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O2058 f:\atty\muni\laws\barry\drintorddowntown-1.wpd City Council Meeting 11-12-02 Santa Monica, California ORDINANCE NUMBER 2058 (CCS) (City Council Series) AN INTERIM ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SANTA MONICA MODIFYING THE DEVELOPMENT REVIEW THRESHOLDS IN C3, C3C AND BSC DISTRICTS TO 7,500 SQUARE FEET AND EXEMPTING AFFORDABLE HOUSING PROJECTS OF FIFTY UNITS OR LESS FROM A DEVELOPMENT REVIEW PERMIT OR A CONDITIONAL USE PERMIT CITYWIDE THE CITY COUNCIL OF THE CITY OF SANTA MONICA DOES ORDAIN AS FOLLOWS SECTION 1. Findings and Purpose. The City Council finds and declares: (a) A development review permit is intended to allow the construction of certain projects for which the design and siting could result in an adverse impact on the surrounding area such as development that is proposed to be built to a greater intensity and building height than generally permitted in the area. (b) A development review permit allows for the review of the location, size, massing and placement of a proposed structure on the site, particularly as the project relates to the existing context of the area in which it is located. The development review process is designed to ensure that the development is compatible with and relates harmoniously with the surrounding neighborhood (c) The City's Zoning Ordinance establishes by zoning district square footage threshold criteria for development review permits based upon the floor area of a project. 1 (d) A project that requires a development review permit is subject to public review by the Planning Commission, with appeal to the City Council, whereas a project below the development permit review threshold can be administratively approved. (e) Presently, under the City's Zoning Ordinance, the City's development review thresholds vary from 5,000 square feet in the C2 district along Montana Avenue to 30,000 square feet in the downtown zoning districts, the industrial zoning districts, the C5 Special Office District, portions of the RVC Residential Visitor Commercial District and the C6 district along Wilshire Boulevard, (f) However, the City presently has in place an interim ordinance which modified the development review threshold in the RVC Residential Visitor, BCD, C2, C4, C5, C6, CM, CP, M1 and LMSD Districts to 7,500 square feet with certain exceptions, including housing projects with at least 15% of the units deed restricted as affordable to households with 80% of median incomes and 10% of the units deed restricted as affordable to households with 60% of median incomes and housing projects with 100% of the units deed restricted to households with 80% of median incomes. (g) The City itself is extremely dense with a land area of just eight square miles and a population of approximately 85,000 people. Additionally, about 300,000 people work in the City and approximately 500,000 people visit the City on weekends. The downtown business district is particularly dense and busy. (h) Since the early 1990's, the City has promoted housing by creating substantial incentives for developers to build such housing in the downtown area. These incentives have particularly favored affordable housing. 2 (i) During recent years, the City has experienced an unprecedented economic prosperity. U) As a result of these two factors, and others, construction in the downtown has boomed, far exceeding expectations. Indeed, there are currently approximately 800 new housing units in various stages of completion in the downtown area, having obtained either a certificate of occupancy, a building permit, or all necessary City approvals but a building permit. (k) Some of the housing developers have taken advantage of the opportunity to build multiple, large, identical or nearly identical projects on adjacent lots or on lots in close proximity pursuant to administrative approvals. (I) These projects helped the City achieve its goal of promoting housing; and, today, the downtown is home to many Santa Monica residents. (m) However, the impact upon residents and businesses of the building boom in general and the building of multiple identical or similar large projects on the same block has been substantial and dire, (n) Because such projects have, individually, been beneath the downtown review threshold of 60,000 square feet, they have been subject to only administrative review. (0) The current development review thresholds in the downtown area of the City is too high since these thresholds have resulted in the administrative approval of projects that create significant adverse impacts on adjacent uses, Yet, given the ministerial nature of the approval process, the City was not able to mitigate or address these impacts, (p) More specifically, these larger scale developments have created adverse noise, traffic, parking, aesthetic, privacy, light and air, shade and shadow impacts on these 3 residential areas and are incompatible with the existing scale and character of these neighborhoods. (q) During the period of May 1997 through May 2002, thirty-three (33) administrative approvals were issued both for new buildings and additions in the C3, C3C, and BSC Districts of the City. (r) The median new building project size equaled over twenty-eight thousand feet with fourteen projects exceeding forty-eight thousand feet. (s) Because of the high threshold for discretionary review, residential neighbors and members of the business community have not had the opportunity to express particular concerns relating to such issues as the location of loading docks, trash collection sites, driveway access, and impacts upon light and shade - an opportunity they have in the discretionary review process. (t) Consequently, because the downtown has become much more dense in recent years and because it has become home to a large number of City residents, it is necessary to lower the development review threshold to ensure that the quality of the area is preserved for the benefit of residents, workers, and visitors alike. Reducing the development review threshold to 7,500 square feet would allow thorough review of the impacts of large projects and enable the public to participate in this review. Reducing the development review threshold would also ensure that administrative approval is only available to smaller scale developments which produce far fewer adverse impacts on nearby residential neighborhoods. However, adoption of this ordinance would not prohibit any uses currently authorized in the downtown. 4 (u) Indeed, reducing the development review threshold would not alter the City's substantial commitment to promoting residential uses in non-residential zoning districts which is manifest in City policy and law. (v) Residential development in all of the City's commercial districts would still be authorized. Thus, residential development could still occur in over 80% of the City's acreage. (w) Moreover, City policy provides substantial development incentives for residential housing. For instance, in the BSC, C3, and C3C districts, any floor area devoted to residential use is eligible to receive a FAR (Floor Area Ratio) discount of 50%. For instance, a residential development located on two adjoining lots in portions of the C3C district would be eligible to develop a 60,000 square foot project in contrast to a 30,000 square foot commercial project. (x) Additionally, the City has eliminated the restriction on the number of stories that can be built if the structure contains at least one floor of residential use and has increased the maximum height of projects with a designated number of floors of residential use. (y) The City's Affordable Housing Production Program housing fees are also discounted for residential development in commercial areas. (z) Additionally, in determining whether a development review permit is required for new development, floor area devoted to residential uses is discounted by fifty percent (50%). Thus, even with the proposed changes, residential development of up to 15,000 square feet could be approved administratively. (aa) Further, this ordinance exempts projects that are one hundred percent affordable to households with incomes of eighty percent of median income or less or 5 projects that contain a minimum of eighty percent of the floor area is devoted to multi- family housing with fifteen percent of the housing units affordable to households with incomes of eighty percent of median income or ten percent of the housing units devoted to households with incomes of sixty percent of median income or less. Such projects could be administratively approved if the projects were less than 60,000 square feet. This ordinance would also establish affordable rental housing projects with no more than 50 units as a permitted use in all districts in the City which already authorizes this use and would eliminate the development review permit requirement for these projects. (bb) The ordinance's exemptions for affordable housing projects and projects with a significant percentage of their units affordable to low income tenants advances several goals and policies of the City's Housing Element including, but not limited to, Housing Element Policy 2.8 (Continue to provide development incentives and reduced planning fees for development of affordable housing). (cc) In preparing its 2000-2005 Housing Element, the City contracted with the policy, financial, and management consulting firm of Hamilton, Rabinovitz & Alschuler ("HR&A"). HR&A undertook an extensive review and analysis of numerous governmental programs to assess whether these programs operated as a constraint on housing development. Although not generally required in conjunction with the adoption of an ordinance, the City subsequently retained HR&A and voluntarily undertook a constraint analysis on the proposed ordinance because of the City's strong municipal commitment to fostering affordable housing. HR&A prepared an analysis of the impact that this proposed ordinance would have on the financial return of multifamily project applicants for the purpose of assessing whether this ordinance would constitute a "governmental constraint" 6 within the meaning of State Housing Element Law ("Constraint Analysis"). HR&A concluded that this ordinance would not constitute a constraint. More specifically, HR&A concluded that this regulatory change would not operate as a constraint within the meaning of State Housing Element law because it will not add costs to a project that are so substantial that it would render an otherwise feasible project to become infeasible. (dd) However, for the reasons detailed above, it is not appropriate that all housing projects above 15,000 square feet continue to be approved without discretionary review unless these projects constitute affordable housing projects or contain a significant portion of affordable housing. (ee) Given the circumstances described above, the Zoning Ordinance requires review and revision as it pertains to the development review permit threshold in the C3, C3C, and BSC districts. (ff) Pending the study and possible amendment of the Zoning Ordinance, it is necessary, on an interim basis, to extend the modifications to the existing project design and development standards in these districts establishing a 7,500 square foot threshold for requiring a development review permit. (gg) As described above, there exists a current and immediate threat to the public health, safety, or welfare should the interim ordinance not be adopted and should development inconsistent with the contemplated revisions to the developments standards be allowed to occur. Approval of additional development inconsistent with the proposed interim standards would result in a threat to the public health, safety, or welfare. Therefore, the City Council finds that the public health, safety and general welfare require 7 that the modificc:'tions to the development review thresholds be implemented and that the following standards for the BSC, C3, and C3C districts on an interim basis. SECTION 2. Interim Zoning. Except as provided in Sections 3 and 4 of this Ordinance: (a) No development or permit shall be approved pursuant to Chapter 1 of Article IX of the Santa Monica Municipal Code for land in the C3 District, unless the following findings are made: The project complies with existing C3 District property development standards except, a development review permit is required for any development of more than seven thousand five hundred square feet of floor area. Square footage devoted to residential use shall be reduced by fifty percent when calculating whether a development review permit is required (b) No development or permit shall be approved pu rsuant to Chapter 1 of Article IX of the Santa Monica Municipal Code for land in the C3C District unless the following findings are made: The project complies with existing C3C District property development standards except, a development review permit is required for any development of more than seven thousand five hundred square feet of floor area Square footage devoted to residential use shall be reduced by fifty percent when calculating whether a development review permit is required. (c) No development or permit shall be approved pursuant to Chapter of Article IX of the Santa Monica Municipal Code for land in the BSC District unless the following findings are made: The project complies with existing BSC District property development standards except, a development review permit is required for any development of more 8 than seven thousand five hundred square feet of floor area. Square footage devoted to residential use shall be reduced by fifty percent when calculating whether a development review permit is required. SECTION 3. The following projects shall be exempt from this ordinance: (a) Projects that contain a minimum of eighty percent (80%) of floor area devoted to multi-family residential use provided that at least twenty percent (20%) of the housing units are deed-restricted or restricted by an agreement approved by the City for occupancy by households with incomes of sixty percent (60%) of median income or less or at least ten percent (10%) of the housing units are deed-restricted or restricted by an agreement approved by the City for occupancy by households with incomes offifty percent (50%) of median income or less. The required percentage of affordable housing units shall not apply to the 25% State density bonus units if so provided in the project. (b) Affordable housing projects in which one hundred percent (1 00%) of the housing units are deed-restricted or restricted by an agreement approved by the City for occupancy by households with incomes of eighty percent (80%) of median income or less, SECTION 4. Affordable Rental Housing Projects with no more than fifty units shall be considered a permitted use, shall not require a development review permit, and shall not be subject to Santa Monica Municipal Code Section 9.04.08.28.040 (v) and (w). All other property development standards and architectural review requirements of the Zoning Ordinance in the district in which the parcel is located shall apply. For purposes of this Section, an affordable rental housing project shall be defined as rental housing in which 9 100% of the dwelling units are deed-restricted or restricted by an agreement approved by the City for occupancy by households with incomes of eighty percent (80%) of median income or less. An affordable rental housing project may also include non-residential uses, as long as such uses constitute neighborhood-serving goods, services, or retail uses that do not exceed fifteen percent of the floor area of the total project and these neighborhood-serving goods, services or retail uses are designated as permitted uses in the Zoning Ordinance in the district in which the parcel is located, This Section 4 shall not apply in the LMSD, the DP, the BP, and the R-MH districts. SECTION 5. This ordinance shall be of no further force and effect forty-five days from the date of its adoption, unless prior to that date, after a public hearing, noticed pursuant to Santa Monica Municipal Code Section 9.04.20.22.050, or any successor ordinance thereto, the City Council, by majority vote, extends this interim ordinance. SECTION 6. Any provision of the Santa Monica Municipal Code, appendices thereto, or any interim ordinance inconsistent with the provisions of this Ordinance, to the extent of such inconsistencies and no further, is hereby repealed or modified to that extent necessary to effect the provisions of this Ordinance. SECTION 7. If any section, subsection, sentence, clause, or phrase of this Ordinance is for any reason held to be invalid or unconstitutional by a decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Ordinance. The City Council hereby declares that it would have passed this 10 Ordinance and each and every section, subsection, sentence, clause, or phrase not declared invalid or unconstitutional without regard to whether any portion of the ordinance would be subsequently declared invalid or unconstitutional. SECTION 8. This Ordinance shall be applicable to applications for development projects deemed complete on or after May 21,2002. SECTION 9. 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: S MARSHA J ' City Attorney 11 Adopted and approved this 22"d day of October,2002. State of California ) County of Los Angeles) ss. City of Santa Monica ) I, Maria M. Stewart, City Clerk of the City of Santa Monica, do hereby certify that the foregoing Ordinance No. 2058 (CCS) had it's introduction on September 24, 2002, and was adopted at the Santa Monica City Council meeting held on November 12, 2002, by the following vote: Ayes: Council members: O'Connor, Bloom, Genser, Mayor Pro Tem McKeown, Mayor Feinstein Noes: Council members: Holbrook, Katz Abstain: Council members: None Absent: Council members: None ATTEST: