re: Housing Element Update

May 12, 2021

Re: Item 10A - Housing Element Update

Dear Mayor Himmelrich, Mayor Pro Tem McCowan, and members of the Santa Monica City Council,

Santa Monica Forward has several concerns with the Housing Element process. If left unaddressed, we fear that Santa Monica’s Housing Element will not be the strong plan that Santa Monica is capable of producing but rather a box checking exercise which perpetuates Santa Monica’s history of exclusion, segregation, and placating non-representative NIMBY opposition at the expense of planning for the future.

As a reminder of the challenge before you – Santa Monica currently produces 200 homes per year on average. To satisfy RHNA, we will need to produce about 1,000 homes per year. That’s a five-fold increase in housing production. Moreover, new Affirmatively Furthering Fair Housing (AFFH) rules require us to not only produce the housing called for by RHNA but to produce it in a way that advances equity and inclusion. There is no realistic way of achieving any of this without significant reforms to zoning in Santa Monica.

Our concerns with the Staff Report are as follows:

Affordable Housing Production Program

Page 3 of the Staff Report says the following:

“Council gave clear direction that targeting greater amounts of inclusionary housing, which would necessitate greater FAR was not a desired approach.”

After re-watching the March 30th meeting, we believe this is an incorrect interpretation of Council direction. Rather, our takeaway was that Council did want greater amounts of inclusionary housing to satisfy by AFFH requirements in neighborhoods which traditionally have excluded housing and to meet state law requirements for compliant housing elements.

Mayor Himmelrich initially indicated that greater amounts of inclusionary housing was not her desired approach, in-line with her slow-growth preferences and her general aversion to middle-class housing construction. However, other councilmembers and Staff pushed back including City Manager Dilg who raised the possibility that Mayor Himmelrich’s approach may not even be compliant with state law. After further discussion, City Attorney Cardona drafted a motion which included the following language:

“Select Option B for distribution of potential housing sites, with consideration of zoning changes necessary to incentivize housing relative to commercial.”

Notably, the March 30th Staff Report for Option B included the following:

“Option B would increase the number of sites available for housing and such sites would be dispersed in various areas of the City. This option, however, would require changes to development standards in order to incentivize housing production.”

And Councilmember McCowan, after Option B was added, said the following:

“The fact that option B was put in there, I feel better about because I understand what you [Mayor Himmelrich] were saying that you didn't want to maximize inclusionary, but I believed that we need to make it very clear that we supported maximizing density if it means getting affordable housing in more diverse parts of our city. And I think that that is there now with Option B, that George wrote that in, but I was not feeling comfortable, that that was excluded, prior to George's language going up on the screen, so I appreciate that we made that abundantly clear because just the city owned sites was not sufficient in my opinion at all. We were failing to address a significant thing."

This leads us to believe that Council is supportive of more inclusionary housing, especially in parts of the city that have traditionally excluded new housing. We additionally believe that Council does not want only a box checking exercise but a real plan that will deliver results. This will require upzoning – as the HR&A analysis confirmed.

And, contrary to what some have said, inclusionary zoning works. Since 1993, 40% of all income-restricted units in Santa Monica have been developed through our inclusionary zoning program. An expansion of this program, by rezoning citywide to incentivize more inclusionary developments, would be a realistic and proven way of meeting our housing needs.

City Owned Sites

City owned sites are an excellent location for income-restricted housing. However, it would be unwise for us to believe that we will be able to produce any significant amount of income-restricted housing on city owned land during the 6th Cycle Housing Element. Our Housing Element needs to be workable plan, not a wish list without regard to reality, and we urge you to further analyze whether relying on city owned will lead to success. Potential issues include:

Funding – Affordable housing on city owned would likely require more than $1B between now and 2029. That’s money that Santa Monica does not have and has no plausible way of receiving.

Political Will – Santa Monica has a very bad record of developing housing on city owned land. Examples include Bergamot Transit Village (killed by Council in 2015), 4th/Arizona (killed by Council in 2020), and PS3 (languishing, status unknown). We do a disservice to those in need by assuming that this time will be different.

Prop I Limitations – Prop I limits the amount of housing that the city government can finance to no more than 0.5% of the existing housing stock per year. This was equal to only 265 new units FY 2019-2020. RHNA will require more than 800 new income-restricted units each year.

Existing Site Constraints - Every city owned site has an existing use. Per HCD guidance, cities which rely on non-vacant land for more than 50% of their low-income housing requirements must provide “substantial evidence” that the existing use will be discontinued during the planning period. We do not have substantial evidence that any of the existing uses on city owned land will be discontinued.

None of the above is meant to suggest that Santa Monica should not develop affordable housing on city owned land. We absolutely should. But there are simply too many issues for Santa Monica to honestly tell HCD that city owned land has a high likelihood of being redeveloped during the 6th cycle planning period. To include any city owned land in the Suitable Sites Inventory, we believe a substantial discount factor on the total number of units needs to be applied.

R1 Zoning

Council made a bold statement – our Housing Element needs to address patterns of historic discrimination in Santa Monica. Kevin McKeown perhaps said it best: “We need to do more to acknowledge and remedy the history of discriminatory zoning in this city.”

However, despite this bold direction, we are concerned by the discussion of R1 zoning in the Staff Report. Albeit preliminary, the language seems to suggest that we will only address discriminatory zoning with a tepid response at best.

Our concerns are as follows:

7,500 Square Foot Lots – The Staff Report says that changes to lots smaller than 7,500 square feet are not being considered. This is flatly unacceptable – hundreds, if not thousands, of R1 lots across Santa Monica are smaller than 7,500 square feet. Moreover, Council never once mentioned a carve-out for lots smaller than 7,500 square feet.

There is no physical reason why changes cannot happen to lots smaller than 7,500 square feet. Ocean Park – one of the most desirable neighborhoods in Santa Monica – already has many small-scale multifamily structures on lots smaller than 7,500 square feet. If these structures work in Ocean Park, they will work elsewhere in Santa Monica too.

Existing Building Envelope – The Staff Report seems to indicate that changes are only being contemplated within the existing R1 building envelope. We hope this is not accurate. Council was very clear – additional density is acceptable. By limiting changes only to the existing building envelope, you will be making multifamily development harder. $3M+ new single-family homes, which exacerbate inequality in our city, would continue to be the norm. That would be an implicit (and very unfortunate) admission that aesthetic concerns are more important than taking meaningful steps to address Santa Monica’s history of segregation and exclusion. As a better approach, we urge you to consider the R1 reforms adopted in Portland. Portland allows 3-4 units on R1 lots, or up to 6 if some are deed-restricted affordable. To incentivize multifamily middle-class housing over luxury single-family housing, Portland allows more square footage for each additional unit, from 3,000 square feet total for duplexes (1,500 sq ft per unit) up to 6,000 square feet total for a 6-plex (1,000 sq ft per unit).

Sincerely,

Abby Arnold and Carl Hansen

Co-chairs, Santa Monica Forward