People stand in line to apply for affordable housing in December. (Daniel Archuleta


A new report shows the City of Santa Monica is struggling to meet its affordable housing quota, a ratio set by voters back in 1990 when they passed Proposition R, according to a new report released by the City.

During the 2016 fiscal year, developers built seven new apartment buildings in the City. Prop R requires thirty percent of all new multi-family housing go to middle or low-income households. With 175 brand new apartments open for rent in 2016, only 34 of them were below market-rate, or just 19 percent. This is the third year in a row the City has failed to meet the benchmark.

Low-income is defined as someone making less than $48,650 a year. Moderate-income is defined as a single person making less than $54,450 per year.

Developers have four options when constructing new buildings to help the City meet those goals. They may reserve units in new buildings for low-income households, build affordable housing somewhere else, pay a fee, or dedicate or sell land to the City or nonprofit housing providers.

Most developers are opting to pay the fee, according to the data complied by the City’s director of housing and economic development.

“If a developer is allowed to pay a fee, those fees are typically not equivalent to the cost to build affordable housing so the number of homes that are created, tend to be lower when a fee is paid,” Director Andy Agle said in an interview with the Daily Press.

Proving on-site housing for low-income families also allows those people to get into neighborhoods they can’t otherwise afford. Last year, only two for-profit developers provided onsite, or inclusionary, housing.

Three developers opted to pay the fee, totaling $481,232. That money will go into a fund to pay for affordable housing developments in the future.

The final development, Step Up on Colorado, was subsidized by City housing trust funds and provided 32 affordable apartments, making up more than 90 percent of the increase in affordable housing stock.

City staff report they are struggling to keep up with the benchmark since the state legislature eliminated redevelopment funds in 2012. In the past, those funds went into loans for non-profits to build affordable housing. Back in 1996, for example, City funding resulted in 98 affordable units, versus only 10 market-rate apartments built that year. Overall, redevelopment funds accounted for more than 80 percent of funding for affordable housing.

So what happens now? In the event the thirty percent threshold is missed, the proposition simply dictates, “the City Council shall take such action as is necessary to ensure that the provisions will be met in the future.”

The City Council did take action in 2016 by placing a measure on the November ballot to raise the money. Voters increased the local sales tax by one-half percent. That increase combined with loan repayments and property taxes may help restore affordable housing funding, although it may take years to see projects come down the pipeline. The new funding has Agle feeling more optimistic.

“We anticipate going forward that we’ll be able to increase the number of loans we’re making for affordable housing,” Agle said.

Progress will take time. This year, thirteen new developments will put 126 new apartments on Santa Monica’s rental market. Only fifteen of those are slated to be affordable.