Six years of process, and then . . . boom!

At the City Council meeting last Tuesday night on Santa Monica’s Downtown Community Plan (DCP) the ironies abounded. As planning staff has told us many times, the DCP is the result of six years’ of process involving countless public meetings, along with studies and other work by consultants. The Monday night before Tuesday’s meeting itself featured about 150 community members testifying on the plan. Yet to make the biggest decisions about the plan, on the most difficult, contentious and significant issues, the City Council had only time for frantic deliberations as Mayor Ted Winterer pushed them to take “straw votes” as if they were on a life-and-death deadline.

So much for deliberative representative democracy.

Not only that, but the debate over the very most contentious and significant issue—the amount of affordable housing to require for-profit developers to build—was based on a new financial analysis that had been assembled in admitted haste over the previous weekend in response to a recommendation from the Housing Commission to expand the required amount of affordable housing to 30% in some circumstances, a percentage more than what any other jurisdiction in California requires. This analysis, by the City’s regular consultant, Paul Silvern, had not been released to the public for comment or even given to the councilmembers prior to the meeting. The first they heard of it was Silvern’s oral presentation Tuesday night.

Based on this analysis the councilmembers voted to require an on-site affordable housing requirement of more than 20% on any market-rate apartment building greater than 50 feet in height, reaching a 30% affordable requirement at 70 feet in height. I’d say that these numbers are unprecedented, but in fact they would bring Santa Monica back to where it was in the early 1990s, when it had a 30% requirement. For those without long memories, the results of that requirement were (i) no housing got built, and (ii) housing developers sued the City and won, and the City had to revise its zoning so that housing could be built.

While anti-change forces in the City have been chipping away at that 1990s pro-housing zoning for 20 years, it’s the DCP that is finally replacing it entirely. Ironic for a plan that is touted as a “housing plan.”

But I want to be fair to Paul Silvern: I said his analysis was what the council used to justify going to 30%, but he himself, as passionately as I’ve ever heard him speak, advised the council not to go there. He did not believe his analysis of theoretical and marginal financial feasibility at the 30% level provided justification for requiring it.

And I also don’t want to be completely negative. The council did some good things at the meeting, building on good work from the Planning Commission and staff.

For one, the council voted to remove parking minimums for developments downtown; this was in fact a “forward to the past” move, since the City back in the 1960s removed parking minimums for the core area around Third Street, but 50 years later it’s still considered a brave and radical move.

For two, the council approved expanding significantly (though not as far as would have been justified) the scope of administrative review over housing development. It was telling, however, that some councilmembers wanted to get back every bit of advantage this gave housing developers by assessing new burdens on the construction of market-rate housing. This is where the impetus to increase the on-site affordable housing obligation to 30% came from.

The council also approved reasonable development standards for the three large hotel sites downtown, gave more incentives to 100% affordable housing developments, and increased allowable development in the “Neighborhood Village” area south of Wilshire (although this last improvement will probably be moot considering the increased affordable housing cost put on developments above 50 feet in height).

But getting back to housing, some readers might be wondering why I, a proponent of building affordable housing, object to piling affordable housing requirements on market-rate housing. The reason is that we need market-rate housing just as much as we need affordable, because if middle-class households can’t find new housing that they can afford, particularly in historically middle-class areas like the Westside, then they will cannibalize existing housing occupied by low-income people. This is what is happening all over California, as reported in the papers (including now the New York Times) nearly every day. Housing and neighborhood activists decry gentrification, but discouraging investment in housing is what drives increases in housing costs.

For so long as we have more people who don’t qualify for affordable housing than who do, which is, by the way, a good thing, then, by definition, or simple math, we need more housing for people who don’t qualify. We need that housing to be built, and if we unreasonably burden developers who build it, or owners of the property it could be built on, we won’t get it.

It’s not like there shouldn’t be inclusionary housing. We also have a value that we want housing for different incomes to be mixed together or in proximity. And in a rising housing market, there are some developer profits that can be tapped for this purpose, if developers are given sufficient entitlements to build and there is certainty in the process. But we have to recognize that more investment will be attracted to housing development the lesser the burdens on it.

Ultimately the money for building necessary affordable housing must come from the whole of society.

Thanks for reading.

2 thoughts on “Six years of process, and then . . . boom!

  1. Pingback: Santa Monica will force developers to build more affordable apartments, condos in Downtown - Dan May Real Estate

  2. Pingback: Santa Monica’s ‘grand bargain’ on growth and housing: A model for other cities? – TopNewsPH

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