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Santa Monica, California
ORDINANCE NUMBER 1968(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. Findinas 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 of the 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 amenities and a community scale that
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(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
communities in Los Angeles County. Santa Monica is also the workplace for approximately
155,000 workers and a destination for as many as 400,000 daily 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 sixty-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) Planning 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 residential among westside/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. In the late 1970's,
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demolished and hundreds of others were converted into condominiums. These housing
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units 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 policy issues raised by the Demolition Derby
but could not resolve them. So the voters took control. They amended the City Charter by
adopting a stringent Rent Control Law. The law imposed strict controls on rents, which
applied even when units were vacated, and restricted the demolition or conversion of
controlled units. Legal challenges ensued, but the courts upheld the iaw as a legitimate
exercise of the City's police 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
ofthe City. In the years following its adoption ofthe Rent Control Law, the City maintained
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
interaction and quietude. The streets in the residential neighborhoods were "pedestrian
friendly". A City survey showed that walking became City residents' favorite recreational
activity .
(i) Meanwhile. in the years following the adoption of the Rent Control Law, the rest
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selling for $250,000 or more. Prices dipped in the early 1990's, and shot upwards again,
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making it virtually impossible for low or moderate income families to purchase homes in the
R-1 District.
Q) 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
increase dramatically as new multi-story office buildings are completed during 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 richer and more crowded, but the multi-
family residential neighborhoods remained relatively quiet and stable considering their
density. Accordingly, for years, a balance was struck between residential and commercial
interests which preserved the characterofthe City's multi-family residential neighborhoods
but allowed the City to flourish economically.
(I) In 1994, natural disaster swept the City into a period of transition. On January
17th, the City suffered widespread damage to both its residential and commercial districts
as a result of the Northridge earthquake. The earthquake rendered approximately 3,100
dwelling units uninhabitable and damaged thousands of other properties thus necessitating
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
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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 Monica. It also threw the community into a period of extreme uncertainty 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 December 31 ,1999, there have been vacancy increases on 3,192
units which has resulted in the loss of 2,000 units formerly affordable to low income
households. 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 affordability has a number of serious repercussions. At a time when
the demand for affordable housing already exceeds supply, the additional loss of
affordable housing 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 into 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
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unable to secure larger affordable units as their need for such units develop.
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(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 hundreds ofthousands
of dollars to a million or more. During the six month period 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 cost of single family homes has
continued to increase dramatically since that time. 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). Moreover, the rate of development
activity in the City's multi-family residential districts in 1999 represented a 246% increase
over the rate in 1998/1997 and a 533% increase over the rate in 1996.
(q) Along with the economic boom and acceleration in building came a dramatic
shift in demographics. The vast majority 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 unaffordable 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
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(r) A significant amount of the City's residential housing stock was buiit prior to 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. The redevelopment of
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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.
(s) There is also a significant shortage of reasonably available and convenient
parking spaces in these residential districts. This is demonstrated in part by the large
number of preferential parking districts that have been established by the City and the
continued demand for the creation of new preferentiai parking districts. Given the growing
affluence of the community, increased development may exacerbate an already
unacceptable level of parking problems.
(t) In order to address the changes resulting from Costa-Hawkins 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.
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 units and its quantified objective at 1,542 housing units. These objectives
are based exclusively on the construction of new housing.
(u) After the Citv comnleteri revi!':ion!': the ~t::ltFl ::In::lin r.h::lnnFlri thFlI::lw Thi!': timFl
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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
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neighborhood preservation. Accordingly, consistent with local policies favoring
preservation, the City needed the opportunity to evaluate whether this change in state law
affords new opportunities for the City to fulfill its own goals.
(v) 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 existing neighborhood
conditions can further environmental and social goals. Preservation of existing
neighborhoods can serve to maintain the City's supply of affordable housing and its
architectural diversity. Meanwhile, workers need good traffic circulation, adequate parking
and perhaps even places to live. Tourists expect to recreate in an aesthetically appealing
community which combines entertainment opportunities with small town warmth and
charm.
(w) 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.
(x) In light of the above-mentioned concerns, the City Council adopted Ordinance
Number 1944 (CCS) on May 25, 1999 which established a moratorium on multi-family
development in the City's multi-family residential districts with specific exceptions. On June
29, 1999, the City Council adopted Interim Ordinance Number 1947 (CCS) extending
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Interim Ordinance Number 1944 (CCS) for nine months or until March 28, 2000. This
extension was necessary to provide the City sufficient time to analyze the issues outlined
above.
(y) On March 7, 2000, City staff returned to the City Council with its analyses and
proposals responsive to the previous Council direction. More specifically, staff proposed
an interim ordinance to require a design compatibility permit for residential condominium
projects and to implement a construction rate management program in all multi-family
residential districts with limited exceptions. Staff also presented an updated Affordable
Housing Production fee analysis and requested that Council direct staff to prepare a fee
resolution to reflect the updated analyses. Additionally, staff provided its analysis of AS
438 as it relates to the City's 1998-2005 Housing Element Technical Update.
(z) Council adopted the interim ordinance and directed staff to prepare the fee
resolution. The Council also determined that there were additional issues and programs
which required staff analysis and public comment prior to the expiration of the moratorium
in order to ensure that the objectives of the moratorium were achieved and that City's
character, diversity and quality of life were preserved. These actions include, among
others: applying the North of Wilshire Overlay standards to other multi-family
neighborhoods and assessing possible incentives that could be established for the
preservation of existing housing types or existing affordable housing.
(aa) For the reasons described 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 completion of the City's comprehensive review of its
housing and land use policies and regulations presents a current and immediate threat to
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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 housing development in the City's multi-family housing districts, with
limited exception, pending the City's completion of its review of its housing and land use
policies and regulations would result in a threat to the public health, safety, and welfare.
Consequentiy, this ordinance extends the provisions of Ordinances; 944 (CCS) and; 947
(CCS) for fifty (50) days or up to and including May 17, 2000, to provide the City sufficient
time to further evaluate and undertake the additional actions directed by Council.
SECTION 2. Moratorium.
(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 Ordinance, the multi-family residential districts in the City are: R2R, R2,
R3, R4, RVC, 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
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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 housing 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) Applications for approval of permits involving the erection, construction, and
excavation 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 or a duplex.
(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 contains structures that are uninhabitable 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 fifty (50)
days or May 17, 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 of this 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 effective upon
its adoption.
APPROVED AS TO FORM:
13
Adopted and approved this 28th day of March, 2000.
~~~
Ken Genser, M~yor
State of California )
County of Los Angeles) ss.
City of Santa Monica )
I, Maria M. Stewart, City Clerk of the City of S1Ll1ta MODica, do hereby certify that the
foregoing Ordinance No. 1968 (CCS) had it's introduction and adoption at the City Council
meeting held on March 28,2000, by the foilowing vote:
Ayes:
Council members:
Rosenstein, McKeown, Feinstein, Bloom, Mayor Pro Tern
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V ~UllllUl, IVl<lYUl Uelll>el
Noes: Council members:
Holbrook
Abstain: Council members:
None
Absent: Council members:
None
ATTEST:
--.
\<~::_..{ ~ 1_;
Maria M. Stewart, City Clerk