On Feb. 26, this newspaper ran a front page story about how City Hall failed to hold annual reviews of development agreements as required by law.
DAs are made with a developer when his/her project exceeds the zoning codes. For example, in return for providing low- to moderate-income housing or other public benefits, developers can build projects with extra height and density.
City Hall recently filed a lawsuit against the owners of The Plaza at the Arboretum, a 350-unit apartment complex with 97 rental units deed restricted for low- and moderate-income tenants at 2200 Colorado Ave.
The suit alleged widespread violations of affordable housing deed restrictions by failure to rent to verifiably low- and middle-income persons and renting to ineligible tenants and management’s employees. The suit was brought about because tenants complained.
City officials claim lack of review has not led to abuses. If you believe that, you probably believe in the tooth fairy. The Arboretum may be the tip of the iceberg.
For example, “The Dorchester” is a luxury condominium project constructed in 1990 at 1040 Fourth St. with 42 condominiums. A DA requires that all 15 first floor condos — consisting of eight low income and seven moderate income units — must be so leased and cannot be occupied by owners. The units are supposed to be under rent control with all monthly rents currently under $1,300.
While looking at another condo in the Dorchester, attorney Stan Epstein noticed an ad for unit 113 on the first floor that was for sale for $515,000. Epstein called the lead broker who was also 113’s owner. She said the current tenant is paying $1,400 plus $200 for parking and $399 in home owner association (HOA) fees for a total of $1,999 per month or more than $750 over the $1,247 permitted monthly maximum allowable rent.
The owner/broker volunteered correctly that all or almost all of the other 14 Dorchester low and moderate income units were occupied by owners who had paid “market rates” to purchase them. She said the owners bought the units assuming that city officials would ignore the DA.
Epstein expressed his concerns with executives from Coldwell Banker, 113’s alternate broker. After saying, “What happens to the unit after the sale is not a broker’s problem” even though the broker knew the DA would be breached, Coldwell Banker reconsidered its involvement and resigned the listing.
City Hall is close to adopting a revised Land Use and Circulation Element (LUCE), which emphasizes development of low/moderate income housing through major incentives to developers. Therefore, questions need to be answered.
Why bother to approve LUCE’s “affordable” housing requirements when they’re incorporated into lengthy DAs that apparently are put on a shelf to rarely, if ever, be looked at let alone enforced?
Will DAs be regularly monitored? And, penalties for violations?
Will ground floor Dorchester units be devalued from $500,000 to $100,000 because of very low cash flow resulting from a City Hall requirement that their mandatory rent levels be way below market rate? What happens to the owners, real estate brokers, banks, mortgage brokers, escrow agents, homeowners association and others who undoubtedly had documentation showing the affordable housing requirement during the escrow period — which they ignored?
Who is responsible for the obvious law breaking, if not criminal actions, of those involved that’s gone on for over 20 years?
When will the City Attorney proactively enforce city agreements and the law (beyond sending a defective notification to owners last July — a notice generated because of an un-related incident that came to City Hall’s attention by chance) through aggressive review, investigation and action?
Does City Hall have any idea how many low- and moderate-income apartments mandated by DAs still exist? If not, how can planners make decisions on future needs? How many other Dorchesters are out there? Dozens or hundreds?
Santa Monicans deserve to know the facts and how City Council will clean up this mess before November when five of the seven of them will ask you to reelect them.
I had written last week that Kevin McKeown voted for Terry O’Day in the final voting round to replace the late Ken Genser on City Council. He actually voted for Jennifer Kennedy.
There’s little chance McKeown would vote for O’Day because they’re at opposite ends of the development spectrum. McKeown was a consistent supporter of the failed 2008 ballot measure T, which would have temporarily capped commercial development in Santa Monica. O’Day co-chaired Save Our City, the committee that opposed the measure.
I mentioned that Richard Bloom voted for O’Day in all eight voting rounds. He voted for Kennedy once in the fifth round.
That’s what happens after three hours of sleep and rewriting the column on deadline. My apologies to Messrs. McKeown and Bloom and my readers for the confusion.
Bill Bauer can be reached at email@example.com. Bill thanks Stan Epstein for his assistance with this column.