Santa Monica City Hall's lobby. (Daniel Archuleta


Setting aside money to fund affordable housing was an easy decision for City Council at their July 25 meeting, but deciding who gets to spend it was harder.

Council approved revisions to the city’s housing trust fund guidelines on Tuesday that included establishing a new dedicated fund of about $15 million a year to build and/or retain existing affordable housing units. The money would be available to nonprofit housing organizations but the council split over giving staff the authority to release the money without Council approval.

Santa Monica used to have a cap on the amount of money the city would loan to housing builders but the monetary limit was removed about 10 years ago. Since then, there have been limits in place on the amount that would be lent per unit ($600,000) and a cap on the maximum number of units the council would support per project (50).

However, with the recommendation to create a new fund, staff multiplied the per unit limit by the maximum units supported and felt the resulting $30 million loan was too large to be approved without council consideration. Therefore, debate occurred at the Housing Commission level that resulted in a proposal to limit staff authority to $15 million per loan or about one year’s worth of revenue.

Councilmember Kevin McKeown said the $15M limit was far below anything he could support and said involving council in the loan approval process would create unnecessary delays that could jeopardize affordable housing projects.

“I’m struck by the difference between transparency and discretionary,” he said. “And I think transparency is really important that there be an investigation, there be an evaluation, there be documentation, there be disclosure. All of that I support. Where I just feel tremendously uncomfortable that this is merely a tool to stop 100 percent affordable housing from being built is setting an unrealistically low cap that requires a delay and a visit to the council before the funding can be guaranteed to the affordable housing developer.”

In hearing from staff and affordable housing providers, Councilmember Sue Himmelrich proposed a $25 million cap on staff approved loans arguing there should be a limit to the authority council bestowed on staff.

“I do believe that particularly in view with what we’ve been doing with the budget and potential crunches we may have, we need to be more careful about how and where we spend our money and I think that this isn’t really creating a terrible impediment to doing the kinds of projects we want to do,” she said.

Councilmember Gleam Davis said given the laissez faire approach to affordable housing Council had just approved for the Downtown Community Plan, a hard cap on a city-backed loan seemed at odds with their intent to promote affordable housing.

“I’m concerned we might adopt the $25 Million now and then in the downtown where land is the most expensive, it may not turn out to be a feasible number,” she said.

Davis ultimately proposed a compromise that gave staff authority to approve a loan of any size without council approval but required council be notified of any potential loan over $25 Million via an information item.

Councilmembers that wanted to intervene in those noticed loans could ask for the item to be agendized for formal discussion.

The compromise motion passed by a 6-1 vote with Himmelrich opposing the measure.


Matthew Hall

Matthew Hall has a Masters Degree in International Journalism from City University in London and has been Editor-in-Chief of SMDP since 2014. Prior to working at SMDP he managed a chain of weekly papers...