Santa Monica will try to increase the number of low-income housing units in the city by restricting the affordability levels offered to developers.
Current rules offer developers a sliding scale for affordable units. The number of below market-rate units is determined by the affordability level of those units and new projects have capitalized on the system in a way that has undermined citywide affordability goals.
Santa Monica voters passed Measure R in 1990 to ensure that 30 percent of all new multi-family housing include some units affordable to renters who make less than the city’s median income. However, the Affordable Housing Production Program (AHPP) the City of Santa Monica enacted to carry out Measure R gave developers the option to build fewer units for extremely low-income tenants instead of constructing more units for other low-income tenants.
Under those rules, the City is projected to fall short of the Measure R requirement during the 2013-2021 Housing Element cycle by 5 percent and 25 percent of all units built within city limits will be affordable.
At their Dec. 18 meeting, Council approved a motion by Kevin McKeown and Sue Himmelrich to direct staff to remove the extremely low-income option. Meanwhile, the City will conduct a feasibility study to extend the Downtown Community Plan (DCP) formula, which requires a mix of units at appropriate sizes and affordability levels, to the rest of the city.
Extending the DCP rules could prevent developers from constructing buildings with mostly market-rate units and only a few affordable units.
McKeown described one example where a 105-unit project at 216-234 Pico Boulevard, the current location of Bowlmor Lanes, would only include eight affordable units marked for very low-income tenants. He said this put the burden on the City to produce 34 affordable units elsewhere to meet Measure R’s mandate.
“To avoid digging a deeper hole in affordable housing production, we’re simply suspending this incentive and hoping this will increase the pressure on us to complete the feasibility study and create something much more finely tuned like we did downtown,” McKeown said.
At the meeting, some questioned whether mandating that developers reserve more units for lower-income tenants could discourage them from building more housing of any kind.
Mayor Gleam Davis said no developers have applied to build housing downtown since the City adopted the DCP and questioned whether suspending the option would depress the production of new housing overall.
Paula Larmore, who has served on the Chamber of Commerce’s Land Use and Circulation Element Subcommittee, said forcing developers to set aside a higher proportion of affordable units could render projects financially unviable. She said the City risks losing any potential housing by trying to make more of it affordable.
Larmore also said in a memo to Council that as of 2014, 79 percent of people on the City’s affordable housing waitlist qualify as extremely low-income.
McKeown said the City is only suspending the option temporarily and may allow developers to build extremely low-income housing in the future.