SR 10-15-2019 7B
City Council
Report
City Council Meeting: October 15, 2019
Agenda Item: 7.B
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To: Mayor and City Council
From: David Martin, Director, City Planning
Andy Agle, Director, Housing and Economic Development
Subject: Introduction and First Reading of and Ordinance Amending Santa Monica
Municipal Code Chapter 9.64 to Extend the Removal of the Extremely-Low
Income Affordable Housing Category from the City's the Affordable Housing
Production Program
Recommended Action
Staff recommends that the City Council introduce for first reading an ordinance
amending the text of Santa Monica Municipal Code Chapter 9.64, the City’s Affordable
Housing Production Program, to extend the removal of the Extremely-Low Income
affordable housing category as an option to satisfy a project’s Affordable Housing
Production Program obligation.
Executive Summary
At a time of escalating housing costs locally and regionally, affordability is one of Santa
Monica’s foremost priorities to sustain the economic and social diversity of our
community. The City’s Affordable Housing Production Program (AHPP) is a primary
tool to implement this priority by requiring market-rate housing projects to contribute to
the City’s affordable housing needs. The AHPP provides options for compliance
including providing units within a project, construction units at another site, or paying a
fee. The program works in combination with the City’s own robust efforts to produce
affordable housing.
On March 26, 2019, the City Council authorized a feasibility study and outreach for
potential modified requirements under the City’s Affordable Housing Production
Program (AHPP) for future Tier 2 retail/multi-family developments outside the City’s
Downtown. On April 9, 2019, the City Council adopted revisions to the AHPP to remove
the extremely-low income category as an option for developers to satisfy a project’s
AHPP obligation while the feasibility study is completed. This provision sunsets on
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November 27, 2019. This date was established based on the time that staff anticipated
completion of the feasibility analyses necessary to propose potential revisions to the
AHPP. Work is well under way and expected to be completed in early 2020. However,
2019 is a particularly dynamic time for housing policy in California. The statewide
housing crisis has resulted in a new batch of legislative bills aimed at increasing
production by removing barriers to entitlements, including project streamlining, fee
reductions, and limiting local control, to name a few.
At the same time, the 6th Cycle of the Regional Housing Needs Allocation (RHNA) is
predicted to vastly increase for jurisdictions positioned like Santa Monica that have
access to high quality transit, jobs, and a healthy development community. Projects
proposed under today’s rules will likely not obtain building permits for at least two years ,
and, therefore, would likely not be accounted for in the current Housing Element cycle
(covering 2013-2021). At the time of the decision to remove the extremely-low income
category as an option to satisfy AHPP obligations, Council reviewed the City’s progress
towards achieving the current RHNA. The data showed that the City has produced
many units at the extremely low-income level but is deficient at the moderate income
and very low-income levels. This has not changed substantially since that time. As a
result, extending the sunset date of the provision to eliminate the extremely-low income
option to November 27, 2020 will preserve the ability to have affordable housing
produced at other income levels and also provide an opportunity to account for evolving
State legislation and the pending RHNA allocation in order to meet the City’s obligations
under Housing Element law.
Background
On March 26, 2019, Council introduced for first reading Ordinance Number 2605 (CCS)
(Ordinance 2605) to amend the Affordable Housing Production Program (AHPP) to
remove the extremely-low income (ELI) category as an option for satisfying a project’s
AHPP obligation pursuant to SMMC Chapter 9.64 for projects with completed
applications filed after March 26, 2019 and before November 27, 2 019. The City
Council adopted Ordinance 2605 on April 9, 2019. At the time the City Council
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considered Ordinance 2605, the City’s progress towards meeting its RHNA was
provided to Council and is shown in Table 1.
Table 1: RHNA and Quantified Objectives Progress for 5th Cycle Housing Element (March 2019)
Also on March 26, 2019, Council authorized an agreement with HR&A Advisors, Inc., a
California-based company, for financial feasibility analysis and outreach of potential
modified affordable housing requirements of future Tier 2 retail/multi-family
developments similar to those which were adopted in the Downtown Community Plan
(DCP). At the time, staff indicated a timeline of approximately six to eight months to
complete the work, once the project was initiated. A kick-off meeting was held on July
16, 2019, which puts the projected completion date in early 2020, several months after
the sunsetting of the ordinance temporarily removing the option for providing ELI units
to satisfy a project’s AHPP obligation.
Similar to the previous analysis completed by HR&A for the DCP, the assignment
involves:
1. Research. Research on current real estate market conditions for the most
sensitive financial feasibility modeling assumptions. This includes updating
relevant assumptions used in prior related HR&A financial feasibility modeling
utilizing a variety of third-party data sources that include either Santa Monica-
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specific or more general Westside rents, absorption and vacancy data, operating
expenses, income capitalization rates, and project financing terms and pricing. In
addition to these sources, an independent professional construction cost
estimator has been subcontracted to provide assumptions about above -grade
and below grade hard construction costs for each prototype.
2. Financial Modeling. Empirical testing of prototypical private developments to
establish the financially feasible limits of modified affordable housing
requirements and development fees. This work utilizes static pro-forma financial
feasibility Excel models to test the developer investment return implications of
revised affordable housing requirements on prototypical developments on each
boulevard.
3. Stakeholder Briefings and Outreach to Development Community. This task
consists of roundtable briefings with developers (including non-profits) and
property owners to discuss market conditions, as well as costs of construction
and labor in order to more accurately model development prototypes that use a
modified affordable housing production framework. This task also includes
presentations to the Housing Commission, the Planning Commission and the
City Council.
4. Memorandum Report. Once the analysis has been finalized, HR&A will prepare
a memorandum report describing the analysis approach, assumptions, findings
and conclusions. The memorandum will include attachments with the output from
the financial feasibility models.
5. Recommendations to Council. Based on the conclusions of the financial
feasibility model, and comments and direction generated from outreach and
presentations to the City’s Boards, Commissions and Council, staff will develop a
series of recommendations for potential modifications to the existing AHPP.
Discussion
Work is well underway on the financial feasibility model and memorandum report, b ut
recommendations to Council for modifying the AHPP will not be ready by the sunset
date of November 27, 2019. The delay in progress is partly a factor of contracting
timelines and procurement procedures, as well as staff and consultant availability
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towards the end of the fiscal year. In addition to these more administrative factors, the
extension of the sunset date is recommended for the following reasons:
• Opportunity for market-rate development to produce more affordable housing
units that will likely be counted towards compliance with the next Housing
Element.
• Rapidly evolving housing policy landscape that has created new questions
around key model inputs that have given the project team some pause as to what
the future portends for by-right and discretionary mixed-use housing projects in
California.
• Pending RHNA allocation that is expected to substantially increase both Santa
Monica’s overall number but also at the lower income levels, which may require
testing feasibility scenarios that do not represent current regulations.
Progress on Financial Feasibility
To date, the project team has completed the market research, conducted the first round
of roundtable briefings with local housing developers, architects, and land use
attorneys, and has constructed the financial model using the inputs generated from
outreach, research and cost-estimating subcontractors. A draft memorandum report
has been completed and staff is scheduled to present findings to the Planning and
Housing Commissions in late November. An update to City Council on the Planning
Commission and Housing Commission’s comments and direction is anticipated in
December 2019.
Based on the direction from Council, the project team will complete a revised report that
includes a variety of inclusionary requirement scenarios. This final draft will form the
basis of recommendations to modify the zoning ordinance, which could be submitted to
Council in early 2020 if direction is given to proceed with the assumption the existing
development parameters of the Zoning Ordinance will remain unchanged despite strong
signals from the State that indicate otherwise.
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Housing Landscape in California
Since the adoption of the temporary revisions, the housing discussion has progressed
at the State level in terms of new housing legislation and at the regional level, in terms
of the Regional Housing Need Allocation (RHNA) process that will inform the 6th Cycle
Housing Element Update covering 2021-2029. At the time of the writing of this report,
the 2019 legislative session continues to focus on removing barriers to housing
production with pending bills such as SB330, which is intended to provide stricter
parameters around the development approval process including vesting projects at time
of application submittal and prohibitions on downzoning until 2025.
AB1771 and SB828 were signed into law as part of the 2018 legislative session. Those
bills altered the RHNA allocation process to de-emphasize local inputs into the process
in order to ensure all jurisdictions are accountable in doing their fair share to address
the region’s housing needs. Importantly, the housing allocation now accounts for
existing unmet need, whereas prior years have been based solely on projected
population growth. In the SCAG region, this could potentially result in a tripling of
needed housing units to accommodate job growth, housing-cost burdens, and
overcrowding.
The Regional Housing Needs Assessment – 6th Cycle (2021-2029)
The RHNA process is predicated on five main objectives:
• Increase the housing supply and mix of housing types, tenure and affordability
within each region in an equitable manner
• Promote infill development and socioeconomic equity, the protection of
environmental and agricultural resources, and the encouragement of effic ient
development patterns
• Promote an improved intraregional relationship between jobs and housing
• Allocate a lower proportion of housing need in income categories in jurisdictions
that have a disproportionately high share in comparison to the County distribution
• Affirmatively further fair housing
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SCAG has released possible methodology options for RHNA allocation. Staff has been
closely following the RHNA process by attending every RHNA subcommittee meeting
and submitted a comment letter on the options during the public comment period
(Attachment B). The public comments are currently being considered by the RHNA
subcommittee in anticipation of a draft methodology to be recommended in
January/February 2020 with final allocation anticipated in October 2020. In light of
these factors, staff anticipates that like many highly resourced communities, Santa
Monica may receive a significantly larger allocation overall, especially at the lower
income level compared to the prior cycle. As a result, the feasibility analysis currently
underway will need to accommodate future changes in policy and allocation. In light of
this, staff was authorized to seek a SB2 grant for funds to complete housing -related
analyses. Staff was notified that the City was successful in obtaining the grant in
September 2019 and will return on November 12, 2019 for Council’s budget
authorization to program the grant funds.
Given the evolving discussion on expectations regarding RHNA allocation and the
technicalities involved in preparing the 6th Cycle Housing Element, staff needs additional
time to ensure that the feasibility analyses and any proposed amendments to the AHPP
and zoning ordinance to incentivize housing production do not negatively impact Santa
Monica’s ability to be compliant with a certified Housing Element.
Current RHNA and Quantified Objectives Progress
Table 2 updates the information in Table 1 showing the City’s current progress towards
achieving RHNA and Quantified Objectives. Currently, Santa Monica has exceeded the
overall RHNA however, the allocation of units at the Low and Moderate Income
category has not been met.
Table 2: RHNA and Quantified Objectives Progress for 5th Cycle Housing Element (September 2019)
Affordable
Category RHNA Quantified
Objective
Completed
and In
Construction
Needed for
RHNA
Needed for
Quantified
Objective
Approved (not
In Construction)
Extremely Low
(0-30% AMI) 428 83 114 60 (31) 50
Very Low (31-214 254 (40) 56
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Affordable
Category RHNA Quantified
Objective
Completed
and In
Construction
Needed for
RHNA
Needed for
Quantified
Objective
Approved (not
In Construction)
50% AMI)
Low (51-80%
AMI) 263 263 150 113 113 25
Moderate (81-
120% AMI) 283 111 26 257 85 2
Above
Moderate
(>120% AMI)
700 700 1648 (948) (948) 933
Totals 1674 1371 2192 (518) (821) 1066
Proposition R Progress
The production of multifamily affordable housing in Santa Monica is regulated by the
voter-approved Proposition R, which requires that:
• Thirty percent of all multifamily housing completed in each fiscal year be
affordable for and occupied by low- and moderate-income households; and
• At least one-half of the total affordable housing completed be affordable for and
occupied by low-income households.
The FY18/19 Prop R compliance report is not yet published, however, based on current
permit data for housing projects that are anticipated to be complete in 2014 and later,
the 30% Prop R standard has been met for all completed developments. However, it is
not anticipated to be met through future projects either In Construction, those that have
received Planning Approval or are Pending Review (Figure 1).
Figure 1: Affordability of Multi-Unit Development Anticipated to be Complete 2014 and Later
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As a further point of information, staff has received no applications for housing projects
since the adoption of the ordinance removing the ELI option in March 2019. However,
this a relatively short period of time to assess the effects of the ordinance. At the same
period (March-September) during the past 5 years, the City received varying numbers of
housing applications predominantly in the Downtown with the exception of two projects
and as such, it is challenging to draw a correlation between the temporary revision to
the AHPP and development activity. Therefore, in order to ensure that there is an
opportunity for market-rate projects to produce as many affordable units as possible,
particularly at the low and moderate income levels, staff recommends extension of the
temporary removal of the ELI option in the AHPP until November 27, 2020. However,
staff will continue to monitor development activity and if it is apparent that there is a
reduction in applications for housing projects, will report back to Council with potential
policy options at that time, which may include but not be limited to revisions to the ELI
option.
Environmental Analysis
The proposed amendments to the Municipal Code are procedural in nature and are
categorically exempt from the provisions of the California Environmental Quality Act
(CEQA) pursuant to Section 15061(b)(3) of the State Implementation Guidelines
(common sense exemption). Based on the evidence in the record, it can be seen with
certainty that there is no possibility that the proposed amendment may have a
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significant effect on the environment. The recommended amendment only extends an
applicability date for a provision in the AHPP to remove the ELI category as an option
for meeting a project’s AHPP obligations. Therefore, no further environmental review
under CEQA is required.
Alternative Actions
As an alternative, Council could take no action and let the provision sunset on
November 27, 2019. Reintroducing the option to produce ELI housing to satisfy a
project’s AHPP requirements would allow for the continued production of ELI housing
through the AHPP, assisting to meet a great need in the City. Allowing the provision to
sunset would likely have no impact on meeting current Housing Element production
requirements as the development cycle affected by the extension would likely result in
building permits being issued at least two years from now. However, as a result, given
the uncertainty regarding the RHNA and the need to maximize production of housing
units at all income levels, staff recommends extending the provision to remove the ELI
category as an option.
Financial Impacts and Budget Actions
There is no immediate financial impact or budget action necessary as a result of the
recommended action.
Prepared By: Jing Yeo, Planning Manager
Approved
Forwarded to Council
Attachments:
A. PCD - Ordinance - AHPP Low Income - 10.15.2019
B. Comment Letter on SCAG RHNA Methodology
C. March 26, 2019 Council Staff Report (Web Link)
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D. PowerPoint Presentation
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City Council Meeting: October 15, 2019 Santa Monica, California
ORDINANCE NUMBER _________ (CCS)
(City Council Series)
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
SANTA MONICA AMENDING SANTA MONICA MUNICIPAL CODE CHAPTER 9.64
TO EXTEND THE REMOVAL OF THE EXTREMELY-LOW INCOME AFFORDABLE
HOUSING CATEGORY
WHEREAS, the City has a long history of prioritizing preservation and production
of affordable housing in order to promote and maintain affordability and diversity within
the community; and
WHEREAS, the City’s residents have affirmed this priority in voter-approved
initiatives, such as Proposition R, which was adopted by the voters in 1990 and mandated
that 30 percent of all new multi-family housing units constructed each year be affordable,
and Proposition I, which was adopted by the voters in 1998 and authorized the City to
participate financially in creating affordable housing equal to one-half of one percent of
the housing stock annually; and
WHEREAS, the City Council has further facilitated preservation and production of
affordable housing by adopting land use incentives and administrative funding guidelines
to streamline affordable housing production and preservation and through the policy
foundation of supporting affordable housing articulated in the General Plan’s Land Use
and Housing Elements; and
WHEREAS, the City’s Affordable Housing Production Program, codified at
Chapter 9.64 of the Santa Monica Municipal Code (the “AHPP”), requires developers of
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multi-family housing projects to contribute to affordable housing production and thereby
enhances the City’s efforts to meet its affordable housing production goals; and
WHEREAS, the requirements of the AHPP are based on a number of factors
including, but not limited to, the City’s longstanding commitment to economic diversity;
the serious need for affordable housing as reflected in local, state, and federal housing
regulations and policies; the demand for affordable housing created by market rate
development; the depletion of potential affordable housing sites due to market-rate
development; and the impact that the shortage of affordable housing has on the health,
safety, and welfare of the City’s residents, including local and regional traffic, transit,
transportation and air quality impacts; and
WHEREAS, on June 25, 2013, the City Council adopted Ordinance Number 2429
(CCS) to amend Chapter 9.64 by revising affordable housing categories, income-eligibility
limits, and rent limits to be consistent with federal and state affordable housing programs
(“Ordinance 2429”); and
WHEREAS, Ordinance 2429 also expanded AHPP income categories to include
households at the lowest end of the income scale, whose gross income does not exceed
30 percent of the area median income, sometimes referred to as the extremely low-
income category; and
WHEREAS, Ordinance 2429 further provided that a developer may meet its AHPP
requirements by developing 5 percent of the total units of the project to be made available
at affordable rent to households in the extremely low-income category; and
WHEREAS, the extremely low-income category was added to the AHPP to
stimulate the development of such units; and
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WHEREAS, since the adoption of Ordinance 2429, more than one-third of all
affordable units approved have been in the extremely-low income category, and, in 2018,
84 percent of all affordable units approved were in the extremely-low income category;
and
WHEREAS, although the City has met its overall affordable housing production
requirements as mandated by Proposition R since adoption of Proposition R and,
collectively, since 2014, the City has seen an overall decline in affordable housing
production since 2014 and has not met its annual targets for affordable housing
production under Proposition R in fiscal years 2014/2015, 2015/2016, or 2016/2017; and
WHEREAS, the production of such a large number of affordable units in the
extremely low-income category has resulted in fewer affordable units being produced in
the very low-, low- and moderate-income categories and fewer affordable units being
produced overall; and
WHEREAS, on July 25, 2017, after conducting a feasibility study, the City adopted
AHPP obligation requirements specific to the Downtown as part of the Downtown
Community Plan (“DCP”); and
WHEREAS, the DCP established a 20 percent base requirement for a p roject’s
total affordable housing contribution, with a required distribution across all affordable
income levels; and
WHEREAS, the DCP AHPP requirements are designed to ensure the development
of affordable units to be made available across all income levels and to assist the City in
meeting its affordable housing production goals overall; and
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WHEREAS, on March 26, 2019, the City Council authorized a feasibility study to
determine whether adjustments to the AHPP obligations are appropriate for areas outside
of the City’s Downtown; and
WHEREAS, on April 9, 2019, the City Council adopted Ordinance Number 2605
(CCS) to remove the extremely-low income category as an option for satisfying affordable
housing production obligations until November 27, 2019 in order to ensure production of
affordable housing units at a variety of affordable income levels and to encourage the
overall production of affordable housing within the City while the feasibility study is
completed; and
WHEREAS, since the adoption of Ordinance 2605, the California legislature
passed legislation intended to address the State’s housing crisis by removing regulatory
barriers that discourage housing production; and
WHEREAS, the Southern California Association of Governments has released
possible methodology options for allocation of the Regional Housing Needs Assessment
(“RHNA”) for the based on recent changes in State law; and
WHEREAS, the current feasibility study will need to be updated to account for
these changes in State law and possible RHNA outcomes; and
WHEREAS, in order to accommodate such revisions, the City desires to extend
the elimination of the extremely-low income category as an option for satisfying affordable
housing production obligations until November 27, 20 20; and
WHEREAS, the proposed amendments to the AHPP are intended to achieve
greater affordability and maintain Santa Monica’s economic diversity; and
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WHEREAS, the proposed changes to the AHPP would result in lower rents and
greater accessibility of affordable housing to lower income households; and
WHEREAS, the proposed amendments to the AHPP are consistent with
Proposition R.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SANTA MONICA
DOES HEREBY ORDAIN AS FOLLOWS:
SECTION 1. Santa Monica Municipal Code Section 9.64.030 is hereby amended
to read as follows:
9.64.050 On-site option.
The following requirements must be met to satisfy the on -site provisions of
this Chapter:
A. For ownership projects of at least four units but not more than fifteen
units in multi-family residential districts, the multi-family project applicant agrees to
construct at least: (1) twenty percent of the total units as ownership units for
moderate-income households at an Affordable Ownership Hosing Cost, or as an
alternative; (2) twenty percent of the total units as rental units for 80% income
households at affordable rent if these rental units are provided by the applicant in
accordance with Civil Code Sections 1954.52(b) and 1954.53(a)(2); (3) ten percent
of the total units as rental units for 50% income households at affordable rent if
these rental units are provided by the applicant in accordance with Civil Code
Sections 1954.52(b) and 1954.53(a)(2); or (4) for projects with an application for a
ministerial or discretionary planning approval that is determined complete on or
before March 26, 2019 or after November 27, 2019 2020, five percent of the total
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units as rental units for 30% income households at affordable rent if these rental
units are provided by the applicant in accordance with Civil Code Sections
1954.52(b) and 1954.53(a)(2).
B. For ownership projects of sixteen units or more in multi-family
residential districts, the multi-family project applicant agrees to construct at least:
(1) twenty-five percent of the total units as ownership units for moderate -income
households at an Affordable Ownership Housing Cost, or as an alternative; (2)
twenty-five percent of the total units as rental units for 80% income households at
affordable rent if these rental units are provided by the applicant in accordance
with Civil Code Sections 1954.52(b) and 1954.53(a)(2); fifteen percent of the total
units as rental units for 50% income households at affordable rent if these rental
units are provided by the applicant in accordance with Civil Code Sections
1954.52(b) and 1954.53(a)(2); or (4) for projects with an application for a
ministerial or discretionary planning approval that is determined complete on or
before March 26, 2019 or after November 27, 2019 2020, ten percent of the total
units as rental units for 30% income households at affordable rent if these rental
units are provided by the applicant in accordance with Civil Code Sections
1954.52(b) and 1954.53(a)(2).
C. For all other multi-family applicants, the multi-family project applicant
agrees to construct at least:
1. five percent of the total units of the project for 30% income
households at affordable rent for projects with an application for a ministerial
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or discretionary planning approval that is determined complete on or before
March 26, 2019 or after November 27, 2019 2020;
2. ten percent of the total units of the project for 50% income
households at affordable rent;
3. twenty percent of the total units of the project for 80% income
households at affordable rent; or
4. one hundred percent of the total units of a project for moderate
income households at affordable rent.
D. Except as provided in 9.23.030(A), any fractional affordable housing
unit that results from the formulas of this Section that is 0.75 or more shall be
treated as a whole affordable housing unit (i.e., any resulting fraction shall be
rounded up to the next larger integer) and that unit shall also be built pursuant to
the provisions of this Section. Any fractional affordable housing unit that is less
than 0.75 can be satisfied by the payment of an affordable hou sing fee for that
fractional unit only pursuant to Section 9.64.070(A)(2) or by constructing all the
mandatory on-site affordable units with three or more bedrooms. The City shall
make available a list of income levels for 30% income households, 50% income
households, 80% income households, and moderate income households, adjusted
for household size, the corresponding maximum affordable rents adjusted by
household size appropriate for the unit, and the minimum number of units required
for 30% income households, 50% income households, or 80% income households
required for typical sizes of multi-family projects, which list shall be updated
periodically.
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E. The multi-family project applicant may reduce either the size or
interior amenities of the affordable housing units as long as there are not significant
identifiable differences between affordable housing units and market rate units
visible from the exterior of the dwelling units; provided, that all dwelling units
conform to the requirements of the applicable Building and Housing Codes.
However, except as provided in Section 9.23.030(A), each affordable housing unit
provided shall have at least two bedrooms unless:
1. The proposed project comprises at least ninety-five percent
one bedroom units, excluding the manager’s unit, in which case the
affordable housing units may be one bedroom;
2. The proposed project comprises at least ninety-five percent
zero bedroom units, excluding the manager’s unit, in which case the
affordable housing units may be zero bedroom units;
3. The proposed project comprises zero and one bedroom units,
excluding the manager’s unit, in which case the affordable housing units
must be at least one bedroom units; or
4. The multi-family project applicant has elected not to pay the
affordable housing fee pursuant to Section 9.64.070(A)(2), in which case
the affordable housing units must be at least three bedroom units. The
design of the affordable housing units shall be reasonably consistent with
the market rate units in the project. An affordable housing unit shall have a
minimum total floor area, depending upon the number of bedrooms
provided, no less than the following:
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0 bedrooms 500 square feet 1 occupant
1 bedroom 600 square feet 1 occupant
2 bedrooms 850 square feet 2 occupants
3 bedrooms 1,800 square feet 3 occupants
4 bedrooms 1,200 square feet 5 occupants
Affordable housing units in multi-family projects of one hundred units or
more must be evenly disbursed throughout the multi -family project to prevent
undue concentrations of affordable housing units.
F. All affordable housing units in a multi-family project or a phase of a
multi-family project shall be constructed concurrently with the construction of
market rate units in the multi-family project or phase of that project.
G. On-site affordable housing units must be rental units in rental
projects. In ownership projects, these affordable housing units may be either rental
units or ownership units.
H. Each multi-family project applicant, or his or her successor, shall
submit an annual report to the City identifying which units are affordable units, the
monthly rent (or total housing cost if an ownership unit), vacancy information for
each affordable unit for the prior year, verification of income of the household
occupying each affordable unit throughout the prior year, and such other
information as may be required by City staff.
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I. A multi-family project applicant in a residential district who meets the
requirements of this Section shall be entitled to the density bonuses and incentives
provided by Sections 9.22.030 or any successor thereto and the
waiver/modification of development standards provided by Section 9.22.040 or any
successor thereto. A multi-family project applicant in a commercial or industrial
district shall be entitled to the development bonuses and incentives provided in the
Land Use and Circulation Element and implementing ordinances.
J. All residential developments providing affordable housing on-site
pursuant to the provisions of this Section shall receive priority building department
plan check processing by which housing developments shall have plan check
review in advance of other pending developments to the extent authorized by law.
K. The City Council may by resolution establish compliance monitoring
fees which reflect the reasonable regulatory cost to the City of ensuring compliance
with this Section when affordable housing units are being initially rented or sold,
when the required annual reports are submitted to the City, and when the unit s are
being re-sold or re-leased.
SECTION 2. Any provision of the Municipal Code or appendices thereto
inconsistent with the provisions of this Ordinance, to the extent of such
inconsistencies and no further, is hereby repealed or modified to that extent
necessary to effect the provisions of this Ordinance.
SECTION 3. If any section, subsection, sentence, clause or phrase of this
Ordinance is for any reason held to be invalid or unconstitutional by a decision of any
court of competent jurisdiction, such decision shall not affect the validity of the remaining
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portions of this Ordinance. The City Council hereby declares that it would have passed
this Ordinance and each and every section, subsection, sentence, clause, or phrase not
declared invalid or unconstitutional without regard to whether any portion of the ordinance
would be subsequently declared invalid or unconstitutional.
SECTION 4. The Mayor shall sign and the City Clerk shall attest to the passage of
this Ordinance. The City Clerk shall cause the same to be published once in the official
newspaper within 15 days after its adoption. This Ordinance shall become effective 30
days from its adoption.
APPROVED AS TO FORM:
_______________________
LANE DILG
City Attorney
CITY OF SANTA M ONICA
Affordable Housing Policy
CITY COUNCIL
October 15, 2019
Discuss
Progress on
AHPP
Feasibility
Study
2
Purpose of Tonight’s #7B Discussion
Extend
Removal of
ELI Option
from AHPP
Until Nov.
2020
1
Preview
Rapidly
Changing
Housing
Policy
Landscape
3
Extremely Low-Income
•Council Direction
•Development Activity UpdateELI Removal
Extenstion
1
Council Direction
March 26, 2019
•Remove the Extremely-Low Income affordable housing category as
an option to satisfy a project’s Affordable Housing Production
Program obligation (SMMC 9.63)
•Conduct financial feasibility of a revised AHPP using Downtown
Community Plan approach to distributing inclusionary units
across all income categories
Needed for
RHNA
Needed for
Quantified
Objective
93
(14)
(24)
128 128
257 85
(563)(563)
Completed and In
Construction
97
238
135
27
1,263
1,760
Housing Production
RHNA
Quantified
Objective
Extremely Low
(0-30% AMI)
428
83
Ve ry Low (31-50% AMI)214
Low (51-80% AMI)263 263
Moderate (81-120% AMI)283 111
Ab ove Moderate
(>120% AMI)700 700
To tals 1,674 1,371
Progress Towards RHNA and Housing Element Quantified Objectives
MARCH 2019
Approved
(Not In
Construction)
60
52
19
2
1,251
Needed for
RHNA
Needed for
Quantified
Objective
58
(31)
(40)
11 3 11 3
257 85
(948)(948)
Completed and In
Construction
11 6 (+19)
254 (+16)
150 (+15)
27 (same)
1,648 (+385)
2,195 (+435)
Housing Production
RHNA
Quantified
Objective
Extremely Low
(0-30% AMI)
428
83
Ve ry Low (31-50% AMI)214
Low (51-80% AMI)263 263
Moderate (81-120% AMI)283 111
Ab ove Moderate
(>120% AMI)700 700
To tals 1,674 1,371
Progress Towards RHNA and Housing Element Quantified Objectives
OCTOBER 2019
Approved
(Not In
Construction)
50
56
25
2
933
Housing Production
Applications received since March 26, 2019 for
Mixed-Use Housing Projects
LUCE Growth Areas
•Downtown: 0
•Bergamot: 0
•Memorial Park: 0
•Boulevards: 2
•825 Santa Monica Blvd (Toyota lot), Tier 2 @ 15% Very Low Income
•1834 14th Street, 100% Affordable
Feasibility Study
•Progress updateAHPP
Feasibility
Study
2
AHPP Study
Process for AHPP Financial Feasibility Study
Forthcoming mid-point check-in with PC, Housing
Commission and Council
State and Regional
Update
•State Legislature
•Regional Housing Needs Assessment
Housing
Landscape
in California
3
State Housing Bills
State Housing
Bills Status Description
FA STER
APPROVALS
Approved
SB330: Faster approvals for housing and zoning
changes. Statewide ban on (A) downzoning, (B)
moratoriums on housing development, (C) non-
objective design standards, and (D) limit on number of
permits issued.
Active AB1484: Development fees published throughout
project approval process.
Approved
AB1485: Incentives and faster approvals for moderate-
income housing built with prevailing (union) wage
labor.
Approved AB1763: 80% density bonus for affordable housing.
UPZONING Approved
AB101: By-right approval for homeless shelters. AB101
includes $650 million in grants for cities and counties to
address homelessness issues. It also includes $250
million for local governments and regional bodies to
measure housing needs and develop plans for
providing more housing.
SHELTERS Inactive SCA3: Ends inheritance of Prop 13 tax break, unless
heir lives in the house.
TA X POLICY Active SCA1: Eliminates requirement that public hearing be
approved by ballot measure.
State Housing Bills
State Housing
Bills Status Description
BALLOT
MEASURE
Failed ACA1: Allows bonds for housing and infrastructure to
pass with a 55% majority.
Approved AB1482: Statewide limit to annual rent increases.
Statewide Just Cause limits to evidence.
TENANT
PROTECTIONS
Approved
AB1110: Longer notice require for rent increases. 60
days for under 10%, 90 days for 10-15%, 120 days for
15%+
Approved SB13 and AB68: Simplifies process of approvals and
allows more houses to add Accessory Dwelling Units.
ACCESSORY
DWELLING
UNITS
Active AB10: Expands Low Income Housing Tax Credit funding
program by $500 million per year.
FUNDING Ve toed SB5: Creates new local funding agencies for affordable
housing, infrastructure and community investment.
Approved AB1483: Creates housing production database.
DATA Approved AB857: Allows cities to create Public Banks.
Approved SB18: Funds for legal aid and rent assistance.
LEGAL AID Approved SB329: Requires landlords to accept Section 8
vouchers.
MOVE-IN
ASSISTANCE Active AB437: Move-In loans for security deposit and first
months rent.
Regional Housing Needs Assessment
6th Cycle RHNA
•Anticipating large allocation to
Santa Monica (estimate ~
4800 units based on SCAG
tool)
•January/February 2020 final
methodology announced
•October 2020 final numbers
•Fall 2021 Housing Element
Adopted
To ols for Implementation
Upcoming Efforts
•SB2: City awarded grant to pursue
incentives to housing production
•Process streamlining
•Incentives for housing
•Increase certainty in entitlements
•Information and communications
•Te nant support and protection
•Pursuing other opportunities
Consideration for Council
1.Should staff proceed with AHPP study using
existing development parameters?
Recommendation to Council
1.Introduce for first reading an ordinance
amending the text of SMMC Chapter 9.64 to
extend the removal of the Extremely-Low
Income affordable housing category as an
option to satisfy a project’s Affordable Housing
Productions Program obligation.