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COUNCIL MEETING: January 8, 1991
Santa Monica, California
TO:
Mayor and City Council
FROM:
city Staff
SUBJECT: Recommended Strategy to Address the Issues Related to
the Implementation of Proposition R.
INTRODUCTION
This Report identifies issues that need to be addressed as part
of the implementation of Proposition R, recommends a process to
resolve the issues, and recommends that staff be directed to
prepare an ordinance for Council consideration.
ISSUES TO BE RESOLVED
Proposition R, passed in the November 1990 election, requires
that 30% of all newly constructed multi-family units be
affordable to low and moderate income households.
Of these
affordable units, 50% must be affordable to low income households
and 50% must be afordable to moderate income households. As
required by Proposition R, the City council must adopt an
ordinance implementing the provisions of the Initiative. staff
has examined the initiative and identified several issues that
need to be addressed before an ordinance can be prepared. The
following is a summary of the issues staff has identified:
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Jt.N 6 i991
1. Findings. Should implementation occur on a proj ect by
project basis, or should it occur on a Citywide basis? If it
is implemented on a proj ect by proj ect basis, should the
percentage of inclusionary units be increased to off-set the
impact of density bonus units for which additional affordable
units are not required? Under the present standards, if a
simple 30% affordable is required, if a project includes a
State Density Bonus, approximately 24% of the total number of
units constructed would be dedicated as affordable. Thus,
the present inclusionary requirement would have to be
increased to as much as 37.5% to produce a 30% requirement
for all units constructed in the City during any given period
of time.
Alternatively, it may not be necessary to increase the
present inclusionary requirement. The pUblicly sponsored
housing production programs of the City of Santa Monica could
make up for the shortfall created by density bonus units.
2. Applicability Date.
into effect?
When should the requirements go
3.
In-Lieu Fees.
Should payment of an in-lieu fee be
permitted?
4. Off-site Housing. Should the construction of off-site
housing be permitted to satisfy the requirements? If so,
should it apply to all projects, should the units be
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constructed within a specific geographical area, and what
type of approval process should exist for off-site projects
to ensure construction of affordable units in a timely
manner?
5. Measurement of Compliance. Proposition Rls performance
standard is measured in terms of "multifamily-residential
housing newly constructed in the City on an annual basis...."
Should the units start to be counted at issuance of a
planning permits, building permits or certificate of
occupancy?
In addition, should compliance be measured on a fiscal year
or calendar year basis?
6. Tenant Selection. How should tenant selection occur?
Should the City maintain a list? If so, how many names
should be provided, or can the developer independently
select the tenants?
7. Income Eligibility. proposition R requires that the
units be permanently affordable and occupied by income
eligible households. What are the consequences if the tenant
is no longer income eligible? Should the city allow tenants
to remain once they are no longer eligible?
A group of City staff members has met to consider the above
issues. Attached to this report is a brief outline which
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reflects tentative conclusions by Planning, Rent Control, Housing
and the city Attorney's office staff as to these issues which
need to be examined as part of a public process.
PROPOSED PROCESS
To fully understand and address the issues, staff feels it is
necessary to gather input from the community. Therefore, prior
to developing an ordinance, staff is proposing that members of
public and representatives of the following groups be asked to
submit written comments by February 8, 1991 to Planning staff.
City staff will be available to meet with representatives from
the groups to discuss the issues.
Representatives from the Neighborhood Support Center
Representatives from Neighborhood Organizations
The Chamber of Commerce
Apartment Owners Association
Housing Producers (public and private)
with the input provided from the Community, staff will develop an
ordinance for Council consideration and review on the February
26, 1991 agenda.
BUDGET/FINANCIAL IMPACT
The recommendation presented in this report does not have a
budget or fiscal impact other than to require staff time of the
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Community Development, Land Use and Transportation Management
Departments and the city Attorney's office.
RECOMMENDATION
It is recommended that the city Council direct staff to implement
the proposed public process and direct staff to prepare an
ordinance implementing Proposition R and return on February 26,
1991.
Attachment A: City staff Working Document On The Implementation
of Proposition R.
Prepared By: Paul Berlant, Director of LUTM
Suzanne Frick, Principal Planner
Land Use and Transportation Management Department
Program and Policy Development Division
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CITY STAFF WORKING DOCUMRNT
ON THE
IMPLEMENTATION OF PROPOSITION R
1. Findin!!s.
Proposition R can be complied with by requiring that Program 12
be modified to eliminate the in-lieu fee payment and require that
developers construct affordable housing either on-site or off-site.
Currently, Program 12 requires that developers provide 30% affordable
housing. However, with State Density bonuses, the number of
affordable housing units produced by modification of Program 12 will
amount to approximately 24 % of the units constructed by private
developers. (The inclusionary requirement would have to be increased
to 37.5 % in order for it to produce 30 % affordable housing taking into
account the State Density bonus.)
The additional six percent necessary to comply with Proposition
R will be satisfied by the public housing production programs of the
City of Santa Monica. If the public housing production programs of
the City later are inadequate to address the shortfall, the City will be
required to either increase the inclusionary requirement or implement
a housing allocation program to delay private housing production to
match public housing production's ability to make up the shortfall in the
inclusionary program.
2. Aonlicabilitv Date.
Any project that files an application on or after January 8, 1991.
3. Elimination of In-Lieu Fee.
.
An in-lieu fee can no longer be paid to comply with the
inclusionary housing pr<?,gram. The in-lieu fee will continue to be
1
accepted from developers whose projects were applied for prior to the
Applicability Date.
4. Off-Site Housing.
Off-site housing will be permitted, subject to the following
standards:
a. Some large projects will be required to have on-site
inclusionary housing.
b. A geographic restriction on the location of the off-site
housing should be required so that the housing is provided in the same
neighborhood. The accompanying map contains proposed geographical
districts for this purpose.
c. In order to develop an off-site project:
i. An agreement with the City is required.
.
ii. A building permit for the market rate project cannot
be issued until a building permit for the affordable project is issued.
111. A certificate of occupancy for the market rate
project will not be issued until a certificate of occupancy for the
affordable project is issued.
iv. The affordable project must be rented-up within 60
days of issuance of a certificate of occupancy. .
v. The developer of the market rate project must
demonstrate that it has provided financing for its proportionate share of
the affordable project.
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5. Measurement of Compliance.
Proposition R's performance standard is measured in terms of
"multifamily-residential housing newly constructed in the City on an
annual basis . . . . II Since a project can be abandoned at any time
prior to a certificate of occupancy, the certificate of occupancy should
be used as the method of measuring the number of units newly
constructed during the applicable time period.
6. Fiscal Year or Calendar Year Measurement.
Compliance will be measured on a calendar year basis.
7. Tenant Selection.
Selection of the occupants of affordable housing should be
pursuant to list developed by the City. The developer will be given
five names for each unit to be rented. If the developer is not satisfied
with any of the five, additional names will be provided.
The list will be limited to individuals who live or work in the City
of Santa Monica or have been displaced from housing within the City
of Santa Monica in the previous five years.
8. Changes in IncQme Eligibility.
Proposition R requires that the units be permanently affordable and
occupied by income eligible households. If tenants lose income
eligibility for an extended period of time, they will be required to find
other housing so that the units may be occupied by income eligible
households.
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