SR 12-13-2022 10D
City Council
Report
City Council Meeting: December 13, 2022
Agenda Item: 10.D
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To: Mayor and City Council
From: David Martin, Director, City Planning
Subject: Introduction and Adoption of an Emergency Interim Zoning Ordinance to
Allow 100% Affordable Housing Projects to Request Waivers or Reductions of
Development Standards Pursuant to State Density Bonus Law
Recommended Action
Staff recommends that the City Council:
1. Adopt a finding that no subsequent environmental review is required pursuant to
California Environmental Quality Act (CEQA) Guidelines § 15162 based on a
determination that the proposed project was analyzed as part of the 2021-2029
6th Cycle Housing Element Environmental Impact Report (EIR) [SCH No.
20212269242021] that was certified by Council on October 12, 2021 with an
Addendum to the EIR approved on October 11, 2022.
2. Introduce and adopt an emergency interim zoning ordinance to allow 100%
affordable housing projects that receive unlimited density and up to three stories
or 33 feet in additional height under State Density Bonus Law to request
additional waivers or reductions of development standards.
Summary
On October 11, 2022, the City Council adopted an amended 6th Cycle (2021-2029)
Housing Element, which was subsequently certified by California’s Housing and
Community Development Department (“HCD”) as compliant with State Housing Element
Law on October 14, 2022. The City’s certified 6th Cycle Housing Element includes a
commitment to implement certain programs by October 15, 2023, that focus on planning
for new housing units consistent with the City’s Regional Housing Needs Assessment
(“RHNA”) allocation of 8,895 housing units with approximately 70 percent allocated as
affordable housing. One of the key principles of the 6th Cycle Housing Element,
consistent with the City’s RHNA allocation and longstanding commitment to affordable
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housing, is to increase housing production for all, with an emphasis on production of
affordable housing units in Santa Monica.
State Density Bonus Law provides significant advantages for 100% affordable housing
projects that are within one-half mile of a “major transit stop”, which, for purposes of
State law, includes, but is not limited to, rail stations, bus rapid transit stations, and the
intersection of certain qualifying bus routes. These advantages include:
• Extra 3 stories or 33 feet of building height;
• No maximum controls on density (i.e., no limit to number of units in the project’s
building envelope); and
• Up to four (4) incentives/concessions from development standards in the
Municipal Code.
In addition to incentives and concessions, projects that request a State Density Bonus
also typically have the option of also requesting waivers or reductions of development
standards that physically preclude development of a project. Prior versions of State
Density Bonus Law prohibited 100% affordable housing projects that receive unlimited
density from also being able to request waivers or reductions of development standards
(in addition to the 4 incentives/concessions already granted). However, in processing
projects, staff has found that this may constitute a barrier to 100% affordable housing
projects that need more relief from the code as contemplated by State Density Bonus
Law.
As a result, staff proposes an Emergency Interim Zoning Ordinance (“IZO”) to remove
potential barriers to production of 100% affordable housing projects that are within one-
half mile of a major transit stop on an interim basis while the City continues
implementation of adopted Housing Element programs. Housing Element
implementation, which is scheduled to be presented to the City Council in Spring 2023,
includes comprehensive rezoning and process streamlining as set forth in required 6th
Cycle Housing Element Programs including but not limited to 1F (Downtown standards),
1J (Citywide standards), 2C (AHPP Update), and 2D (State Density Bonus). More
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specifically, for purposes of the proposed Emergency IZO, Housing Element Program
2D requires revisions to the City’s Density Bonus Ordinance to ensure consistency with
recent changes in State Density Bonus Law, California Government Code Section
65915 et seq. (“SDBL”).
The proposed Emergency IZO would allow these projects to request “waivers or
reductions” of development standards that would physically preclude the development
of the affordable housing project.
Staff will be proposing that this change be made on a permanent basis in Spring 2023
as part of implementation of Housing Element Program 2D, which includes a broader
Density Bonus Ordinance update. In the interim, in order to continue to support the
production of 100% affordable housing development, the proposed Emergency IZO is
recommended for adoption immediately. This would help to ensure the City does not
lose the opportunity to approve applications for 100% affordable housing projects, which
are generally subject to strict processing timelines to secure funding. A delay in
implementation of this provision could threaten an 100% affordable housing project’s
ability to move forward and could, as a result, threaten the City’s ability to meet its
RHNA allocation goals.
Background
State Density Bonus Law
The State legislature’s stated purpose of the SDBL is to allow public entities to reduce
or even eliminate subsidies for housing projects by allowing a developer to include more
total units in a project than would otherwise be allowed by the local zoning ordinance in
exchange for affordable units, and to cover at least some of the financing gap of
affordable housing with regulatory incentives, rather than additional public subsidy. The
additional units granted under SDBL are referred to as a “density bonus”, and the
regulatory incentives include “incentives or concessions”, and “waivers or reductions of
development standards”.
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For purposes of SDBL, “development standard” includes, but is not limited to, a height
limitation, a setback requirement, a floor area ratio or parcel coverage limitation, an
onsite open-space requirement, or a parking requirement.
Under SDBL, the City is required to grant a density bonus to any housing development
project that sets aside a minimum percentage of units as affordable. The density bonus
increases based on the number of affordable units set aside, with the highest density
bonus for mixed-income projects being 50%. Depending on the percentage of
affordable housing units in a project, developers can request up to four incentives or
concessions and additionally may request waivers or reductions of development
standards.
The City may only deny a request for regulatory incentives based on certain findings.
Specifically, to deny an incentive or concession, the City is generally required to
demonstrate that the incentive or concession would not result in identifiable and actual
cost reductions to provide for affordable housing, and to deny a request for a waiver or
reduction of a development standard, the City is generally required to demonstrate that
the waiver or reduction would not physically preclude the developer from constructing
the project.
AB 1763
On October 9, 2019, the Governor of California signed 18 bills into law to stimulate
housing production, including Assembly Bill 1763, which amends the SDBL to provide
for increased density bonuses and incentives and concessions for 100% affordable
housing developments. For purposes of SDBL, a 100% affordable housing
development is defined as a housing project with 100% of all units in the development
for lower income households, except that up to 20% of the units in the development,
including total units and density bonus units, may be for moderate-income households.
Under AB 1763, 100% affordable housing developments are automatically granted a
density bonus equal to an 80% increase in units and up to 4 incentives or concessions.
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In addition, if the 100% affordable housing project is within one-half mile of a major
transit stop, the City is required to grant the housing development unlimited density and
a height increase of up to three additional stories, or 33 feet. Although the City is
required to grant the project “unlimited density”, the City is still able to limit the height of
the project to 33 feet or three stories above the maximum for the applicable zoning
district. Unlimited density in this context means that the City cannot place a limitation
on the number of affordable units that fit within the building envelope.
However, AB 1763 also declared that 100% affordable housing developments that
received unlimited density could not request additional waivers or reductions of
development standards.
City’s Implementation of AB 1763
AB 1763 became effective on January 1, 2020. On September 8, 2020, the City
Council adopted Ordinance Number 2649 (CCS), which, in part, updated Santa Monica
Municipal Code (SMMC) Chapter 9.22 to incorporate updates made by AB 1763. In
accordance with AB 1763, Santa Monica Municipal Code Section 9.22.070(C) prohibits
a developer to request additional waivers or reductions of development standards for
100% affordable housing developments that received unlimited density.
AB 2345
In order to further encourage the development of 100% affordable housing projects, the
State legislature passed Assembly Bill 2345, which became effective on January 1,
2021, and expressly authorizes cities to grant additional waivers or reductions to
development standards that were formerly prohibited under Assembly Bill 1763.
Consequently, the City now has the option to grant the additional waivers or reductions
that the City determines is necessary to allow the construction of 100% affordable
housing projects. No additional height is allowed for these projects. During this interim
period, staff will further research whether the City can limit the categories of waivers or
reductions of development standards that an 100% affordable housing project applicant
can request.
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Discussion
Under SMMC Chapter 9.22, and in accordance with SDBL, the City is required to grant
unlimited density and up to three stories or 33 feet in height when requested for 100%
affordable housing developments located within a ½ mile of a major transit stop (see
Figure 1). In addition, those housing development projects may request up to four
additional incentives or concessions, but no waivers or reductions of development
standards.
Figure 1: Map of Areas within ½ mile of a Major Transit Stop
By adopting the proposed Emergency IZO, the City would agree to allow developers to,
in addition to what is already required by SDBL, request additional waivers and
reductions in development standards.
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The proposed IZO would not allow a developer to request additional height beyond the
additional 3 stories or 33 feet that the City is already required to grant under SDBL.
Waivers are generally requested to modify development standards such as setbacks,
stepbacks, parcel coverage or floor area, and open space requirements, but can only be
used if the development standard would physically preclude the development of the
project at its permitted density and with any incentives or concessions granted. The
proposed Emergency IZO would only grant developers of 100% affordable housing
projects that receive unlimited density the ability to request waivers or reductions of
development standards. Any request for a waivers or reductions would not be
automatically granted. The proposed Emergency IZO would not affect the City’s
discretion to deny a developer’s request for waivers or reductions of development
standards, such as when denial of the requested waiver or reduction of a development
standard would not have the effect of physically precluding the construction of the 100%
affordable housing project. If the City is able to make the findings set forth in SDBL,
then the City may deny a request for a waiver or reduction of development standards.
The Planning Commission has been conducting discussions on implementation of the
6th Cycle Housing Element, and it is anticipated that the Commission will make a formal
recommendation to the City Council in January 2023. If the Planning Commission
makes a formal recommendation in January 2023, any changes to Chapter 9.22 to
implement Program 2D would not be presented to Council before February 2023, with a
likely effective date of April 2023, if adopted by Council in February 2023.
Based on this anticipated timeframe, the adoption of this Emergency IZO provides an
opportunity for 100% affordable housing projects to be eligible for a wider range of
assistance to make qualifying projects feasible, as authorized by SDBL. More
specifically, the combination of SDBL-authorized development incentives and
concessions and ability to request waivers supports the development of 100%
affordable housing projects. This is particularly important, given the challenges with
funding 100% affordable housing projects, which often necessitates the use of financing
sources such as tax credits that establish a strict schedule for obtaining entitlements
and building permits. A delay in agreeing to waivers or reductions of development
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standards before the anticipated effective date for implementation of Program 2D in the
Spring of 2023, could jeopardize the production of 100% affordable housing
developments within the city as well as the City’s ability to meet its RHNA allocation
goals.
If adopted, the proposed Emergency IZO would take effect immediately for an initial
period of 60 days, subject to extension by the City Council in accordance with Santa
Monica Municipal Code Section 9.46.090(C).
Environmental Review
The proposed adoption of an Emergency IZO to allow a request for waivers of
development standards in conjunction with a 100% affordable housing project utilizing
State Density Bonus Law provisions was analyzed as part of the 2021-2029 6th Cycle
Housing Element Environmental Impact Report (EIR) [SCH No. 20212269242021] that
was certified by Council on October 12, 2021, with an Addendum to the EIR approved
on October 11, 2022. This approval of an Emergency IZO implements a portion of that
6th Cycle Housing Element project.
An analysis has been performed pursuant CEQA Guidelines § 15162 to determine
whether subsequent environmental review is required for the adoption of an Emergency
IZO to allow a request for waivers of development standards in conjunction with a 100%
affordable housing project utilizing State Density Bonus Law provisions. Based upon
this analysis, the following findings are made to support the determination that no
subsequent environmental review is required:
1) No substantial changes are proposed in the project which will require major
revisions of the previous EIR and Addendum due to the involvement of new
significant environmental effects or a substantial increase in the severity of
previously identified significant effects. In this case, there are no changes to the
project.
2) No substantial changes occur with respect to the circumstances under which the
project is undertaken which will require major revisions of the previous
addendum due to the involvement of new significant environmental effects or a
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substantial increase in the severity of previously identified significant effects. In
this case, no substantial changes have occurred.
3) There is no new information, which was not known and could not have been
known at the time of the previous EIR and Addendum that the project will have
significant effect not discussed in the EIR and Addendum.
Based upon these findings, it has been determined that no further environmental
documentation is required for this project.
Past Council Actions
Meeting Date Description
10/11/2022
(Attachment B)
Adoption of Resolution Amending the 6th Cycle (2021-2029)
Housing Element to the City’s General Plan and Approval of
Addendum to the Final Environmental Impact Report for the
6th Cycle (2021-2029) Housing Element
Financial Impacts and Budget Actions
There is no immediate financial impact or budget action necessary as a result of the
recommended action.
Prepared By: Roxanne Tanemori, Principal Planner
Approved
Forwarded to Council
Attachments:
A. Attachment A EIZO Density Bonus for Affordable Housing 121322
B. Attachment B Link to 10-11-2022 Council Meeting
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City Council Meeting: December 13,2022 Santa Monica, California
ORDINANCE NUMBER _____ (CCS) (City Council Series)
AN EMERGENCY INTERIM ZONING ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SANTA MONICA TO UPDATE DENSITY BONUS REQUIREMENTS FOR 100% AFFORDABLE HOUSING DEVELOPMENTS WHEREAS, the State is experiencing a housing supply crisis, with housing
demand far outstripping supply; and
WHEREAS, the housing crisis has particularly exacerbated the need for affordable
homes at prices below market rates; and
WHEREAS, the housing crisis has resulted in increased poverty and
homelessness, especially first-time homelessness, forced lower income residents into
crowded and unsafe housing in urban areas, and forced families into lower cost new
housing in greenfields at the urban-rural interface with longer commute times and a higher
exposure to fire hazard; and
WHEREAS, California needs an estimated 180,000 additional homes annually to
keep up with population growth, and the Governor has called for 3.5 million new homes
to be built over a 7-year period; and
WHEREAS, the City of Santa Monica has long been committed to ensuring that
Santa Monica is an inclusive and affordable community despite mounting market
pressures; and
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WHEREAS, the City’s Land Use and Circulation Element, adopted in 2010, and
Zoning Ordinance, adopted in 2015, demonstrate this commitment through providing
extra bonuses and incentives for one hundred percent affordable housing; and
WHEREAS, on October 9, 2019, the Governor signed 18 bills into law to stimulate
housing production, including: AB 1763, which amends the State Density Bonus Law,
California Government Code Section 65915 et seq. (“SDBL”), to provide for increased
density bonuses and incentives and concessions for housing developments that contain
one hundred percent of all units in the development, including total units and density
bonus units, but exclusive of a manager's unit or units, are for lower income households,
except that up to 20 percent of the units in the development, including total units and
density bonus units, may be for moderate-income households (“100% affordable housing
developments”); and
WHEREAS, AB 1763, in part, provides that the City may not impose maximum
controls on density on 100% affordable housing developments located within one-half
mile of a major transit stop, and that those 100% affordable housing developments shall
receive shall also receive a height increase of up to three additional stories, or 33 feet;
and
WHEREAS, AB 1763 further provides that 100% affordable housing developments
that received unlimited density are not eligible for additional waivers or reductions of
development standards; and
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WHEREAS, on September 8, 2020, the City Council adopted Ordinance Number
2649 (CCS) which, in part, incorporated provisions of AB 1763, including the prohibition
against waivers for 100% affordable housing developments that receive unlimited density;
and
WHEREAS, AB 2345, which became effective on January 1, 2021, amended the
SDBL to allow a city to authorize a developer to request additional waivers or reductions
of development standards for 100% affordable housing developments that receive
unlimited density; and
WHEREAS, the City received a Regional Housing Needs Assessment (“RHNA”)
allocation for is 6th Cycle (2021-2029) Housing Element (“6th Cycle Housing Element”)
of 8,895 housing units, with approximately 70 percent allocated as affordable housing;
and
WHEREAS, this RHNA allocation will require the City to permit approximately
1,000 housing units annually between 2021 and 2029, 700 of which are required to be
affordable housing, representing an increase of approximately five times over the City’s
RHNA allocation for the 5th Cycle (2013-2021) Housing Element; and
WHEREAS, on October 11, 2022, the City Council adopted Resolution Number
11469 (CCS), adopting an amended 6th Cycle Housing Element, which was certified by
the State on October 14, 2022; and
WHEREAS, the 6th Cycle Housing Element represents the City’s longstanding
commitment to affordable housing, tenant protection, housing and services for special
needs groups, homeless services, sustainable development, and fair housing; and
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WHEREAS one of the four key principles of the 6th Cycle Housing Element is to
increase housing production for all, with an emphasis on affordable housing; and
WHEREAS, through Housing Element Program 2D, the City has committed to
updating its density bonus ordinance to ensure consistency with SDBL and integration
into the City’s land use system no later than October 15, 2023; and
WHEREAS, on August 4, 2021, the Planning Commission adopted Resolution
Number 21-007 (PCS) declaring its intention to consider recommending to the City
Council that the City Council amend the text of the Zoning Ordinance for consistency with
the goals, policies, and programs set forth in the 6th Cycle Housing Element, including
Program 2D; and
WHEREAS, the Planning Commission has been conducting discussions on
implementation of the Housing Element, and it is anticipated that the Commission will
make a formal recommendation to the City Council in January 2023; and
WHEREAS, if the Planning Commission makes a formal recommendation to the
City Council in January 2023, it is anticipated that amendments to the Zoning Ordinance
to implement Program 2D would not be presented to Council before February 2023, with
a likely effective date of April 2023; and
WHEREAS, agreeing to additional waivers or reductions of development
standards for 100% affordable housing developments that receive unlimited density will
facilitate the development of affordable housing within the City, consistent with the key
principles of the 6th Cycle Housing Element and Program 2D; and
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WHEREAS, 100% affordable housing projects, with challenges in available
funding, often turn to financing sources such as tax credits, which establish a strict
schedule for obtaining entitlements and building permits; and
WHEREAS, if the City does not agree to waivers or reductions of development
standards before the anticipated effective date for implementation of Program 2D in the
Spring of 2023, it could jeopardize the production of 100% affordable housing
developments within the City as well as the City’s ability to meet its RHNA allocation
goals; and
WHEREAS, there exists a current and immediate threat to the public health, safety
and welfare due to the State’s ongoing and unprecedented housing crisis, which has
resulted in the City’s RHNA allocation that heavily focuses on affordable housing
production; and
WHEREAS, the City desires to immediately agree to waivers or reductions of
development standards for 100% affordable housing developments that receive unlimited
density; and
WHEREAS, adoption of this emergency Interim Zoning Ordinance is necessary to
preserve public peace, health, safety and welfare as it will remove barriers to production
of housing, particularly 100% affordable housing developments.
NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF SANTA MONICA
DOES HEREBY ORDAIN AS FOLLOWS:
SECTION 1. Interim Zoning Regulations. Notwithstanding anything to the contrary
in Santa Monica Municipal Code Section 9.22.070(C), a housing development that
receives a waiver from any maximum controls on density pursuant to Santa Monica
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Municipal Code Section 9.22.050(B)(3)(d)(ii), and up to three additional stories or 33 feet
in height in accordance with 9.22.060(A)(4), shall be eligible for, and may receive,
additional waivers or reductions of development standards in accordance with the
provisions of SDBL and Santa Monica Municipal Code Chapter 9.22.
SECTION 2. Any provision of the Santa Monica Municipal Code or any appendix
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
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
immediately upon adoption. Pursuant to Sections 615 and 619 of the City Charter, and
Section 9.46.090 of the Municipal Code, for the reasons stated in the recitals above, the
staff report accompanying this ordinance, oral and written testimony received by the City
Council, and City Council discussion, the City Council declares this ordinance to be
necessary as an emergency measure for preserving the public peace, health, and safety,
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with the result that this ordinance shall be introduced and adopted at the same meeting
and shall become effective immediately upon its adoption.
SECTION 5. This Ordinance shall be of no further force or effect sixty days from
its effective date, unless it is otherwise extended pursuant to Santa Monica Municipal
Code Section 9.46.090(C).
APPROVED AS TO FORM:
_________________________ DOUGLAS SLOAN
City Attorney
10.D.a
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Attachment B
Link to the October 11, 2022 City Council:
Adoption of Resolution Amending the 6th Cycle (2021-2029) Housing Element to the
City’s General Plan and Approval of Addendum to the Final Environmental Impact
Report for the 6th Cycle (2021-2029) Housing Element
https://santamonicacityca.iqm2.com/Citizens/Detail_LegiFile.aspx?Frame=&MeetingID=
1320&MediaPosition=&ID=5191&CssClass=
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Packet Pg. 510 Attachment: Attachment B Link to 10-11-2022 Council Meeting (5467 : Emergency IZO Regarding State Density Bonus Provisions for 100%