SR-400-001-03
PCD:SF:f:\ppd\share\ccreport\hsngelmt\Housing Element Update.doc
Council Mtg: April 24, 2001 Santa Monica, California
TO: Mayor and City Council
FROM: City Staff
SUBJECT: Recommendation to Conduct a Public Hearing and Approve in Concept
the Draft 2000-2005 Housing Element for Transmittal to the State
Department of Housing and Community Development (HCD) and Direct
Staff to Prepare Environmental Review.
INTRODUCTION
This staff report recommends that the City Council conduct a public hearing and
approve in concept the Draft 2000-2005 Housing Element for transmittal to the State
Department of Housing and Community Development (HCD) and direct staff to prepare
the environmental review on the document.
BACKGROUND
The Draft 2000-2005 Housing Element is a technical update to the City’s current
Housing Element adopted by the City Council on April 21, 1998. One of seven
mandated elements of the General Plan, the Housing Element establishes a five-year
plan for addressing the City’s housing needs. The Draft Housing Element has been
prepared in conformity with State law. In large measure, the Draft 2000-2005 Housing
Element commits the City to continue housing programs established in the 1998-2003
Housing Element. The Planning Commission held a public hearing and reviewed the
Draft 2000-2005 Housing Element on February 28, 2001. The Housing Commission
received the document on March 8, 2001 and reviewed the document at its April 19,
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2001 meeting. The comments of the Planning Commission are summarized later in this
report. Housing Commission comments are provided as a supplement to this staff
report.
This report provides the following: background information including a summary of
applicable legal requirements, a description of the Draft Element’s contents, a summary
of key technical changes, a summary of the Housing Element goals and changes to
program action plans, and a summary of the Planning Commission’s recommended
modifications to the Element.
ANALYSIS
Applicable Legal Requirements
By law, the City’s Housing Element must analyze existing and projected housing needs,
set forth goals, policies, and programs for addressing those needs, and identify
adequate housing sites. Additionally, the Housing Element must identify potential and
actual constraints upon the maintenance, improvement, or development of housing for
all income levels. Specifically, the legislation requires the following:
The housing element shall consist of an identification and analysis of
existing and projected housing needs and a statement of goals, policies,
and quantified objectives and scheduled programs for the preservation,
improvement, and development of housing. The housing element shall
identify adequate sites for housing, including rental housing, factory-built
housing, and mobile homes and shall make adequate provision for the
existing and projected needs of all economic segments of the community.
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California Housing Element law (Section 65588) requires that local jurisdictions update
their housing elements every five years, however, such updates are contingent on
preparation of future regional housing needs estimates, i.e. fair share targets (“RHNA”).
The agency responsible for assigning these fair share targets for Santa Monica is the
Southern California Association of Governments (SCAG).
SCAG adopted its prior RHNA in 1988, covering the 1988-1994 planning period. In
1994, SCAG was technically required to prepare a RHNA for the 1994-1999 period.
SCAG’s ability to prepare the RHNA, however, was dependent on the State Legislature
appropriating funds for this State-mandated local program. As part of an effort to
balance the State budget in the early 1990s, the Legislature chose not to provide funds
for the mandate and therefore SCAG took the position that its obligation to prepare a
new fair share allocation for member jurisdictions was suspended. In fact, subsequent
legislation was adopted in 1993, 1996 and 1998 to postpone the due dates for the
Housing Element.
Although many communities in southern California did not update their housing
element, Santa Monica chose to do so. In preparing the 1998-2003 Housing Element,
the City engaged in an in-depth, comprehensive evaluation of the City’s housing needs
and resources, housing-related regulations, and programs. The City also estimated its
“fair share” housing need by applying SCAG’s 1988 RHNA calculation, with variations in
some of the calculation assumptions to account for alternative household growth rates.
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Through this evaluation, the City identified the following priority goals and objectives:
preservation of affordable housing threatened by the Costa-Hawkins Rental Housing
Act, the development of housing for families, and reexamination of the City’s
development incentives and standards for affordable housing. The policies and
programs set forth in the 1998-2003 Housing Element directly responded to these
identified priorities.
A summary of the 1998-2003 Housing Element is contained in the staff reports that
were presented to City Council prior to that element’s adoption (Attachment B). The
1998-2003 Housing Element was adopted following an extensive public process to
receive input and to foster a discussion of housing issues and policies for the City. It
was reviewed by an inter-departmental committee comprised of representatives of the
Community and Cultural Services Department, the Housing Division, Rent Control
Administration, the City Manager’s Office, the City Attorney’s Office and the Planning
and Community Development Department. The committee collectively considered
public input and the analyses prepared by the City’s consultants, and formulated the
proposed goals, policies and programs of the Housing Element based on input received
at the public workshops, and the desire to continue to provide the community with a
broad array of affordable housing opportunities.
The 1998-2003 Housing Element was adopted by the City Council on April 21, 1998.
The State Department of Housing and Community Development (HCD) approved the
City’s Housing Element in November 1998. In November 2000, SCAG assigned the
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City a new RHNA allocation for the 1998-2005 planning period. The need to update
the 1998-2003 Housing Element is largely the result of SCAG’s recent action.
Consequently, the Draft 2000-2005 Housing Element is considered a technical update.
As detailed later, the City has been highly successful in meeting many of the objectives
set forth in the 1998-2003 Housing Element and therefore the Draft 2000-2005 Housing
Element includes the same goals and policies. The proposed changes to the Element
reflect changes to the City’s RHNA allocation, updates to relevant data cited in the
Element, and refinement to programs, many of which have been implemented since the
adoption of the 1998-2003 Element. The law also requires that the information within
the Element be updated to reflect current conditions and to reflect the City’s progress
towards meeting the goals and objectives of the current Housing Element. Adoption of
the Housing Element in compliance with State law not only provides the City with a
valuable planning tool but also satisfies a requirement that the City must meet to receive
State housing funds.
The City has retained two consulting firms for this project. Cotton/Bridges/Associates
(CBA) has prepared the technical update to the Draft Housing Element, and Hamilton,
Rabinovitz and Alschuler (HR&A) has prepared technical memoranda in support of the
Housing Element.
Contents of the Housing Element
The Draft 2000-2005 Housing Element is bound under three separate covers -- the
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2000-2005 Housing Element Update, Technical Appendix #1, and Technical Appendix
#2. The latter two documents were prepared by Hamilton, Rabinovitz & Alschuler
(HR&A). The Housing Element Update is organized according to State law as follows:
Section II - Housing Needs. An assessment of housing needs
Section III - Potential Constraints on Housing Production and Conservation. A
discussion of potential constraints on housing production
Section IV- Housing Resources. An assessment of housing resources
Section V - Review of Housing Element Past Performance. A summary of
progress under the 1993 Housing Element and the 1998-2003 Housing Element
Section VI - Housing Objectives, Goals, Policies, and Programs. A description of
the goals, quantified objectives, policies, and programs that the city has chosen
to meet the identified needs.
The memoranda included in Technical Appendix #1 were prepared for the 1998-2003
Housing Element and remain relevant to the analysis in this update. Technical
Appendix #1 includes the following memoranda:
? Results of the 1995 Santa Monica Apartment Tenants Survey.
? The Impacts of the Costa-Hawkins Rental Housing Act on the Rent-
Controlled Apartment Stock in Santa Monica.
? Assessment of the Rent Control Board's Ellis Act Removal Permit Process
as a Potential or Actual "Constraint" on the Development of Housing.
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? Assessment of Four Large-Scale Residential Rezoning Actions as a
Potential or Actual "Constraint" on the Development of Housing.
? Assessment of the City's Inclusionary Housing Program (Ordinance 1615)
as a Potential or Actual "Constraint" on the Development of Housing.
? Cumulative Effects of Five City of Santa Monica Requirements on Multi-
Family Housing Projects as a Potential or Actual "Constraint" on the
Development of Housing.
Technical Appendix #2 analyses the degree to which eight City policies, programs and
regulations, or features of them, operate as “actual or potential governmental
constraints” on the production of new housing. Specifically, HR&A analyzed the impact
of changes to the City’s regulatory framework on housing development. These studies
are grouped into three subsets of analyses and are included as Technical Appendix #2.
The three subsets are as follows:
?
City Council actions to modify development and construction regulations. These
include the development moratoria in the City’s multi-family districts, changes in
multi-family district development standards, and a construction rate program;
?
Specific discretionary review procedures, including Rent Control law removal
permits, the Landmark Ordinance, project scale thresholds for Development
Review Permits, Design Compatibility Permits for condominiums, and various
other discretionary review procedures; and
?
Features of the City’s Affordable Housing Production Program with specific focus
on the affordable housing fee for condominium projects and administrative
procedures for exercising the available mitigation options.
Key Technical Changes
In addition to the technical update necessitated to address the approved RHNA
allocation, the law also requires that the information within the Element be updated to
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reflect current conditions and to reflect the City’s progress towards meeting the goals
and objectives of the current Housing Element. Changes were made in the following
areas:
Data Update
?
Projected Housing Needs
?
Funding
?
Potential for Residential Development in Commercial Districts
?
Potential Governmental and Non-Governmental Constraints
?
Quantified Objectives
?
A brief discussion of each of these key technical changes follows.
Data Update: In preparing the 2000-2005 Housing Element, updated data was obtained,
wherever possible, to provide a portrait of the housing needs and resources available in
Santa Monica. The 1990 Census still provided the primary basis for demographic
characteristics since it remains the most comprehensive and widely accepted source on
demographic characteristics. The following data provide updated information in the
2000-2005 Housing Element:
?
Demographic data from the State Department of Finance, the Santa
Monica-Malibu Unified School District, and the Employment
Development Department as of 2000.
?
Housing market data was updated by obtaining the Year 2000
apartment rents and sales prices of homes through surveys, tax
assessor's files, and other available sources.
?
City agencies and various service agencies were consulted to provide
information on the magnitude of special needs populations as of Year
2000; and
?
Data on lending patterns were updated based on interviews with City
staff and utilization of outside sources where available.
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Projected Housing Needs: As discussed, State Housing Element law requires that each
city and county develop local housing programs designed to address its “fair share” of
existing and future housing needs for all income groups, as determined by the
jurisdiction’s Council of Governments, when preparing the State-mandated Housing
Element of its General Plan. SCAG’s process for adopting the 1999 RHNA concluded
in November 2000.
The RHNA allocation for the City of Santa Monica is 2,208 units of housing to be
constructed over a 7 ½ year period. The City’s total construction need is the sum of
units needed for household growth during the 1998-2005 period (1,133 units), additional
units needed to achieve an ideal vacancy rate, now and in the future (152 units), plus
additional units to account for demolitions and other housing stock losses during the
planning period (923 units), for a total of 2,208 units.
The RHNA allocation distributes the construction need total into four household income
categories: very low income; low income; moderate income; and, above moderate
income. The following table presents the RHNA allocation for Santa Monica.
1999 Regional Housing Needs Assessment Allocation to Santa Monica, 1998-2005
Construction 1998-2005 Replacement Total
Existing
Need Household and Future Need
Growth Vacancy
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Need
Number of Units 1,133 152 923 2,208
Household Very Low Low Moderate Above Total
Income Income Income Income Moderate
Distribution Income
Number of Units 513 335 431 929 2,208
Percent of Total 23% 15% 20% 42% 100%
Source: SCAG, Final 1999 Regional Housing Needs Assessment
The City’s zoning laws and policies include substantial incentives for the production of
affordable housing, including height and density bonuses and reduced parking
requirements. In addition, the City operates a number of programs that facilitate the
production of affordable housing. These include loans to private, for-profit developers
and owners and funding to non-profit agencies to acquire or construct housing units.
The City also funds many social service programs which provide emergency shelter,
transitional housing and permanent and supportive housing to individuals and families
with very low incomes.
These and other laws, policies and programs have resulted in the preservation and
production of an extraordinary number of affordable units within the City. The presence
of these units has allowed a very substantial number of low and moderate income
households to live in the City notwithstanding its desirable location and high real estate
values.
In creating housing policy the City has tried to strike a balance between protecting the
existing housing stock, and allowing for the development and production of new housing
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for all income groups while protecting the quality of life within the City.
Funding: Increasingly, the threats of federal and state budget cuts have left many local
jurisdictions unable to provide their affordable housing production. Due to these funding
and revenue reductions, the City must be aggressive in pursuing creative financing
mechanisms. The technical update to the 2000-2005 Housing Element reflects
changes to funding amounts and sources and related affordable housing production
estimates.
Potential for Residential Development in Commercial Districts: The City has long
promoted residential development, or mixed use, in commercial zones. In 1993, the
City amended the Zoning Ordinance to conditionally permit residential development in
the Special Office Commercial (C5) and Industrial Conservation (M1) Districts, and to
permit residential uses in most other commercial districts (BCD, C2, C3, C3C, C4, C6).
In 1995, the City established the Light Manufacturing Studio District (LMSD) to replace
a portion of the M1 and C5 districts. The LMSD permits studio live/work uses, while
preserving existing light industrial uses and providing a location for studio-related uses,
such as film and music production and post-production facilities. The City also permits
residential development in the commercial Bayside Commercial District (BSC), which it
established in early 1996. Moreover, in several districts, the City offers special
incentives for housing. In the C3, C3C and CM districts, any floor area devoted to
residential use is eligible to receive a FAR (Floor Area Ratio) discount of 50 percent. In
BCD, C2, C4, and C6 districts, the City offers increased density if at least 30 percent of
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the FAR is residential. These changes have been very successful in bringing residential
development to commercial districts.
While the 1998-2003 Housing Element included an analysis of sites in commercial
districts that would be most likely to recycle during the planning period and an
assessment of the potential for residential development, the 2000-2005 Housing
Element refines this analysis. The analysis is limited to the downtown, the Broadway
Commercial District and the Main Street corridor since these are the areas where there
has been demonstrated and significant market interest in residential development. This
analysis can be located on Table IV-5 (Residential Unit Potential in Select Commercial
Zones Under Varying Development Scenarios) of the Draft Housing Element.
Potential Governmental and Non-governmental Constraints: The Draft Housing
Element includes a detailed analysis of potential governmental and non-governmental
constraints upon the development, maintenance and improvement of housing. In
assessing whether a City program operates as an actual constraint on housing
production, the Element uses the following definition of “actual government constraint”:
A program will constitute an actual governmental constraint on new housing
production within the meaning of Government Code 65583(a)(4) if the program,
either individually or in combination with other governmental programs, has a
significant adverse impact on the City’s ability to meet its fair share of the
regional need for additional housing determined in accordance with the Southern
California Association of Governments’ regional housing need allocation process.
Since State certification of the1998-2003 Housing Element, the City has modified some
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programs and enacted, or indicated an intention to enact, other programs that have
been identified as potential governmental constraints. The Draft 2000-2005 Housing
Element includes an assessment of these programs. A detailed analysis of many City
policies and programs prepared by HR & A is included in Technical Appendix #2.
Quantified Objective: The Draft 2000-2005 Technical Update includes a quantified
objective that reflects changes in housing market characteristics, available funding for
publicly assisted affordable housing, and the new RHNA allocation. The City’s 1998-
2003 Housing Element established a housing production objective of 1,542 new
housing units; the updated housing element proposes a production objective of 2,208
new units including 513 very low income units, 335 low income units, 431 moderate
income units, and 929 above moderate income units. As discussed this housing
production objective is for the 1998-2005 time period. This housing production objective
will allow the City to provide its “fair share” of new housing to satisfy the region’s
housing needs as determined by the RHNA allocation.
Planning Commission Recommendations
The City’s Planning Commission reviewed the Draft 2000-2005 Housing Element at its
February 28, 2001 meeting and recommended conceptual approval. The Commission
recommended that the population density of the City be presented in the document in
such a way as to factor out large land masses such as the airport. Additionally, the
Commission recognized that the City provides its fair share of housing in terms of
density, and that the City seeks to protect the quality of life and preserve its character
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for the residents of Santa Monica.
Housing Commission Recommendations
The City’s Housing Commission received copies of the Draft 2000-2005 Housing
Element. The Commission discussed the Draft Element at its April 19, 2001 meeting.
Housing Commission comments are provided as a supplement to this staff report.
Conclusion
The Draft 2000-2005 Housing Element is a technical update to the recently adopted and
HCD certified 1998-2003 Housing Element. The proposed modifications include
changes to the City’s RHNA as recently determined by the SCAG, updates to relevant
data cited in the current Housing Element, and refinement to programs, many of which
have been implemented since the adoption of the 1998-2003 Element. No significant
changes to the policies and goals established in the previous Element have been
proposed. The City will meet its housing allocation and existing programs will not
impede the production of units.
Following City Council conceptual approval, this draft document will be transmitted to
the State Department of Housing and Community Development (HCD) for a 60-day
review period. Following this review, the Draft 2000-2005 Housing Element will be
revised as necessary to address HCD’s concerns. The revised Housing Element and
the CEQA documentation will be reviewed by the Planning Commission and then
reviewed by the City Council. Following Council certification of the CEQA
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documentation and adoption of the 2000-2005 Housing Element, the document will be
submitted to HCD for review and approval.
CEQA STATUS
An Environmental Impact Report (EIR) was prepared for the 1998-2003 Housing
Element Update and evaluated the potential environmental impacts of implementation
of the policies and programs contained in the Housing Element. An Initial Study will be
prepared for the Housing Element Update prior to adoption by the City Council. No new
programs are contained in the 2000-2005 Housing Element Update, but the action plans
of some programs have been modified. The Initial Study will examine only the potential
environmental effects of the new and modified programs.
PUBLIC NOTIFICATION
The Draft 2000-2005 Housing Element Update has been prepared and was made
available for public review on February 22, 2001. The availability of the document and
the City Council public hearing were noticed by mailing flyers to all people on the City's
"Big List" and to local non-profit housing developers, affordable housing advocates, and
other interested parties. A display ad was also published in the Westside Weekly
section of the Los Angeles Times and on the City’s web site. A copy of the notice is
included as Attachment A.
BUDGET/FINANCIAL IMPACT
The recommendation presented in this report does not have any budget or fiscal impact.
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RECOMMENDATION
Staff respectfully recommends that the City Council conduct a public hearing on the
Draft 2000-2005 Housing Element, consider changes as proposed by the Planning
Commission, approve the Draft Element in concept, direct staff to transmit the draft
document to the State Department of Housing and Community Development (HCD) for
review and comment, and direct staff to begin the CEQA process.
Prepared by: Suzanne Frick, Director
Jay Trevino, AICP, Planning Manager
Amanda Schachter, Principal Planner
Susan Healy Keene, AICP, Senior Planner
Laura Beck, AICP, Associate Planner
Planning and Community Development Department
ATTACHMENTS:
A. Public Hearing Notice
B. Planning Commission staff report 2/28/01 with Attachments
C. Summary of Housing Element Goals and Changes to Program
(Not available electronically - Can be viewed in the
Action Plans
City Clerk’s Office)
(Not
D. Draft Housing Element 2000-2005 with Technical Appendices
available electronically - Can be view in the City Clerk’s Office)
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ATTACHMENT A
Public Hearing Notice
17
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NOTICE OF A PUBLIC HEARING
BEFORE THE SANTA MONICA CITY COUNCIL
SUBJECT:
Approve in Concept the Draft 2000-2005 Housing Element for Transmittal
to the State Department of Housing and Community Development (HCD)
and Direct Staff to Prepare Environmental Review.
WHEN:
Tuesday, April 24, 2001 at 6:45 p.m.
WHERE:
Council Chambers
1685 Main Street, Room 213
Santa Monica, California
DESCRIPTION OF PROJECT:
The City of Santa Monica proposes to update its
existing Housing Element which was adopted in April 1998, pursuant to Section 65302
of the California Government Code. The update consists of technical revisions to
address the Regional Housing Needs Assessment (RHNA) allocation prepared by the
Southern California Association of Governments (SCAG), revisions to reflect the
extended planning period established by the State Department of Housing and
Community Development (HCD), and updated data and programs to reflect past
changes.
The Housing Element represents a component of the City of Santa Monica General
Plan, a planning document that identifies the community’s long-term goals for
development. The Housing Element sets forth the City’s strategy to preserve and
enhance the community’s character, expand housing opportunities for all economic
segments, and provide guidance and direction for local government decision-making in
all matters related to housing. The goals and objectives contained in the Housing
Element Update provide an implementation strategy for effectively addressing the
housing needs of all Santa Monica residents for the 2000-2005 period; these are
unchanged from the 1998-2003 Housing Element. The programs proposed to meet
these goals and objectives have been changed and/or updated as necessary to reflect
past progress towards implementation.
The City Council will hear public testimony on the Draft 2000-2005 Housing Element for
approval in concept, transmittal to the State Department of Housing and Community
Development (HCD) and will direct staff to prepare environmental review.
HOW TO COMMENT
: You may comment at the City Council public hearing, or by
writing a letter. Written information received before 3:00 p.m. on the Wednesday before
the hearing will be given to the City Council in their packet. Information received after
that time will be given to the City Council prior to the meeting.
Address your letters to: City Clerk
1685 Main Street, Room 102
19
Santa Monica, CA 90401
MORE INFORMATION:
You may obtain further information about this project by calling
Associate Planner Laura Beck at (310) 458-8341, or via e-mail at laura-beck@santa-
monica.org. Sections of the Code are available at the Planning Counter during business
hours or available on the City’s web site at www.santa-monica.org. The meeting facility
is handicapped accessible. If you have any disabilities related request, contact at (310)
458-8701 or TTY (310) 458-8696 at least three (3) days prior to the meeting. Santa
Monica ‘Big Blue” Bus Lines #1, #2, #3, #7 and #8 serve City Hall.
Pursuant to California Government Code Section 65009(b), if this matter is
subsequently challenged in Court, the challenge may be limited to only those issues
raised at the Public Hearing described in this notice, or in written correspondence
delivered to the City of Santa Monica at, or prior to, the Public Hearing.
ESPAÑOL:
Esto es una noticia sobre un reporte de los posibles efectos ambientales
del Elemento de Vivienda propuesto para 2000-2005, lo cual puede ser de interes para
usted. Para mas informacion, llame a Carmen Gutierrez al numero (310) 458-8341.
F:\PPD\SHARE\NOTICES\HETECHNICALUPDATECOUNCIL.DOC
Approved as to Form:
By: _______________________
Jay Trevino, AICP
Planning Manager
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ATTACHMENT B
Planning Commission Staff Report 2/28/01
With Attachments
21
PCD:JT:SHK:LB:f:\ppd\share\ccreport\Attachment B.Housing Element.doc
Planning Commission Mtg: February 28, 2001 Santa Monica, CA
TO: The Honorable Planning Commission
FROM: Planning Staff
SUBJECT: Review and Recommendations to City Council Regarding Approval in
Concept of the Draft 2000-2005 Housing Element
INTRODUCTION:
Action:
Review of the Draft 2000-2005 Housing Element Update and recommendations to the
City Council regarding any proposed modifications.
Recommendation:
Recommend to the City Council that the City Council conceptually approve the
Technical Update and direct staff to submit it to the State Department of Housing and
Community Development for review and comment and prepare environmental review.
PROJECT DESCRIPTION
The Draft 2000-2005 Housing Element is a technical update to the City’s 1998-2000
Housing Element. One of the seven mandated elements of the General Plan, the
Housing Element establishes a five-year plan for addressing the City’s housing needs.
CEQA STATUS
An Environmental Impact Report (EIR) was prepared for the 1998-2003 Housing
Element Update and evaluated the potential environmental impacts of implementation
of the policies and programs contained in the Housing Element. An Initial Study will be
prepared for the Housing Element Update prior to adoption by the City Council. No new
programs are contained in the 2000-2005 Housing Element Update, but the action plans
of some programs have been modified. The Initial Study will examine only the potential
environmental effects of the new and modified programs.
PUBLIC NOTIFICATION
The Draft 2000-2005 Housing Element Update has been prepared and was made
22
available for public review on February 22, 2001. The availability of the document and
the Planning Commission public hearing were noticed by mailing flyers to all people on
the City's "Big List" and local non-profit housing developers, affordable housing
advocates and other interested individuals. A display ad was also published in the
“Westside Weekly” section of The Los Angeles Times. A copy of the notice is included
as Attachment A.
ANALYSIS
Background
By law, the City’s Housing Element must analyze existing and projected housing needs,
set forth goals, policies, and programs for addressing those needs, and identify
adequate housing sites. Additionally, the Housing Element must identify potential and
actual constraints upon the maintenance, improvement, or development of housing for
all income levels. Specifically, the legislation requires the following:
The housing element shall consist of an identification and analysis of
existing and projected housing needs and a statement of goals, policies,
and quantified objectives and scheduled programs for the preservation,
improvement, and development of housing. The housing element shall
identify adequate sites for housing, including rental housing, factory-built
housing, and mobile homes and shall make adequate provision for the
existing and projected needs of all economic segments of the community.
California Housing Element law (Section 65588) requires that local jurisdictions update
their housing elements every five years, however, the State's associations of
governments were unable to prepare future regional housing needs estimates until now
due to a lack of funding. The agency responsible for assigning these fair share targets
for Santa Monica is the Southern California Association of Governments (SCAG). The
City of Santa Monica independently prepared an estimate of its share of the regional
housing need and prepared a Housing Element Update for the 1998-2003 planning
period that was adopted by the City Council on April 21, 1998. The State Department of
Housing and Community Development (HCD) approved the City’s Housing Element in
November 1998.
The need to update the 1998-2003 Housing Element is largely the result of the SCAG’s
recent establishment of the City’s regional housing needs assessment (RHNA)
numbers. Consequently, the Draft 2000-2005 Housing Element is considered a
technical update. A summary of the 1998-2003 Housing Element is contained in the
staff reports that were presented to City Council (Attachment B). The 1998-2003
Housing Element was adopted following an extensive public process to receive input
and to foster a discussion of housing issues and policies for the City. It was reviewed
by an inter-departmental committee comprised of representatives of the Community and
Cultural Services Department, the Housing Division, Rent Control Administration, the
23
City Manager’s Office, the City Attorney’s Office and the Planning and Community
Development Department. The committee collectively considered public input and the
analyses prepared by the City’s consultants, and formulated the proposed goals,
policies and programs of the Housing Element based on input received at the public
workshops, and the desire to continue to provide the community with a broad array of
affordable housing opportunities.
As detailed later, the City has been highly successful in meeting many of the objectives
set forth in the document. Consequently, the Draft 2000-2005 Housing Element
includes the same goals and policies. The proposed changes to the Element reflect
changes to the City’s RHNA allocation as determined by the SCAG in November 2000,
updates to relevant data cited in the Element, and refinement to programs, many of
which have been implemented since the adoption of the 1998-2003 Element. The law
also requires that the information within the Element be updated to reflect current
conditions and to reflect the City’s progress towards meeting the goals and objectives of
the current Housing Element. Adoption of the Housing Element in compliance with
State law not only provides the City with a valuable planning tool but also satisfies a
requirement that the City must meet to receive State housing funds.
The City has retained two consulting firms for this project. Cotton/Bridges/Associates
(CBA) has prepared the technical update to the Draft Housing Element, and Hamilton,
Rabinovitz and Alschuler (HR&A) has prepared technical memoranda in support of the
Housing Element.
Contents of the Housing Element
The Draft 2000-2005 Housing Element is bound under three separate covers -- the
2000-2005 Housing Element Update and its appendices and two Technical Appendices.
The Housing Element Update is organized according to State law as follows:
(Section II - Housing Needs) An assessment of housing needs
(Section III - Potential Constraints on Housing Production and Conservation) A
discussion of potential constraints on housing production
(Section IV- Housing Resources) An assessment of housing resources
(Section V - Review of Housing Element Past Performance) A summary of
progress under the 1993 Housing Element and the 1998-2003 Housing Element
(Section VI - Housing Objectives, Goals, Policies, and Programs) A description
of the goals, quantified objectives, policies, and programs that the city has
chosen to meet the identified needs.
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The general appendices are bound with the Draft Element; however, a series of
technical memoranda have been prepared by Hamilton, Rabinovitz & Alschuler
(HR&A) and are included under separate cover as Technical Appendix #1 and #2.
The memoranda included in Technical Appendix #1 were prepared for the 1998-
2003 Housing Element and remain relevant to the analysis in this update.
Technical Appendix #1includes the following memoranda:
? Results of the 1995 Santa Monica Apartment Tenants Survey.
? The Impacts of the Costa-Hawkins Rental Housing Act on the Rent-
Controlled Apartment Stock in Santa Monica.
? Assessment of the Rent Control Board's Ellis Act Removal Permit Process
as a Potential or Actual "Constraint" on the Development of Housing.
? Assessment of Four Large-Scale Residential Rezoning Actions as a
Potential or Actual "Constraint" on the Development of Housing.
? Assessment of the City's Inclusionary Housing Program (Ordinance 1615)
as a Potential or Actual "Constraint" on the Development of Housing.
? Cumulative Effects of Five City of Santa Monica Requirements on Multi-
Family Housing Projects as a Potential or Actual "Constraint" on the
Development of Housing.
Technical Appendix #2 analyses the degree to which eight City policies, programs and
regulations, or features of them, operate as “actual or potential governmental
constraints” on the production of new housing.
Key Technical Changes
The Draft 2000-2005 Housing Element is a technical update to the City’s existing
housing element that is necessary to address the RHNA allocation that was approved
by SCAG. The law also requires that the information within the Element be updated to
reflect current conditions and to reflect the City’s progress towards meeting the goals
and objectives of the current Housing Element. Changes were made in the following
areas:
Data Update
?
25
Projected Housing Needs
?
Funding
?
Potential for Residential Development in Commercial Districts
?
Potential Governmental and Non-Governmental Constraints
?
Quantified Objectives
?
A brief discussion of each of these key technical changes follows.
Data Update: In preparing the 2000-2005 Housing Element, updated data was obtained
to provide a portrait of the housing needs and resources available to Santa Monica
wherever possible, although the 1990 Census still provided the primary basis for
demographic characteristics since it remains the most comprehensive and widely
accepted source on demographic characteristics. The following data provide updated
information in the 2000-2005 Housing Element:
?
Demographic data from the State Department of Finance, public
school district data, and the Employment Development Department
records as of 2000.
?
Housing market data was updated by obtaining the current (2000)
apartment rents and sales prices of homes through surveys, tax
assessor's files, and other available sources.
?
City agencies and various service agencies were consulted to provide
information on the magnitude of special needs populations as of Year
2000; and
?
Data on lending patterns were updated based on interviews with City
staff and outside data where available.
Projected Housing Needs: As discussed, State Housing Element law requires that each
city and county develop local housing programs designed to meet its “fair share” of
existing and future housing needs for all income groups, as determined by the
jurisdiction’s Council of Governments, when preparing the State-mandated Housing
Element of its General Plan. SCAG’s process for adopting the 1999 RHNA concluded in
November 2000.
The RHNA allocation for the City of Santa Monica is 2,208 units of housing to be
constructed over a 7 ½ year period. The City’s total construction need is the sum of
units needed for household growth during the 1998-2005 period (1,133 units), additional
units needed to achieve an ideal vacancy rate, now and in the future (152 units), plus
additional units to account for demolitions and other housing stock losses during the
planning period (923 units), for a total of 2,208 units.
The RHNA allocation distributes the construction need total into four household income
categories: very low income; low income; moderate income; and, above moderate
income. The following table presents the RHNA allocation for Santa Monica.
26
1999 Regional Housing Needs Assessment Allocation to Santa Monica, 1998-2005
Construction 1998-2005 Existing Replacement Total
Need Household and Future Need
Growth Vacancy
Need
Number of Units 1,133 152 923 2,208
Household Very Low Low Moderate Above Total
Income Income Income Income Moderate
Distribution Income
Number of Units 513 335 431 929 2,208
Percent of Total 23% 15% 20% 42% 100%
Source: SCAG, Final 1999 Regional Housing Needs Assessment
The City has a long-standing commitment to the production of affordable housing. The
City’s zoning laws and policies include substantial incentives for the production of
affordable housing, including height and density bonuses and reduced parking
requirements. In addition, the City operates a number of programs that facilitate the
production of affordable housing. These include loans to private, for-profit developers
and owners and funding to non-profit agencies to acquire or construct housing units.
The City also funds many social service programs which provide emergency shelter,
transitional housing and permanent and supportive housing to individuals and families
with very low incomes.
These and other laws, policies and programs have resulted in the preservation and
production of an extraordinary number of affordable units within the City. The presence
of these units has allowed a very substantial number of low and moderate income
households to live in the City notwithstanding its desirable location and high real estate
values.
In creating housing policy the City has tried to strike a balance between protecting the
existing housing stock, and allowing for the development and production of new housing
for all income groups while protecting the quality of life within the City.
Funding: Increasingly, the threats of federal and state budget cuts have left many local
jurisdictions unable to provide their affordable housing production. Due to these funding
and revenue reductions, the City must be aggressive in pursuing creative financing
mechanisms. The technical update to the 2000-2005 Housing Element reflects
changes to funding amounts and sources and related affordable housing production
estimates.
Potential for Residential Development in Commercial Districts: The City has long
promoted residential development, or mixed use, in commercial zones. In 1993, the
City amended the Zoning Ordinance to conditionally permit residential development in
27
the Special Office Commercial (C5) and Industrial Conservation (M1) Districts, and to
permit residential uses in most other commercial districts (BCD, C2, C3, C3C, C4, C6).
In 1995, the City established the Light Manufacturing Studio District (LMSD) to replace
a portion of the M1 and C5 districts. The LMSD permits studio live/work uses, while
preserving existing light industrial uses and providing a location for studio-related uses,
such as film and music production and post-production facilities. The City also permits
residential development in the commercial Bayside Commercial District (BSC), which it
established in early 1996. Moreover, in several districts, the City offers special
incentives for housing. In the C3, C3C and CM districts, any floor area devoted to
residential use is eligible to receive a FAR (Floor Area Ratio) discount of 50 percent. In
BCD, C2, C4, and C6 districts, the City offers increased density if at least 30 percent of
the FAR is residential. These changes have been very successful in bringing residential
development to commercial districts.
While the 1998-2003 Housing Element included an analysis of sites in commercial
districts that would be most likely to recycle during the planning period and an
assessment of the potential for residential development, the 2000-2005 Housing
Element refines this analysis. The analysis is limited to the downtown, the Broadway
Commercial District and the Main Street corridor since these are the areas where there
has been demonstrated and significant market interest in residential development. This
analysis can be located on Table IV-5 (Residential Unit Potential in Select Commercial
Zones Under Varying Development Scenarios) of the Draft Housing Element.
Potential Governmental and Non-governmental Constraints: The Draft Housing
Element includes a detailed analysis of potential governmental and non-governmental
constraints upon the development, maintenance and improvement of housing. In
assessing whether a City program operates as an actual constraint on housing
production, the Element uses the following definition of “actual government constraint”:
A program will constitute an actual governmental constraint on new housing
production within the meaning of Government Code 65583(a)(4) if the program,
either individually or in combination with other governmental programs, has a
significant adverse impact on the City’s ability to meet its fair share of the
regional need for additional housing determined in accordance with the Southern
California Association of Governments’ regional housing need allocation process.
Since State certification of the1998-2003 Housing Element, the City has modified some
programs and enacted, or indicated an intention to enact, other programs that have
been identified as potential governmental constraints. The Draft 2000-2005 Housing
Element includes an assessment of these programs. A detailed analysis of many City
policies and programs prepared by HR & A is included in Technical Appendix #2.
Quantified Objective: The Draft 2000-2005 Technical Update includes a quantified
objective that reflects changes in housing market characteristics, available
28
funding for publicly assisted affordable housing, and the new RHNA allocation.
The City’s 1998-2003 Housing Element established a housing production
objective of 1,542 new housing units; the updated housing element proposes a
production objective of 2,208 new units including 513 very low income units, 335
low income units, 431 moderate income units, and 929 above moderate income
units. As discussed this housing production objective is for the 1998-2005 time
period. This housing production objective will allow the City to provide its “fair
share” of new housing to satisfy the region’s housing needs as determined by
the RHNA allocation.
Summary of Housing Element Goals and Changes to Program Action Plans
The City’s five-year strategy to preserve and enhance the community’s character,
expand housing opportunities for all economic segments, and provide guidance and
direction for local government in all matters related to housing, mirrors the approach
taken in the 1998-2003 Housing Element. Consequently, the goals and policies of the
2000-2005 Draft Housing Element remain unchanged. The Draft 2000-2005 Housing
Element addresses key City housing issues with goals, policies and programs including
the following:
Table VI-4 of the Draft Housing Element, entitled “Housing Program Summary Table”
details the programs and action plans. The goals of the Housing Element are outlined
below. Under each goal, any modifications to specific action plans since the 1998-2003
Housing Element are noted to reflect progress made towards their implementation:
1. Promote the construction of new housing through regulatory mechanisms.
Housing Element policies designed to promote this goal include providing
adequate sites for all types of housing, maintaining and enhancing the City’s
expedited and coordinated permit processing system, and reviewing
development standards and requirements. (See Goal 1.0 and related policies
and programs.)
Changes to Program Action Plans:
a) Program 1.a (Assess and Revise, Where Appropriate, City Regulatory
Requirements) has been modified to reflect implementation of several
actions included in the 1998-2003 action plan.
The Conditional Use Permit requirement for condominiums has
o
been eliminated and an alternative permit procedure, the Design
Compatibility Permit, has been established under an interim
ordinance to ensure an appropriate level of review. This program
in the action plan has been deleted.
The City has repealed the Inclusionary Housing Program and has
o
adopted the Affordable Housing Production Program. The action
29
plan has been modified to reflect the development and
implementation of the Affordable Housing Production Program.
The City considered whether it was necessary to modify
o
development standards to facilitate the development of density
bonus units and determined that no changes were needed.
The City has already revised the development standards in the
o
C3C District and other commercial districts so that floor area
devoted to residential uses shall be discounted by fifty percent for
the purposes of assessing whether a development review permit
is required for new development. This program in the action plan
has been deleted. However, the City continues to have a
program action plan to promote and provide incentives to develop
residential uses in non-residential zoning districts.
b) Program 1.b. (Streamline Permit Approval Process) has been modified to include
an additional program in the action plan as follows:
Develop policies and procedures that streamline the CEQA
o
process to facilitate the timely processing of development
applications.
2. Increase the supply of housing affordable to very low, low, and moderate income
persons. Housing Element policies designed to promote this goal include
ensuring the continued availability of income-restricted housing for very low, low,
and moderate income households, and cooperating with housing providers to
promote the development and operation of rental housing for very low and low
income households, and ownership housing for low and moderate income
households. (See Goal 2.0 related policies and programs.)
Changes to Action Plans:
a) Program 2.a. (Maintain an Inclusionary Housing Program) has been
changed to Program 2.a. (Maintain an Affordable Housing Production
Program). The action plan for this program has also been modified to
reflect the development and implementation of the Affordable Housing
Production Program.
b) Program 2.b. (Maintain a Density Bonus Program) The City considered
whether it was necessary to modify development standards to facilitate the
development of density bonus units and determined that no changes were
needed. The action plan has been modified to “maintain a density bonus
program”.
c) Program 2.e. (Assess Alternative Affordable Housing Finance Programs)
has been modified to remove the assessment of a Mortgage Credit
30
Certificate program since this program has been assessed and is not
considered a viable option during the planning period.
d) Program 2.k. (Expand Article 34 Authority) has been modified to reflect the
City’s success in expanding Article 34 authority and states the ongoing
commitment to utilize a variety of revenues to develop, construct, or
acquire low and moderate income rental housing projects.
3. Protect the existing supply of affordable housing. Housing Element policies
designed to promote this goal include encouraging the replacement of multi-
family housing that is demolished, and ameliorating the effects of the Costa-
Hawkins vacancy de-control act on the affordable housing stock. (See Goal 3.0
and related policies and programs.)
Changes to Action Plan:
a) Program 3.a. (Develop Programs to Ameliorate the Effects of Costa
Hawkins) has been updated to reflect the City’s accomplishments and the
mix of programs the City will investigate in developing a comprehensive
strategy to address the effects of the Costa-Hawkins Rental Housing Act
on housing affordability.
4. Promote the rehabilitation and continued maintenance of existing housing.
Housing Element policies designed to promote this goal include ensuring that
property owners are made aware of City programs to promote capital
improvements to rental housing, and ensuring that rehabilitation of existing units
does not result in permanent displacement of existing residents. (See Goal 4.0
and related policies and programs.)
5. Provide housing assistance and supportive services to very low, low, and
moderate income households and households with special needs. Housing
Element policies designed to promote this goal include encouraging a fair share
approach to providing housing opportunities and assistance to homeless, very
low, and low income household and households with special needs, and
targeting funds to ensure a broad array of supportive services to very low and
low income persons to ensure their continued maintenance of housing once
obtained. (See Goal 5.0 and related policies and programs.)
Changes to Action Plans:
a) Program 5.b. (Maintain a Community Development Grant Program) has
been modified to remove from the action plan the continued funding of a
Public Works Assessment Assistance (PWAA) program subsidizing very
low and low income households’ required streetlight and sidewalk repairs.
31
b) Program 5.c. (Maintain a Homebuyers Assistance Plan) has been
modified to reflect that the use of Mortgage Credit Certificates and the
associated silent second program, for first-time home buyers has been
assessed and deemed infeasible within this planning period.
6. Eliminate discrimination in the rental or sale of housing on the basis of race,
religion, national origin, sex, sexual preference, age, disability, family status,
AIDS, or other such characteristics. Housing Element policies designed to
promote this goal include enforcing fair housing laws prohibiting arbitrary
discrimination in the building, financing, selling, or renting of housing, on the
basis of race, religion, national origin, sex, sexual preference, age, disability,
family status, AIDS, or other such characteristics. (See Goal 6.0 and related
policies and programs.)
7. Promote quality housing and neighborhoods. Housing Element policies
designed to promote this goal include ensuring that architectural design of new
housing development is compatible with the surrounding neighborhood,
promoting safe and secure housing and neighborhoods, and encouraging
housing design which serves to deter crime. (See Goal 7.0 and related policies
and programs.)
Changes to Action Plan:
b) Program 7.b. (Provide Historic Preservation Programs) has been modified
to complete and implement the Historic Preservation Element of the City’s
General Plan.
8. Promote the participation of citizens, community groups, and governmental
agencies in housing and community development activities. Housing Element
policies designed to promote this goal include ensuring maximum citizen
involvement in housing and community development activities, and encouraging
involvement of all interested parties in the review and formulation of City housing
policies, including property owners, building industry professionals, affordable
housing advocates, lending institutions, and other interested parties. (See Goal
8.0 and related policies and programs.)
Modifications to other programs were made as necessary to reflect implementation
actions that the City has undertaken.
Housing Commission Input: The City’s Housing Commission will review the Draft 2000-
2005 Housing Element Update before the City Council hearing, which is scheduled in
March. Planning staff will forward any comments to the City Council.
32
Conclusion
The Draft 2000-2005 Housing Element is a technical update to the recently adopted and
HCD certified 1998-2003 Housing Element. The proposed modifications include
changes to the City’s RHNA as recently determined by the SCAG, updates to relevant
data cited in the current Housing Element, and refinement to programs, many of which
have been implemented since the adoption of the 1998-2003 Element. No significant
changes to the policies and goals established in the previous Element have been
proposed. The City will meet its housing allocation and existing programs will not
impede the production of units.
RECOMMENDATION
It is recommended that the Planning Commission recommend that City Council approve
the Housing Element and direct staff to submit the Draft 2000-2005 to the State
Department of Housing and Community Development for review and comment and to
begin necessary environmental review.
Prepared by: Jay Trevino, AICP, Planning Manager
Amanda Schachter, Principal Planner
Susan Healy Keene, AICP, Senior Planner
Laura Beck, AICP, Associate Planner
Attachments: A. Notice of Public Hearing
B. Staff Reports to City Council on 1998-2003 Housing Element
Update 3/18/97 and 4/14/98
C. Draft 2000-2005 Housing Element Update
D. Technical Appendices #1 and #2
33
NOTICE OF A PUBLIC HEARING
BEFORE THE SANTA MONICA PLANNING COMMISSION
SUBJECT: REVIEW OF DRAFT 2000-2005 HOUSING ELEMENT TECHNICAL UPDATE
WHEN: Wednesday, February 21, 2001 at 7:00 p.m.
WHERE: Council Chambers
1685 Main Street, Room 213
Santa Monica, California
DESCRIPTION OF PROJECT: The City of Santa Monica proposes to update its existing Housing Element which
was adopted in April 1998, pursuant to Section 65302 of the California Government Code. The update consists of
technical revisions to address the Regional Housing Needs Assessment (RHNA) allocation prepared by the Southern
California Association of Governments (SCAG), revisions to reflect the extended planning period established by the
State Department of Housing and Community Development (HCD), and updated data and programs to reflect past
changes.
The Housing Element represents a component of the City of Santa Monica General Plan, a planning document that
identifies the communitys long-term goals for development. The Housing Element sets forth the Citys strategy to
==
preserve and enhance the communitys character, expand housing opportunities for all economic segments, and
=
provide guidance and direction for local government decision making in all matters related to housing. The goals and
objectives contained in the Housing Element Update provide an implementation strategy for effectively addressing
the housing needs of all Santa Monica residents for the 2000-2005 period, these are unchanged from the 1998-2003
Housing Element. The programs proposed to meet these goals and objectives have been changed and/or updated
as necessary to reflect past progress towards implementation.
The Planning Commission will hear public testimony on the 2000-2005 Housing Element Update, make a
recommendation on adoption of the Technical Update of the Housing Element, and the recommendations will be
forwarded to the City Council.
HOW TO COMMENT: You may comment at the Planning Commission public hearing, or by writing a letter. Written
information received before 12:00 noon on the Wednesday before the hearing will be given to the Planning
Commission in their packet. Information received after that time will be given to the Planning Commission prior to the
meeting.
Address your letters to: City Planning Division, Laura Beck, AICP, Associate Planner
1685 Main Street, Room 212
Santa Monica, CA 90401
MORE INFORMATION: You may obtain further information about this project by calling Associate Planner Laura
Beck at (310) 458-8341,
or via e-mail at laura-beck@santa-monica.org. Sections of the Code are
available at the Planning Counter during business hours or available on the Citys web site at
=
The meeting facility is handicapped accessible. If you have any
www.santa-monica.org
disabilities related request, contact at (310) 458-8701 or TTY (310) 458-8696 at least
three (3) days prior to the meeting. Santa Monica ‘Big Blue” Bus Lines #1, #2, #3, #7
and #8 serve City Hall.
34
Pursuant to California Government Code Section 65009(b), if this matter is subsequently challenged in Court, the
challenge may be limited to only those issues raised at the Public Hearing described in this notice, or in written
correspondence delivered to the City of Santa Monica at, or prior to, the Public Hearing.
ESPAÑOL: Esto es una noticia sobre un reporte de los posibles efectos ambientales del Elemento de Vivienda
propuesto para 2000-2005, lo cual puede ser de interes para usted. Para mas informacion, llame a Carmen
Gutierrez al numero (310) 458-8341.
F:\PPD\SHARE\NOTICES\HETechnicalUpdate.wpd
Approved as to Form:
By: _______________________
Amanda Schachter
Principal Planner
35
PCD:SF:KG:LB
f:\ppd\share\ccreport\1996\318he
COUNCIL MEETING: March 18, 1997 Santa Monica, California
TO: Mayor and City Council
FROM: City Staff
SUBJECT: Recommendation to conduct a Public Hearing and Approve in Concept
the Draft 1998-2003 Housing Element for Transmittal to the State
Department of Housing and Community Development (HCD) and direct
staff to prepare an Environmental Impact Report on the document and
Prepare Implementation Ordinances Related to the Inclusionary Housing
Policies and Revised Development Standards.
INTRODUCTION
This staff report recommends that the City Council conduct a public hearing and
approve in concept the Draft 1998-2003 Housing Element (Draft Element) for transmittal
to HCD for review, direct staff to begin preparation of the Draft EIR, and direct staff to
prepare implementation ordinances addressing two key policy issues.
The Draft Element is an update to the current Housing Element which the City Council
adopted on September 28, 1993. One of the seven mandated elements of the General
Plan, the Housing Element establishes a five year action plan for addressing the Citys
=
housing needs.
This report provides the following: background information including summaries of
36
applicable legal requirements and the preparation process, a description of the Draft
Elements contents, a summary of the analysis contained in the Draft Element with key
=
findings and recommendations, and a summary of the Planning Commissions and
=
staffs recommended modifications to the element.
=
The Draft Element contains several programs which would commit the City to changing
existing housing programs. Key changes would include amendments to the Citys
=
Inclusionary Housing Program, revisions to residential development standards, and
revisions to the CUP process for condominiums. Staff recommends that it be directed
to begin preparation of implementing ordinances related to inclusionary housing policies
and revised development standards now because these ordinances would address the
two issues which are viewed to be the most crucial with regard to housing policy.
BACKGROUND
Summary of Legal Requirements
By law, the Citys Housing Element must analyze existing and projected housing needs,
=
set forth goals, policies, and programs for addressing those needs, and identify
adequate housing sites. Government Code 65583. Additionally, the Housing Element
'
must identify potential and actual constraints upon the maintenance,
improvement, or
development of housing for all income levels and demonstrate local efforts to remove
37
actual constraints that hinder the locality from meeting its share of the regional
A@
housing need. Id.Local jurisdictions normally must update their housing elements every
five years. Government Code 65588. The City originally prepared its current adopted
'
housing element for the 1989-1994 planning period. However, because the State
legislature failed to authorize funding for the State's associations of governments to
prepare future regional housing needs estimates for the period beyond 1994, the 1989-
1994 planning period was formally extended. Consequently, the new planning period is
1998-2003 for the Housing Element Update.
The Draft Housing Element has been prepared in conformity with both State law and the
April 5, 1995 settlement agreement in Santa Monica Housing Council, et. al. v. City of
Santa Monica, a case which challenged the Citys current Housing Element.
=
Public Participation And Preparation Process
Prior to commencement of preparation of the initial draft of the Housing Element, the
Planning and Community Development Department held a public scoping meeting and
two workshops to receive public input on areas of concern and interest and to gather
relevant information. The public scoping meeting was held on April 24, 1995; the two
workshops were held on August 5, 1995 and August 9, 1995. A summary of the
comments from these public meetings is included in the Draft Element as Appendix A.
Two consulting firms were retained by the City for this project.
Cotton/Beland/Associates (CBA) has prepared the Draft Housing Element Update, and
38
Hamilton, Rabinovitz and Alschuler (HR&A) has prepared specialized analyses and
technical memoranda in support of the Housing Element.
The Draft Housing Element was subsequently reviewed extensively by an inter-
departmental committee comprised of representatives of the Community and Cultural
Services Department, the Housing Division, Rent Control Administration, the City
Managers Office, the City Attorneys Office and Planning and Community Development.
==
The committee collectively considered public input, reviewed the work of the
consultants, and formulated the proposed goals, policies and programs of the Draft
Element based on input received at the public workshops, and the desire to continue to
provide the community with a broad array of affordable housing opportunities.
A draft of the Housing Element was released for public review and comment on
November 11, 1996.
On December 11, 1996, the Planning Commission and Housing Commission held a
joint study session to review the Draft Element. Public testimony and written comments
were received. Subsequently the Planning and Housing Commissions each conducted
separate public hearings on the Draft Element. On January 9 and January 16, 1997
the Housing Commission held public hearings. Their comments were forwarded to the
Planning Commission (Attachment B). The Rent Control Board and the Arts
Commission also held public hearings to deliberate on the Draft Element. Their
comments were also forwarded to the Planning Commission (Attachments C and D).
39
On January 15, 22, and 29 and February 5, 1997, the Planning Commission held public
hearings on the Draft Element. On February 5, 1997 the Planning Commission
concluded its deliberations and made recommendations for Council consideration which
are discussed beginning at page 23. (See also Attachment A )
Noticing
The City Council hearing on the Draft Element was noticed by mailing flyers to all
people on the City's "Big List" and the "Housing Element List" which includes the mailing
lists of the Citys Housing Division and the Rent Control Board and other interested
=
individuals. The Draft Element was made available for public review on November 11,
1996. The availability of the document and the Planning Commission hearings were
noticed in a similar fashion. A display ad announcing the availability of the document
was also placed in the Outlook and on the Public Electronic Network.
CONTENTS OF THE HOUSING ELEMENT
The Housing Element provides the City with an essential planning tool which sets forth
the Citys five-year strategy to preserve and enhance the communitys character,
==
expand housing opportunities for all economic segments, and provide guidance and
direction for local government decision-making in all matters related to housing. To this
end, the Housing Element has four primary components: an assessment of the housing
needs of the City and an inventory of resources available to meet those needs; an
40
evaluation of potential and actual constraints on the production, maintenance, and
improvement of housing; an evaluation of the progress made toward meeting the goals
and objectives for the last planning period; and, the establishment of the Citys goals,
=
objectives, and programs for the next five year planning period. This section
summarizes these components. The Draft Element is bound under two separate covers
-- the 1998-2003 Housing Element Update and the Technical Appendix.
A@A@
Draft Housing Element
The Draft Element follows the organization prescribed by state law as follows:
1. An assessment of housing needs and an inventory of resources (Section II
- Housing Needs and Resources)
2. A discussion of potential constraints on housing production (Section III -
Potential Constraints on Housing Production and Conservation)
3. A summary of progress under the 1993 Housing Element (Section IV -
Review of Housing Element Past Performance)
4. A description of the goals, quantified objectives, policies, and programs
that the city has chosen to meet the identified needs (Section V - Housing
Objectives, Goals, Policies, and Programs)
Given the detailed and lengthy analysis undertaken in developing this Draft Element,
much of the supporting background material has been included as appendices to the
Draft Element. These appendices include:
Appendix A - Summary of Comments from Community Meetings
Appendix B - 1995 Santa Monica Apartment Tenant Survey
Appendix C - Inventory of Land Suitable for Residential Development:
1996 - June 1998
Appendix D - Available Financial Resources and Projections
41
Appendix E - Residential Development Standards and Fees
Appendix F - Comparison of Residential Intensity Permitted Under the
1984 Land Use Element and Current Zoning Ordinance
Appendix G - Re-evaluation of the 1993 Housing Element
Technical Appendix
In addition to the appendices bound with the Draft Element, a series of technical
memoranda have been prepared by Hamilton, Rabinovitz & Alschuler (HR&A), and are
included under separate cover as the Technical Appendix. These include:
? Results of the 1995 Santa Monica Apartment Tenants Survey.
? An Estimate of the City of Santa Monica's "Fair Share" of Regional
Housing Need for the 1998-2003 Housing Element Update.
? The Impacts of the Costa-Hawkins Rental Housing Act on the Rent-
Controlled Apartment Stock in Santa Monica.
? Assessment of the Rent Control Board's Ellis Act Removal Permit Process
as a Potential or Actual "Constraint" on the Development of Housing.
? Assessment of the Rent Control Removal Permits as a Potential or Actual
"Constraint" on the Development of Housing.
? Assessment of the City's Conditional Use Permit Requirement for New
Condominiums as a Potential or Actual "Constraint" on the Development
of Housing.
? Assessment of Four Large-Scale Residential Rezoning Actions as a
Potential or Actual "Constraint" on the Development of Housing.
? Assessment of the City's Inclusionary Housing Program (Ordinance 1615)
as a Potential or Actual "Constraint" on the Development of Housing.
? Cumulative Effects of Five City of Santa Monica Requirements on Multi-
Family Housing Projects as a Potential or Actual "Constraint" on the
Development of Housing.
? Analysis of the R2 District Buildable Envelope.
Assessment of Housing Needs and Resources
The Draft Element (Section II) examines the characteristics of existing and projected
population and housing stock in order to define the extent of unmet housing needs in
the community for the 1998-2003 planning period. The document provides statistical
42
data and analysis of the Citys population, household and housing stock characteristics,
=
an inventory of land suitable for residential development and an assessment of future
housing needs.
To gather input on housing issues pertaining to rent-controlled units in the City, and to
update 1990 census information, the Draft Element includes a detailed tenant survey.
Apartment buildings, both rent-controlled and uncontrolled, account for a large share of
Santa Monica's housing stock. However, the most commonly relied upon source of
data for information on Santa Monica's housing stock and its households, the decennial
U.S. Census, has significant limitations in meeting the City's information needs about
apartments. First, the 1990 U.S. Census is over half a decade old, and in light of the
historically greater degree of turnover in the multi-family stock than in single-family
housing, data from 1990 may not adequately describe the situation of apartment renters
today. Second, although, the Census distinguishes "renters" and "rental housing" from
"owners" and "owned housing," and "single-family" housing from "multi-family" housing,
it does not include data specifically on apartment units or households residing in
apartments. The 1995 Santa Monica Tenant Survey ("Tenant Survey") was conducted
to help fill these information gaps. Some key results of the Tenant Survey are set forth
in Attachment H. A complete discussion of the survey methodology and a detailed
presentation of the survey results are contained in the Technical Appendix.
The Draft Element also contains the Citys fair share allocation. A citys fair share
=A@=A@
allocation represents a distribution of regional housing needs based upon such factors
43
as market demand for housing, employment opportunities, the availability of suitable
sites and public facilities, and commuting patterns. In the six county Southern California
region, which includes Santa Monica and all other incorporated cities and
unincorporated areas in Los Angeles County, the agency normally responsible for
assigning housing fair share allocations to each jurisdiction is the Southern California
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Association of Governments (SCAG). However, due to the unavailability of State
funding, SCAG has not prepared specific, current fair share allocations. Therefore, the
City has elected to prepare its own estimate of the Citys fair share of regional housing
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need for the 1998-2003 planning period. The estimate in the Draft Element was
developed using the same approach which the State has approved and which SCAG
would have used had the State Legislature provided funding.
Although the City used SCAGs methodology to develop its own fair share estimate, the
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Draft Element includes a discussion of the Citys disagreement with this methodology
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(Section II.E.). Of chief concern is the fact that SCAGs methodology does not
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differentiate between densely populated and built-out communities like Santa Monica,
which can accommodate limited growth, and communities which are less built-out and
can accommodate significant additional growth. Other City concerns with the SCAG
methodology include: (1) inappropriate vacancy rate assumptions and household
growth factors; (2) a disregard for the economic constraints imposed on housing
development by the current real estate market, the relatively high land prices and other
costs of development; and (3) the methodology used for distributing and assessing
housing needs in the Westside region. Despite these concerns, the City chose to use
44
the SCAG methodology to increase the likelihood for HCD approval of the Element and
to reduce the potential for challenges to the document. The City still reserves its right to
challenge the methodology and/or the fair share allocation numbers once SCAG
resumes the process. However, even utilizing SCAGs methodology, the Draft Element
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demonstrates that the City has adequate sites to accommodate its regional fair share
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of housing production.
Analysis of Potential Constraints on Housing Production
The provision of adequate and affordable housing may be constrained by both market
conditions and governmental programs and regulations. Potential non-governmental
constraints include the price of land, the cost of construction, and the availability of
financing. Potential governmental constraints include land use controls, building codes
and their enforcement, site improvement fees and other exactions, and local processing
and permit procedures.
Preparation of the Draft Element included extensive analysis of the impact that various
non-governmental and governmental regulations in the City have on housing
production. The conclusions of this analysis are presented in the Draft Element
(Section III). The detailed analysis itself is presented in a separate document --
Technical Appendix.
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The principal conclusion of this analysis is that current market conditions -- largely high
land costs combined with a dampened real estate market -- are an actual constraint to
45
the development of housing in the City. These market conditions render the
development of the average multi-family development project in the City infeasible.
Therefore, special circumstances are generally required to make a project financially
feasible, such as unusually low land cost, unusually high rent/sales prices, below
market-rate financing, and/or significant reductions in construction or other development
costs.
The analysis also concludes that certain City policies/regulations such as the
inclusionary housing program and some development standards constitute potential
constraints to housing production. That is, these programs have the potential to
negatively impact project feasibility on a per-square-foot basis. While it is market
conditions, not the Citys policies and regulations, which at the present time actually
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constrain housing production, should market conditions sufficiently improve in the
planning period, these programs could constitute an actual constraint on housing
production. For this reason and in furtherance of other City goals, the Draft Element
contains programs and policies which address and help alleviate the effects of these
potential constraints. Additionally, the Draft Element recognizes that some City
regulations, which may negatively effect housing production, enhance other City goals
including preservation of existing affordable housing and neighborhood character.
Review of Housing Element Past Performance
The housing programs adopted as part of the Citys current (1993) Housing Element
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have been reviewed and evaluated to determine their effectiveness in delivering
46
housing services (Section IV). This review provided a basis for developing programs to
address the housing issues identified in the Draft Element.
Housing Objectives, Goals, Policies and Programs
The Housing Element provides a statement of the community's goals, quantified
objectives, and policies related to the maintenance, preservation, improvement, and
development of housing (Section V). In contrast to the fair share methodology, the
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City has developed realistic housing production objectives based on an assessment of
available City resources, existing and proposed City policies and programs, and
consideration of conditions that will likely result in the production of housing units within
the City during the planning period.
This section highlights the key housing issues facing the City and sets forth the Citys
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overall quantified objectives for housing production, rehabilitation, and assistance for
the planning period. A summary of the Citys housing goals, policies and programs,
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including a future action plan for the 1998-2003 planning period, is also included as part
of Section V.
SUMMARY OF HOUSING ELEMENT GOALS AND POLICIES
The Draft Element sets forth the goals, policies and programs that constitute the Citys
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strategy to effectively address the Citys housing needs for the 1998-2003 period.
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(Section V). As discussed, the Draft Element contains several programs that commit
47
the City to changing existing housing policies. Key changes include amendments to
Ordinance 1615 (Inclusionary Housing Ordinance), revisions to residential development
standards, and revising the conditional use permit process for condominiums. A table
summarizing the Citys housing programs including its 1998-2003 action plan, can be
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found as Attachment A.
The following is a summary of the goals and associated policies included in the
document:
1. Promote the construction of new housing through regulatory mechanisms.
Housing Element policies designed to promote this goal include providing
adequate sites for all types of housing, maintaining and enhancing the Citys
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expedited and coordinated permit processing system, and reviewing
development standards and requirements.
2. Increase the supply of housing affordable to very low, low, and moderate income
persons. Housing Element policies designed to promote this goal include
ensuring the continued availability of income-restricted housing for very low, low,
and moderate income households, and cooperating with housing providers to
promote the development and operation of rental housing for very low and low
income households, and ownership housing for low and moderate income
households.
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3. Protect the existing supply of affordable housing. Housing Element policies
designed to promote this goal include encouraging the replacement of multi-
family housing that is demolished, and ameliorating the effects of the Costa-
Hawkins vacancy de-control regulation on the affordable housing stock.
4. Promote the rehabilitation and continued maintenance of existing housing.
Housing Element policies designed to promote this goal include ensuring that
property owners are made aware of City programs to promote capital
improvements to rental housing, and ensuring that rehabilitation of existing units
does not result in permanent displacement of existing residents.
5. Provide housing assistance and supportive services to very low, low, and
moderate income households and households with special needs. Housing
Element policies designed to promote this goal include encouraging a fair share
approach to providing housing opportunities and assistance to homeless, very
low, and low income households and households with special needs, and
targeting funds to ensure a broad array of supportive services to very low and
low income persons to ensure their continued maintenance of housing once
obtained.
6. Eliminate discrimination in the rental or sale of housing on the basis of race,
religion, national origin, sex, sexual preference, age, disability, family status,
aids, or other such characteristics. Housing Element policies designed to
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promote this goal include enforcing fair housing laws prohibiting arbitrary
discrimination in the building, financing, selling, or renting of housing, on the
basis of race, religion, national origin, sex, sexual preference, age, disability,
family status, AIDS, or other such characteristics.
7. Promote quality housing and neighborhoods. Housing Element policies
designed to promote this goal include ensuring that architectural design of new
housing development is compatible with the surrounding neighborhood, and
promoting safe and secure housing and neighborhoods, and encouraging
housing design which serves to deter crime.
8. Promote the participation of citizens, community groups, and governmental
agencies in housing and community development activities. Housing Element
policies designed to promote this goal include ensuring maximum citizen
involvement in housing and community development activities, and encouraging
involvement of all interested parties in the review and formulation of City housing
policies, including property owners, building industry professionals, affordable
housing advocates, lending institutions, and other interested parties.
KEY HOUSING ELEMENT ISSUES
This section focuses on the key housing issues facing the City and the policies and
programs contained in the Draft Element which are designed to respond to these
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issues.
Santa Monica faces a myriad of complex housing issues, and housing funds for
construction and rehabilitation are shrinking, particularly from federal and state sources.
Understanding these issues is critical to making the difficult policy decisions to create
cost-effective housing. In preparing this Draft Element, the City has engaged in an in-
depth and comprehensive evaluation of the Citys housing-related regulations and
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programs and the Citys housing needs and resources. Through this evaluation, the
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City has identified its priority goals and objectives. These include preservation of
affordable housing threatened by the Costa-Hawkins Rental Housing Act, the
development of housing for families, and reexamination of development incentives and
standards for affordable housing.
Anticipated Loss of Affordable Housing
Adoption of the Costa-Hawkins Rental Housing Act in the Fall of 1995 by the State
legislature brought about statewide de-control of rent-controlled housing upon vacancy.
By January 1999, the Costa-Hawkins Act will eliminate any limits on rent increases that
may be charged when a tenant voluntarily vacates an apartment unit or is evicted for
non-payment of rent. Vacancy de-control will be phased-in so that rents may be raised
up to two times upon voluntary vacancy until January 1999, when full vacancy de-
control goes into effect. Upon occupancy by a new tenant, units will be re-controlled
until vacated again.
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In the first eight months of implementation of the vacancy de-control regulation in Santa
Monica, over 3,000 units have applied for rent increases. It is estimated that by 2003,
between one-half and three-quarters of the 28,000 plus rent-controlled apartment units
that existed at the end of 1995, will be decontrolled and rents will increase in the long
term. This will result in a loss of a significant portion of the Citys affordable housing
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stock. The effects of Costa-Hawkins have been evaluated extensively as part of this
Draft Element.
The goals, policies and programs recommended by this Draft Housing Element include
mechanisms to mitigate the impacts of Costa-Hawkins. Goal 3.0 is to protect the
A
existing supply of affordable housing. Policies designed to promote this goal include
@
encouraging the replacement of multi-family housing that is demolished, and
ameliorating the effects of the Costa-Hawkins vacancy de-control regulation on the
affordable housing stock. Program 3a. contained in Chapter V directs the City to
develop a comprehensive strategy to address the effects of Costa-Hawkins Rental
Housing Act by investigating and developing a mix of programs which could include
funding for acquisition and/or rehabilitation in exchange for deed restrictions on units;
market rate financing for new construction in exchange for deed restricted rental units
and/or permitting rental unit conversion to ownership units in exchange for permanently
deed-restricted rental units. (See Goal 3.0 and related policies and programs.)
Constraint Analysis
The Draft Element includes a detailed analysis of potential governmental and non-
governmental constraints upon the development, maintenance and improvement of
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housing. By a mutual agreement memorialized in a settlement agreement between the
City and the plaintiffs in a lawsuit challenging the adequacy of the Citys current Housing
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Element, a constraint on new housing production is one which causes a significant
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adverse impact on the Citys ability to meet its regional responsibility to construct new
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housing. Specific analyses included assessments of the following programs to
determine if they acted as potential or actual constraints on the development of housing:
the Rent Control Board's Ellis Act Removal Permit Process; Rent Control Removal
Permits; the City's Conditional Use Permit Requirement for New Condominiums; Four
Large -Scale Residential Rezoning Actions; the Citys Inclusionary Housing Program
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(Ordinance 1615); and, the Cumulative Effects of Five City of Santa Monica
Requirements on Multi-family Housing Projects.
The Draft Element addresses these potential constraints with specific programs
including: revisions to existing development standards (Program 1.a - Page V-9);
changes to the review procedures for condominiums (Program1.a. - Page V-9);
revisions to the Citys inclusionary housing program (Program 2.a - Page V-12);
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maintenance of a density bonus program for the City (Program 2.b - Page V-13); and,
expansion of Article 34 authority to utilize a variety of revenues to develop, construct, or
acquire low and moderate income rental housing projects (Program 2.k - Page V-20).
(See Goals 1.0 and 2.0 and related policies and programs.)
Housing for Families with Children
The supply of housing units adequately-sized for families with children is limited,
53
particularly in the rental market; and home purchase opportunities are restricted by high
housing prices. Overcrowding results as many families overpay for housing and/or live
in small housing units to save on housing costs.
The Draft Element includes goals, policies and programs to facilitate the development of
housing suitable for families at affordable costs, and to provide for a broad range of
supportive services including, but not limited to, child care and employment assistance
for low income families (see especially Program 2h).
Housing for Special Needs Populations
In recent years, the City has sought to maintain an open housing market that attracts
and maintains a diverse population. As demonstrated by the goals, policies and
programs within the Draft Element, the City has a strong commitment to providing
housing and supportive services to persons with special needs including:
Senior Citizens - According to the 1990 Census, elderly residents represent
over 16 percent of the population in Santa Monica. In the planning and
development of housing for the elderly, particularly for those who live alone,
appropriate unit size, affordable cost, and easy access to transit, services, and
health care facilities need to be considered.
Persons with Disabilities- The 1990 Census documents that over 11 percent of
the City's population aged 16 or over had work, mobility, and/or self-care
limitations. These people may require a barrier-free living environment and easy
access to transit, services, and employment centers. As many disabled persons
earn lower incomes, housing affordability is also a concern.
Persons with HIV and AIDS- The Los Angeles County Department of Health
Services, HIV Epidemiology Program, estimates that there are currently 1,000
residents in Santa Monica who are HIV positive. According to the Santa Monica
AIDS Project, at present there are approximately 290 AIDS/HIV patients in Santa
54
Monica who are receiving medical treatment. As the disease progresses, these
patients will require various types of assistance with legal, medical, employment,
and housing issues.
-
Homeless Populations Santa Monica has a significant homeless population.
Homelessness is not caused by merely a lack of shelter, but involves a variety of
underlying unmet social and economic needs. While continuing and expanding
the strategy to address homeless issues in Santa Monica, the City will continue a
comprehensive policy that promotes a balanced continuum of care for the
homeless, integrating outreach, intake and assessment, emergency shelter,
transitional housing, permanent housing, case management, employment, and
supportive services.
Housing and Neighborhood Conditions
There are two goals in the Draft Element that relate to protecting and maintaining the
Citys aging existing housing. The first goal addresses improving and preserving the
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quality and character of residential neighborhoods in the City (Goal 7.0). With over half
of the housing stock more than 30 years old, continued maintenance and rehabilitation
efforts are required to prevent widespread deterioration. This requires a coordinated
strategy for community input, design review, rehabilitation, and code enforcement
efforts. Housing Element policies designed to promote this goal include ensuring that
architectural design of new housing development is compatible with the surrounding
neighborhood, and promoting safe and secure housing and neighborhoods, and
encouraging housing design which serves to deter crime.
The second goal of the Draft Element which addresses neighborhood conditions is:
promote the rehabilitation and continued maintenance of existing housing (Goal 4.0).
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Housing Element policies designed to promote this goal include ensuring that property
owners are made aware of City programs to promote capital improvements to rental
55
housing, and ensuring that rehabilitation of existing units does not result in permanent
displacement of existing residents.
Funding
Increasingly, the threats of federal and state budget cuts have left many local
jurisdictions paralyzed in their housing production. Additionally, in Santa Monica,
reduced commercial development in recent years has also reduced the City's potential
income from the Office Development Mitigation Program. These funding and revenue
reductions require that the City aggressively pursue creative financing mechanisms
such as partnerships with private lenders to leverage public funds and participation in
the low income housing tax credit allocation process.
Currently, the City has at least two specific revenue sources for funding housing
resulting from the Northridge Earthquake. Federal HUD monies were made available to
the City of Santa Monica through the federal Emergency Supplemental Appropriations
Act of 1994. With these funds, the City created the Multi-Family Earthquake Repair
Loans (MERL) Program to provide financial assistance for the rehabilitation, acquisition,
and reconstruction of housing.
Additionally, the Earthquake Recovery Redevelopment Project Area was adopted in
June 1994. Under State law, the City is required to set aside at least 20 percent of the
tax increment revenues from redevelopment projects to provide financial assistance in
the production of housing affordable to low and moderate income households.
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Currently no tax increment funding is being generated in this Redevelopment Project
area and projecting an amount to be generated is difficult. However, when tax
increment funding is provided, 20% will be set aside for low and moderate income
housing. The Planning Commission, Rent Board and Housing Commission all
recommend that additional monies beyond the State mandated 20% set aside be
allocated to the acquisition, rehabilitation and new construction of affordable housing.
With program income from the repayment of the MERL loans and redevelopment
housing set-aside funds from the Earthquake Recovery Redevelopment Project, the
City has potential to receive a significant pool of funds that can be used to provide
financial assistance for housing construction and rehabilitation. Goal 5.0 to provide
A
housing assistance and supportive services to very low, low, and moderate income
households and households with special needs is supported by policies and programs
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which call for the development of a coordinated strategy for the expenditure of these
and other funds to maximize cost-effectiveness in addressing the City's complex
housing needs. Housing staff recommends the consideration of additional funding
sources including: Tax Exempt Bonds; State Low Income Housing Tax Credits; HUD
Section 8 Program; and, Mortgage Credit Certificates. (See Program 2.e.)
PLANNING COMMISSION AND STAFF RECOMMENDATIONS
Impact of Costa-Hawkins and HUD Regulation and Policy Changes on the
Section 8 Program
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The Planning Commission accepted the Housing Commissions recommendation to add
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a discussion of the impact of vacancy de-control (Costa-Hawkins) upon the Section 8
Program and of the impact of changing federal regulations upon the future of the
program (See Attachment B). Staff recommends this be incorporated into Section II
(Housing Needs and Resources) and augmented with additional text to provide proper
context.
Potential Constraints
The Planning Commission recommends that the potential governmental constraints
section (Section III.B) include a brief background of why the subject programs and/or
regulations were implemented, their stated objectives and an assessment of their
impact on the Citys existing housing stock so that the document provides the proper
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context for policy discussion.
Additionally, the Planning Commission recommends that the Housing Element include a
more detailed analysis and discussion of potential governmental constraints on the
preservation and conservation of existing housing. In response to the above
recommendations, staff has prepared and recommends additional text be incorporated
into Section III of the Draft Element. (See Attachment I for proposed text.)
Housing Objectives, Goals Policies and Programs
To facilitate Council consideration Attachment A includes a strikeout-highlight copy of
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the Planning Commissions proposed revisions to the Housing Objectives, Goals,
=A
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Policies, and Programs section of the Draft Element (Section V). The Housing
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Commission, the Rent Control Board and Arts Commission submitted recommendations
to the Planning Commission for their consideration. (See Attachments B, C and D.) In
some cases these recommendations were not accepted by the Planning Commission
because the Commission felt that the language was inappropriate for a policy document
given the proposed language, or because the Planning Commission disagreed with
proposed programs on their own merits. Recommendations from the Planning
Commission which originated in another board or commission are identified as such.
The following discussion highlights the Planning Commissions recommended changes
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to the Draft Element policies and programs.
Goal 1.0 Promote the Construction of New Housing Through Regulatory
Mechanisms
? The Planning Commission recommends that Policy 1.5 be revised to include a
periodic review of zoning and building codes to ensure that they do not
unreasonably constrain housing development. Staff recommends that the
original language proposed for Policy 1.5 be maintained because the review of
zoning codes is already embodied in Policy 1.3 and building codes are set by the
state and provide life/safety assurance which should not be compromised.
? The Planning Commission recommends the addition of a policy under Goal 1.0
(Policy 1.7) to maintain development standards that promotes the development
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of new housing which is designed to fit within the existing neighborhood context.
Staff supports this addition.
Program 1.a Assess and Revise, where appropriate City Regulatory Requirements
? The Planning Commission recommends that the first bullet under the action plan
be modified as follows:
Evaluate modifying the review procedures for
A
condominiums from a Conditional Use Permit
to a Development Review permit process
another discretionary review procedure.
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Staff recommends that this language be strengthened and clarified to reflect the
nature of the review as follows:
Modify the review procedures for
A
condominiums from a Conditional Use Permit
to another discretionary review procedure
which relates to project compatibility, including
review of the physical location, size and
massing of the structure(s), and public
improvements to ensure that the project is
compatible and integrates with and relates
harmoniously to surrounding sites and
neighborhoods.
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? The Planning Commission recommends that the bullet under Program 1.a.
which would revise income definitions contained within City regulations to define
moderate as 60 - 80 percent of the County Median Income be removed.
Both the Rent Control Board and the Housing Commission support the following
recommendation contained in the Draft Element:
To the extent feasible, revise income definitions
A
contained within City regulations to define moderate
income as 60-80 percent of the County median
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income.
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Staff, the Rent Board and the Housing Commission support this approach
principally because the moderate income category as currently defined
establishes rent ceilings that are comparable to market-rate. For example, in
1996 the rent limits for 1- and 2- bedroom moderate income units were $1,026
and $1,218, respectively. In the opinion of the Rent Board, Housing
Commission, and staff, there is no public benefit to programs which provide
rental rates comparable to market rate.
The Planning Commission disagrees with this approach, arguing that even
though deed restricted moderate income rents may be comparable to current
market rates, over time as inflationary trends boost market rental rates, the rates
of deed-restricted units will stay lower, thus serving an income niche not served
by the market. However staff still believes that during the time period of the Draft
Element, as vacancy decontrol depletes the available supply of rental housing
affordable to lower income households, there is a greater need for programs
targeted to lower income groups. Staff recommends that the existing language
be clarified as follows:
To the extent consistent with State law and
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the Charter, target City subsidies and
bonuses to affordable housing projects that
serve households earning 61-80% of the
County median income.
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? The Planning Commission concurs with the Housing Commission and
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recommends the addition of a bullet under Program 1.a. to broaden the current
opportunities for second units in the R-1 District as follows:
As a means of providing additional sites for
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housing, broaden the current opportunities for
second units in the R-1 District within
reasonable limits consistent with State law.
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? The Planning Commission recommends the following addition under Program 1a:
In cooperation with private property owners
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assess the feasibility of developing air rights
projects above privately owned parking lots
and other sites which may provide air space for
affordable housing development.
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Staff supports this addition but recommends that it be relocated to Program 2F
and
that Program 2F be modified as follows:
Assess the use of City-owned, publicly-owned
A
privately owned
and land for affordable
housing.
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? The Planning Commission recommends adding two bullets under Program 1.a.
to address additional housing opportunities including the continued support of the
construction of live/work space, and development of housing in commercial
areas. Staff supports this addition.
Goal 2.0 Increase Supply of Affordable Housing
Program 2.a: Maintain an Inclusionary Housing Program
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? The Planning Commission recommends modification of the Action Plan for
Program 2.a. to clarify that the proposed amendments to the Citys Inclusionary
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Housing Program are intended to help support new housing production in a way
that is balanced with the maintenance of existing housing stock. Staff supports
this but recommends that the first bullet under 2.a be modified as follows:
Study modifications to the Citys Inclusionary
A=
Housing Program (Ordinance 1615) which
would help support new housing production in
a way that balances this production with
maintenance and conservation of existing
housing stock, while complying with
Proposition R. Changes to be considered will
include, but not be limited to: . . Proposed
amendments will be reviewed by the City
Council.
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? The Planning Commission supports the Housing Commission recommendation
that consideration be given to recalculating the in-lieu fee periodically to meet
certain program objectives. Staff supports this recommendation and
recommends that this be done every two years.
? As part of the analysis to be undertaken for evaluating possible revisions to
Ordinance 1615, staff proposed that consideration be given to eliminating the
option for satisfying the inclusionary obligation by building all moderate income
units deed restricted for households earning 100% of the county median family
income (MFI) or replacing it with an option to satisfy the inclusionary obligation by
building 100% of units deed-restricted for households earning less that 80% of
the county MFI. The Planning Commission does not recommend that this be
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considered. Staff continues to support its original recommendation that the
option for satisfying the inclusionary requirement by building all moderate income
units be eliminated. Based on available information, staff believes that the
market already provides housing affordable to households earning 100% of
median income, and therefore there is no public benefit to targeting City
programs to this income group.
? The Planning Commission recommends that the following language be added to
Program 2.a as a way to insure that monitoring of on-site units occurs.
Evaluation of the success of the on-site
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inclusionary requirements, particularly in terms
of administration.
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Staff will continue to monitor on-site units and does not recommend that this be
included in the document.
Program 2b. Maintain a Density Bonus Program.
? The Planning Commission recommends that the Action Plan be revised as
follows to be more affirmative.
Revise existing development standards as
A
necessary to assure the building envelope
adequately accommodates the construction of
density bonus units.
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Staff supports this modification and recommends that it also be included as part
of Program 1.as Action Plan.
=
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Program 2h: Facilitate the Development of Housing for Families with Children.
? The Planning Commission recommends that two items be added to the Action
Plan to expand housing opportunities for families. These proposed changes
include the possibility of code revisions to allow alternative types of housing (ie.
Co-housing) to be developed in the City with particular emphasis on facilitating
this development on City-owned properties. Staff supports this addition and
recommends the following language:
Assess the possibility of revising the zoning
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code to allow for the construction of alternative
types of housing (e.g. co-housing), including
the construction of such housing on City-
owned properties.
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The other item is to consider alternative development standards that will facilitate
the development of housing for families with children, consistent with the
program suggested by the Housing Commission under Program 1.a. Staff
supports this addition and recommends the following language:
Consider alternative development standards
A
(e.g. height, lot coverage, density, setbacks,
parking requirements, etc.) that facilitate the
development of housing for families with
children.
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Program 2i: Facilitate the Development and Maintenance of Special Needs Housing
? The Planning Commission recommends that a bullet be added to assess the
development of a high subsidy program for permanently affordable housing for
very, very low income household earning minimum wage, including both SRO
and family units. This is consistent with the Housing Commissions
=
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recommendation for a program to provide permanent housing for persons
emerging from transitional housing facilities. Staff supports this program.
Goal 3.0 Protect the Existing Supply of Affordable Housing
? The Planning Commission recommends that Policy 3.3 be modified as follows in
order to create the possibility for developing a conversion program.
affordable
Continue to Protect rental housing
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regulating
by limiting the conversion of rental
units to ownership units.
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Staff recommends that the original language calling for limiting the conversion of
rental units be maintained. Through the TORCA process, approximately 10% of
the rental housing stock was converted to ownership units and only 40% of the
units have been sold resulting in over 2,000 available units for sale. Therefore,
allowing additional units to be converted is not necessary during this planning
period.
? In response to the Housing Commission comments, the Planning Commission
recommends the addition of Policy 3.5 and additions to the Action Plan under
Program 3.a. Proposing changes to the Section 8 program in response to
changes in the market induced by the Costa-Hawkins Rental Housing Act. Staff
concurs with these recommendations as proposed.
Program 3.a: Develop Programs to Offset The Effects of Costa-Hawkins
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? The Planning Commission supported the Housing Commissions
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recommendation that the City investigate the feasibility of developing a program
to permit the conversion of rental units to ownership units in exchange for a
flexible mix of permanently deed-restricted rental units, and/or affordable sale
units and/or appropriate in-lieu fees. Staff believes that if a sales program or in-
lieu program were put into place, a substantial number of existing affordable
rental units could be put at risk and therefore recommends that no changes be
made to the language currently in the document.
? The Planning Commission recommends that a new item be added to Program
3.a to target redevelopment funds as follows:
To the extent feasible in addition to the 20%
A
set-aside, target Redevelopment Funds for a
housing acquisition and rehabilitation program
with a set aside goal of 50%.
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Staff supports this idea in concept but recommends that the proposed language
be refined as follows to allow greater flexibility on an annual basis for the use of
these funds:
To the extent feasible utilize additional non-
A
housing Redevelopment Funds to supplement
the annual 20% set-aside requirement for
eligible housing acquisition, rehabilitation and
new construction purposes.
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Program 3.b. Protection of Mobile Home Park Tenants
The Planning Commission recommends that the second bullet be revised as
follows:
Assist with mobile home park rehabilitation or
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conversion to ownership housing if appropriate
and/or feasible.
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Staff recommends that the original language be maintained because of the
complexity of issues involved in mobilehome conversion projects, and because
the Planning Commissions recommended language implies that financial
=
feasibility is the sole consideration.
Goal 5.0 Provide Housing Assistance and Supportive Services to Very Low, Low
and Moderate Income Households with Special Needs
Program 5C: Maintain a Homebuyers Assistance Program
? The Planning Commission recommends adding two additional items under this
Program which were recommended by the Housing Commission. One calls for
the development of a new program to permit the conversion of rental units to
ownership units, in exchange for a flexible mix of permanently deed-restricted
affordable rental units and/or affordable sale units or in lieu fees. Staff does not
support this program as proposed because as previously stated, staff believes
that during this planning period it will put a substantial number of existing
affordable units at risk. The other item addresses alternative means of providing
first-time low income homebuyers assistance through the development of a silent
second program. Staff supports this addition.
Program 5F: Develop a strategy to Address threats to the HUD Section 8 Rental
Subsidy Program
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? The Planning Commission supports the addition of this new program as
proposed by the Housing Commission for the development of a strategy to
address threats to the HUD Section 8 rental subsidy program. Staff concurs with
this recommendation as proposed.
Goal 6.0 Eliminate Discrimination in the Rental or Sale of Housing on the Basis of
Race, Religion, National Origin, Sex, Sexual Preference, Age, Disability,
Family Status, AIDS, or other such Characteristics
? The Planning Commission recommends that Policy 6.2 which encourages the
distribution of housing for low and moderate income households throughout the
City be relocated because it does not belong under this goal as written. Staff
concurs with the Planning Commission recommendation and recommends that
this Policy be placed under Goal 2.0 as Policy 2.7.
Goal 7.0 Promote Quality Housing and Neighborhoods
? The Planning Commission recommends that Policy 7.6, a directive to balance
housing and employment opportunities in the City, be eliminated. This is due to
the fact that the formula for jobs housing balance does not realistically address
an integrated urban setting like the Westside. For purposes of this kind of
analysis, residential communities such as Pacific Palisades, Venice and Mar
Vista should be factored into the housing balance for Santa Monica. It is
69
unrealistic to limit this type of analysis to arbitrary City limits when the area
functions as a regional network. Staff concurs with this recommendation.
70
Program 7.a: Provide a Residential Neighborhood Safety Program
? In response to the Rent Control Boards comments about safety concerns, the
=
Planning Commission recommends expanding the action plan for program 7.a.
to include exploring the feasibility of developing a program to facilitate the
installation of safety features such as deadbolts, peepholes and motion detector
lights. Staff supports this recommendation.
Program 7.b: Provide Historic Preservation Programs
? The Planning Commission recommends that Program 7.b. be expanded to
include the evaluation of the Historic Resources Survey as the basis for the
development of a comprehensive preservation plan for the City. Staff concurs
with this recommendation.
Program 7.d. Facilitate Sustainable Housing Development
? To enhance the action plan under Program 7.d, the Planning Commission
recommends that the City continue to incorporate sustainable design and
construction strategies within Development Agreements. Staff concurs with this
recommendation.
Additional Staff Recommendations
The following are additional staff recommendations:
? Revise the introduction to the Goal, Policies and Programs subsection as
A@
follows:
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The following describes each of a full range of
A
housing programs which will be undertaken by
the City. Housing programs include programs
both currently being implemented in the City,
and new programs added to address existing
and projected needs. A brief background on
each program is provided, followed by the
Citys action plan for the 1998-2003 Housing
=
Element planning period.
Table V-2
, Housing Program Summary,
located at the end of this section, summarizes
the goals of each program for the planning
period, and identifies the program funding
source, responsible agency, and time frame for
implementation. The programs outlined below
and set forth in table V-2 are designed to
comprehensively address the Citys identified
=
housing needs.
@
? Revise the second bullet under Program 1.a to eliminate redundant language as
follows:
Evaluate modifications to parking standards
A
(e.g., rounding down for half spaces and
elimination of guest parking requirement) to
facilitate construction of all housing units
including allowable density bonus units.
@
? Revise the fifth bullet under Program 1.a to be more definitive as follows:
Propose amendments
evaluate potential
A
modifications to the Inclusionary Housing
Program (refer to Program 2.a.).
@
? Revise the second bullet under Program 1.b as follows:
Expand the types of information available on
A
Permits and improve reporting procedures
A@
to facilitate project tracking and provide up to
date information.
@
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? Add another policy under Goal 2.0 as follows:
Policy 2.8: Continue to provide development
A
incentives and reduced planning fees for
development of affordable housing.
@
? Under Program 2e. Assess Alternative Affordable Housing Finance Programs,
add the following bullet under the Action Plan.
Encourage developers to take advantage of
A
affordable housing bond financing and facilitate
coordination among developers when
appropriate.
@
Staff also recommends that miscellaneous tables, maps and text be revised to update
and/or clarify information presented in the Draft Element. These proposed modifications
to the Draft Element are presented in Attachment J.
ENVIRONMENTAL IMPACT REPORT
An Environmental Impact Report (EIR) will be prepared following approval in concept of
the Draft Element by the City Council. The EIR will evaluate the potential environmental
impacts of implementation of the policies and programs contained in the Draft Element.
BUDGET/FINANCIAL IMPACT
The recommendation presented in this report does not have a budget or fiscal impact.
SUBSEQUENT ACTION AND RECOMMENDATION
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Subsequent to Council conceptual approval of the Draft Element, the document will be
submitted to HCD for review and comment, and the EIR will be prepared. Following
preparation of the EIR and receipt of comments from HCD on the Draft Element, the
Final Housing Element will be prepared. The Final Housing Element and Final EIR will
be presented to the Planning Commission for their consideration in the summer of 1997
and to the City Council for adoption in the fall.
Staff respectfully recommends that the City Council conduct a public hearing on the
Draft Element consider the changes as proposed by the Planning Commission and
staff, adopt in concept the Draft Element, direct staff to transmit the document to HCD
for review and comment, begin the EIR process and prepare implementation ordinances
related to the inclusionary housing policies and revised development standards.
Prepared by: Suzanne Frick, Director
Karen Ginsberg, Planning Manager
Laura Beck, Associate Planner
Attachments: A. Planning Commissions Recommended
=
Changes to Goals, Policies and Programs (Section
A@
V.C.)
B. Memorandum from Housing Division Staff regarding
Housing Commission Recommended Changes to the
Draft 1998-2003 Housing Element.
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C. Letter from Rent Control Board Regarding
Recommended Changes to the Draft 1998-2003
Housing Element.
D. Letter from Arts Commission Regarding
Recommended Changes to the Draft 1998-2003
Housing Element.
E. Letters from the public, including the Santa Monica
Housing Council, concerning the Draft 1998-2003
Housing Element.
F. Planning Commission Staff Reports regarding the
Draft 1998-2003 Housing Element.
G. Minutes of Planning Commission Public Hearings
H. Key Results of the Tenant Survey
I. Proposed Additional Text for the Potential
Governmental Constraints Section (Section III.B.)
J. Miscellaneous Revisions to Tables, Maps and Text
75
PCD:SF:KG:LB:f:\ppd\share\ccreport\hsgelmt2.wpd
COUNCIL MEETING: April 14, 1998 Santa Monica, California
TO: Mayor and City Council
FROM: City Staff
SUBJECT: Recommendation to Adopt a Resolution Amending the Existing Housing
Element of the General Plan by Approving the Draft 1998-2003 Housing
Element Update with Amendments as Proposed By Staff; and
Recommendation to Adopt a Statement of Overriding Considerations and
Certify the Final Environmental Impact Report Evaluating the
Environmental Impacts of the 1998-2003 Housing Element Update.
INTRODUCTION
This report recommends the City Council 1) adopt a Statement of Overriding
Considerations and certify the Final EIR evaluating the environmental impacts of the
1998-2003 Housing Element Update; 2) adopt a resolution amending the existing
Housing Element of the General Plan by approving the Draft 1998-2003 Housing
Element Update with amendments as proposed by staff. (Attachments A, B, and C.)
This report provides background on the 1998-2003 Housing Element Update, including
responses to comments made by the State Department of Housing and Community
Development (HCD), and discussion of the EIR.
Pursuant to the Citys Zoning Ordinance, the City Council must conduct a public hearing
=
upon any proposed amendment to the General Plan within 60 days of Planning
Commission action and must consider adoption of any proposed amendments within 90
76
days of Planning Commission action.
BACKGROUND
The 1998-2003 Housing Element is an update to the Citys current Housing Element
=
which was adopted by the City Council on September 28, 1993. One of the seven
mandated elements of the General Plan, the Housing Element establishes a five year
plan for addressing the Citys housing needs.
=
Summary of Legal Requirements
By law, the Citys Housing Element must analyze existing and projected housing needs,
=
set forth goals, policies, and programs for addressing those needs, and identify
adequate housing sites. (Government Code 65583.) Additionally, the Housing
'
Element must identify potential and actual constraints upon the maintenance,
improvement, or development of housing for all income levels.
The Draft 1998-2003 Housing Element Update has been prepared in conformity with
both State law and the settlement agreement in Santa Monica Housing Council, et. al. v.
City of Santa Monica, a case which challenged the Citys current Housing Element.
=
PublicProcess
This 1998-2003 Housing Element Update was initiated in April, 1995. The Planning and
Community Development Department held a public scoping meeting and two public
workshops on the Housing Element Update to receive public input and to foster a
77
discussion of housing issues and policies for the City. The preliminary draft of the
Housing Element was released for public review and comment on November 11, 1996.
The Draft Element was reviewed by the Planning Commission through the course of five
public hearings which concluded its deliberations on February 5, 1997 and made
recommendations for Council consideration.
Public hearings were held by the City Council over the course of three meetings
between March 18, 1997 and April 15, 1997. On April 15, 1997, the Council approved
the Draft Element in concept for transmittal to the State Department of Housing and
Community Development (HCD). Before transmittal, the Draft Element was revised to
clarify and/or correct information and to incorporate changes requested by Council.
On July 21, 1997 staff submitted the revised Draft Housing Element Update to HCD for
their review and comment. HCD provided a written response dated September 5, 1997.
(HCDs review and comments are discussed fully later in this report.)
=
The Draft Environmental Impact Report on the Draft 1998-2003 Housing Element
Update was prepared and released for a 45-day public review on December 1, 1997.
On February 25, 1998, the Planning Commission held a public hearing to review the
revised Draft 1998-2003 Housing Element Update and the Final Environmental Impact
Report which evaluates the potential environmental impacts of implementation of the
policies and programs contained in the 1998-2003 Housing Element Update. The
78
Planning Commission recommends approval with modifications. (Planning Commission
recommendations are presented later in this report.)
REVISED DRAFT 1998-2003 HOUSING ELEMENT UPDATE
As stated, the 1998-2003 Housing Element Update has been revised to reflect Councils
=
action in April, 1997 (Attachment L). A summary of significant text changes is provided
as an attachment to the report. The revisions made to the programs in the Housing
A
Objectives, Goals, Policies and Programs section of the document are presented in a
@
bold/strikeout version. (Attachments D and E.)
REVIEW AND COMMENT BY HCD
As discussed, on July 21, 1997 staff submitted the revised Draft Housing Element
Update to HCD for their review and comment. Pursuant to Government Code Section
65585(b), the State Department of Housing and Community Development is required by
State law to review draft housing elements and report their findings to the locality. HCD
provided a written response dated September 5, 1997 and concluded that further
revisions were needed to bring the element into compliance with State law.
(Attachment F) State law requires that the City Council consider HCDs comments in its
=
decision to amend the Housing Element. HCDs comments and staffs response to the
==
issues raised are provided below.
Category D Removal Permits
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HCD expressed concerns that the replacement housing requirement imposed by the
Rent Control Board for Category D removals could result in an affordable unit burden
A@
in excess of 30% for the redeveloped property. In response to HCDs concern, the Rent
=
Control Board has modified its requirement to clarify that no more than 15% of the units
in the new project would be required to be affordable. The discussion on page III-30 of
the Element will be revised to reflect this. The proposed revision can be found in
Attachment H.
The staff report to the Rent Control Board is also attached for reference. (Attachment
G)
Inclusionary Housing
With regard to Housing Element Program 2a (Maintain an Inclusionary Housing
Program) HCD feels that the Citys housing element should clearly commit the City to
=A
removing or mitigating those provisions of the ordinance that have already been
determined to be obvious constraints, and goes further to conclude that the City should
@
exempt residential projects of less than 20 units from the inclusionary requirement.
HCD is critical of the action plan for Program 2a since it does not include such a
strategy in the list of changes to be considered.
The City believes the draft Housing Element does commit the City to amending its
inclusionary housing ordinance. Indeed, when the City Council gave conceptual
approval to the Housing Element, it also directed staff to commence the process of
modifying the Inclusionary Housing Ordinance. The City is actively engaged in this
80
process of modifying the inclusionary housing ordinance. Subsequent to Council
direction in July, 1997, the City enlisted the professional services of HR&A to assist in
the development of alternatives to Ordinance 1615. Six conceptual alternatives were
identified and refined through workshops, study sessions and public hearings. More
specifically, a Public Workshop was held September 7, 1997 that included an open
house segment where participants viewed and commented on display panels that
explained the current Inclusionary Program and possible conceptual alternatives. A
presentation with group discussion about the existing Inclusionary Program and
conceptual alternatives was conducted. Subsequently, Public Hearing and Study
Sessions were conducted at the September 10, 1997, February 25 and March 4, 1998
Planning Commission meetings, at the September 18, 1997, February 19 and March 5,
1998 Housing Commission meetings and at the October 7, 1997 City Council meeting.
Staff is recommending replacing Ordinance 1615 with a new Affordable Housing
Production Program that requires developers of market-rate multi-family housing to
assist in the production of affordable housing through payment of an affordable housing
development fee or through other specified options. Under this approach, the
mandatary on-site requirement, found by HCD to constitute a potential constraint, would
be eliminated for all projects. (See April 14, 1998 City Council staff report prepared by
the Housing Division on proposed modifications to the inclusionary program.)
At its April 14th meeting the City Council takes further testimony and consider the merits
of the staffs recommendations.
=
81
Additionally, the City is actively engaged in a process to modify the development
standards in certain residential districts to facilitate accommodation of State Density
Bonus units. These proposed modifications will act in concert with a modified
inclusionary program. (See April 14, 1998 City Council staff report regarding Proposed
Revisions to Residential Development Standards in the R2 and R3 Districts pertaining
to State Density Bonus Units.)
Potential for Residential Development in Commercial Districts
HCD has indicated that the element should include specific program actions designed
to promote residential recycling (including the removal of potential constraints) and
residential development, or mixed-use, in commercial zones.
First, as discussed, the City is actively engaged in revising or is committed to revising,
certain programs that have been identified as potential constraints to residential
recycling, namely the Citys Inclusionary Housing Program and the Citys development
==
standards.
Second, the City has long promoted residential development, or mixed use, in
commercial zones. In 1993, the City amended the Zoning Ordinance to conditionally
permit residential development in the Special Office Commercial (C5) and Industrial
Conservation (M1) Districts, and to permit residential uses in most other commercial
districts (BCD, CP, RVC,CM,C2,C3,C3C,C4,C6). In 1995, the City established the Light
Manufacturing Studio District (LMSD) to replace a portion of the M1 and C5 districts.
82
The LMSD permits studio live/work uses, while preserving existing light industrial uses
and providing a location for studio-related uses, such as film and music production and
post-production facilities. The City also permits residential development in the
commercial Bayside Commercial District (BSC), which it established in early 1996.
Moreover, in several districts, the City offers special incentives for housing. In the BSC,
C3, C3C and CM districts, any floor area devoted to residential use is eligible to receive
a FAR (Floor Area Ratio) discount of 50 percent. In BCD, C2, C4, and C6 districts, the
City offers increased density if at least 30 percent of the FAR is residential. These
changes have been very successful in bringing residential development to commercial
zones.
To further facilitate development of residential uses in non-residential zoning districts,
Program 1.a of the revised Draft 1998-2003 Housing Element Update identifies specific
analyses and revisions which will be undertaken during the planning period, including
evaluate additional modifications of development standards to encourage the
A
development of housing in commercial areas of the City. The action plan for Program
@
1.d. (Consider Rezoning Non-residential Areas for Residential Use) states that the City
A
will explore further opportunities for developing housing in areas currently zoned for
non-residential use.
@
HCD states that the element should include specific programs which articulate the Citys
=
intent or clearly describe the incentives to encourage residential development in
commercial zones. As discussed above, the Housing Element already has such
83
programs. However, to further confirm the Citys intent to maintain the current
=
incentives for residential development in commercial zones, staff recommends the
following modification to the seventh bullet under the action plan for Program 1a.
Continue to promote and provide incentives to develop residential uses in
!
non-residential zoning districts and evaluate additional modification of
development standards to encourage the development of housing in
commercial areas of the City.
On March 3, 1998, the City Council introduced an interim ordinance modifying the
development standards in the C3C Downtown Overlay District to discount square
footage devoted to residential purposes for purposes of calculating the development
review square footage threshold. The requirement of a development review permit
adds additional time and expense to the review of a project and also subjects a project
to environmental review since it is a discretionary action. Staff recommends that an
additional bullet be added to Program 1.a. to reflect these specific efforts to further
facilitate residential development in the non-residential districts as follows:
Evaluate the modification of the existing project design and development
!
standards in the C3C District and other commercial districts as
appropriate, to provide that for the purposes of assessing whether a
development review permit is required for new development, floor area
devoted to residential uses shall be discounted by fifty percent.
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HCD also asked that the City further assess the potential for residential development in
commercial zones. In response staff prepared an analysis of sites in commercial
districts (C2, C4, C3, C3C, C4, C6, CM) which would be most likely to recycle during the
planning period due to the age and/or condition of the existing structures, or due to the
potential for a substantial intensification of the existing use(s). Considering the
incentives the City has in place for residential development in commercial zoning
districts, it is quite likely that some portion of these parcels, which total in area over 70
acres, will be developed as residential projects or include some residential units.
The number of potential residential units is unrestricted in these commercial districts,
however, the size of projects is determined by FAR. Each project will have a different
mix of residential and commercial uses depending on the developers project objectives.
=
Although it is difficult to estimate the actual number of residential units which could be
accommodated on these sites, the following table provides a preliminary assessment of
the residential potential based on an assumed 10% residential mix, a 30% residential
mix, and a 100% residential mix in buildings built to the maximum FAR permitted. The
number of units were calculated based on the maximum FAR, adjusted by 15% to
account for non-leasable space, and an average 1200 square foot unit size.
A@
Commercial 100%
District 10% Residential 30% Residential
Corridor Residential
Lincoln C4 16 - 39 68 - 84 225 - 282
85
Pico C2 33 -39 140 -165 468 - 551
Santa Monica C4 46 - 51 198 -228 660 - 761
Wilshire C6 21 - 25 92 - 105 307 - 350
Main Street CM 15 - 20 44 - 59 147 - 196*
Downtown C3, C3C 98 294 - 392 979 - 1306*
Total 228 - 249 units 836 -1034 units 2786 - 3445 units
* Certain zoning districts restrict the use of ground floor frontage and would prevent a
project from being 100% residential.
This preliminary investigation indicates that if these commercial properties, were to be
redeveloped during the planning period and devoted 10% of the floor area to residential
use, between 228 and 249 residential units would result. If the same properties were to
be redeveloped with 30% residential use (the threshold for density incentives in the C2,
C4, and C6 zoning districts), between 836 to 1034 residential units would be developed.
For comparison purposes, if these properties were to be redeveloped as 100%
residential projects, between 2,786 and 3,445 units would be developed. As discussed,
each project will have a different mix of uses. These calculations have been prepared
for illustrative purposes.
Staff recommends that this information be included in the Housing Element discussion
of suitable sites in the Housing Needs and Resources section (Page II-76). (See
Attachment H).
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Projected Housing Needs
HCD states that the Citys 3,219-unit estimate developed of the Citys fair share of the
==
regional housing need for the 1998-2003 planning period is acceptable, but may be
subject to revision if SCAG issues revised need allocations or growth forecasts. HCD
expresses some confusion over the alternative estimates referenced in the housing
element. Staff has made certain that all footnotes and references with regard to the
Citys projected housing needs are accurate. As stated on page II-92 of the Housing
=
Element Update, the City has adopted 3,219 units as its Fair Share. HCD has accepted
this number under present circumstances. Consequently, there is no dispute between
HCD and the City as to the Citys fair share number. Accordingly, no modifications to
=
the Housing Element are necessary.
Second Units Ordinance
HCD feels that the Citys second unit ordinance should be analyzed in the housing
=
element as a potential constraint. HCD contends that the decision to exclude second
A
units from the single family zones should not only be evaluated relative to the provision
@
of adequate sites and the accommodation of projected housing needs, but also in
consideration of the Citys overall strategy to assist affordable housing development.
=
First, as regards to the provision of adequate sites, the adequate site analysis in the
Housing Element Update is not dependent upon increased development on R1 and
OP1 sites. The City has demonstrated it has sufficient sites to meet its needs during the
87
1
planning period without consideration of these single-family residential areas. (See
Table II-25 on pg. II-72 and Table II-27 on pg. II-81)
Second, with regards to governmental constraints, the Housing Element defines a
constraint as:
A program ... [which] either individually or in combination with other governmental
programs, has significant adverse impact on the Citys ability to meet its fair
=
share of the regional need for additional housing determined in accordance with
the Southern California Association of Governments regional housing need
=
allocation.
The City does not believe that the second unit ordinance constitutes a constraint.
The City adopted the interim ordinance addressing second units on October 15, 1996.
Second units are allowed in all multi-family districts. The City also allows a variety of
residential development in non-residential zones, including second units. Further, this
ordinance allows second units in the R1 and OP1 Districts, albeit under limited
circumstances.
Moreover, as HCD has acknowledged, even if the City were to liberalize its second unit
1
The adequate sites inventory in the 1998-2003 Housing Element Update includes 16 vacant parcels in R1 or OP1
zones to be developed as 16 single-family residences.
88
ordinance, it is unlikely that second units would have a significant impact on the new
housing stock during this planning period. The majority of requests for second units in
these districts would likely be for legalization of existing illegal units and not for the
construction of new housing units. Additionally, in regards to second units in single-
family districts, the City remains concerned for the reasons detailed fully in the interim
ordinance that second units would erode the quality of life for residents of single family
districts in Santa Monica. It would, among other things, exacerbate problems resulting
from the Citys overall density and the unusually large number of persons who work
=
within the city, visit it for recreation, and travel through it.
Third, with regard to housing affordability, staff does not believe that newly constructed
second units will necessarily be affordable. The City has no ability to control the rents
and these units are not subject to the Proposition R requirement. Date provided by the
Rent Control Board tracking the rent levels of units decontrolled as a result of Costa-
Hawkins demonstrates that these units are losing their affordability. Given the rent
levels commanded for these units, staff has no reason to believe that newly constructed
second units would be offered at affordable rents. Consequently, staff does not
consider second units to be an integral part of any affordable housing program in the
City.
The City has a long-standing commitment to the provision of affordable housing, and
the City successfully effectuates this commitment through implementation of various
City laws, policies and programs. The Citys zoning laws and policies include
=
89
substantial incentives for the production of affordable housing, including height and
density bonuses and reduced parking requirements.
In addition, the City operates a number of programs which facilitate the production of
affordable housing. These include loans to private, for-profit developers and owners
and funding to non-profit agencies to acquire or construct housing units. The City also
funds many social service programs which provide emergency shelter, transitional
housing and permanent and supportive housing to individuals and families with very low
incomes.
These and other laws, policies and programs have resulted in the preservation and
production of an extraordinary number of affordable units with in the City. The presence
of these units has allowed a very substantial number of low and moderate income
households to live in the City notwithstanding its prime location and high real estate
values. Census data shows that sixty percent of the Citys households have low or
=
moderate incomes.
In creating housing policy the City has tried to strike a balance between protecting the
existing housing stock, and allowing for the development and production of new housing
for all income groups while protecting the quality of life within the City. The
maintenance of this balance has been a difficult task because of the unique
characteristics of Santa Monica which are a function of its prime seaside location and its
historical development pattern.
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Staff recommends that this discussion of the Citys policy regarding second units in the
=
R-1 and OP-1 Districts be included in the Potential Governmental Constraints section of
the Housing Element (Section III-B). Although, the City does not conclude that the
second unit policy acts as a constraint to the development of housing, inclusion of this
discussion would address the HCD comment that the Citys policy be considered in the
=
context of the Housing Element constraint analyses. The proposed text is presented in
Attachment H.
COMMISSION RECOMMENDATIONS
The Planning Commission conducted a public hearing on the Housing Element update
and Final EIR on February 25, 1998. The Citys Housing Commission reviewed the
=
revised Draft 1998-2003 Housing Element Update and provided their comments to the
Planning Commission in a letter dated February 6, 1998. (Attachment I) The Planning
Commission recommends Council adoption of the Housing Element update with some
modifications, certification of the Final EIR, and adoption of a statement of overriding
considerations. Modifications recommended by the Planning Commission include those
proposed by staff and additional modifications as described below.
Section 8 Housing
The Planning Commission concurs with the Housing Commission recommendation that
Program 3a. (Develop Programs to Ameliorate the Effects of Costa-Hawkins) be revised
91
to include three additional programs to be investigated when developing a strategy to
address the effects of the Costa-Hawkins Rental Housing Act on housing affordability.
The following will be added to the list of programs under the fourth bullet of Program 3a:
? a rental assistance program that funds the difference between the Fair
Market Rent and the market rent for Section 8 tenants;
? a rental program that assists Section 8 tenants whose landlords have
opted out of the Section 8 program to pay the Maximum Allowable Rent if
the tenant decides to remain in the unit;
? a program that provides security deposit assistance for initial lease up and
contract opt out relocations for needy Section 8 recipients.
The Housing Division and Planning staff concur with this recommendation.
Land Banking
The Housing Commission recommends that Program 2f (Assess the Use of City-
Owned/Publicly-Owned Land for Affordable Housing) be revised to reflect a more
definitive commitment by the City to land banking. The Planning Commission supports
the program if feasible and recommends the following modification:
A@
? Assess the feasibility of developing Enact a land banking program, if
92
feasible, for the City and non-profit developers of affordable housing to
purchase land and existing properties for future development of affordable
housing.
Second Units
The Planning Commission, along with the Housing Commission, continue to
recommend that the City Council include the following program as part of Program 1as
=
action plan:
? As a means of providing additional sites for housing, broaden the current
development standards for second units in the R1 District within
reasonable limits requiring at least one of the units be owner occupied.
The City Council did not support this program and it is not included in the revised
document. As discussed, the Planning staff does not consider this program to be
critical to the Citys affordable housing strategy. There is no guarantee that the second
=
units created would be affordable since their rent level would not be subject to
governmental regulation. Furthermore, it is likely that a substantial number of permits
issued for second units that would be directed toward legalizing existing illegal second
units.
Non-Conforming Residential Buildings
The Housing Commission recommends that the 1998-2003 Housing Element Update
include a policy that permits the reconstruction of nonconforming residential buildings
93
located in residential districts in the case of destruction by fire, earthquake, flood or
other disaster.
The Planning Commission reconsidered this recommendation during its review of the
revised draft Housing Element Update, and now recommends that an additional bullet
be added to Program 1a to address this issue as follows:
? Evaluate modifications to the Zoning Ordinance to allow for existing
non-conforming multi-family residential developments that are
destroyed due to fire, earthquake or other natural disaster to be
replaced in-kind in order to prevent the loss of dwelling units in the
City. Consider the use of the Earthquake Recovery Act as a model
for this program.
Staff concurs with the recommendation to include a program to evaluate potential
modifications to the Zoning Ordinance with regard to nonconforming buildings and uses.
ADDITIONAL STAFF RECOMMENDATIONS
Staff also recommends that miscellaneous tables, maps and text be revised to update
and/or clarify information presented in the 1998-2003 Housing Element Update. These
proposed modifications are presented in Attachment H. Additionally, Housing Division
staff recommends that a provision in Program 1as action plan to target City Subsidies
=
to affordable housing projects that serve households earning 61-80% of the County
median income be removed. Planning staff concurs with this recommendation.
94
Following adoption of the 1998-2003 Housing Element, City staff will submit a copy to
HCD for its review.
ENVIRONMENTAL IMPACT REPORT
An Environmental Impact Report (EIR) has been prepared by Cotton/Beland/Associates
which evaluates the potential environmental impacts of implementation of the policies
and programs contained in the 1998-2003 Housing Element Update. ( Attachment K)
Public Review
The Draft EIR on the Draft 1998-2003 Housing Element Update was released for a 45-
day public review on December 1, 1997. Two comment letters were received. The
comments contained in these letters, as well as responses to these comments, have
been incorporated into the Final EIR.
Approach/Methodology
Many of the programs contained in the 1998-2003 Housing Element Update are not
new. To the extent that ongoing programs would not present any new impacts, the EIR
examines only the potential environmental effects of the new and modified programs.
For the purposes of the EIR analysis, a number of alternatives to the proposed project
are considered: A) an alternative that assumes that current housing goals and policies
remain in place and no new element is adopted; B) an alternative that assumes that
residential development is permitted by right in all commercial and industrial zoning
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districts; C) an alternative that involves adding a new program to the Housing Element,
whereby the Ocean Park and North of Wilshire neighborhoods would be rezoned to
allow higher densities; D) an alternative focusing on revisions to the Citys inclusionary
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housing program implementing Ordinance 1615. The EIR identifies Alternative B as the
environmentally superior alternative.
Significant Impacts
The EIR concludes that there are significant impacts in the areas of Air Quality;
Transportation/Circulation; Parks and Recreation and Water Use as a result of the
proposed project. The EIR identifies four areas of unavoidable significant impact
associated with the adoption and implementation of the 1998-2003 Housing Element
Update even after mitigation. These include:
Air pollutant emissions associated with new development in excess of
S
thresholds established by the South Coast Air Quality Management
District.
Increased traffic due to new development, with the traffic potentially
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impacting intersections already experiencing adverse conditions.
Increased demand on parks and recreation services.
S
Cumulative air quality, circulation, and parks and recreation services
S
impacts, when the contributions of new residential development is
combined with other development expected to occur during the 1998-2003
period.
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The EIR identifies the cumulative use of domestic water supplies when the contributions
of new residential development is combined with other development expected to occur
during the 1998-2003 period, as one area of potentially significant impact that can be
mitigated to a less-than-significant level.
It will be necessary for the City to adopt a Statement of Overriding Considerations in
order to adopt the 1998-2003 Housing Element Update and certify the Final EIR.
BUDGET/FINANCIAL IMPACT
The recommendation presented in this report does not have a budget or fiscal impact.
RECOMMENDATION
Staff respectfully recommends that City Council take the following actions:
Adopt a Statement of Overriding Considerations and certify the Final EIR evaluating the
environmental impacts of the 1998-2003 Housing Element Update.
2. Adopt a resolution amending the existing Housing Element of the General Plan
by approving the Draft 1998-2003 Housing Element Update with amendments as
proposed by staff.
Prepared by: Suzanne Frick, Director
Karen Ginsberg, Planning Manager
Laura Beck, Associate Planner
Planning and Community Development Department
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Attachments: A. Resolution to Certify the EIR
Resolution to Approve a Statement of Overriding Considerations
Resolution Amending the Housing Element of the General Plan
Summary of Revisions pursuant to Council Action
Program Revisions (Bold/Strikeout) pursuant to Council Action
HCD letter dated September 5, 1997
Staff Report to Rent Control Board dated December 1, 1997.
Proposed Revisions to Hou-sing Element Update
February 6, 1998 letter from Housing Commission
Public Hearing Notice
Final Environmental Impact Report and Mitigation Monitoring Program
Draft 1998-2003 Housing Element Update- Revised July, 1997 and Technical
Appendix
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