By Jorge Casuso

May 8, 2024 -- Despite a surge in multi-family development over the past four fiscal years, Santa Monica met its affordable housing requirement only once, according to a report to the City Council Wednesday.

Proposition R -- approved by local voters in 1990 -- requires that 30 percent of new multifamily housing constructed annually be affordable to low- and moderate-income households.

Santa Monica met that goal in Fiscal Year 2022-23, when 164 of the 484 units built, or 34 percent, were affordable, but fell short of the requirement in the three previous years.

During the four-year stretch, of the 1,396 units built, 329, or about 24 percent, were affordable, according to data provided by the City's Department of Housing and Human Services.

The report notes "the important role City-funded affordable housing, through nonprofit housing developers, has played in affordable housing production."

Of the affordable units built over the past four fiscal years, 237 -- or 72 percent -- were City funded, according to the data.

Since Proposition R was implemented in the 1994-95 fiscal year, 35 percent of all newly-constructed multifamily housing in Santa Monica, or 2,363 residences, are affordable to low- and moderate income households, according to the report.

Under the State's current housing mandate, Santa Monica must plan to add 8,895 new housing units -- some 6,200 of them affordable -- by 2030 or face stiff penalties, including the loss of control over local zoning.

The report notes that "multifamily housing development permit data reflect steadily improving progress in affordable housing production over the last four fiscal years," a trend that should continue.

A total of 723 multifamily residences, 215 of them affordable, or 30 percent, were under construction as of February 2024.

And a total of 1,350 multifamily residences, 372 of them affordable, or 28 percent, received planning approval.

City planning officials are proposing "potential amendments" to the Affordable Housing Production Program (AHPP) when the Council approves the second phase of the City's Housing Element implementation in October.

They include evaluating the "in-lieu fee" developers pay to the City instead of building the units themselves. This would "ensure the fee supports the funding and construction of new affordable housing."

Another consideration would allow developers of market-rate projects to comply with the option to build the affordable units off-site by acquiring and rehabilitating existing rental units and converting them to deed restricted units.

A third would be to "explore the possibilities of a mixed-compliance option that would allow more flexibility in meeting AHPP requirements."

Under Proposition R, one-half of the required affordable housing must be affordable to low-income households, defined as those not exceeding 60 percent the Los Angeles County median income adjusted by family size.

“Moderate-income household” is defined as those not exceeding 100 percent of the County median income, adjusted by family size.

The Proposition R requirement that 30 percent of all units built be affordable has been met in 14 of the 29 years it has been in effect.

"On an annual basis throughout the fiscal reporting period, the 30 percent affordability target was not met in some years while some years significantly exceeded, and even doubled, this target," the report notes.