Santa Monica has a state mandated requirement to build 8,895 new housing units by 2029, but the Department of Housing and Community Development (HCD) says the City’s plan to do so is not up to par.

As a result, HCD has declined to certify the City’s 6th Cycle Housing Element and is asking for a revised plan with more research into the feasibility of converting City-identified sites into housing and tweaks to the City’s proposed development programs.

The City’s Housing Element was adopted by City Council on Oct. 12, 2021, and received for review by HCD on Nov. 10, 2021. On Feb. 8, HCD Senior Program Manager Paul McDougall sent a letter to City Manager David White, notifying him of Santa Monica’s non-compliance with the State Housing Element Law and providing an outline of the changes the agency would like to see in a five page appendix.

In the interim the City had begun the process of revising various zoning ordinances in order to enable the housing development programs outlined in its Housing Element.

On Feb. 14, the City issued the following statement, “City of Santa Monica staff have done substantial work on proposed amendments to the Zoning Ordinance, Land Use and Circulation Element, Downtown Community Plan, and Bergamot Area Plan for consistency with the adopted 6th Cycle Housing Element. Planning Commission public hearings were under way however, given the Department of Housing and Community Development’s (HCD) comments, staff will be pausing hearings with the Planning Commission on Housing Element implementation to provide staff the opportunity to review the comment letter, seek consultation and clarification with HCD staff, and possible direction from City Council on how to proceed.”

A failure to regain Housing Element compliance could result in the City losing access to state and federal funding programs. In his letter McDougall said these include the CalTrans Senate Bill (SB) 1 Sustainable Communities grant; the Strategic Growth Council and HCD’s Affordable Housing and Sustainable Communities programs; and HCD’s Permanent Local Housing Allocation.

HCD is asking the City to include more research and detail in its inventory of sites suitable for housing development, particularly in relation to the goal of affirmatively furthering fair housing. Specifically, HCD asks that the element be amended to include an analysis of how the number of units by income group and location would affect existing housing patterns; more local data and knowledge; and goals and metrics to measure housing mobility enhancement, affordability in high opportunity areas and strategies for displacement protection.

Based on the results of this research, the City may need to revise or add programs to further fair housing.

The letter also calls for more research on recent affordable housing developments to support the City’s capacity assumptions for the production of future affordable units. Of the 8,895 units Santa Monica is mandated to produce, 6,168 must be affordable.

“Realistic capacity should account for recent development by affordability,” states the HCD appendix. “This is particularly important since some development affordable to lower-income households may not be built at higher densities assumed in the inventory.”

HCD officials also raised a concern regarding the City’s identification of several 15 unit or less sites as potential locations for affordable housing, given that trends show most 100 percent affordable developments are larger than this.

The appendix further outlines changes HCD would like to see to the zoning and development approval processes that the City is proposing in order to meet its housing element goals.

One of the key programs proposed by the City is by-right approvals for many housing projects. This will speed up development approval by removing the need for public hearings in most scenarios.

HCD would like the City to specifically commit to acreage, allowable densities and anticipated units in its by right approval program. HCD is also asking for sites identified in previous housing element cycles to qualify for by-right approvals if the project includes at least 20 percent affordable housing. Lastly, HCD would like to see more plans to overcome patterns of segregation and foster inclusive communities beyond the City’s existing plan to promote accessory dwelling units in single-family zoned neighborhoods.

Santa Monica is not alone in failing to meet HCD’s requirements. In January, the Department declined to certify Beverly Hills and Redondo Beach’s respective Housing Elements.