By Jason Islas
Staff Writer

September 4, 2013 -- As property values rise, Santa Monica's affordable housing advocates are backing a State Assembly bill they hope will help empower City Hall to shore up the number of low-rent units.

The Santa Monica Democratic Club and Councilmember Kevin McKeown are among those urging State Senator Ted Lieu to vote this week for AB 1229, the so-called “inclusionary housing” bill which its champions say will ensure cities' rights to require developers to build low-income housing.

AB 1229 is “about allowing local governments to set their own standards and make decisions on the ground for their community,” said School Board member Ben Allen, an at-large member of the Santa Monica Democratic Club and signatory to the organization's letter to Lieu.

“If the community feels that (affordable housing is) important to them, this bill would allow them to act upon it,” he said.

State Assemblymember Toni Atkins introduced the bill in February in response to a 2009 ruling by California courts that said cities' zoning codes which require developers to include housing priced below market rates violated the Costa-Hawkins Rental Housing Act.

The Act, passed by the State legislature in 1995 to rollback stringent restrictions placed on landlords by local rent control laws, says that property owners have the right to initially set rents in new developments at market rate.

The 2009 ruling in Palmer v. the City of Los Angeles left cities like Santa Monica, which have affordable housing requirements on the books, unable to make developers build low-income housing.

There is a loophole, however. Development agreements (DAs) are voluntary contracts that developers enter into with the City, each negotiated on a case-by-case basis.

In those contracts, the City can require developers to provide affordable housing as a community benefit in exchange for building outside the City's zoning envelop.

Because DAs are not mandatory, they are exempt from the court's interpretation of the Costa-Hawkins law, said attorney Bejamin Reznik, who represented G.H. Palmer and Associates in the 2009 case.

Santa Monica currently has about 30 such DAs in the planning pipeline. Between DAs and State-mandated density bonuses that encourage developers to include high proportions of affordable housing in their developments, Santa Monica has managed to keep up its affordable housing stock in the four years since the Palmer ruling.

In the future, AB 1229 “would likely give us more flexibility in how our local program is constructed,” said Andy Agle, Santa Monica's Housing and Economic Development director.

Municipalities throughout the State are looking for flexibility as funding sources for affordable housing dry up.

Until recently, Santa Monica and other cities could rely on money from redevelopment districts to fund affordable housing developments by nonprofit developers.

But in February 2012, a State law closed down California's 400 redevelopment agencies (RDAs) and the money that went along with them -- an increment of the property taxes within the districts -- stopped flowing into cities' coffers.

Assemblymember Richard Bloom, Santa Monica's former mayor, said losing RDAs means that it is vital to make sure cities have all tools for building affordable housing at their disposal.

Being able to include affordable housing requirements in zoning ordinances “is certainly an increasingly important tool because we don't have redevelopment available,” Bloom said.

He added that AB 1229 “can only help because it enables cities to act on ordinances they have had on the books but were” blocked from enforcing by the Palmer decision.

“It's a pretty sad state of affairs when you have that situation in a city that is known for building affordable housing,” Bloom said, referring to Santa Monica, where he spent more than a decade on the City Council.

Bloom said that he supports the bill, but as of press time Senator Lieu remains undecided.

Reznik argued, however, that even if it did pass the Senate vote this week, the bill wouldn't change anything, since the bill's language contradicts the Costa-Hawkins Act.

The bill would simply add a line to the State's Government Code section which outlines specifically what local governments can control, adding affordable housing requirements to the list.

“If they don't deal with that issue,” he said, there will likely be more litigation. But dealing with that issue, he said, would mean fundamentally altering the Costa-Hawkins Act.