SR-400-008-01 (2)
ATTACHMENT B
l)
COTTON/BELAND/ASSOCIATES,INC.
URBAN AND ENVIRONMENTAL PLANNING CONSULTANTS
(c'1Xil
February 17. 2000
To: Laura Beck, Associate Planner
City of Santa Monica
From: Karen Warner
CottonlBeIandl Associates
Re: Application of AD 438 to Fulfill Portion of Residential Sites Requirement in
Housing Element
As you are aware, AB 438 modified the Housing Element statutes to provide options to
fulfill a portion of the Element's residential sites requirement through means other than
new construction. Specifically, jurisdictions may meet up to 25 percent of their sites
requirement as defined by the regional housing needs assessment (RHNA) by
substituting existing units which will be made affordable through committed assistance
to very low and low income households. HCD's technical assistance paper on AB 438
is attached for reference.
Pursuant your request, we have reviewed the three assistance options under AB 438 for
potential application in Santa Monica, summarized below:
1. Substantial rehabilitation of sevendy substandard housing. This provision of
AB 438 provides credit towards the residential sites requirement for
rehabilitation of substandard housing with 20 year affordability covenants.
However, criteria for units to qualify as "substandard" include: unfit for human
habitation, at imminent risk of loss to the housing stock, and the presence of a
minimum of four of seven specified health and safety code violations.
Unfortunately this definition of substandard is so narrowly defined it has little
application in Santa Monica, Nonetheless, the following evaluates the City's
various rehabilitation programs to assess any potential relevancy:
a. Code Enforcement "Bootleg" Units Program - The City is initiating a
program to bring bootlegged housing units into compliance with Health
and Safety codes. Building and Safety staff have developed a list of
747EASTGREEN SUITE300 . PASADENA, CALIfORNIA 91101- 2119
{626) 304-0102 FAX (626) 304-0402
6336 GREENWICH DR. SUITE F . SAN DIEGO. CALIFORNIA ~Zl12'5911
/61'9t 62S-0056 FAX ~ 625-0545
(8S8) (85\1)
.... ,:
properties with bootlegged units to be inspected and cited for Health and
Safety Code violations. Staff has reviewed the "substandard"criteria
under AB 438, and have indicated that the condition of these bootlegged
Wlits, and in some instances adjacent units which were modified due to
the bootleg, would likely fulfill the minimum four of the seven
substandard conditions specified in AB 438, While the City could
establish a program to provide rehabilitation assistance to these units with
associated 20 year affordability covenants which qualified under AB 438,
at one - two units per building, this would represent a very incremental
and labor intensive program to provide housing sites.
b. CCSM Acquisition and Rehabilitation of Substandard Apartments -
Community Corporation has a long tradition of acquiring substandard
buildings in the City, rehabilitating and placing long term affordability
covenants on the units. Most recently, the City entered into a $2.9
million loan agreement with CCSM to acquire and rehabilitate a troubled
34 unit apartment building located at 1923-33 20'h Street. However, the
magnitude of substandard conditions in this pr(. :! and other CCSM
projects do not meet the minimum thresholds established under AB 438,
including imminent risk of loss to the housing stock, unfit for human
habitation, and a minimum of four of the seven substandard conditio..
criteria.
c. Multi-family Neighborhood Improvement Program - The City's
Housing Element calls for evaluation of a multi-family rehabilitation
program to upgrade substandard housing (Program 4a). As part of the
proposed program, rehabilitation assistance would be provided to
property owners willing to deed restrict units for affordable housing.
This program has not yet been developed, and is not anticipated to be
operational prior to the updated Housing Element.
2. Purchase of affordability covenants on market rate housing. This AB 438
provision provides residential sites credit for specialized programs which buy
down the cost of market rate, non-affordable rental units in projects with 16+
units to levels affordable to very low and low income households. Affordability
covenants must be for a minimum of 30 years. Units can not currently be
occupied by lower income tenants, The City clUTently has no such program
which fits these parameters. In addition, the application of such a program would
be rather limited, with the large majority of non-subsidized rental projects in the
City either already renting at affordable housing cost, and/or occupied by lower
income tenants due to the lasting effects of rent control.
- ",
~* ?
~ 'D...-.....-._........::...._ _", _6 -=~..r L....._:_... ,-,..~.... .....^',:L'Ot^.... _P^,...rlolilI~ ....,..s!IoA.+ ,;^,. ~vt9"Qint'\ nf'
.:J~ ..- r-~~'i;'-W' A'IUU UI. .__-. Mft. UU....,IU5.. 1.1.11.;:11 ,t-'IU Y .':::UUII, 1-'1 U'" I............, "". ",,_..L ..V.. ...""....u&;;/'......,..... "...
affordability controls on government subsidized rental housing at imminent risk
of conversion to market rete. Affordability controls must be extended for a
minimum of 40 years, and the local government must provide direct financial
assistance by acquisition of the project or purchase of affordability covenants.
The City's Housing Element identifies seven publicly assisted rental
developments considered at-risk of conversion due to potential non-renewal of
Section 8 contract by HUD. Recent discussions with the City's Housing
Authority indicate none of these projects are at-risk during the planing period. To
summarize their response:
....T.6nA......._ ,,,al,,,,... ...._A D.n._.o....:I Dft....... \!.nn.... 1\..T^+ 101+ ..;co..... ^, l'o""rn'~rC!.^... A1I....
- L~'liJ..1~U.1 ., llla..::J CUi.... UQI..UMl'W. I a.l~ ., II.IM-'" - 1 'II VI. ,...1. .....;:11ft. L.U. ""'V............hUV... ,..,"'....
to restrictions on mortgage prepayment
- Geneva Plaza, Santa Monica Christian Towers and Westminister
Towers - Not at risk of conversion due to deed restrictions
- Ocean Park Villas - Not at risk of conversion due to restrictions on the
omnt deed
0---- ----
- 1434 Santa Monica Blvd - Although the underlying use restriction on
...L_ _________. __.!11 L~ _.._.::-.:_~ ....L___ 1_ __ :_..J~__...~__ ...L_ _______ :_...__...J_ ~_
mt: propt:ny Will Dt: t:xplnng, mt:rt: IS nu InUICi1L1Un un: uwner IlllCllUS LU
convert the units to market rate,
Based on our discussions with HCD, AB 438 provisions for preservation of at-
risk housing would not apply to any program efforts to extend affordability
controls on previously rent controlled units, In order to qualify under these
provisions, the units must have received direct governmentaJ assistance under
specified programs, of which rent control is not included.
In summary, it would appear AB 438 has virtually nO application in Slll1ta Monica for
this Housing Element cycle. Based on our preliminary assessment, the City should be
"3'k10. +" ....^.....1'........o t"" _"'^'I,~rI..::a n,.,Q".......'O'+_ ~;+A~ +"'" ....AA_E".:ot ;"ro .._...:......_,...1 ...............:_.., ..._....n
u.v..... LV ....VUI.IUU""' \.V }'IV ,..1........ QW,,",,'iW(;U""" '-'U.'-"" I.U MoU'UI"'''''' .,,'" L"15IUllal UUU;:'UI!i uV\.Ou...,
requirements (RHNA) without reliance on the special provisions ofAB 438.
",
/1. .'-1