CITYWIDE ‚Äî Realizing that living in the city by the sea is expensive, city officials are introducing a new plan that may increase construction of more affordable housing.
The new proposed housing element will get its first draft review Wednesday in a Planning Commission hearing. The 2013-21 draft housing element, which is renewed every eight years or so, is a tool used by City Hall to plan for broad-based, long-range housing needs.
City officials said the objective is to build market rate and affordable housing near the Expo Light Rail stations.
Elizabeth Bar-El, senior planner in the strategic and transportation planning division, said there are a higher proportion of renters in the city, so what City Hall can do is create opportunities for more affordable housing and provide incentives.
But that could be an uphill battle in a city that is already built out with very few vacant plots of available land, which sells at a premium. With demand high and the supply low, prices for single-family homes make it almost impossible for working families to buy.
In 2013, the median home price for single family residences in the 90403 zip code is at $1.8 million, according to the Multiple Listing Service. For all of 2012, the median home price was $1.6 million.
In the Sunset Park area, homes are going for $1.2 million to $1.8 million, Robert Kronovet, broker and owner of Kronovet Realty Companies, said. He said homes were selling for $2 million to $3.5 million north of Wilshire Boulevard.
Kate Bransfield, realtor with Coldwell Banker Residential Brokerage on Montana Avenue, said homes that do exist in Santa Monica are in such demand in the last six months that they‚Äôre selling for higher than their asking price and receiving multiple offers.
“It’s a very strong market. This year has been typical of most years where we had the buying frenzy in the spring and it’s leveled off somewhat now,” Bransfield said. “We’re in the middle of the summer doldrums. It’s still strong. It’s such a desirable place to live.”
Santa Monica‚Äôs reputation for being a technology hub, which earned it the moniker Silicon Beach, has only increased demand for housing, Bransfield said.
Bar-El said home ownership is a “big issue” in Santa Monica, where more than 70 percent of residents rent.
In the draft housing element plan, the Southern California Association of Governments, the nation‚Äôs largest metropolitan planning organization, has assigned Santa Monica the objective to build 1,674 units, according to the plan documents.
“This time, we said no, but we are still aiming pretty high,” Bar-El said.¬† City Hall has an objective for 1,346 new housing units to be constructed, broken into several affordability categories, over the next eight years, she added.
“The reason we are expecting that high of a number [is] because it fits into our transit-oriented mixed-use neighborhood plan. We are not going to try to insert that number into our residential zone. The LUCE [Land Use and Circulation Element] said we are protecting neighborhoods,” she said. “The land we are showing as available is the Bergamot area, Downtown and Memorial Park as well, and they‚Äôre near the Expo stations.”
She said in most cases a lot of the units will be proposed as rental, but in terms of ownership, “if you‚Äôre able to build more units on the property, the theory and the market is they can be more affordable.”
Bar-El said the question on whether units will be built for ownership or rental is one that will be answered by developers who propose building the units.
City officials¬† will go to the City Council for review in August and then for adoption toward the end of the year, she said.
The loss of redevelopment funds has dealt a major blow to City Hall‚Äôs efforts to create more affordable housing. Before Gov. Jerry Brown and the Legislature killed redevelopment agencies across the state and redirected tax money to help pay off California‚Äôs crushing budget deficit, City Hall used those funds to support the nonprofit Community Corporation of Santa Monica, the city‚Äôs leading builder of affordable housing.
To continue supporting Community Corporation, the City Council would have to either take money from the General Fund, which pays for essential city services, or find another revenue stream, such as a bond.