R-10071
f:\atty\muni\law\barry\affordfeeres010-11-0S
City Council Meeting 10-11-0S
Santa Monica, California
RESOLUTION NUMBER 10071 (CCS)
(City Council Series)
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA MONICA
REVISING THE AFFORDABLE HOUSING UNIT BASE FEE FOR NEW MARKET-
RATE MULTIFAMILY DEVELOPMENT
WHEREAS, the Santa Monica City Council adopted Ordinance Number 1918
(CCS) on July 21, 1998 - the City's Affordable Housing Production Program; and
WHEREAS, the Affordable Housing Production Program requires developers of
market-rate multifamily housing to assist in the production of affordable housing, but
provides numerous options to meeting this requirement through the payment of an
affordable housing development fee, development of on-site affordable units or through
other specified options; and
WHERAS, the vast majority of new market rate multi-family development in the
City is only affordable to very high income households; and
WHEREAS, since the program's adoption in 1998, most developers of multi-
family housing have chosen to pay the affordable housing development fee to comply
with the Affordable Housing Production Ordinance; and
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WHEREAS, because the City is built-out, land available for residential
development in the City is limited and land which could be used for development of
affordable housing is being depleted by development of high cost housing resulting in a
continued rise in land costs; and
WHEREAS, changes in State and Federal laws and housing programs
increasingly inhibit the City's ability to meet State goals and local policies concerning
income diversity; and
WHEREAS, in July 1998, Hamilton, Rabinovitz & Alschuler, Inc. ("HR&A") on
behalf of the City prepared an analysis of the relationship between new market rate
apartment and condominium development in the City and the need for affordable
housing created by this new development. This study focused on the relationship
between the demand for goods and services created by households who occupy new
market rate apartment and condominium development in the City, the number of low-
wage workers in public agencies and businesses need to satisfy this demand, and the
costs of producing the affordable housing needed by these workers. The study
demonstrated the fee range per square foot which could be imposed on new market
rate multi-family development to finance the development of affordable housing needed
to meet the demand created by market-rate development; and
WHEREAS, on July 28, 1998, the City Council adopted Resolution No. 9295
(CCS) establishing the Affordable Housing Base Fee of $6.14 per square foot of floor
area for apartment developments and $7.13 per square foot of floor area for
condominium developments; and
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WHEREAS, HR&A updated this analysis in March 2000 for condominium
projects; and
WHEREAS, on March 28, 2000, the City Council adopted Resolution No. 9498
(CCS) establishing the Affordable Housing Unit Base Fee of $11.01 per square foot of
floor area for condominium developments and leaving the Affordable Housing Unit Base
Fee for apartment developments unchanged; and
WHEREAS, on November 25, 2003, the City Council directed staff to evaluate
the Affordable Housing Production Program and/or other City programs and policies,
and suggest ways to update these provisions to facilitate meeting the Proposition R
affordable housing goals; and
WHEREAS, since the City Council adopted the current Affordable Housing Unit
Base Fee for apartment and condominium developments. new household income and
spending and other data have become available, and the costs of constructing, renting,
and purchasing multifamily housing have all increased significantly; and
WHEREAS, on May 17, 2005, the City Council commenced consideration of the
proposed adoption of a resolution and related amendments to the City's Affordable
Housing Production Program; and
WHEREAS, at the conclusion of that hearing, the City Council directed City staff
to return to Council with a proposed resolution and amendments to the Affordable
Housing Production Program; and
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WHEREAS, in light of the City Council's direction and the changed economic
conditions, HR&A has updated its fee study; and
WHEREAS, on May 30, 2005, the City published notice that at the July 12, 2005
City Council meeting, the City Council would consider a proposed resolution and related
ordinance amendments to increase the affordable housing fee that private developers
pay to the City for the production of affordable housing; and
WHEREAS, the City republished this notice on June 30, 2005 and July 7, 2005;
and
WHEREAS, a copy of the HR&A fee study has been available in the City Clerk's
Office for public review since July 1, 2005; and
WHEREAS, based on this updated fee study, an Affordable Housing Unit Base
Fee of $22.33 for apartments and $26.08 for condominiums would be appropriate; and
WHEREAS, since development activity does not take place uniformly across the
City, but tends to be concentrated more or less in some neighborhoods, these fees are
based on a weighted average which takes into account this neighborhood variation, and
WHEREAS, continued new residential development which does not include or
adequately contribute toward the cost of affordable housing development will only serve
to further exacerbate the current affordable housing shortage; and
WHEREAS, the failure to provide adequate affordable housing for low-wage
workers can force these workers to live in less than adequate housing within the City,
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pay a significantly disproportionate share of their incomes to live in adequate housing
within the City, or commute ever-increasing distances to their jobs from housing located
outside the City; and
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SANTA MONICA
DOES RESOLVE AS FOLLOWS:
SECTION 1. The Affordable Housing Unit Base Fee for new market rate
condominiums established pursuant to Section 9.56.070 is $26.08 per square foot of
floor area.
SECTION 2. The Affordable Housing Unit Base Fee for new market rate
apartment established pursuant to Section 9.56.070 is $22.33 per square foot of floor
area.
SECTION 3. Commencing upon July 1, 2006 and on July 1 of each fiscal year
thereafter, all fees established by this resolution shall be reviewed and adjusted in
accordance with the Santa Monica Municipal Code Section 9.56.070(b).
SECTION 4. The City Clerk shall certify to the adoption of this Resolution, and
thenceforth and thereafter the same shall be in full force and effect either sixty (60) days
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from the date of adoption of this Resolution or upon the effective date of Ordinance
Number ~l"iccs), whichever is later.
APPROVED AS TO FORM:
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Adopted and approved this 11 th day of October, 2005.
\
OcR-
Pam O'Connor, Mayor
I, Maria Stewart, City Clerk of the City of Santa Monica, do hereby certify
that the foregoing Resolution No. 10071 (CCS) was duly adopted at a meeting of
the Santa Monica City Council held on the 11 th day of October, 2005, by the
following vote:
Ayes:
Council members: Mayor O'Connor, Bloom, Genser, McKeown
Noes:
Council members: Mayor Pro Tem Katz, Holbrook, Shriver
Abstain:
Council members: None
Absent:
Council members: None
ATTEST:
\). a.~~ ~.,~
Maria M. Stewart, C y Clerk
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