Dear Fellow Santa Monicans,

The City of Santa Monica has for many years led the way in the construction and preservation of affordable housing in California. Through a variety of mechanisms including rent control, public financing for the construction of new and preservation of existing rental dwellings as deed restricted affordable housing stock, inclusionary housing, and the provision of housing vouchers, the City has ensured continuous housing access for a diversity of income groups including the homeless and disabled, the working poor and moderate-income households who might not otherwise be able to live in the community in which they work.

In 1979, Santa Monica’s voters passed the Santa Monica Rent Control Law, which applied to all rental units then in existence at the time of passage. The law currently benchmarks the allowable annual increase in an existing tenant’s rent to 75 percent of the increase in CPI for that year. From 1979 until 1998, affected units remained under some form of controlled annual adjustment whether occupied or vacant.

While rent control ensured continued affordability for Santa Monica’s low and moderate-income residents, landlords chafed statewide under the restrictions of the various forms of municipal rent control. And in 1985, the State Legislature passed the Ellis Act, providing landlords with the right to discontinue renting all units in a given property, and, if they so chose, convert them to condominiums. In 1995, the State Legislature passed the Costa Hawkins Rental Housing Act, which continued to allow for rent control while a tenant continuously occupied a residential unit, but mandated decontrol and a return to market rents immediately after a tenant vacated a unit. As a result of these two measures the percentage of Santa Monica housing stock affordable to low and moderate-income households dropped from 60 percent in 1998 to 32 percent in 2014. As of December 31, 2014, roughly 17,000 of the City’s approximately 52,000 residential units remained affordable to low and moderate-income households, and Santa Monica continues to lose an average of approximately 500 long-term rent controlled units each year. At the current rate of attrition, the City would likely lose most of its affordable housing stock over the next 20 years.

In an effort to preserve the supply of affordable housing, Santa Monica voters passed Proposition R in 1990, requiring that 30 percent of all new multifamily housing be affordable to low and moderate-income households, and Proposition I in 1998, authorizing the City to participate financially in creating affordable housing equal to one half of one percent of the existing housing stock annually, or about 250 dwelling units.

In recent years, the City committed about $15 million per year, largely through the Redevelopment Agency, toward the development of new and preservation of existing affordable housing stock through its Affordable Housing Trust Fund. Of these funds, 51 percent was allocated to new housing and 49 percent to preservation of existing buildings. As of year end 2014, the City had funded nearly 3,000 units of new and preserved long-term deed restricted units, and market rate developers delivered approximately 1,000 more such units under the provisions of the City’s Affordable Housing Production Program requiring inclusionary housing. The inclusionary law allows developers to include affordable units on site, pay a fee, or provide land for affordable housing.

In February, 2012, the State of California dissolved municipal redevelopment agencies, and as Santa Monica’s redevelopment agency had been sourcing more than 80 percent of the City’s Affordable Housing Trust Fund, Santa Monica’s ability to deliver new or preserve existing affordable housing stock has been decimated. As a result, while the City continues to lose 500 long-term rent controlled affordable dwellings each year, it can no longer offset the loss thereof in a significant way, and the City’s demographic profile continues to dramatically change.

Approximately 50 percent of the City’s household population earns less than $75,000 per year. However, only 32 percent of the City’s housing stock is affordable to these families, and the gap continues to grow. Whereas affordability was once a concern limited to the homeless, disabled and working poor, increasingly even young middle-income working households can no longer find reasonably priced rental housing in the City. Ownership housing is simply out of reach for most young families.

Under these circumstances, earlier this year the Santa Monica Housing Commission committed to an in-depth study of the City’s housing crisis, and has, in recent months, engaged in what will ultimately prove to be a nine month process of community engagement and analysis that leads to a recommendation to the City Council as to what steps should be taken to address the matter. To date, we have in our regular public meetings, sought information regarding:

– The history of the City’s affordable housing policy from former and current elected officials, as well as Housing Department staff.

– Housing production history from leading affordable housing developers and service providers, as well as service recipient experience from affordable housing residents

– Current and projected housing supply and demand from representatives of the City’s Rent Control Board, and Economic and Community Development and Planning Departments.

Now we want to hear from as broad a cross section as possible of stakeholder groups and individual citizens regarding your thoughts on the matter, and how we should best address the problem we face together. With this in mind, we invite you to share your thoughts and perspectives at a special meeting to be held on Saturday, Sept. 26 at 10:30 a.m. in the multipurpose room on the second floor of the Main Library, 601 Santa Monica Blvd.

Thank you in advance for your consideration of this most important issue, and your commitment to the City’s continued wellbeing.

Sincerely,

The Santa Monica Housing Commission

Richard Hilton, Chair; Joanne Leavitt, Vice Chair; Loren Bloch, Commissioner; Rene Buchanan, Commissioner; Anjuli Rachel Kronheim Katz, Commissioner; Michael Soloff, Commissioner

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