SR 09-10-2019 4B
City Council
Report
City Council Meeting: September 10, 2019
Agenda Item: 4.B
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To: Mayor and City Council
From: David Martin, Director, City Planning
Subject: Review Potential Goals and Policy Options for Existing Housing Stock and
Consider Role of New Housing Models
Recommended Action
Staff recommends that the City Council review and discuss potential goals and policy
options for protecting the City’s existing housing stock and consider what role new
housing models may have in the production of housing that consists of both affordable
and market rate units serving the full range of family and household sizes in the City.
Executive Summary
Southern California is experiencing a severe housing crisis that is driving the cost of
living beyond the reach of an increasing share of the population. This is particularly
acute in attractive areas like Santa Monica. Among the City’s highest priorities is the
protection of the community’s existing housing stock, particularly rent-controlled
housing, while also promoting the production of housing that consists of both affordable
and market rate units serving the full range of family and household sizes.
On December 18, 2018, Council held a study session on corporate housing in response
to growing concerns about the erosion of the City’s supply of affordable housing due to
market pressures. Council specifically expressed concerns about adverse impacts of
renovation of rent-controlled housing and the construction of new housing that appeared
to be designed to facilitate temporary occupancy. Council gave direction to bring back
options for protecting existing rent-controlled units, amending the corporate housing
definition, revising the Zoning Ordinance to address new housing models, and
enhancing enforcement measures.
This study session report provides an overview of staff’s analysis of new housing
models and presents concepts for addressing new housing models in follow up to
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Council’s corporate housing study session and discussions on SRO housing that
occurred earlier this year. As part of this study session, staff recommends that Council
discuss the following:
1. Policy Goals
a. Confirm the City’s intent to encourage production of new housing to serve
the full range of family and household sizes while protecting the City’s
existing rental-housing stock, and particularly affordable / rent-controlled
units, from negative impacts associated with new housing market trends.
b. Reaffirm that the City’s residential neighborhoods should be protected
from negative impacts associated with temporary occupancy and certain
commercial uses.
2. Lease Duration
a. Assess benefits of requiring property owners to offer minimum one-year
leases for all rental units, or for existing rental units, including rent-
controlled units.
b. Consider whether to permit medium-term housing (tentatively defined as
leases between 31 and 365 days) and, if yes, identify parameters for such
use.
c. Confirm requirement that leases be with natural persons for all rental
units, or existing rental units, including rent-controlled units .
3. Unit Size
a. Assess whether market-rate micro units are a desirable and necessary
component of Santa Monica’s housing stock and, if yes, identify
parameters for such use.
4. Consider whether there is support for new housing models not included above
and, if yes, identify parameters for such uses.
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Following Council discussion, staff will establish the parameters for an ordinance to
amend the Municipal Code; gather feedback from the Planning Commission, Housing
Commission, and Rent Control Board; and then return with a draft ordinance for Council
consideration.
Background
Summary of Council Direction on Corporate Housing
On August 14, 2018, as part of direction to examine statutory renter protections for
outdated definitions and compensations, and in light of rapidly intensifying market
pressures on local rents, Council directed staff to study what constitutes “corporate
housing” and “short-term rentals” under the Municipal Code – both are currently
prohibited land uses.
On December 18, 2018, Council held a study session to review and discuss potential
goals and policy options to guide preparation of an updated corporate housing
ordinance. Council direction to staff was wide-ranging and included the following:
• Provide recommendations on how to facilitate innovative housing types without
displacing existing residents.
• Require minimum one-year leases for rent-controlled units and a requirement
that leases be made only to natural persons.
• Return with an Interim Zoning Ordinance to create a new “medium -term housing”
definition that is a commercial use prohibited in all residential zones.
• Provide recommendations on how to protect all existing rental units from
conversion to “medium-term housing,” including potential regulation of
incremental permits for floor-plan changes that may lead to use as medium-term
housing.
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• Recommend increased fines and penalties for use of rent-controlled properties
for unpermitted medium-term housing, including failure to submit buyout offers
made to tenants occupying rent-controlled units to the City as required. Require
that buyout offers be submitted to the Rent Control Board when presented to the
tenant.
• Consider new regulations to restrict advertising of unlawful corporate housing.
• Review feasibility of a vacancy tax for leaving residential units vac ant.
• Assess enforceability of potential new regulations.
This staff report focuses on land use regulations directly related to medium-term
housing and new housing models. Advertising prohibitions and penalties for violations of
local law will be associated with any model adopted and included in any ordinance
proposed. Consideration of a residential vacancy tax is a separate analysis not
included here.
Summary of Council Action on SRO Housing
On May 14, 2019, Ordinance No. 2610 was adopted to establish a prohibition on Single -
Room Occupancy uses that are not 100% Affordable Housing Projects or specialized
housing in all Zoning Districts. Direction to staff was provided to expeditiously conduct
comprehensive analysis of both new housing models and existing regulations and to
provide options for instituting new or amended zoning regulations to support
development of a diverse range of housing types for all income levels and household
sizes, including consideration of whether smaller units should be included as part of the
City’s overall housing stock.
Links to the following Council discussions about Corporate Housing and Single-Room
Occupancy Housing are provided in Attachment “A”:
• City Council Study Session, Corporate Housing, December 18, 2018
• City Council Staff Report, SRO Housing, March 26, 2019
• City Council Staff Report, SRO Housing, April 23, 2019
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• City Council Staff Report, SRO Housing, May 14, 2019
Housing Policy and the Need to Develop a Range of Housing Types
The dimensions of the housing crisis extend far beyond Santa Monica. Californ ia
Governor Gavin Newsome recently said, “The high price of housing and rent makes it
almost impossible for many families to live in the communities where they work.
Housing costs are a huge impediment to businesses finding and attracting workers. And
families see how their paycheck doesn’t go nearly as far as it should. I’ve long said that
California must use every tool in its toolbox to confront the housing affordability crisis.”
Santa Monica has long been committed to doing its share and more to keep Sa nta
Monica an inclusive and affordable community despite mounting market pressures.
Through a variety of discussions over the years with community input at the Council,
Planning Commission, and Housing Commission, a need has been identified for
development of new affordable housing and specialized housing for all household sizes,
as well as market-rate multi-family apartments for all household sizes near transit in
Santa Monica. These discussions have occurred at Council, Planning Commission, and
Housing Commission most recently in the context of discussions regarding market-rate
Single Room Occupancy (SRO) uses, the 2017 Downtown Community Plan, the 2015
Zoning Ordinance update, various amendments to the City’s Affordable Housing
Production Program (AHPP), and preparation of the City’s Housing Element.
As documented in the December 18, 2018 Council staff report, there is a need for a
variety of housing types to serve permanent residents and temporary residents,
including residents in the city for the purposes of education, healthcare, or any other
kind of business. Recently, several new housing trends have emerged that seek to
address the housing affordability gap that exists in the Southern California region, and
specifically, the westside. As rents have continued to increase, housing providers have
proposed increasingly creative models to allow the opportunity to live in Santa Monica
and immediately surrounding areas.
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Changing Regional Housing Trends
Housing development trends in the local and regional context show a shift toward higher
density multi-family projects intended to offset rising land value and construction costs.
Regionally, development trends illustrate movement toward smaller average unit size,
including movement toward micro-units, particularly in high-density, expensive
metropolitan markets where proximity to work and school, neighborhood amenities, and
public transportation, are key factors. While housing models have long included SRO
housing micro unit housing concepts that provide affordable housing in urban centers,
or serve as a housing type for supportive and transitional housing, emerging trends
show that in higher density metropolitan areas, a focus has been on development of
market-rate rental apartment projects with smaller-sized units that reflect a balance
between location, overall unit square footage, and building amenities. In addition to the
trend toward smaller units, there has been a move towards co -living models that are
based on smaller living spaces, whether individual or shared.
Discussion
In order to be responsive to Council’s direction to ensure the protection of existing rent -
controlled units while also providing options for innovative housing models that do not
displace existing tenants, the following sections present policy options for Council’s
consideration. This section concludes with a proposed framework to address this multi-
faceted issue.
Protection of Existing Housing Stock
As a city with approximately 71% of its residents in rental housing, the City has
maintained a long-standing commitment to protecting tenants and existing housing
stock, particularly in rent-controlled housing. Within the context of a statewide housing
shortage and associated impacts on housing affordability, the City has an interest in
ensuring that this valuable resource is retained for permanent housing to the greatest
extent possible. As such, the following policy options, or any combination of options, are
presented for Council consideration:
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A. Prohibit medium-term housing (tentatively defined as leases between 31 and 365
days) and new housing models in existing rent-controlled units.
This option would provide land use protections for tenants of existing rent -
controlled units by explicitly addressing Council’s concerns regarding the loss of
rent-controlled housing due to a combination of market pressures and outdated
definitions in the Municipal Code. As a point of reference, according to the 2010
American Community Survey, there were approximately 51,000 housing units in
Santa Monica, of which approximately 13,000 units were owner-occupied. The
Santa Monica Rent Control Board’s most recent annual report indicated there
were 27,445 units subject to rent control law at the end of 2018.
B. Prohibit medium-term housing and new housing models in all existing rental
housing units.
This option would apply to all existing rental housing stock, including multi-unit
rental housing and ownership units, such as single unit dwellings and
condominiums, that are being rented to tenants. Staff has observed changes in
floor plans for recently approved housing projects that appear to be a precursor
to dividing units for multiple tenants/leases. Extending protections to all existing
rental housing would be consistent with Council’s policy intent to offer incentives
for housing production that is available for permanent, long-term residents.
C. Either Option A or B plus regulations to protect residential neighborhoods from
the impacts of new housing trends.
This option is intended to provide broader protections for the City’s residential
neighborhoods, particularly Ellised units to the extent allowed by law, which are
potentially vulnerable to conversion to other uses that may not be in keeping with
the purpose of residential neighborhoods for long-term, permanent housing
stock.
Concepts for Consideration: Duration of Lease
As detailed in the December 18, 2018 Council staff report, there is a segment of the
housing market seeking “medium-term” housing options of between 31 days and 365
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days (consumers of this housing model include relocated employees; younger workers
holding jobs for shorter durations and/or workers who are working under more flexible
employment models and therefore seeking housing with greater durational flexibility;
those looking for interim housing while they search for permanent housing, and those
seeking extended vacations in home-like settings). Council should consider the
following policy options:
A. Require property owners to offer minimum leases of one year
This option will affirm that the City’s housing stock is intended for the provision of
long-term permanent housing. Council should consider whether this option
should apply to all rental units, including new construction, or existing rental
units, including rent-controlled units.
B. Allow property owners more flexibility in duration of lease
There are circumstances where requiring a one-year lease may not be practical
given the varying needs of tenants. As a result, Council may want to consider
providing flexibility in duration of lease by lowering the minimum lease term to a
time period of less than a year. Another possibility may be a hybrid approach
where initial leases are required to be one-year but reduce to minimum of 31
days after the first year.
Create New Medium-Term Housing Definition
Regardless of whether Council is interested in medium-term housing, the existing
definition of “corporate housing” is too specific and presents challenges in enforcement.
As a result, a new definition for “medium-term housing” will need to be created in the
place of “corporate housing”. The duration of lease for medium-term housing should be
considered by Council. As context, the Municipal Code already defines short -term
vacation rentals as 30 days or less. If there is interest in defining long-term permanent
housing with lease duration of at least one year, a logical definition for medium -term
housing would be leases between 31 and 365 days. However, Council may also
choose to define the maximum duration of lease as something less than 36 5 days.
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Leasing to Natural Persons
An associated concept to duration of lease is regarding who may sign a lease. Similar
to regulations adopted by the Rent Control Board in August 2018, Council could
consider requiring that leases for rental units only b e to natural persons. This would
further re-affirm that the City’s housing supply is largely intended for long-term,
permanent housing and not corporate entities, which may encourage use of rental units
for other than long-term housing. Council should consider whether this option should
apply to all rental units, including new construction, or existing rental units, including
rent-controlled units.
Concepts for Consideration: Medium-Term Housing Parameters
As a policy matter, the City provides process and development standard incentives for
housing projects. If is the intent of Council to encourage housing production while
providing flexibility in lease terms, there are limitations that Council may wish to
consider in order to ensure that new construction includes a mix of both medium-term
and longer-term housing. If there is interest in allowing medium -term housing in new
construction, the following are presented as policy options for Council consideration:
A. Allow medium-term housing in new construction in certain commercial zones or
all commercial zones citywide.
With a base assumption that medium-term housing would be prohibited in
residential neighborhoods to protect from negative impacts associated with
temporary occupancy and certain commercial uses, if Council was interested in
allowing medium-term housing, an option would be either allowing this kind of
housing in all commercial areas citywide or only in certain zones. Providing
limitations as to location would provide a relief valve for pressure t o locate
medium-term housing in residential neighborhoods. As such, there may be
circumstances that Council believes is appropriate to allow this kind of housing if
consistent with policy objectives.
B. Allow medium-term housing in a percentage of units in new construction, or no
limit on number.
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If medium-term housing is allowed, a consideration is parameters on how much
should be allowed in a project. If viewed within the context of Council’s support
of housing production intended to increase the City’s housing supply, it may be
appropriate to limit the number of units in a project that could be reserved for
medium-term housing. As an alternative, if Council believes that prohibiting
medium-term housing in all existing rental housing units – including multi-unit
rental units and ownership units, such as condominiums and single -unit dwellings
– that are being rented to tenants is sufficient, then there could also be no limit
on how much of a new project could have medium-term housing units. As a point
of reference, according to the 2010 American Community Survey, there were
approximately 51,000 housing units in Santa Monica, of which approximately
13,000 units were owner-occupied. The Santa Monica Rent Control Board’s
most recent annual report indicated there were 27,445 units subject to rent
control law at the end of 2018.
C. Allow medium-term housing in new construction, but with higher affordable
housing obligations, or keep affordable housing obligations the same.
Due to the shorter lease duration, it stands to reason that the economics of a
project that includes some or all medium-term housing are different than a project
that may have lower turnover in units. As a result, Council should consider
whether it would be appropriate to study whether such proje cts could withstand
higher affordable housing obligations. As an alternative, Council could also
choose to keep affordable housing obligations the same (i.e. not taking medium -
term housing into consideration). Changes to affordable housing obligations
would require a new nexus study.
Concepts for Consideration: Market-Rate Micro units with Common Area Amenities
On March 26, April 23, and May 14, 2019, Council discussed the issue of Single-Room
Occupancy (“SRO”) Housing projects in the context of several applications in the
Downtown that had been submitted. Ultimately, Council voted to enact an ordinance
prohibiting market-rate SRO projects pending further study of the issue. The SRO
Housing definition in the Zoning Ordinance contemplated transitional ho using and
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similar projects as evidenced by the specific standards in SMMC Section 9.31.330.
This use classification was not intended to allow entire buildings of market-rate units
without certain common area amenities. As noted above, addressing the regional
housing crisis requires some flexibility in unit types, size of living spaces, and amenities.
Within metropolitan housing markets, trends have developed that include smaller units
associated with common area amenities.
Staff reviewed of peer cities’ approach to micro-units, specifically, ordinances for San
Francisco, Los Angeles, Berkeley, and West Hollywood. The ordinances were
instructive in shaping the concepts presented herein for unit size and common area
amenities. Most of the ordinances refer to the Building Code to establish a minimum
unit size (150 SF) and also do not require common area amenities. San Francisco was
an exception in that their ordinance defines a micro-unit with reduced square footage
(fully contained units with bathroom and kitchen) with living area of less than 220 SF.
These micro-units are allowed in very limited circumstances (e.g. student housing,
affordable housing). The term micro-unit for purposes of this report will refer to fully
contained units with bathroom and kitchen in order to distinguish between living units
that may not contain individual kitchen and bathroom facilities that is traditionally
associated with Single-Room Occupancy units or housing and the City’s current use
classification for SRO housing projects.
Micro-units, if developed with complimentary amenities, could provide a more affordable
market rate response to the shortage of housing. If Council supports incorporating this
emerging housing type into the range of permissible unit types, staff would bring back
an ordinance at a future meeting to add this new use classification and associated
standards. The following options regarding micro-units are presented for Council’s
consideration:
A. Allow micro-units in new construction or not at all
If Council believes that micro-units are a desired component of Santa Monica’s
housing stock, allowing micro-units would create opportunities for a diversity of
households to live in Santa Monica. As a starting point and within the context of
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protecting existing housing supply, Council could consider allowing micro-units
only in new construction projects or within changes of use from commercial use
to residential use. As an alternative, micro-units could also be prohibited.
B. If micro-units are allowed, permit as a singular use type or part of a mix of units.
If micro-units are allowed, Council should consider in what manner they would be
allowed – as a single building type or as part of a mix. Micro-units allowed as a
single building type would allow flexibility for innovative housing types without the
restriction of typical physical layouts and also increase the number of overall
housing units produced due to their smaller size. However, allowing micro-units
as part of a mix of units would also provide a greater diversity of housing units
within individual projects to meet the diverse housing needs of the City and allow
developers to meet market demand in a variety of ways. As background
information, the requirement for a unit mix for Tier 2 projects has been in place
since the 2015 Zoning Ordinance Update and the 2017 Downtown Community
Plan. Prior to that, there were relatively few two- and three-bedroom units
produced in the city.
C. If micro-units are allowed, require special standards such as minimum and
maximum unit size, required amenities within the unit, and required common
area amenities.
If micro-units are allowed, Council should consider special standards that may
apply. In researching peer cities’ ordinances and as a starting point, staff has
identified parameters that may be of interest to Council including minimum and
maximum unit size, required amenities within the unit, and required common
area amenities. The primary concern regarding micro-units has been quality of
life for tenant, specifically the lack of community socializing space and minimal
amenities in the unit. Special standards would address the inherent micro-unit
tradeoff of private living space to common living area with a focus on livability.
D. If micro-units are allowed, allow in certain zones or citywide.
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Council should consider in which zones micro-units would be appropriate within
the context of protecting existing housing supply in residential neighborhoods.
Commercial zones are largely where the greatest amount of development activity
is occurring and where the majority of future housing production is likely to occur.
In providing direction on geographic limitations on locating micro-units, Council
should also consider the likely tenant profile of micro-unit occupants especially
with large healthcare and educational employers in the city, in addition to the
tech industry.
Concepts for Consideration: New Housing Models
Staff has researched co-living models in the region and also in other jurisdictions to
evaluate how co-living could potentially be introduced as a housing model with defined
rules and regulations in order to create more housing options and in turn create more
diversity in the city’s housing stock. While there are different corporate entities that offer
or market co-living situations, these kinds of projects are typically distinguished by a
greater number of bedroom than in traditional multi-family units, particularly in a new
construction context, allowance for leasable bedrooms, and flexibility in lease term.
Peer Cities Research – Co-Living
Staff conducted a review of peer cities’ approach to the co -living concept, which centers
around renting bedrooms in a larger multi-unit residential or mixed-use project; where
one or two individuals can enter a lease agreement for a single bedroom (with or
without a private bath) and use shared kitchen and bath facilities, and common living
spaces with other tenants who typically each enter into separate leases. Specifically,
staff reviewed ordinances for a number of cities that rely on “group housing” or “group
residential” definitions and do not currently have special development or use standards
that would differentiate it from traditional multi-unit dwelling units. In contrast, San
Francisco and San Jose both have regulations that provide more specific parameters
for co-living. San Jose adopted regulations earlier this year as a way to test whether this
housing type helps the municipality address the housing crisis in the Bay Area. The
following summarizes several of the key components of these cities’ ordinances:
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City of San Jose defines “Co-Living Community” as a residential community where
individual secure bedrooms are rented to one or two persons. Special standards include
the following:
• Co-living communities contain bedrooms that are provided for an established
duration with a lease agreement. Individual bedrooms that contain a full kitchen
facility are not considered a co-living community.
• A co-living community must have common open space and shared full kitchen
facilities must serve a minimum of six bedrooms and must include interior
common space.
• Minimum amount of common area required per bedroom. An individual bedroom
may not have an external entryway.
• Bedrooms are minimum 100 SF in size; average 275 SF in size; and maximum
400 SF in size.
• Increased bicycle parking requirements; reduced vehicle parking requirements;
and stipulation for Transportation Demand Management program requirements.
• Each bedroom within a Co-Living Community is considered a separate living
quarter to be occupied by permanent residents (lease terms are not stipulated).
• Each bedroom is intended to be a unit for Regional Housing Need Allocation
purposes, and will, subject to further study, be equivalent to dwelling units under
the city’s Inclusionary Housing Ordinance.
• Co-Living Community established as a permitted use in San Jose’s Downtown
subject to a Special Use Permit for new development.
San Francisco’s zoning ordinance permits co-living, subject to its group housing
definition:
“A Residential Use that provides lodging or both meals and lodging, without
individual cooking facilities, by prearrangement for a week or more at a time, in a
space not defined by this Code as a dwelling unit. Such group housing shall
include, but not necessarily be limited to, a Residential Hotel, boardinghouse,
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guesthouse, rooming house, lodging house, residence club, commune, fraternity
or sorority house, monastery, nunnery, convent, or ashram. It shall also include
group housing affiliated with and operated b y a medical or educational institution,
when not located on the same lot as such institution…”
• Residential Use is defined as a use category that provides housing for San
Francisco residents, rather than visitors, including dwelling units, group housing,
senior housing, homeless shelters, etc.
• Density limitations are established to regulate the number of bedrooms in a
group housing project and limitations vary by zoning district.
• Group housing can also be defined as student housing or 100% affordable
housing and in certain zoning districts, group housing is not permitted unless it is
a student housing or 100% affordable housing subtype.
Research - Membership-Based Transitory Housing
Staff has received inquiries from companies that are proposing housing m odels that are
neither permanent housing nor hotels and as such, the Zoning Ordinance does not
perfectly address the proposed use. These hybrid models are being proposed in
commercial zoning districts (as opposed to residential neighborhoods) and typically
involve persons renting a bed in a large common area with shared kitchens and
bathrooms. The model is an evolution of existing subscription-based extended stay
hotels. Members pay a monthly fee and can choose to stay in any available location for
a few days, a week, or extend to several weeks but it is clear that these models are not
intended for long-term permanent housing. Under the City’s current regulations, stays
of less than 30 days could potentially be considered a violation as the use might be
more akin to lodging or vacation rentals. The companies have shared that the average
length of stay is typically several weeks. However, these kinds of uses have both
residential and commercial elements as the model evolves to accommodate travelers,
tenants transitioning between employment, and others looking for medium -term
accommodations. As a result, this kind of use appears to be an evolution of hostels and
similar lodging facilities and are more in line with commercial instead of residential uses.
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If there is interest, Council could direct staff to further explore accommodating and
simplifying the process for these kinds of accommodations, which could potentially
alleviate some of the pressure for temporary housing in residential neighborhoods.
Policy Options – New Housing Models
If Council is interested in accommodating new housing models as a desirable
component of Santa Monica’s housing stock, the following are policy options for Council
consideration:
A. Allow new housing models in new construction or not at all.
In order to protect existing housing supply, Council should consider limiting new
housing models to within new construction, or within changes of use from
commercial to residential uses. However, if Council would prefer to reaffirm that
existing and future housing rental units are intended only for long-term,
permanent housing, it would not be appropriate to accommodate new housing
models that largely have an emphasis on flexibility in duration of lease and
options for shared living quarters.
B. If new housing models are allowed, consider certain zones or citywide.
If new housing models are allowed, similar to micro-units, there may be value in
providing geographic limitations as to where this land use may be located. Given
that these new housing models can have varying impacts on adjacent residential
neighborhoods and within the context of the City’s incentives for housing
production in areas with access to high frequency transit and access to daily
needs, Council should consider limiting these uses to certain commercial zones,
or all commercial zones citywide only and prohibiting such uses in residential
zones.
C. If new housing models are allowed, consider special limitations.
If new housing models are allowed, some limitations on the use may b e
considered including limitations on occupancy, requirements for amenities within
units and in common areas, and other considerations that increase livability in a
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co-living or membership-based transitory housing setting. Since the living
quarters may only include leasing of beds with shared kitchens, bathrooms, and
living areas, it is important that there are requirements in place that ensure the
livability of such housing types.
Staff Recommendation
Table 1 summarizes staff’s recommendation on all of th e above concepts with respect
to duration of lease, whether micro units should be allowed, and whether new housing
models should be allowed. This recommendation also provides staff’s recommendation
as to how these concepts could be addressed in existing and future housing supply with
recommendations on geographic limitations.
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**Subject to special standards
Duration of Lease Micro-Units**New Housing
Models**
EXISTING HOUSING STOCK
Existing Units -
(Rent-Controlled)1- YEAR MINIMUM NO NO
Existing Units -
(Not Rent-Controlled)
Residential Zones
1- YEAR MINIMUM NO NO
Existing Units -
(Not Rent-Controlled)
Commercial/Mixed-Use Zones
1-YEAR MINIMUM
OR
31-->365 DAYS
FOR PERCENTAGE OF UNITS
MAYBE MAYBE
NEW CONSTRUCTION
Table 1. Summary of Potential Use Regulations
YES WITH LIMITATIONS
YES WITH LIMITATIONS YES WITH
LIMITATIONS
YES WITH
LIMITATIONS
YES WITH
LIMITATIONSNO
New Construction / Change of Use -
Healthcare Mixed-Use Zone
New Constuction -
Residential Zones
31-->365 DAYS
FOR PERCENTAGE OF UNITS
New Construction / Change of Use -
Commercial/Mixed-Use Zones
31-->365 DAYS
FOR PERCENTAGE OF UNITS
31-->365 DAYS
FOR PERCENTAGE OF UNITS
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Regulating Advertising of Medium-Term Housing
Council can also prohibit advertising of leasing activity that is in violation of local law.
Remedies
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Regardless of the regulatory policy choice ultimately chosen, it is equally important to
further buttress available remedies to ensure that violations are appropriately deterred.
While a significant set of remedies are currently available for violations of the Zoning
Ordinance, each remedy has its limitations. Currently, violations of the Zoning
Ordinance are subject to all of the following remedies:
1. Administrative Enforcement by Citations (SMMC Chapter 1.09) or Compliance
Order (SMMC Chapter 1.10).
2. Criminal Prosecution, with a maximum fine of $500 and/or imprisonment of up to
6 months for each violation.
3. Permit Suspension or Revocation.
4. Civil Lawsuit to enjoin the violation.
Historically, the City has principally relied upon Administrative and Criminal enforcement
tools. While such tools are effective in many situations, each contains limitations.
Administrative remedies – generally up to $1,000 per violation – are relatively quick and
easy to impose; however, due to the limitations in fine amounts and the limited judicial
process available to enforce such fines, they are less effective against entrenched
violators. Criminal prosecution can be a powerful remedy; however, the serious
congestion in the criminal courts system creates significant delays and, at times,
inadequate judicial attention to even serious cases. While permit suspensions and
revocations can have powerful consequences (e.g. a business operating without a
permit), such consequences still need to be enforced by administrative, criminal or civil
means.
Civil remedies have not historically been a favored tool by enforcement staff because it
can be a much slower process, comparatively far more staff -time intensive, and,
generally, a win only results in a court enjoining the violation. Such an outcome does
not provide meaningful deterrence against serious and entrenched violators.
Staff recommends that the Council consider meaningfully enhancing the City’s civil
remedies in the two following ways. First, staff recommends that the Council consider
adoption of significant civil penalties. While administrative penalties are limited by state
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law, and criminal penalties are limited by both state law and the City Charter, far less
limitations apply to the adoption of civil penalties. A significant civil penalty could
provide meaningful deterrence against violations, especially against violations largely
motivated by economic incentives.
Second, the City Attorney’s Office will examine and consider the appropriateness of
receivership and forfeiture processes as remedies for very serious and entrenched
violations. In situations involving, among other things, serious health and safety
violations (e.g. slum housing), state law authorizes local enforcement agencies to
request a court-appointed receiver to take over a property, remedy the violations, and, if
necessary, sell the property to pay for the remediation costs, administrative costs and
fines. See California Health & Safety Code §§ 17980 – 17992. While this remedy is
available in only rare and extreme cases, the City Attorney’s Office will also explore
ways to expand the availability and use of this remedy to address serious violations of
local law that harm the community’s general welfare.
Next Steps
Once staff receives clear policy direction from Council, staff will draft redline changes
and seek input from the Planning Commission, Housing Commission, and Rent Control
Board prior to bringing back an ordinance for adoption at a future Council Meeting.
Financial Impacts and Budget Actions
There is no immediate financial impact or budget action necessary as a result of the
recommended action.
22 of 22
Prepared By: Roxanne Tanemori, Principal Planner
Approved
Forwarded to Council
Attachments:
A. Attachment A Links to Prior Council Reports
B. Written Comments
C. PowerPoint Presentation
Attachment A
Links to prior City Council Staff Reports
City Council Study Session, Corporate Housing, December 18, 2018
City Council Staff Report, SRO Housing, March 26, 2019
City Council Staff Report, SRO Housing, April 23, 2019
City Council Staff Report, SRO Housing, May 14, 2019
1
Vernice Hankins
From:Andrew Wilder <andrew@andrewwilder.com>
Sent:Monday, September 9, 2019 6:27 PM
To:councilmtgitems
Cc:Stacey AS; Council Mailbox; Ted Winterer; Councilmember Kevin McKeown; Sue Himmelrich -
Western Center on Law and Poverty (suehimmelrich@suehimmelrich.net; Lane Dilg; Rick Cole; David
Martin; Rahim Kanji; Wendy Trager; Danny Mayorga; Donna Rosecu; William Reed; zinajosephs;
Maurice Cochee; Denise Smith; gold.eliza@yahoo.com
Subject:Agenda Item 4B (Disruptive dormitories in R1 zones)
Dear Council Members,
I very much appreciate Stacey's email to you earlier today -- she outlined the situation at 2222 Pier
(and other homes in Santa Monica) very nicely, so please see below if you haven't read her email
yet.
Corporations should not be allowed to lease homes in R1 neighborhoods, turn them into
dormitories, and sub-lease them to individuals. Even without changes to the current laws,
Bungalow Living is already in violation of the current R1 Zoning ordinance. Here is an excerpt
(emphasis added):
The purposes of the “Single-Unit Residential” District are to:
B. Preserve and protect the existing character and state of the City’s different residential neighborhoods and
the quality of life of City residents against potential deleterious impacts related to development—traffic,
noise, air quality, and the encroachment of commercial activities.
D.Avoid overburdening public facilities, including sewer, water, electricity, and schools by an influx and
increase of people to a degree larger than the City’s geographic limits, tax base, or financial capabilities can
reasonably and responsibly accommodate.
Street parking and trash/recycling pickup are both Public Facilities, and they are both overburdened by this
commercial real estate venture. Their trash and recycle bins are overflowing every single week.
Additionally, I have searched the City's Business License Directory to see if Bungalow Living has a
business license to operate in Santa Monica, and none of the names that match the search
"Bungalow" match the corporation's name on their website ("Bungalow Living, Inc.")... so they may
very well be operating without a business license, too!
I also think the idea proposed in the Staff Report to allow leases to be signed only by natural
persons -- no corporations! -- is a great suggestion to help improve this situation.
Thank you for moving forward to remedy this situation!
Best,
Andrew
On Mon, Sep 9, 2019 at 11:46 AM Stacey AS <sjaconsulting@gmail.com> wrote:
All,
Item 4-B
09/10/19
1 of 5 Item 4-B
09/10/19
2
While I appreciate the Council looking at the issue of vacation rentals in our City, previous legislation on home‐sharing,
and current staff recommendations, do not address "medium term" rentals (rentals that are 31 days or more,)
specifically related to companies such as Bungalow (Bungalow.com) invading our residential neighborhoods.
Bungalow is a COMMERCIAL ENTERPRISE, IN THE BUSINESS OF HOME‐SHARING. Home‐sharing is not an allowed
business in an R1 zoned neighborhood. (Bungalow is not the owner of the houses it uses for its business; however, the
following would still apply, as Bungalow is a business running out of the properties.) Section 9.07 of the Santa Monica
Municipal Code states that any land uses not specifically listed in Chapter 9.51, Use Classifications, are prohibited. A
home sharing business is not a permitted use in an R1 zoned area, in accordance with the existing language of the
Santa Monica Municipal Code. Note that the owners of 2222 Pier Avenue whom leased the property to Bungalow have
never lived in the house, not have they ever lived in Santa Monica.
Bungalow is a commercial enterprise which has raised $64 million dollars to build a business of home sharing. Its
business model is to lease homes, put up false walls to create additional private spaces, then rent out each space to an
individual for a period of more than 31 days (thus not be regulated as a vacation rental) as a "bedroom", creating
dormitory style housing in residential neighborhoods (https://www.globenewswire.com/news‐
release/2018/08/23/1555854/0/en/Bungalow‐a‐New‐Residential‐Real‐Estate‐Platform‐Launches‐and‐Raises‐64‐
Million‐to‐Build‐a‐Better‐Rental‐Experience.html).
Bungalow puts up false walls to create additional private spaces (i.e., around a dining room, or bifurcating a living
room), which it then leases out as bedrooms. Where the new model of home sharing creates a burden on a
neighborhood zoned for single family homes, Bungalow’s model takes the burden to an extreme. Among the stated
purposes of Section 9.07 is to “Preserve and protect the existing character and state of the City’s different residential
neighborhoods and the quality of life of City residents against potential deleterious impacts related to development—
traffic, noise, air quality, and the encroachment of commercial activities.”
There are currently NINE ever revolving tenants at 2222 Pier Avenue. Permanent residents, some elderly, and many of
whom have been living in Santa Monica for fifty years or more, are forced to park blocks away from their homes. We
are forced to endure the frequent “community parties” Bungalow actually advertises as part of its marketing, which
often violate noise ordinances. The alley is always littered with the trash of nine residents, whom do not have enough
of a vested interest in the property to dispose of trash properly. Last week, the residents of 2222 Pier had a party,
which did not end until 3:00 am, and several residents ended up calling the police. The next day all of the trash/green
bins of at least six houses on the block were filled with pizza boxes.
The owners of 2222 Pier Avenue have been cited once for Code violations in the year since Bungalow has established
its home‐sharing business at the property. However, Code Enforcement has informed me that any new case must begin
all over again, rather than exist as a continuation of any violations. Why? Because none of the tenants interviewed for
the initial case still live at 2222 Pier Avenue ‐ everyone there is new!
Bungalow clearly has deleterious impacts on our neighborhood. It is a commercial enterprise which is not permitted in
R1 neighborhoods.
More so, Bungalow is a new kind of unregulated real estate development. Without legislative language directed at
this new model of commercial enterprises establishing home‐sharing businesses, Bungalow will succeed in changing
our single family home, R1 zoned area into a neighborhood of home‐sharing businesses and dormitories.
Best,
Stacey Abrams‐Sherick
90405
Item 4-B
09/10/19
2 of 5 Item 4-B
09/10/19
1
Vernice Hankins
From:Clerk Mailbox
Sent:Tuesday, September 10, 2019 8:32 AM
To:councilmtgitems
Subject:FW: Item 4 B tUESDAY SM Council agenda
From: Mathew Millen <matmillen@msn.com>
Sent: Monday, September 9, 2019 9:02 PM
To: Clerk Mailbox <Clerk.Mailbox@SMGOV.NET>; Sue Himmelrich <Sue.Himmelrich@SMGOV.NET>
Subject: Item 4 B tUESDAY SM Council agenda
The proposed 1 year minimum lease and prohibiting leasing to corporations has problems
The City Temporary Relocation ordinance requires a rental housing provider to rent an apt. for a tenant if
repairs will exceed 30 days...
1.If the apt. building is owned by a corporation ( and I own my apt. building in my family trust NOT a corp) how
will the apt. owner ,a corporation lease the unit for the tenant if Corporations are denied the opportunity to
lease?
2. If the repairs are scheduled to be completed in 90 days owners cannot afford to lease the tenant an apt. for
1 year if the tenant will be returning to their apt. in 90 days. Forcing the apt. owner to pay rent for the other 9
months is A. is expensive and B.. keeps a unit vacant that could be rented.
THIS PROPOSAL NEEDS MORE THOUGHT
Mathew Millen
Item 4-B
09/10/19
3 of 5 Item 4-B
09/10/19
1
Vernice Hankins
From:William Robertson <william@designbuildlabs.com>
Sent:Tuesday, September 10, 2019 8:59 AM
To:councilmtgitems
Subject:Fwd: Santa Monica R1 - proposed
To whom it concerns,
I’d like the below email to be part of the review package for the september 24th hearing.
William Robertson
william@designbuildlabs.com
310.985.3969
www.linkedin.com/in/williamrobertson2
www.designbuildlabs.com
Begin forwarded message:
From: William Robertson <william@designbuildlabs.com>
Subject: Santa Monica R1 - proposed
Date: September 9, 2019 at 2:07:52 PM PDT
To: ross.fehrman@smgov.net, tony.kim@smgov.net, planning@smgov.net
Ross and Tony,
I own and operate an architectural design firm here in santa monica. We are also a general
contractor. I’ve been following the R1 development standards topic for a while and thought i’d chime in
a bit.
We are also getting ready to submit plans for our own house, so it's especially personal for us right now.
We’ve seen a number of colossal structures go up in recent years, many that are poorly proportioned
and out of step with the size of the lots in the area. We are keen to see a better system but we want to
make sure this happens with eye to practicality.
Generally I think the following:
1. setback, layback and building envelope standards should be very restrictive
2. parcel coverage and garage requirements however should be less restrictive
3. Plan check priority and lower fees should be given for designs below incremental parcel
coverage thresholds, for electing to add a garage and for maximizing green building elements.
Thank you. See you later in the month at the council hearing.
Item 4-B
09/10/19
4 of 5 Item 4-B
09/10/19
2
William Robertson
2401 22nd St.
Santa Monica, CA 90405
Item 4-B
09/10/19
5 of 5 Item 4-B
09/10/19
1
Vernice Hankins
From:zinajosephs@aol.com
Sent:Tuesday, September 10, 2019 11:27 AM
To:councilmtgitems; Gleam Davis; Greg Morena; Sue Himmelrich; Ana Maria Jara; Councilmember Kevin
McKeown; Ted Winterer; Terry O’Day; Lane Dilg; David Martin; Sharon Guidry; Rick Cole
Cc:zinajosephs@aol.com
Subject:City Council 9/10/19 items 4B and 7D -- ongoing illegal multi-family use in R1 in Sunset Park
City Council 9/10/19 items 4B and 7D
Home-sharing vs. illegal ongoing multi-family use in Sunset Park R1 district
Dear Council members,
The City Council discussion of new housing models should include the dormitory-style housing that Bungalow.com has
been doing in Sunset Park at 2222 Pier Avenue for some time.
Complaints have been filed with the city since at least August 2018, and still the problem persists.
2222 Pier Avenue -- Bungalow Living just got a $64 Million Venture Capital investment....Big Business operating in our R1
neighborhood.
From a nearby resident: “It's gotten really bad -- I had to call SMPD a couple of weeks ago because of a loud, disruptive
party at 1 o'clock in the morning. After the party, they filled our green bin and our neighbor's recycle bin with pizza boxes,
to the brim....There are frequently smaller parties that we can hear from inside our house. And they leave a ton of trash in
the alley. The list goes on and on....This sub-rental of 9 individuals inside an R1 home should not be allowed to continue.”
Another neighbor filed a complaint with the city in August 2018, and I followed up with a GO complaint. An email thread
below with the head of Code Enforcement shows that the city apparently can do nothing to end this ongoing practice
with the current city regulations, as the illegal multi-unit use of 2222 Pier Avenue in an R1 zone in the Sunset Park
neighborhood is still apparently "under investigation" after all this time.
Zina Josephs
From: Sharon.Guidry@SMGOV.NET
To: zinajosephs@aol.com
2
Cc: Efren.Galindo@SMGOV.NET
Sent: 9/6/2019 2:55:31 PM Pacific Standard Time
Subject: RE: Closed Request # 3897337 [6664656633383066] -- code enforcement
Hi Ms. Josephs, unfortunately the case is ongoing and I am not able to provide you with specific information regarding the
case at this time. In our previous communication, I hoped that I would be able to do so soon however, due to the nature
of enforcement investigations, I have been unable to do so. With that, when the case is closed, we will be happy to give
you an update on the case with any information that is disclosable to the public. I cannot at time give you an estimate of
when that will be but I can assure you, the case is still very active.
Efren Galindo, Lead Cod Enforcement Officer is assigned to this case, while he too can’t provide any specific information
regarding the case, feel free to check in with him periodically as he will be able to inform you when the case reaches
completion. I have added Lead Officer Galindo to this response so you have is contact information.
Best,
Sharon L. Guidry
Code Enforcement Manager
City of Santa Monica | Planning & Community Development
Code Enforcement Division
1685 Main Street, Room 111 | Santa Monica, CA 90401
sharon.guidry@smgov.net
310-458-4984
*********************************************************
From: zinajosephs@aol.com <zinajosephs@aol.com>
Sent: Friday, September 6, 2019 1:45 PM
To: Sharon Guidry <Sharon.Guidry@SMGOV.NET>
Subject: Re: Closed Request # 3897337 [6664656633383066] -- code enforcement
Sharon,
I don't seem to have heard from you since March 20th about 2222 Pier Avenue.
Nearby residents have expressed concern about this since August 2018. More and more FOSP members are
complaining. What is the current status of code enforcement?
Sincerely,
Zina Josephs
Friends of Sunset Park
******************************************************************************
In a message dated 3/20/2019 4:05:58 PM Pacific Standard Time, Sharon.Guidry@SMGOV.NET writes:
Thank you Ms. Josephs, and you are most welcome. I can certainly understand where frustration can arise when limited
information can be provided while it appears the violations continues. I assure you that this case is moving through the
process in accordance with established policy and the law and we will reach a conclusion using all available enforcement
remedies available to us. As I mentioned previously, I expect that we will be able to share some information with you
soon.
Best,
3
Sharon L. Guidry
Code Enforcement Manager
City of Santa Monica | Planning & Community Development
Code Enforcement Division
1685 Main Street, Room 111 | Santa Monica, CA 90401
sharon.guidry@smgov.net
310-458-4984
***************************************************************
From: zinajosephs@aol.com <zinajosephs@aol.com>
Sent: Wednesday, March 20, 2019 3:05 PM
To: Sharon Guidry <Sharon.Guidry@SMGOV.NET>
Cc: zinajosephs@aol.com
Subject: Re: Closed Request # 3897337 [6664656633383066] -- code enforcement
Ms. Guidry,
Thank you for your response.
I don't recall speaking with anyone in your department about this matter.
Bill Reed (see below), a longtime member of Friends of Sunset Park, doesn't understand why it's taking so long to resolve
the matter.
Neither do I, as Mr. Reed first emailed me about this matter on August 2, 2018.
Zina Josephs
President, Friends of Sunset Park
******************************************************************************
In a message dated 3/20/2019 2:54:24 PM Pacific Standard Time, Sharon.Guidry@SMGOV.NET writes:
Good afternoon Ms. Josephs, thank you for offering your assistance with the enforcement on this property. I understand
that you have spoken with Code Enforcement Supervisor Maurice Cochee who shared that we have an active
enforcement case on this property and therefore cannot provide any specific information on the status except to say that
our enforcement is active and we will continue our case until full compliance with the law. When the case is satisfactorily
resolved, we will be able to share more information at that time. We hope to have information to share in the near future.
Best,
Sharon L. Guidry
Code Enforcement Manager
City of Santa Monica | Planning & Community Development
Code Enforcement Division
1685 Main Street, Room 111 | Santa Monica, CA 90401
sharon.guidry@smgov.net
310-458-4984
***************************************************************
From: zinajosephs@aol.com <zinajosephs@aol.com>
Sent: Saturday, March 16, 2019 6:31 PM
To: Sharon Guidry <Sharon.Guidry@SMGOV.NET>
Cc: billreed1@aol.com; zinajosephs@aol.com
Subject: Re: Closed Request # 3897337 [6664656633383066]
4
Dear Sharon,
Seven months after the initial complaint in August 2018 on the GO system, the problem below (illegal multi-unit use
of 2222 Pier Avenue in an R1 zone in the Sunset Park neighborhood) has apparently not been dealt with effectively.
Is there anything else residents can do to get the municipal code enforced?
Zina Josephs
Friends of Sunset Park
******************************************************************************
Hi Bill,
Jing is out on maternity leave. I'm forwarding this to Sharon Guidry, who is the head of Code Enforcement.
Zina.
https://www.smgov.net/Departments/PCD/Code-Enforcement/Code-Enforcement-Division-Staff/
******************************************************************************
In a message dated 3/16/2019 11:05:33 AM Pacific Standard Time, billreed1@aol.com writes:
You told Zina Josephs on August 10, 2018 in an E-mail that the multi-unit use of 2222 Pier Ave in an R1 zone was not
legal (see below). However, after filing a complaint (August 2018), and dozens of follow-ups with code enforcement, city
council members, etc. by multiple residents nothing has happened. Justice is only useful if it is 'speedy'. I do not think
after seven (7) months we are asking for too much for either the city of Santa Monica to stop what is happening at 2222
Pier Ave or you do not enforce your own residency codes.
Sincerely,
William Reed
2215 Pier Ave.
Santa Monica
*************************************************************
-----Original Message-----
From: zinajosephs <zinajosephs@aol.com>
To: billreed1 <billreed1@aol.com>
Sent: Fri, Aug 10, 2018 11:17 am
Subject: Fwd: Closed Request # 3897337 [6664656633383066]
From:santamonica@user.govoutreach.com
To: zinajosephs@aol.com
Sent: 8/10/2018 8:29:43 AM Pacific Standard Time
Subject: Closed Request # 3897337 [6664656633383066]
---If replying by email, enter your reply above this line---
(Please allow up to 15 minutes to update your request record when replying by email)
5
Your request # 3897337 has been closed in the Santa Monica Works system for the following reason:
Hi Zina,
What you are describing sounds like a multi-unit use, which is not permitted in the R1 zone.
If you are concerned about the use of the property, please file a complaint with Code Enforcement so that we may
investigate what is occurring at the property.
Complaints may be filed by submitting a GO complaint with the specific address, or filling out a Code Enforcement
complaint form found here:https://www.smgov.net/uploadedFiles/Departments/PCD/Applications-Forms/Code-
Compliance-Complaint-Form.pdf
You may e-mail to code.enforcement@smgov.net or drop it off at the Planning desk in City Hall.
Thanks,
Jing
Jing Yeo, AICP
Planning Manager
City of Santa Monica
Planning and Community Development
1685 Main Street
Santa Monica, CA 90401
tel: (310) 458-8203
e-mail: jing.yeo@smgov.net | smgov.net/pcd
facebook | youtube | twitter
This is in reference to the request you submitted on 08/02/2018 11:50 PM
Description: An R1 property in the Sunset Park neighborhood used to have a 5-bedroom house in the front and a 1-
bedroom cottage in the rear.
Construction began several months ago to add another bedroom to the rear cottage.
It seems that as of August 1, 2018, the house and the cottage are now being leased as 9 1-bedroom units. Each unit has
its own lease.
Is the property owner allowed to do this in an R1 zone?
September 9, 2019
Re: Item 4-B Goals and Policy regarding Existing Housing Stock/New Rent Models
Dear Mayor and Councilmembers:
We are writing to lend our support, and share our experiences, as you conduct
your study session to solidify goals and policies that will help protect Santa Monica’s
residential rental housing while considering the effects of the proliferation of new short-
term rental models.
More and more property owners of rent-controlled, non-rent-controlled, and
deed-restricted rental housing units have been renting their apartments as short-term
rentals to tourists and other temporary occupants, instead of to tenants who use the unit
as their permanent, or long-term, domicile. Long-term residents of Santa Monica are
being forced out of their apartments. Some owners reconfigure the walls and doors of
their units, or furnish them with services and amenities, to attract and accommodate a
succession of short-term visitors. Our well-intended laws prohibiting short-term rentals
and vacation rentals to protect residents are being circumvented in favor of tourists,
businesspersons, professors, relatives of city residents, and roommates in “co-living”
arrangements, as owners avoid renting unfurnished units as long-term tenancies.
Short-term accommodation operators have gone to extraordinary lengths to
brand themselves as housing. Please keep in mind that for every existing apartment
that is lost to a short-term-accommodation business model, the new tourist business
takes a residence out of our home town. Owners are not paying temporary occupancy
taxes on these rentals. In fact, residents of Santa Monica are the ones paying for the
city to handle the plethora of problems that arise such as eviction, harassment, and
municipal code violations. We’re concerned that workers who service the units may not
have the same wage protections as other hotel workers. Units are usually managed off-
site using booking software that enables owners and managers to rotate tenants
frequently and with ease, like hotel rooms. Most cater to tourists, or single, affluent
college graduates, and leave working families and those needing supportive or
affordable housing without housing opportunities during our housing crisis.
These new commercial rent models need to be controlled in our popular tourist
city so we can continue to preserve housing stock and affordability.
During your study session you will consider a wide variety of issues, review
existing and new definitions and ordinances, and address the impacts of new rental
market trends.
Existing residential rental units
o Confirm the City’s intent to protect our existing rental housing stock including
rent-controlled, non-rent controlled, deed restricted, in both residential and
commercial zones
o Protect the ability to obtain and maintain long-term tenancies. This could be done
with a requirement for 12-month leases, for example
o Prohibit short-term and medium-term rentals, and similar new rent models, in
existing rental housing stock including rent-controlled, non-rent-controlled, or
deed-restricted, in both residential and commercial zones
o Reaffirm that the City’s residential neighborhoods should be protected from
negative impacts of these new rental models
o Classify these new rental models as commercial uses, not residential uses
o Recognize that residentially or commercially zoned rental housing units for long-
term residential occupancy are a primary need in our city
o Recognize that many existing, newer, rental housing units in commercial zones
were approved with permits and incentives to build residential housing units and
that prohibiting these new rental models in these units will help return them to
long-term tenancy housing stock
o Re-affirm your commitment to enforcing violations
o Prohibit owners from “carving up”, re-configuring or re-sizing, existing rental
housing stock, whether rent-controlled, non-rent-controlled, or deed-restricted, in
both residential and commercial zones
Future new construction of rental units
Your staff report asks you to consider SROs and Micro Units. Very small units
can have various characteristics and uses. For example, they may or may not have
bedrooms, kitchens, or full bathroom facilities. They may be used for individuals
transitioning out of homelessness, used as domiciles with long-term leases, or as “co-
living” rentals or other temporary occupancies for people who live elsewhere. The
bottom line is that ‘small and kitchenless’ should not automatically mean ‘luxury co-living
rental’. In many worthy innovations, Santa Monica has and should lead, but
accommodations for short-term occupancy should be at the bottom of the list.
o Classify short-term, medium-term, co-living or similar new rent models for
temporary occupancy, as commercial uses in residential and commercial zones
o Prohibit short-term, medium-term, co-living or similar new rent models for
temporary occupancy in residential zones for any new construction
o Recognize that residentially or commercially zoned rental housing units for long-
term residential occupancy, not accommodations for short-term occupancy, are a
paramount need in our city and a better use of limited land in a housing crisis
o Limiting furnished units and/or requiring 12-month leases in new construction can
help control new rental models
o Prohibit incentives or density bonus (or similar concessions) for new construction
of units for short or medium-term occupancy
o Require TOT for new construction of units for short or medium-term occupancy
o Short-term, medium-term, co-living or similar new rent models restrict to
commercial zones only
Housing is for residents, not tourists or visitors. Please ensure that your discussion
includes controls on these new housing models in other zones in order to address
issues that have come to light in single-family homes or condos. Thank you.
Sincerely,
Patricia Hoffman Denny Zane
Co-Chair, Santa Monicans for Renters’ Rights Co-Chair, Santa Monicans for Renters’ Rights
Anastasia Foster Jennifer Kennedy
SMRR Housing Committee SMRR Housing Committee
City Council
September 10, 2019
Review Goals and Policy Options
for Existing Housing Stock
and
Consider Role of New Housing Models
Purpose of Study Session
Follow up on Council Direction –December 2018 / March-May 2019
•Corporate Housing & SRO Housing Discussions
•Protect City ’s housing stock, in particular rent-controlled units.
•“Medium-Te rm Housing ” to replace corporate housing definition
•Consider role of market-rate micro-units & new housing models
•Eva luate ways to enhance enforcement measures.
Purpose of Study Session
Council Direction on Concepts to Inform Ordinance Amendments
•Protect City ’s Existing Housing Stock
•Lease Duration
•Medium Term Housing
•Unit Size
•New Housing Models
Introduce Staff Recommendations for Consideration
•Potential framework for protecting existing housing stock and
accommodating Medium-Te rm Housing and new housing models tied to
policy goals.
The Need to Address This Issue
Changing Regional Housing Tr ends and Increasing Pressures on Housing Stock
§Need housing to accommodate variety of household sizes.
§Demand for variety of housing types to serve permanent and temporary
residents.
•Affo rdability gap and changing nature of work and living situations.
Local Context
§~71% of Santa Monica residents are renters
§Affo rdability –One of six Framework Priorities –strive to provide
opportunities for people to afford to live within the City ’s
boundaries
Policy Goals for City ’s Housing Stock
q Encourage production of new housing to serve full range of family and
household sizes
q Protect existing rental housing stock, in particular rent-controlled units, from
negative impacts associated with new housing market trends
q Protect City ’s residential neighborhoods from negative impacts associated
with temporary occupancy
Applicability Definitions as Introduced in Concepts
q Existing Rental Units
§ALL multi-unit rental housing (controlled and not) and ownership units
rented to tenants
§Includes apartments, single-unit dwellings, condos
q Re nt Controlled Units
§As defined in Charter
q New Construction
§Future housing units
Protect Existing Housing Stock –Policy Options
Why?
Protect existing housing units from conversion to multiple
leases and/or shorter-term housing.
A.Prohibit medium-term housing and new housing
models (co-living /group housing, etc.) in rent-
controlled units
B.Prohibit medium-term housing and new housing
models (co-living /group housing, etc.) in all existing
rental housing stock
Option
Option
Existing
Housing Inventory
(2010 ACS)
~51,000 units
total
~13,000 units
owner-occupied
Existing
Rent Control Units
(2018)
27,445 units
Option C.Either Option A or B –plus –regulations to protect residential
neighborhoods from impacts of new housing trends
•Impose additional restrictions on former rent-controlled units that are
vulnerable to conversion to other uses, to the extent allowed by law.
Protecting Existing Housing Stock –Policy Options
Duration of Lease –Concepts for Consideration
Why?
Distinguish between “medium-term” and “long-term” housing
Prioritize longer-term residents with need for ‘medium-term’ housing options
§Jobs with shorter duration, flexible employment models, interim housing
while remodeling /s earching for permanent housing, etc.
ü Define duration of lease for Medium-Te rm Housing
•Proposed as lease between 31-365 days
•Consider if a term less than 365 days is desirable (i.e., 31-180 days)
ü Leasing to Natural Persons
•Enact parallel regulation to Rent Control Board August 2018 action
•Applicable to all units?
Duration of Lease –Policy Options
A.Require property owners to offer minimum one-year leases
•Re quires that tenants and landlords may only sign a one-year lease
B.Allow property owners more flexibility in lease duration
•Consider varying needs of tenants; consider shorter minimum lease
term or initial one-year lease and minimum 31-days after first year
Applicability
Option
Option
Rent
Controlled
Units
Existing
Rental Units
New
ConstructionOROR
Medium-Te rm Housing & New Construction –Concepts for Consideration
City provides process and development standards incentives for housing
projects. Is there interest in encouraging housing production while providing
flexibility in lease terms?
•Relief Valve: consider whether or not new construction should be primarily
fo r long-term housing.
•Should new construction include a mix of medium-term and long-term
housing?
•If yes, identify conceptual options / parameters.
Medium-Te rm Housing & New Construction –Conceptual Parameters
Allow Medium-Te rm Housing in New Construction
•Consider allowing in commercial zones to take pressure off residential
neighborhoods.
•Consider allowing in a percentage of units (e.g., up to 30% of units) –or no limit.
•Consider whether to study potential affordable housing obligation increase.
Applicability & Options
All
Commercial
Zones
Citywide
Certain
Commercial
Zones OR
100% of
New
Construction
Units
Allowed
OR
Limitation
on % of New
Construction
Units
Allowed
Market-Rate Micro-Units –Concepts for Consideration
Consider Role of Market-Rate Micro-Units
•Fully contained units with kitchen & bath, less than Zoning Ordinance’s
minimum dwelling unit size (375 SF)
•Flexibility in unit types, sizes of living spaces, and amenities
•Assess whether market-rate micro-units are a desirable and necessary
component of our housing stock
•If yes, identify conceptual options / parameters
Market-Rate Micro-Units –Conceptual Parameters
Allow Market-Rate Micro-Units in New Construction
•Consider allowing in new construction projects or change of use –or not at all.
•If allowed, consider in which zones (Downtown, Healthcare District, etc.)
•Should market-rate micro-units be a single building type and/or part of a mix.
•Consider special standards (e.g., amenities in unit, common area, unit size)
•Tr adeoff smaller private living space for common living area –focus on livability.
Applicability & Options
Which
Commercial
Zones?
New
Construction
or Not
Allowed?
Special
Standards
Required?
Single
Building
Type
or
Mix of
Units?
allowed
New Housing Models –Concepts for Consideration
Consider Role of New Housing Models
•Individual leasable bedroom/group housing format: shared
kitchen/bath/common areas; tenants typically enter into separate leases.
•Membership-based transitory housing format:leasable beds/shared
kitchen/bath/common areas; subscription-based extended stay fo rmat.
•Flexibility in unit types, sizes of living spaces, and amenities –reflects
housing market trends.
•Assess whether these new housing models are desirable and necessary
component of our housing stock.
•If yes, identify conceptual options / parameters.
New Housing Models –Conceptual Parameters
Allow New Housing Models in New Construction
•Consider allowing in new construction projects or change of use –or not at all.
•If allowed, consider in which zones (Downtown, Healthcare District, etc.)
•Consider special standards (e.g., occupancy, ratio of bedrooms to common area)
•Tr adeoff smaller private living space for common living area –focus on livability.
Applicability & Options
Which
Commercial
Zones?
New
Construction
or Not
Allowed?
Special
Standards
Required?
allowed
Commercial
Lodging
Use?
Residential
Use? OR
Membership-Based Transitory Housing
Policy Options for Discussion
1.Protection of Existing Housing Stock
§Prohibit Medium Te rm and New Housing Models in:
2.Duration of Lease
ü Natural persons only
ü Define medium-term housing
Rent-controlled
units
Option A
All existing units
Option B
A OR B plus
all residential
neighborhoods
Option C
Flexibility for
tenant ’s choice or
subsequent years
Option B
1-year lease only
Option A
4.Market Rate Micro-Units & Amenities
5.New Housing Models
§Allow in New Construction only
§Special Standards?
Policy Options for Discussion
3.Medium Term Housing Parameters
§Allow in New Construction only
Certain Commercial
Zones
Where?
All Commercial
Zones
100% of new units
How Much?
Percentage of new
units
More Affordable
Units
Affordability?
No Change to
Affordable Units
Certain Commercial
Zones
Where?
All Commercial
Zones
100% of new units
How Much?
Percentage of new
units
Staff Recommendation
LEASE DURATION MICRO UNITS NEW HOUSING
MODELS
EXISTING HOUSING STOCK
Rent Controlled 1 Year Minimum No No
Not Rent Controlled
Residential Zones 1 Year Minimum No No
Not Rent Controlled
Commercial Zones
1 Year Minimum OR
31 à 365 days
for Percentage of Units
Maybe Maybe
NEW CONSTRUCTION
Residential Zones 31 à 365 days
for Percentage of Units No Ye s with limitations
Commercial Zones 31 à 365 days
for Percentage of Units Ye s with limitations Ye s with limitations
Healthcare Mixed Use
Zone
31 à 365 days
for Percentage of Units Ye s with limitations Ye s with limitations
§Protect Rent
Controlled Units
§Protect Residential
Neighborhoods
§1-year minimum
with some flexibility
in lease duration
§Limited
accommodation for
micro units and
demand for new
housing types
REFERENCE:
Ordinance No. 2614
(CCS)