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Santa Monica Takes Initial Step to Dramatically Boost Housing Production

Bob Kronovetrealty
We Love Property Management Headaches!

Have Extra Room for the Holidays 2019

Santa Monica Apartments

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Santa Monica, CA 90405
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By Jorge Casuso

December 13, 2019 -- Accepting the daunting task of building 9,000 new housing units over the next decade -- more than two-thirds of them affordable -- the City Council this week began exploring removing caps on development.

The State-mandated target -- which Councilmembers said they would not contend -- cannot be met by continuing to rely on developers to include affordable units in market-rate projects, the Council agreed.

Instead, massive new funding must be found to develop the projects on public land -- including in the Bergamot area in the city's old industrial zone -- and along major boulevards, such as Wilshire.

"If we don't do this, the State will do it for us," Councilmember Gleam Davis said during a four-hour-long study session Tuesday. "It's coming whether we like it or not."

"It is clear that we need to fundamentally re-orient our approach to housing," said Counciilmember Terry O'Day. "For years it's been easier to say no and to place restrictions."

It is, O'Day said, the "anti-growth" and "exclusionary" attitude towards development at all levels of government "that has got us ino the mess that we are in."

Simply put by Councilmember Greg Morena, "We're going to have to build a lot of stuff."

The study session came one month after the Southern California Association of Governments (SCAG) more than doubled Santa Monica's housing target -- from adding some 4,800 new housing units between 2021 and 2029 to adding 9,000 units.

Seventy percent need to be affordable, with half earmarked for low-income households, staff said.

The dramatic hike came after SCAG used an alternative methodology that boosted the quotas for cities like Santa Monica "that have access to high quality transit, jobs, and a healthy development community," staff said.

On Tuesday, developers lined up to seize what they see as a looming bonanza for builders.

"Take the 9,000 (quota) seriously," said local land use attorney Chris Harding, who represents major developers in the City.

"Take a fresh look at development standards and procedures."

Paula Larmore, a principal in Harding's firm, said the City's restrictive affordable housing requirements are dampening housing development and should be loosened.

"The City should court developers," Larmore said. "The City has to have a different way of thinking.

"Density is a way to reduce costs. We can bring down costs by increasing density.”

Developers proposed allowing up to 30 percent commercial use in residential buildings, a State standard that exceeds Santa Monica's standard of limiting it to the ground floor.

The Council agreed that allowing taller, more dense development would encourage new housing construction.

But relying on developers to provide the affordable housing units mandated by the state was not the answer, most Council members agreed.

Mayor Kevin McKeown calculated that under the current affordable housing requirements it would take building 30,000 market-rate units to meet Santa Monica's affordable housing quota.

Such a building boom would add some 48,000 new residents to a City whose population has hovered around 90,000 for decades, McKeown said.

Instead, the Mayor suggested the City could consider putting the affordable housing "on top of market rate and seek new State funding and legislation.

"We need to rethink the production of affordable housing," McKeown said. "It's time to go to the state for new legislation."

Former Mayor Dennis Zane agreed there is little chance of meeting the target through private development.

"The challenge is the affordable housing development," Zane told the Council. "It's never going to happen through the private marketplace.

"There is zero chance of meeting that without significant public investment in money and land."

Zane said the State should fund the affordable housing target.

Councilmember O'Day disagreed. Housing, he said, "is not pollution. It is not sewage.

"We need to take this opportunity the State is putting before us."

In the end, the Council agreed the new development has to be built outside existing residential neighborhoods so tenants are not displaced.

"If we build it, they will come," said Councilmember Ana Jara. "If we do it right, we won't displace or gentrify."

The Council directed staff to explore boosting density and height limits for 100 percent affordable housing developments and for housing developments along major transit corridors.

It also asked staff to look at allowing "much more intense" residential development in the Bergamot area and to ask the State to allow the old DMV surface lot in the area to be used for affordable housing.

In addition, the Council asked staff to explore removing or significantly easing parking requirements for new developments across the City.

"Some of the things are easy, some of the things are hard, and some are impossible," McKeown said.

City Manager Rick Cole said that given the "gravity and urgency of the challenge," moving forward will take "political will."

The Planning Commission will take up the Council’s recommendations in January, before staff asks the Council to prioritize what actions to take.

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