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O1947 f \atty\munI\laws\barry\moratora 4 wpd City Council Meeting 6-29-99 Santa Monica, Callforma ORDINANCE NUMBER 1947 (CCS) (City Council Series) AN INTERIM ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SANTA MONICA EXTENDING THE MORATORIUM ON MULTI-FAMILY RESIDENTIAL DEVELOPMENT IN THE CITY'S MULTI-FAMILY RESIDENTIAL DISTRICTS; DECLARING THE PRESENCE OF AN EMERGENCY THE CITY COUNCIL OF THE CITY OF SANTA MONICA DOES ORDAIN AS FOLLOWS SECTION 1 Fmdlngs and Purpose The Council finds and declares (a) Drastic changes In state law and the local economy have propelled the City to a crossroad In Its history at which the City must now pause to ensure that Its land use laws and poliCies are adequate to ensure Its future welfare (b) The gravity of thiS Situation IS greatly Intensified by the fact that Santa MOnica has much to lose Located at the western edge ofthe Los Angeles basin, the City affords a unique combination of natural splendors -- broad beaches, stunning Views, mild weather and clean air -- together with sophisticated urban amemtles and a community scale that respects both the natural environment and JndJvldual needs. All thiS eXists In a very small space -- Just eIght square mIles (C) In that small space, the City teems with activity It IS home to 90,000 residents; and Its population density, 11,200 persons per square mile, IS the highest among coastal 1 commumtles In Los Angeles County Santa MOnica IS also the workplace for approximately 155,000 workers and a destinatIon for as many as 400,000 dally VISitors Thus, extreme density complicates planning efforts and makes preservation of the quality of life a difficult challenge (d) Moreover, planning dIfficUltIes are exacerbated by the fact that the CIty IS fully bUilt-out and has been so for decades As of November 1995, there were only Slxty~twO (62) vacant residential parcels out of approximately 6,132 multi-family zoned parcels in the entire City. Since then, even this limited number of vacant parcels has shrunk Thus, planning flexibility IS limited by the reality that residential development In the City's resIdentIal dIstricts means change -- not expansion -- and VIrtually any new project or construction replaces an eXisting structure or Improvement (e) Planmng difficulties are most acute In the multi-family districts which are the largest and densest In the City Santa MOnica has the highest percentage of land zoned multi-family resldentral among westslde/south bay jurisdictions Permitted densities In these zones range from approximately 29 unIts to approximately 48 Units per acre As a result of these standards, the vast majority of City residents live In multi-family dwellings Most of them live In the City's 37,000 apartment Units (f) In the past, the dynamiC created by competing demands for use of a small, chOice space has brought the City to crossroads on other occasions I n the late 1970's, the City faced a severe shortage of rental housmg precipitated In part by a "DemolitIon Derby" -- a fifteen (15) month period dUring which over 1,300 rental hOUSing units were demolished and hundreds of others were converted Into condomIniums These hOUSing 2 unrts were removed from the market at ten (10) times the rate of removal (relative to populatIon) of Los Angeles (g) The City Council wrestled wIth the polley Issues raIsed by the DemolitIon Derby but could not resolve them. So the voters took control. They amended the City Charter by adoptmg a stnngent Rent Control Law The law Imposed strict controls on rents, which applied even when Units were vacated, and restncted the demolition or converSion of controlled Units Legal challenges ensued, but the courts upheld the law as a legitimate exercise of the City's pollee power to provide for the health, safety and welfare of its reSidents (h) The Rent Control Law had the effect of limIting change In the multi-family areas of the City In the years follOWing Its adoptlon ofthe Rent Control Law, the CIty maintamed a stable and dIverse residential population, and the multi-family neighborhoods retaIned their basIc character and scale. Most structures In these neighborhoods are one or two stories high Many have gardens, lawns or courtyards Thus, despite their density, these neighborhoods retained a unique sense of space, greenery and light condUCive to human mteractlon and qUietude. The streets In the reSIdential neighborhoods were "pedestnan fnendly". A City survey showed that walkmg became City reSidents' favonte recreational activity (I) Meanwhile, in the years following the adoption ofthe Rent Control Law, the rest of the CIty developed and changed rapIdly In the single famIly dlstncts, housing prices skyrocketed. By the early 1980's even older, very small homes in the R-1 District were selling for $250,000 or more. Prices dipped In the early 1990's, and shot upwards again, 3 making It virtually impossible for low or moderate income families to pu rchase homes In the R-1 District 0) At the same time, the numbers of workers coming to the City each day swelled as multi-story office parks were built In the central city Moreover, commuter numbers will mcrease dramatically as new multi-story office bUlldmgs are completed dunng the next two years. Additionally, as the City shifted ItS revenue base to hotel taxes, many large new hotels were built, and the City became an internationally acclaimed vacation spot hosting approximately 2,355,000 VISitorS In 1997. (k) Thus, the City boomed and became ncher and more crowded, but the multi- famIly residential neighborhoods remained relatively qUiet and stable consldenng their density Accordmgly, for years, a balance was struck between residential and commercial mterests which preserved the character ofthe City's multi-family residential neighborhoods but allowed the City to flourish economically (I) In 1994, natural disaster swept the CIty Into a penod of transition. On January 17th, the City suffered widespread damage to both Its resIdential and commercial distncts as a result of the Northndge earthquake. The earthquake rendered approximately 3,100 dwelling umts UninhabItable and damaged thousands of other properties thus necessltatmg substantial rebUilding. However, the balancing of residentIal and commerCIal Interest remained unchanged. (m) Recent changes in state law destroyed this balance. In 1996, in response to Intense lobbYing efforts by landlords and real estate developers, the State Legislature drastIcally restricted local control of hOUSing polIcy by adoptIng the Costa-Hawkins Rental HOUSing Act of 1995 ("Costa-Hawkins"). Costa-HawkinS weakens local rent control by 4 phasing In mandatory vacancy decontrol, which became fully effective In January of this year. This Signaled the end of local rent control as It had eXisted for almost twenty years In Santa Momca. It also threw the community into a penod of extreme uncertamty as the potential for radical change loomed large (n) Costa-Hawkins has already had a dramatic Impact on the City's housing stock Between January 1 and May 15, 1999, thirteen hundred and forty-four (1344) vacancy regIstrations have been processed by the Rent Control Board These regIstration forms set forth the new rent for Units decontrolled by Costa-Hawkins. The vacancy increases have resulted In the loss of 855 Units affordable to low Income households If vacancy regIstratIons contrnue to be filed at the same rate, it IS estImated that almost 2400 Units that had been affordable to low Income households Will be lost. ThiS fIgure represents, In one year, a CitYWide loss of approXimately 10% of the Units that had been affordable to low Income households. (0) This loss of affordablllty has a number of senous repercussions. At a time when the demand for affordable hOUSing already exceeds supply, the additional loss of affordable housmg Will only serve to exacerbate thiS problem Low Income households WIll face almost Insurmountable odds In securing affordable housing and such housing WIll not be available to new low Income households seeking to move mto the City Individuals presently working In the City Will find It increasingly difficult to find affordable housing The new Jobs that will be created by the additIonal commercIal development ongoIng In the CIty Will only serve to aggravate thiS housing crisis by generating additional demands on this limited supply of hOUSing The result Will be that these workers will be forced to live in more distant communities and commute to Santa MOnica ThiS trend WIll add to the already 5 heavy burden on the region's congested streets and overtaxed transportation system The loss ofthls housing will also result In Increased over-crowding forthose individuals who are unable to secure larger affordable unIts as their need for such umts develop (p) At the same time as Costa-Hawkins was phasing in, the City was experiencing a time of unprecedented economic boom Land values were skyrocketing again In the single family neighborhoods, small lots sold for sums ranging from hu ndreds of thousands of dollars to a mIllion or more. During the six month penod from November 1998 through May 1999, the average two-bedroom house sold for almost $566,000 00 while the average three bedroom house sold for over $756,000. The burgeoning economy Impacted the multi-famIly development as well. Between 1996 and 1997, the number of multi-family housing Units approved for construction almost tripled. Prior to that time, the three year average was under 80 new Units per year. In 1997 the number Jumped to 234 (excluding one enormous and highly unusual proJect of 351 Units) (q) Along With the economic boom and acceleration in building came a dramatic shift In demographics The vast maJonty of new, privately bUilt Units were for upper Income purchasers These new housing developments have committed scarce land resources to proViding luxury housing whIch IS un affordable to most reSidents of the City. Moreover, market conditions, Including the high cost of residential land, construction costs, and the availability and cost of finanCing, make the development of affordable housing In the City extremely dIfficult (r) WIthout a contmuatlon of the moratorium, planning approvals for multi-family construction would substantially exceed the rate approved last year Accelerated development Impacts the City as a whole and also Impact the dally lives of reSidents who 6 must cope with the nOise and Interference caused by construction undertaken In a crowded, fully developed community. ConstructIon matenals and eqUIpment are often placed In the roadway and/or on sidewalks, thereby obstructing both vehicular and pedestrian traffic Neighborhood aesthetics suffer (s) A significant amount of the City's residential hOUSing stock was built pnorto the 1960's Parcels developed with older structures tend to be developed at densities and heights that are lower than what IS currently allowed by zoning Given these conditions and the booming economy, there IS a high likelihood that Without a continuation of the moratonum, a significant amount of construction would occur In the City With its attendant disruption to residents' peace and qUiet enjoyment. (t) The redevelopment of these currently underdeveloped properties at greater height and densities would also result In the loss of views and light and could pose a threat to the existing character of neighborhoods and the City's unique natural environment (u) There IS also a significant shortage of reasonably available and convenient parking spaces In these reSidential dlstncts. ThiS IS demonstrated In part by the large number of preferential parking dlstncts that have been established by the City and the continued demand for the creation of new preferential parking dlstncts Given the growing affluence of the commumty, Increased development may exacerbate an already unacceptable level of parking problems. (v) In order to address the changes resulting from Costa-Hawkms and from the economiC boom, in part, the City undertook a reVISion of ItS hOUSing policies through the process of amending the City'S HOUSing Element ThiS was a difficult process State HOUSing Element law purports to require Cities to continually proVide new hOUSing 7 However, Santa Monica IS fully bUilt out and committed to neighborhood preservation Despite this problem and an additional problem caused by the State's failure to supply RHNA numbers, Santa MOnica completed the amendment process last summer, and the State approved its amendment. The Housing Element establishes the City'S fair share at 3,219 housing u nits and ItS quantified obJective at 1,542 housing units These objectives are based exclUSively on the construction of new housing (w) After the City completed reVISions, the State again changed the law ThiS time, the State amended the Housing Element law to allow CIties to count rehabilitated units In meeting their "fair share" of hOUSing opportunitIes ThiS change has maJor significance for Santa Monica because the City has an aging hOUSing stock and a strong commitment to neighborhood preservation Accordingly, consistent with local policies favonng preservatIon, the CIty needs the opportunIty to evaluate whether thIS change In state law affords new opportunities for the City to fulfill its own goals. ThiS process Will take some time because the state law which allows the counting of rehabilitated units IS complicated and difficult to utilize (x) Maintaining the unique character of Santa MOnica's neighborhoods IS Important for many reasons First, City reSidents value their neighborhoods The preservation of neighborhoods promote a sense of place and loyalty from residents It proVides reSidents with qUiet enJoyment In their homes and a community which eXists on a pedestrian friendly scale. DeSIgn and development standards whIch are sensitIve to existmg neighborhood conditions can further environmental and social goals. Preservation of existing neighborhoods can serve to maintain the City's supply of affordable housmg and ItS architectural diverSity Meanwhile, workers need good traffic cIrculation, adequate parking 8 and perhaps even places to live. Tourists expect to recreate In an aesthetically appealing community whIch combmes entertainment opportunities with small town warmth and charm. (y) The City must address the very difficult question of how to balance these competing demands and fulfill ItS legal responsibility to provide affordable housing In new ways The method which worked for twenty years has been eviscerated by State action. Time IS needed to expeditiously evaluate the new option for rehabilitation supplied by state law (z) In light of the above-mentioned concerns, the City Council adopted Ordinance Number 1944 (CCS) on May 25, 1999 which established a moratonum on multi-family development In the City's multi-family reSidential dlstncts with specific exceptions However, that ordinance will expire on July 9. 1999 (aa) For the reasons descnbed above, the City Council finds that another Interim ordinance IS necessary because the continuing development of multi-family housing In the City'S reSidential zones prior to the comprehensive revIew of the City's housing and land use policies and regulations presents a current and Immediate threat to the public peace, health, safety, and welfare If urgent action IS not taken, Irreversible development activity will continue unabated, thereby commItting scarce land resources to development that is not In the best Interests of the reSidents of the City. The approval of additional multi-family housmg development In the CIty's multI-famIly housing dIstricts, WIth limited exceptIon, pending the City's review of ItS housing and land use poliCies and regulations would result In a threat to the public health, safety, and welfare Consequently, thiS ordinance extends the proVIsions of Ordinance 1944 up to and including March 28, 2000 to provide the City 9 sufficient time to further evaluate the effects of the substantial increase In the rate of development In the City's multi-family zones and the City's loss of affordable housing and to develop appropriate requirements and programs to preserve the City's character, diversity, and quality of life In this period of drastic change SECTION 2. Moratonum (a) Subject to the exemptions set forth In Section 3 of this Ordinance, a moratorium IS hereby placed on the acceptance for processing of any applications for approval of tentative tract maps, tentative parcel maps, administrative approvals, development review permits, and conditional use permits, for any residential bUilding or structure, including any hotel or motel, on properties located In multi-family residential districts In the City. For purposes of thiS Ordmance, the multi-family residential distncts m the City are" R2R, R2, R3, R4, RVe, RMH, OPDuplex, OP2, OP3, OP4, NWOverlay, R2B, and R3R (b) SubJect to the exemptions set forth In Section 3 of thiS Ordinance, the Planning Commission and City staff are hereby directed to disapprove all applications which have not been deemed complete as of May 25, 1999, for tentative tract maps, tentative parcel maps, administrative approvals, development review permits, and conditional use permits for any residential bUilding or structure, including any hotel or motel, on properties located In multi-family reSidential districts In the City. 10 SECTION 3 Exemptions The following applications are exempt from the provIsions of Section 2 of thiS Ordinance (a) Applications for approval of permits involVing the erection, construction, enlargement, demolition or moving of, and excavation and grading for any multiple dwelling development Intended for rental housing for persons of low and moderate Income and whIch development IS financed by any federal, state or City housmg assistance program or owned by any non-profIt organizatIon, provided the DIrector of Planning determines that such development IS In conformance With the General Plan and the ZOning OrdInance and provided a deed restriction IS recorded restricting the development to such purpose (b) Apphcatlons for approval of permits involVing the erection, constructIon, and excavatlon and grading for an additional residential dwelling Unit on a Site, which as of May 25, 1999, was developed with and will maintain an eXisting single family home (c) Applications for approval of permits Involving the erection, construction, enlargement of, and excavation and grading for, a project which will be developed on a site that was vacant as of May 25, 1999 (d) Applications for approval of permits involVing the erection, construction, enlargement, demolition or moving of, and excavation and gradIng for a project which will be developed on a site whIch contams structures that are unmhabltable and which cannot be rendered habitable In an economIcally feaSIble manner SECTION 4. ThiS ordinance IS declared to be an urgency measure adopted pursuant to the proVISion of Section 615 of the Santa MOnica City Charter. As set forth 11 In the findings above, this ordinance IS necessary for preserving the public peace, health, safety, and welfare SECTION 5 This Ordinance shall be of no further force and effect after March 28, 2000, unless prior to that date, after a public hearing, noticed pursuant to Santa Monica MUnicIpal Code SectIon 9.04.20.22.050, the CIty Council, by majority vote, extends thIs Interim Ordinance SECTION 6 Any provIsion of the Santa Monica MUnicipal Code or appendices thereto inconsIstent With the provIsions of this Ordinance, to the extent of such inconsistencies and no further, IS hereby repealed or modified to that extent necessary to effect the provisions of thiS Ordinance SECTION 7. If any section, subsection, sentence, clause, or phrase of this Ordinance is for any reason held to be invalid or unconstitutional by a deciSion of any court of competent JUrisdiction, such decIsIon shall not affect the validity of the remaining portIons ofthls Ordinance The City Council hereby declares that It would have passed thiS Ordinance and each and every section, subsection, sentence, clause, or phrase not declared invalid or unconstitutional Without regard to whether any portion of the ordinance would be subsequently declared invalid or unconstItutIonal SECTION 8 The Mayor shall sign and the City Clerk shall attest to the passage of thiS Ordinance. The City Clerk shall cause the same to be published once In the offiCial 12 newspaper wIthIn 15 days after Its adoption This Ordinance shall become effectrve upon Its adoption APPROVED AS TO FORM ^\.flUj~ ~~h' -~~ MARSHA J~UTRIE City Attorney 13 Adopted and approved thIS 29th day of June, 1999 ~.02'1 p~ O'Connor, Mayor State of Cabforma ) County of Los Angeles ) ss City of Santa Momca ) I, Mana M Stewan, CIty Clerk of the City of Santa Momca, do hereby cenlfy t.ltat the foregoIng OrdInance No 1947 (CCS) had Its IntroductIOn and adoptIOn on June 29. 1999, by the followmg vote. Ayes CouncIl members McKeown, FemsteIn, Bloom, Mayor Pro Tern Genser, Mayor O'Connor Noes CouncIl members Rosenstem Abstam Council members None Absent CouncIl members Holbrook c.. ATTEST ~ -~~~~ Mana M Stewan, CIty '&e~-- -;.