City of Santa Monica Fails to Meet Affordable Housing Mandate for Third Year in a Row

By Niki Cervantes
Staff Writer

May 14, 2018 -- The City of Santa Monica failed to meet its own affordable housing mandate for the third consecutive year in the 2016-2017 fiscal year, according to a report issued Friday.

The year-end report said only 13 percent of the apartments constructed in the last fiscal year -- or 13 units -- was for moderate- to -low-income earners, one of the lowest totals since the 1990 passage of a law requiring 30 percent such units be constructed annually.

As in recent years, the City blamed the failure to meet the dictates of Proposition R on the loss of millions dollars from the 2012 abolishment of local redevelopment agencies.

“Without City funding, meeting the requirements of Proposition R has been a challenge, as nearly two-thirds of the affordable housing constructed in the past 23 years was funded with loans from City housing trust funds,” the report by Andy Agle, the City’s director of housing and economic development, said.

Proposition R mandated 30 percent of all multifamily housing completed in Santa Monica each fiscal year be affordable to and occupied by low- and moderate-income household, and at least half of the total be for low-income earners.

No penalties are imposed by the law. Instead, in the event the City fails to meet the requirements, the City Council is directed to take “such action as is necessary to ensure that the provisions will be met in the future.”

Agle’s report said, however, that 38 percent of all multifamily homes completed over the past 23 years were, cumulatively, affordable to low- and moderate-income families.

In that period, 5,184 units were built. All told, 3,220 of the units were for market-rate renters and 1,994 restricted as affordable, most of it funded with loans from the City’s Redevelopment Housing Trust Fund.

The report for 2016-2017 said 100 multi-family units were completed, with 13 earmarked as affordable.

Another 586 units were under construction, of which 118 were deemed as affordable housing, or 20 percent. Projects with planning approval totaled 386 units, including 70 deemed affordable, or 18 percent.

In the previous fiscal year, 175 multi-family units were completed, including 34 reserved as affordable housing. In the 2014-2015 year, 157 total multi-family units were built, of which 30 were reserved as affordable housing.

Under federal regulations, affordable housing is for those earning from $50,500 annually for a low-income household of one to $74,200 annually for a household of four.

Eligible moderate-income earners are those with annual salaries ranging from $54,500 for a household of one to $77,750 for a family of four.

Maximum rent for such affordable housing is significantly less than market rate apartments.

For low-income earners, the maximum rent ranges from $680 a month for a studio apartment to $972 for a three-bedroom unit. For those in the modern-income category, maximum rents are from $1,247 for a studio to $1,782 for a three-bedroom apartment.

The City expects to recover from the loss of redevelopment funds with $1.2 million in property tax revenue the redevelopment agency received, repayment of loans made to the from redevelopment agency (averaging $10 million a year from 2015-2016 through 2021-2022), and an estimated $8 million a year from the 2016 ballot measure GSH.

Agle’s report also looks at the City’s compliance with Proposition I, which was passed by City voters in 1998 and gives the City authority to finance development, construction and acquisition of affordable housing.

During FY 16/17, the City financed the acquisition and rehabilitation of 26 affordable homes, the report said.