R-10149
f:\atty\muni\law\barry\affordfeereso 6-27-06
City Council Meeting 06-27-06
Santa Monica, California
RESOLUTION NUMBER 10149
(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 Prod uction Program requires developers of
market-rate multifamily housing to assist in the production of affordable housing, but
provides options to meeting this requirement; 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
WHEREAS, because the City is bui It-out, land available for residential
development in the City is limited and land wh ich could be used for development of
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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
WHEREAS, HR&A updated this analysis In March 2000 for condominium
projects; and
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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, 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
WHEREAS, in light of the City Council's direction and the changed economic
conditions, HR&A updated its fee study to reflect, in part, new household income and
spending and other data that had become available and the significant increase in the
costs of constructing, renting, and purchasing multifamily housing; and
WHEREAS, this updated fee study demonstrated that an Affordable Housing Unit
Base Fee of $22.33 for apartments and $26.08 for condominiums would be appropriate;
and
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WHEREAS, on October 11, 2005, the City Council adopted Resolution No.
10071 (CCS) establishing the Affordable Housing Unit Base Fee of $22.33 per square
foot of floor area for apartment developments and $26.08 per square foot of floor area
for condominium developments; and
WHEREAS, on November 8, 2005, the City Council amended Santa Monica
Municipal Code Section 9.56.070 to provide that commencing on July 1, 2006, the
Affordable Housing Unit Base Fee shall be adjusted annually by City Council resolution
based on changes in construction costs and land costs; and
WHEREAS, in order to implement the Council's decision, staff formulated a
proposed method of computation to reflect changes in construction costs and land
costs; and
WHEREAS, this proposed methodology was detailed in an April 24, 2006 letter
prepared by HR&A and approved by the Counci I on June 13, 2006; and
WHEREAS, on June 16, 2006, the City published notice that at the June 27,
2006 City Council meeting, the City Council would consider a proposed resolution to
increase the affordable housing fee that private developers pay to the City for the
production of affordable housing based on this methodology and that the HR&A
analysis was available for review in the City Clerks Office; and
WHEREAS, the City republished this notice on June 22, 2006; and
WHEREAS, a copy of HR&A's analysis has been available in the City Clerk's
Office for public review since June 16, 2006; and
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WHEREAS, based on this analysis, an Affordable Housing Unit Base Fee of
$24.10 for apartments and $28.15 for condomini ums 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,
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 $28.15 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 $24.10 per square foot of floor
area.
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SECTION 3. The City Clerk shall certify to the adoption of this Resolution, and
thenceforth and thereafter the same shall be in full force and effect on September 1,
2006.
APPROVED AS TO FORM:
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Adopted and approved this 27th day of June, 2006.
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Robert T. Holbrook, Mayor
I, Maria Stewart, City Clerk of the City of Santa Monica, do hereby certify that the
foregoing Resolution No. 10149 (CCS) was duly adopted at a meeting of the Santa
Monica City Council held on the 27th day of June, 2006, by the following vote:
Ayes:
Council members: Genser, Katz, McKeown, O'Connor, Mayor Holbrook
Noes:
Council members: None
Abstain:
Council members: None
Absent:
Council members: Bloom, Mayor Pro Tern Shriver
ATTEST:
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Maria M. Stewart, Ity Clerk
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