The Santa Monica City Council is poised to finalize its second attempt at this year’s Housing Element when it meets on Tuesday, June 21. 

The California Department of Housing and Community Development (HCD) rejected Santa Monica’s first attempt at an updated Housing Element for the 2021-29 cycle, which had been submitted in October 2021. In its February rejection letter, HCD provided several pages of notes, which City staff have spent the last four months poring over in order to produce the updated Housing Element.

Each city in California is mandated to produce an acceptable Housing Element once every decade, outlining development guidelines to allow for an increase in residential housing units to hit state-mandated minimums as well as other state standards (such as low-income housing availability).

Council’s final approval comes just days after the Housing Element came before the Santa Monica Planning Commission on Wednesday, June 15. The Commission provided suggestions to Council en route to final submission, which is expected in July.

Perhaps the most substantial change in the updated Housing Element was in the overall housing capacity, or what HCD refers to as SSI (Suitable Sites Inventory).

“The SSI identifies parcels in the City that are the basis for demonstrating that the City can accommodate its Regional Housing Needs Assessment (RHNA) allocation of 8,895 units through assignment of housing units for each parcel in the SSI,” a City Council staff report detailed. In other words, Santa Monica needed to prove there were zoning rules in effect to allow for nearly 9,000 new housing units to be built in the next decade.

In the original Housing Element, there was an SSI for 11,070 units. But, “in order to address HCD’s technical comments,” that estimate has been revised up to 13,000 units, nearly 45 percent above the RHNA number.

“Because the zoning does not exclude the probability of commercial development happening … we don’t have a prohibition on commercial development,” Planning Manager Jing Yeo explained to the Planning Commission on Wednesday. “But that was something that was accounted for in the SSI, so there was a 15% across-the-board haircut. And that was one of the things that bumped up our overall capacity to make up for that loss.”

In other words, HCD believed the first Housing Element was overly optimistic about the number of residential units likely to be constructed in mixed-use zones where it is permitted to develop non-residential uses. So, in response, staff bumped up floor-area ratio and building height maximums in several districts to accommodate more density. As detailed in City Council’s staff report, these increases were kept “largely in commercial l boulevards north of the I-10 freeway (Wilshire, Santa Monica Boulevard, Broadway, Colorado, Olympic), Bergamot, and Downtown in exchange for lesser development standards in Pico neighborhood and neighborhood commercial areas such as Montana Avenue, Main Street, and Ocean Park Boulevard.”

In a two-hour hearing, the Planning Commission and Yeo discussed several aspects of the Housing Element including a commitment to issue an average of 47 new building permits for ADUs (accessory dwelling units, also known as granny flats) each year. Much of that development is expected to be streamlined through SB9, the new state law that streamlines the construction of ADUs and other developments, such as duplexes, on single-family lots. 

Initially, proposed language included a mandate that, “In addition, these SB9 units shall be required to be rented or sold.” Yeo explained that meant that, essentially, any ADUs constructed through SB9 would need to be occupied.

But in the end, the Commission determined that language should be removed.

“That’s a rental unit, and that’s a very affordable unit, and the worst thing we want is for people to create affordable units, but worry about who it’s being rented to or what the circumstances are,” Commissioner Mario Fonda-Bonardi said. “I think it’s really making us almost work against ourselves. It seems like we shouldn’t be involved in those kinds of decisions.”

There was also brief discussion about whether the Housing Element should highlight the potential property transfer tax measures that might be heading to the November ballot, one of which would direct funds toward affordable housing.

Commission Chair Ellis Raskin advocated that the City highlight this potential ballot measure as an example of a long-held commitment toward spending tax money on affordable housing, but Yeo and other commissioners said it was premature, as it was not even guaranteed to appear on a ballot.

In the end, the Commission approved more generic language: “Support measures that are not housing constraints to generate and allocate tax revenue for the acquisition and development of deed-restricted affordable housing.”

These suggestions and others will be presented to City Council for final approval on Tuesday. The meeting is scheduled to begin at 6 p.m. and can be watched on CityTV or at santamonica.gov

emily@smdp.com