Santa Monica’s elected officials spared no time in sharing their intention of halting the construction of 16 new residential developments that have secured vested rights to be built across town.
The new developments, most of which are between nine and 15 stories tall, came about in a flurry of applications in just the past few weeks, all falling under what’s known as the “builder’s remedy.”
From February to October of this year, state rules suspended Santa Monica’s ability to reject qualifying applications for housing developments that include at least 20% affordable units or 100% moderate units, since its Housing Element was out of compliance. That fast-track application process is colloquially called the builder’s remedy. In that window, developers applied for 16 medium- and large-scale residential projects totaling 4,562 new housing units, much to the chagrin of councilmembers and evident schadenfreude of housing advocates.
California Department of Housing and Community Development (HCD) has now accepted the City’s revised Housing Element, but the projects are now in the pipeline and outside City control — according to indications from HCD. But Santa Monica is not taking “no” for an answer.
Ahead of the Tuesday Santa Monica City Council meeting, three councilmembers — Phil Brock, Christine Parra and Oscar de la Torre — placed an item on the agenda asking city staff to “hire appropriate outside legal counsel to conduct a thorough review and write a report regarding the City’s legal options and remedies, including rejecting the applications under all applicable laws.”
On Tuesday, the City Manager and City Attorney both prepared statements in response to the Housing Element fiasco and resulting builder’s remedy applications.
Between Feb. 8 and Oct. 14, HCD considered Santa Monica’s Housing Element to be out of compliance, but in that time the City was working to meet the state’s requirements.
By Sept. 6, it appeared City staff had finally struck the right note: HCD delivered a letter notifying staff the latest Housing Element draft had been found to be “substantially in compliance” and that, if submitted as drafted, it would be accepted. Nearly three weeks later, the City continued the process, posting the draft document to the City’s website for a mandatory seven-day review.
That review period ended Oct. 4. Then, on Oct. 11, City Council took up the item and, after a lengthy hearing, approved the final draft. It was then submitted to HCD where it gained final approval on Oct. 14.
But it was within this time span that nearly all of the builder’s remedy projects were submitted.
According to City Attorney Doug Sloan, that was the City’s best argument to stop construction on 15 of the 16 projects.
“We will be making a good argument that, as of the date we received a letter from HCD saying where you were in compliance, that that was really the cutoff — we were in substantial compliance at that point,” Sloan said. “And so, some of these builder’s remedy applications we received after that, we may not have to treat that way.”
Sloan also insisted there was no way the city could have avoided falling into the predicament.
“I don’t think over the last 18 months the council or staff could have done anything differently to avoid being where we are,” Sloan said, repeating the sentiment twice more in his brief remarks.
There was no immediate action taken at the Tuesday meeting, and councilmembers disagreed on whether or not the legal tactic would be effective.
It was also clear from various statements that both staff and council were on untrod territory.
“I know, nobody’s crystal ball works very well, since this is sort of new territory for everyone, but assuming that we get the applications and they [applicants] comply with what they’re supposed to do … are we putting ourselves at risk of litigation if we don’t process them as builder’s remedy projects on the grounds that September 6 and October 14 are not the date?” Councilmember Gleam Davis asked.
City Manager David White said the City would be seeking more clarity on that issue, mentioning in his response that, “we haven’t been in this position before.”
Davis’ colleague, Parra, said she felt confident the City could prevail.
“I’m going to disagree a little bit with Councilmember Davis, just because I also have been doing some research and I know that this is new territory, and there have been some opinions out there that potentially say that when you have a substantial compliance letter, if you will, from HCD, that could be deemed the official date of compliance,” Parra said.
Sloan said the City would be communicating with other cities in similar positions; he expressed hope that another City might “test the issue” so Santa Monica could see how the argument holds up without incurring its own legal expense. But time is not unlimited.
Developers under the builder’s remedy have six months to submit lengthier formal applications for the projects, at which point the City will need to begin its permitting process or risk likely legal action.