkins Act.

While Brown's veto may have been a hiccup for affordable housing advocates, it certainly isn't the end.

In his veto statement, Brown wrote, “The California Supreme Court is currently considering when a city may insist on inclusionary housing in new developments.

“I would like the benefit of the Supreme Court's thinking before we make adjustments in this area,” he wrote.

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