Some other shoes drop in Santa Monica and Malibu

As summer was winding down last week, reminders arrived that while the world wrestled with the Delta variant and Afghanistan two big local issues had been quietly percolating. The issues are whether Malibu will form its own school district, seceding from the Santa Monica Malibu Unified School District, and how the California Department of Housing and Community Development (HCD) would react to the draft Housing Element that Santa Monica submitted to HCD July 1. In both cases shoes dropped in the form of reports from professional staffs outside of Santa Monica.

Let’s start with Malibu’s attempt to form its own school district. What happened last week was that the staff of the Los Angeles County Office of Education (LACOE) released its report to the “L.A. County Committee on School District Organization” (the “County Committee”) containing the staff’s analysis of whether Malibu had satisfied the requirements of state law to form a separate district. The context is that after about five years of on-and-off negotiations, Malibu broke off negotiations last fall, even as the parties seemed to be finally reaching an agreement. Instead, Malibu renewed a 2017 petition to LACOE to separate. (I wrote about the negotiations and other maneuvers here in April; for an up-to-date and clear-eyed analysis of the Malibu secession drama, including its history, read this article that the L.A. Times ran over the weekend.)

The County Committee held a public hearing on the petition in April, then referred the matter to staff for review. There are nine factors that come into play in determining whether to approve the formation of a school district. The document released last week includes the staff’s analysis of those factors, as well as general conclusions. The document was prepared as groundwork for a continuation of the April hearing September 18. At that meeting the committee can either kill the application or refer it to a further level of review, what is called the “regular review process” (as opposed the current, “preliminary” review). (Whatever the LACOE ultimately decides, the final decision rests with the State Department of Education.)

In the report, the LACOE staff recommends that the matter be moved into the regular review process, during which the County Committee can gather more information and do more analysis. If the committee accepts staff’s analysis, that would keep Malibu’s proposal alive, but if I were a Malibu separatist, I would not be entirely optimistic after reading the report. Staff found that the proposal only satisfied one of the nine conditions, and there is at least one, that a district have at least 1,501 students, that seems difficult for Malibu to satisfy.

More generally, staff advised the committee that a simple desire to have one’s own district does not justify forming a new district: “Staff is informed and believes that resident students in the area proposed for a Malibu UFD [unified school district] have access to enrollment in Santa Monica-Malibu USD schools now, and always have. Whether or not they find the Santa Monica-Malibu USD insufficient for their particular needs does not merit the creation of a new USD, especially in light of the potential negative fiscal impacts such reorganization would have on the resulting Santa Monica USD.”

Nonetheless, perhaps recognizing that neither Malibu nor Santa Monica want to continue in one district spread out over 30 miles of coast and even more social and economic distance, the thrust of the staff’s recommendations is that the parties get back to the negotiating table. The report concludes as follows: “It is also clear that, though they have hit roadblocks numerous times, the City of Malibu and the Santa Monica-Malibu USD still have the opportunity to negotiate and to come to the County Committee with a joint solution. A negotiated solution that honors the needs and concerns of both parties remains the best recommendation.”

As for Santa Monica’s housing element, the shoe that dropped last week was not unexpected: it was a letter from HCD telling the City how its draft housing element was deficient under state law. I say not unexpected, because given all the restraints on building housing in Santa Monica, both regulatory and financial, and the substantial political opposition to growth, it was unlikely that Santa Monica would submit a first draft that would satisfy state housing law. State law requiring real efforts to allow for housing has been substantially strengthened since the last time the City produced a housing element.

It is clear from reading the 12-page HCD letter that Santa Monica has some hard work to do before it will be able to satisfy HCD. As I discussed in previous posts, compliance with housing law has two fundamental dimensions. One is providing enough zoned capacity for the number of units, the “RHNA allocation,” assigned to the city over the eight-year term of the housing element. This involves some tough political decisions in a town where zoning has been used for decades to keep new housing from being built in much of the city. Nonetheless, achieving enough capacity is fundamentally a matter of numbers: how many square feet of land can be built on, and how much can be built on that land. Along with getting rid of all the administrative and regulatory impediments and costs used to slow approvals and construction, determining how much capacity is available, and increasing it as needed, should be a reasonably objective enterprise.

The other dimension of compliance is more subjective: it is a requirement for what’s called “Affirmatively Furthering Fair Housing” (AFFH). This entails trying to remedy a century of unfair housing: legacies of single-family (R1) zoning, restrictive covenants, redlining, outright discrimination by realtors and sellers, etc., the purpose, and result, of which was to allow Anglos to live in their own enclaves and diminish the economic prospects available to households of color. In an earlier draft of the housing element prepared by staff there were provisions to allow more housing development in R1 zones, provisions that the City Council rejected. Those provisions are justifiable on their own as means to increase housing capacity and as such would have opened R1 areas up to more households, some of which no doubt would be of people of color. Because of economic reasons, however, it is not clear that these provisions themselves would have furthered fair housing to a significant extent. A century of discrimination has created fundamental economic obstacles to fair housing.

HCD, in the letter, dismisses the City’s AFFH analysis, saying that the draft “does not address the requirement to provide an Assessment of Fair Housing,” and later advising the City that it “should go well beyond exploring options and must commit to meaningful and sufficient actions to overcome patterns of segregation and foster inclusive communities.”

This is a challenge. More is going to have to be done.

The schedule now is that the City has a statutory due date of October 15 to adopt an approved housing element, but in fact penalties do not accrue until 120 days after that. This means that Santa Monica has about five months to get things right.

Thanks for reading.

The countries we’ve lost

I have been writing my Lookout column and this blog for about 20 years and nearly all I have written has been about Santa Monica or urban issues that affect Santa Monica. At times, however, world events, such as 9/11, have caused me to write about broader matters. A few days after 9/11 I wrote, “I hope we are as smart as we are tough. I have a fantasy that the U.S. will obtain and show the Taliban convincing evidence that Osama bin Laden is guilty, and that the Taliban will give him up to our justice system. Think what a triumph it would be to show that we can give our sworn enemy a fair trial.”

Okay, that was a fantasy, but then fantasies play a big part in the tragedy of Afghanistan.

I was born in the middle of the Baby Boom, in 1952, and as I complete my seventh decade, I am chagrined to realize that while I was born to an American generation that when young had participated in saving the world, my life has been bracketed by two disastrous foreign adventures, Vietnam and Afghanistan. To paraphrase Vizzini in The Princess Bride, two “land wars in Asia” that we should never have gotten involved in. 

Perhaps Vizzini could have made a more generalized statement: don’t get involve in peasant revolutions. People forget that the U.S. sent troops to Mexico and Russia during their peasant revolts, supported the losing side in China, tried to overturn the revolution in Cuba, and then there was Vietnam. You can throw in Iran’s revolution against the Shah, too—as we saw there, and as we see in Afghanistan, peasants and villagers do not always revolt with the purposes we think they should have. They can express their grievances against centralized authority by means of tradition, too.

In any case, our interventions had no effect. We “lost” China. We lost Vietnam. Now we’ve lost Afghanistan. We’ve lost a lot of countries, right? And what of it?

George Santayana famously wrote that “those who cannot remember the past are condemned to repeat it.” They study history in the universities and service academies our leaders and generals attend, right? Nonetheless we have been condemned to repeat a lot of history. Then there’s that other aphorism (often attributed, apparently mistakenly, to Albert Einstein), “Insanity is doing the same thing over and over again and expecting different results.” What if we are doomed not by forgetfulness, but by insanity? A mass psychosis that makes us believe we have powers we don’t have?

“Losing” China, then Cuba, and then losing the Vietnam War, fueled a decades-long rage among the right-wing in America. One result was distortion of the notion of patriotism. It was patriotic to blindly support policies (and deployments) that resulted in America’s humiliation, and unpatriotic to be clear-eyed about reality and what America’s interests were. (The Left fed the rage with its own rhetoric, and lost a lot of elections along the way, but that’s another story.)

Fighting the peasants in Vietnam was unpopular, to say the least, among the Left. Fighting peasants in Afghanistan, after going in to clear out Al Qaeda, not so unpopular. I count myself among the Left in this regard: until three weeks ago I was hoping, even expecting, that the urbanized population of a modernizing Afghanistan would take to the barricades and repulse the Taliban from the cities. More fantasy. One fantasy we have on the Left is that colonialism and imperialism, including the neo- varieties, are all about power, control, exploitation, and capitalism. There is also imperialism of ideas, and that imperialism runs against the tide of nationalism and peasant revolutions just as much as the other imperialism runs against the tide of anti-colonial liberation.

As a leftist I’ve always felt a bit embarrassed with the inconsistency that we on the Left have about this. We trumpet the rights of indigenous peoples, yet is there any economic theory, ideology, or philosophy more Western than everything that came out of the Enlightenment, including human rights, secularism, feminism, and both capitalism and Marxism? How far should we go? What would be better: to extend the Universal Declaration of Human Rights to an unknown people living in the Amazon, or leave them alone?

We on the Left want to change the culture of rural Afghanistan as much as Christian missionaries. To say that we oppose all fundamentalist religions, not only fundamentalist versions of Islam, hardly erases the contradiction with our anti-imperialism, our pro “self-determination.” As for the missionaries, it’s been a century or so since they journeyed to darkest wherever with protection from a powerful military, as our civil society NGOs had in Afghanistan.

Meanwhile, along with Western music, there’s been one extremely successful export of Western ideas: materialism. There is an effective means of reaching the hearts and minds of the un-modern peoples of the world, and that’s been through their stomachs, using “stomach” as a stand-in for all the things people find that they like when they can leave behind subsistence and barter and enter a money economy. People like their cellphones.

Japan might have been the first non-Western country to join its interests to the modern Western economy, about 150 years ago. Many nations have joined since, especially since the end of World War II. It typically takes two or three generations, but generally modernizing countries gradually acquire first a legal system that protects individual rights (such a legal system is essential for a modern economy) and ultimately a democratic system, or at least, along the way, a quasi-democratic system that protects civil and political rights. Hey: arguably we had only a quasi-democracy until women’s suffrage, the termination of lynching, and the Voting Rights Act of 1965. (And we’re still working on it.)

The essential American interests around the world are to support our long-time developed and historically democratic allies as well as those peoples who have joined this group since 1945, while securing a peaceful framework around the world for other peoples to develop and modernize. We don’t need to “confront” China and Russia as much as we need to have patience with them. This patience needs to be grounded in an unwavering faith in our Enlightenment values of democracy and human rights. While these values cannot be imposed from above, certainly not by force, they are powerful. We are on the right side of history.

I’m speaking here of long-term history, but on the short-term, the idea that nationalist and fundamentalist Islamic Afghans are suddenly going to be friendly with Russians and Chinese is farfetched. Again, look at Vietnam, which for quite some time has had friendlier relations with the U.S. than it has with China or Russia.   

Meanwhile, there is the unfolding misery in Afghanistan, and the likelihood that many Afghans, particularly women and girls, are going to lose their freedoms and rights, and are at risk of losing their lives. Many want to get out, and we need to help them. Again, this is not the first time that a revolution has created a wave of refugees. The wars in Indochina produced over a million, of which the U.S. took in 300,000 or so, while hundreds of thousands of “boat people” died at sea.

The experience with the refugees from Vietnam and elsewhere should give us hope and perspective over resettlement. Vietnamese and other Indochinese refugees have, like so many “homeless, tempest-tost” before them, joined our nation and become part of it. If once the dust settles Afghan refugees cannot go back, let’s welcome them here.

As for those who stay behind, or who are left behind, history shows that the worst alternative is for the U.S. to grab its ball and go home. Whenever we lose and then walk away—think Russia, China, Cuba, Vietnam, Iran—we lose influence. In each case, it took decades to reestablish diplomatic relations—we still haven’t done so with Iran. America somehow thinks we help ourselves by denying diplomatic recognition to regimes in power that we don’t like. It’s like having a tantrum and sending ourselves to sit in the corner. More fantasy, more insanity. We need to stay engaged with the Taliban. We’ll have more influence.

Thanks for reading.

Stop the presses: nice words about landlords uttered at the Santa Monica City Council

Before I can quit with writing about the housing element that the City of Santa Monica has sent to the California Department of Housing and Community Development (HCD), I have to visit an extraordinary conversation that took place during the June 15 City Council meeting. That was when council gave planning staff final directions for the housing element before sending it to HCD.

The discussion I’m referring to was extraordinary because in it two councilmembers praised landlords for their role in providing affordable housing. Certainly, I have not observed every City Council hearing during the nearly 30 years I have been following and participating in Santa Monica politics, but I cannot remember anyone praising landlords, as a group or class, from the dais during that time. It seems that after the rent control battles of the ’80s subsided, all political discourse in Santa Monica, even from the pro-business side, devolved into a default mode in which anyone who owned or developed residential property (other than a homeowner) was at best the equivalent of a “kulak” (wealthy peasant) or at worst a predatory capitalist.

The discussion occurred when the councilmembers were discussing Program 3.A in the draft housing element. In the draft presented to the council June 15 Program 3.A said that the City would amend its ordinances to make permanent anti-displacement provisions in the California Housing Crisis Act of 2019 (known as SB 330). SB 330 requires that if a housing developer would in building a new housing development destroy existing rent-controlled or affordable deed-restricted units, the developer would need to replace those units in the new development and rent them to low-income tenants. Under SB 330, these provisions sunset in 2025; Program 3.A would make those requirements permanent in Santa Monica.

The discussion began with Mayor Sue Himmelrich expressing her opinion that not only did she want to make SB 330 permanent, but she wanted to provide that the rents in the newly built, but rent-controlled, apartments would be the old rents, not reset to current market-rate levels. Even better, she wanted the new units to be deed-restricted and made available to low-income tenants. She said this would add “predictability.”

Councilmember Oscar de la Torre, however, had a problem with Program 3.A. He was concerned with its impact on “mom and pop” landlords. He said these apartment owners had been providing affordable housing for many years in the form of rent-controlled apartments. De la Torre said that he would “have a hard time punishing them,” because they had been “doing the right thing for so many years.” He asked if this law wouldn’t “lock them into the same situation where they can’t make any progress for their family.” He said that “government should compensate these people;” he asked, “shouldn’t we have a way where we share that burden?”

De la Torre made it plain that he was only talking about “mom and pop” apartment owners, not corporations that might own “25 buildings,” but still my jaw dropped. As I said before, I cannot remember a member of the Santa Monica City Council expressing sympathy for landlords, big or small, let alone their heirs. Nor one of them making arguments that would make it more economically advantageous to tear down existing apartments—and this from a local figure known for his opposition to the use of the Ellis Act to do precisely that.

Councilmember Phil Brock agreed with de la Torre. He said that the law requiring replacement of rent-controlled units would disincentivize replacement of old housing, and that we would end up with “more rundown apartments.” He used a hypothetical of a 75-year-old building that might ultimately need to be replaced. He said that given the cost of doing so, the replacement could not happen if the new units were rent-controlled or deed-restricted affordable. (Both Brock and de la Torre come from families that own apartments. They did not make announcements at the meeting about this (although Brock referred to his mother as an apartment owner), but I expect that everyone on the (virtual) dais was aware of it.)

At this point Mayor Himmelrich jumped in. She responded to de la Torre and Brock by saying that property owners could make enough money to justify rebuilding from additional, market-rate units they could build. She took a hypothetical four-unit building de la Torre had used and said that such a building could be rebuilt with eight units, and the owners could make plenty of money from the four new units.

I doubt Himmelrich is correct. Since the ’80s Santa Monica has downzoned its multi-unit residential districts, so that it is not generally possible to build as much on a residential lot as could be built previously, when these old apartments were built, let alone double the size of existing apartment buildings. Here is a detail from the zoning map:

Detail of Santa Monica zoning map.

As shown, most multi-unit residential districts are zoned “Low Density Residential” (R2 or the analog in Ocean Park, OP2), including nearly all of the Pico Neighborhood, mid-Wilshire/WilMont, and Ocean Park. The theoretical maximum number of units per lot in R2 is four, but for most lots the real maximum is three because the minimum size of a unit in R2 is 2,000 square feet. (This large unit size is evidence, incidentally, that the downzoning discouraged affordable housing.) Even if retaining the units would qualify the development for a 50% state density bonus (the best available), at most the development would have five, or maybe six, units. Possibly the owner/developer could add a unit by asking for “concessions” under density bonus law, but even if Himmelrich’s hypothetical eight units could be built, privately-financed housing cannot be financed with a 50% inclusionary requirement. Finally, is it realistic that on single lots in residential districts, the size of apartment buildings will be doubled?

In fact, planning staffer Jing Yeo had already explained the real impact of SB 330 on Santa Monica: she told the council early in the discussion that the effect of SB 330 here was to prevent a property owner from tearing down four units and replacing them with three.

Brock replied to Himmelrich by saying that the replacement provisions made reinvestment infeasible. Himmelrich responded by asking him, “are we doing this housing element for landlords or for tenants?” Brock seemed taken back by the question. “I think we’re doing it for everyone,” he replied, “[i]t should be ideally a symbiotic relationship.”  

I am a New Deal-type Democrat with socialist leanings, and as such I believe in regulation of economic activity. That includes rent control, which is, or can be, a reasonable exercise of governmental authority with multiple social benefits. Rent control, however, like any economic regulation, needs to be reasonable. Regulations are not reasonable if they are so strict that they defeat their own purposes. The purpose of rent control is to deliver safe and well-maintained housing that people can afford. All regulations require recalculation and review from time to time, just as all housing needs maintenance, whether the building is a wood-framed apartment structure in termite-country or a steel and concrete condo tower in Florida. Sometimes old buildings need to be replaced.

Councilmember Brock was right when he described the relationship between property owners and tenants as symbiotic. Our economy is largely capitalist, and we rely on private capital to build and maintain housing. This is even the case, to a great extent, when it comes to affordable housing. (Personally, I would like to see government get back into the business of building public housing, but that is not likely to happen any time soon.) Whether the capital comes from “moms and pops” investing their life savings into an apartment building, from private placement financing for specific developments, or from publicly-traded REITs, etc., investors have to believe that they have a good chance of having a better risk/return ratio than they would have if, for instance, they invest their money in a stock market index fund.

If you would like to watch these City Council deliberations about making SB 330 permanent, click here to go to the video, and then go to the 5:02 mark and start watching. Lasts about 20 minutes, and you’ll also see what they decided to do. Hint: nothing.

Thanks for reading.

The housing element: better late than never

As expected, Santa Monica planning staff submitted the City’s draft housing element to the California Department of Housing and Community Development (HCD) on July 1. You can find the draft by clicking here. HCD now has 60 days to review it. Based on the rejections HCD has made to draft housing elements filed by cities in the San Diego area, it is unlikely that HCD will accept the draft as is. HCD is also unlikely to accept the draft because it lacks detail and the City’s “programs” to allow for more housing to be built here are not based on existing policies but on promises to enact changes to Santa Monica’s land use laws. But maybe I’m wrong.

Nonetheless there are reasons to be optimistic about the housing element and what it means for the future evolution of the Bay City. I have been following housing policy in Santa Monica for almost 30 years. What I see in this housing element is recognition of policies that the City should have enacted beginning about 20 years ago, when the success of the pro-housing zoning enacted for downtown Santa Monica in the ’90s became apparent.

Santa Monica has two primary tools for significantly increasing housing production, although there are other policies that would help on the margins. These are allowing housing development on land that has been zoned for commercial or industrial purposes and then encouraging housing on that land by giving property owners and developers (both market-rate and affordable developers) major incentives that favor housing over commercial development.

The housing element if implemented would do both. Its Program 4.A says that the City will allow housing in non-residential zones where housing is now prohibited. Program 4.B says that the City will revise development standards both to incentivize housing development over commercial development and to make housing development financially feasible in all commercial zones (whether or not they have previously been permitted for housing). While the housing element doesn’t specify how much development standards will change, when discussing these provisions with the Planning Commission and City Council planning staff said that based on the City’s financial analysis the City expected that housing development would be entitled to double the square footage allowed for commercial development. This was the standard the City in the ’90s used to encourage housing development downtown.

As I said, these changes have been a long time coming. I remember back in the ’90s arguing on the Planning Commission in favor of allowing housing everywhere. Santa Monica, however, rejected proposals to allow housing in industrial zones. There was nostalgia that factories would return to Santa Monica.

What this argument ignored were the facts that, one, Los Angeles County was no longer the world’s workshop and that, two, office jobs, the kind being created for the “information economy,” take up much less floor area than industrial jobs. Santa Monica and nearby neighborhoods in L.A. could house much of the industrial workforce 75 years ago, and in low-density neighborhoods, because manufacturing jobs were spread out over a one-story factory or workshop. Office parks, with four- or five-story office buildings, with three or more employees for every 1,000 square feet of floorspace, replaced the factories.

Suddenly tens of thousands of employees were streaming into Santa Monica and more into the rest of the Westside every morning and streaming out every afternoon. Most of those workers had no hope of finding places to live close to their jobs. Because of the demand, housing in Santa Monica became as expensive as any place in America. (To the financial benefit of current homeowners, spec buyers of single-family tear-downs, and any developer who could manage to thread the development needle and build apartments here.)

Nothing is wrong with the new jobs. The rest of the world (including Republican politicians in Texas) is envious of the growth and modernization of the Southern California economy. But whenever planners authorize 10,000 square feet of “creative office” space they should plan for 20 or 30 new units of housing: three or four times the square footage of the commercial development.

Financial pressures on local governments militate against this, however. Local governments make money from businesses but spend it on residential services. You can understand why it has been hard, especially in the Prop. 13 world, to get cities to incentivize housing without prodding from the state. This was made quite plain when Santa Monica adopted the 2010 land use and circulation elements of its general plan. Then City Manager Rod Gould wanted most of the development in the Bergamot area to be offices. The attitude was that the City of L.A. could provide the housing for the employees.

What I have never been able to understand is why the anti-development element of Santa Monica politics opposes building housing in commercial zones, when the only thing they care about is traffic. Residential development generates less traffic than commercial development. Any commercially-zoned land that becomes housing is permanently going to generate less traffic than if it were developed commercially. Meanwhile, hardly anyone who ends up living in one of these new residences in Santa Monica would contribute to the worst traffic problem residents face: the masses of commuters who leave Santa Monica every afternoon and trap residents at home.

Who knows what will happen to the housing element, but thanks to California finally mandating a serious effort to address California’s housing needs, the trend is in the right direction.

Thanks for reading.

Once again, can Santa Monica pass a compliant housing element?

It took me a few days, but I made it through watching the Santa Monica City Council’s six-hour June 15 meeting on the housing element. I will try to distill the discussion here.

Where are we: at this point in the process to enact the state-required housing element of the City’s general plan, the council met to tell staff how the council wanted to revise the draft of the housing element that staff had published May 24, and which the Planning Commission had reviewed the first week of June. Once so directed, staff would and could revise the draft accordingly and submit it to the California Department of Housing and Community Development (HCD) by July 1 for a 60-day review. HCD then gives the City comments regarding the draft’s compliance with state requirements by Sept. 1, giving the City 45 days to finalize the housing element before the due date of Oct. 15.

If you have been following this process in the press, you know that the five councilmembers who were present at the June 15 meeting voted 4-1 to approve a set of directions to staff for revisions to the May 24 draft. The dissenting vote came from Councilmember Gleam Davis.

Davis voted no because she did not believe that the draft would comply with the state requirements, particularly after the directions coming from the council, and that HCD would reject it. Davis’ reasons for reaching this conclusion fell into three categories.

The first was that the draft would not satisfy the state’s requirement that the housing element show how the City will “affirmatively further fair housing” (the “AFFH requirement”). At the hearing, the council had removed from the draft any changes to single-family (R1) zoning, including the proposal the council had approved at its March 30 meeting to allow 100% affordable apartment buildings in R1 districts. Davis believes this is a fatal flaw. She spoke eloquently on this topic, saying that “decades of intentional discrimination” can only be addressed with “intentional inclusion.”

Davis is not being alarmist about AFFH compliance. Based on examples from the San Diego region (the San Diego area is on a housing element approval schedule six months ahead of the L.A. region), HCD is being strict about the AFFH requirement and is rejecting housing elements right and left. Although there are other reasons to liberalize R1 zoning, and over time doing so would increase diversity in R1 zones, as I have previously written up-zoning R1 in Santa Monica today, to make up for exclusionary zoning in the past, is not likely to do much to remedy past discrimination. However, in its “denial” letters to cities in San Diego County, HCD has stated (quoting from HCD’s letter to Coronado) that cities must “encourag[e] development of new affordable housing in high resource areas.” “High resource areas” is how HCD refers to high-income areas like Santa Monica’s R1 zones; like Coronado, Santa Monica is mostly “high-resource.”

Excerpt from HCD’s letter to the City of Coronado explaining why its housing element could not be certified. The entire letter is 12 pages.

While given land prices and the size and availability of lots I doubt that on a practical basis it is possible to encourage a meaningful amount of affordable housing in Santa Monica’s R1 zones, the City has missed opportunities in the housing element to promote affordable housing on streets adjacent to or running through them. For instance, the City should extend the proposed overlay for 100% moderate income developments to Montana Avenue and Ocean Park Boulevard.

The second category of Councilmember Davis’ doubts about compliance includes the various ways that the council, ignoring the recommendations of the Planning Commission and staff, whittled away at the draft’s attempts, strengthened by the Planning Commission, to remove restraints against housing development in Santa Monica and make it more feasible. (Regarding the Planning Commission, in a cringeworthy moment in the middle of the meeting, it became apparent that Davis was the only councilmember who had read the commission’s recommendations and staff’s analysis of them, even though staff had provided them to the council in a convenient addendum to the staff report. (Click here then click on item 8.A.c.) It was especially cringeworthy when Councilmember Phil Brock told the council that he’d just received a message telling him which Planning Commission recommendations he should question.)

It seems clear that Mayor Sue Himmelrich and Councilmembers Brock, Cristine Parra, and Oscar de la Torre, the four councilmembers who voted in favor of the directions to staff, do not want to get into a confrontation with HCD. The penalties for not receiving HCD certification for the housing element would be too serious, including loss of funding and potentially losing local control over certain kinds of housing development. At the same time, the four councilmembers tried to shave incentives for building housing, particularly market-rate housing, wherever they could, and the directions to staff reflected that.

Frequently, this negativity took the form of making it more difficult to finance housing. For instance, the housing element includes a provision to encourage religious organizations to develop affordable housing on their parking lots, but the council added a requirement that at least 50% of the housing be deed-restricted affordable. A 50% inclusionary requirement for privately financed development? Davis pointed out that this would make it more difficult to get any housing built on these sites (which presumably would also need expensive underground parking for the religious organization).

Similarly, the council voted to require that all development on City-owned sites be affordable housing, other than a small amount of “community-serving” commercial development. This sounds virtuous, and it would make sense for all housing on City sites to be affordable, but it makes financing the housing less feasible if on a blanket basis you eliminate the possibility of significant commercial development. Consider Bergamot Station, one of the City’s largest properties, and one located at a transit station. In the City’s planning for the site, Bergamot has been seen as an excellent location for a small hotel, to serve the nearby business parks and the Bergamot art galleries (which will stay in some form). A hotel could generate considerable money to subsidize affordable housing, but the council voted to kill that possibility.

The third category of Davis’ objections was perhaps the most telling. Namely that nearly everything substantive in the housing element to encourage or even allow housing development would depend on future changes to zoning that would make housing, including market-rate housing, allowable and feasible. Changing zoning to increase the likelihood of development is difficult politically in Santa Monica. The difficulty will be intensified because many of the changes require amendments to the land use and circulation elements of the general plan (LUCE) and to the Downtown Community Plan (DCP). Amendments to the LUCE and the DCP require a supermajority of five votes in the council. With this draft of the housing element the City is not sending HCD anything more than a unsecured promissory note.

Not only that, but many of the “programs” in the draft rely on operative verbs that are wishy-washy; verbs like “explore,” “support,” “consider,” or “encourage.” In a class of its own is the replacement by both the Planning Commission and the City Council of any concrete program to address the history of exclusionary zoning with merely “a commitment to continue a more expansive community conversation around how to address past exclusionary zoning practices in future land use decisions.”

What does that mean?

Thanks for reading.

Next generation housing

Regardless whether the Santa Monica City Council approves a housing element that is truly compliant with the City’s RHNA obligation or one where compliance is aspirational (or worse, only rhetorical), most of the controversy about the document will involve not the number of units the housing element plans for, although that’s controversial enough, but rather where they might be built and who might live in them.

Most prominently, there have been scores of emails to the City’s planners opposing the proposal City Council approved at its March 30 meeting to extend an “Affordable Housing Overlay” to the City’s R1 (single-family home) districts and another proposal to up-zone parts of the R1 north of Montana Avenue to R2 (the City’s least dense multi-unit zone).

The issue exists because state law now requires cities in their housing elements to explain how they are going to undo the lingering impacts of past segregation-creating practices, such as exclusionary zoning, restrictive racial covenants, and federal policies such as redlining. The R1 districts make up 35% of Santa Monica’s land. Regardless of how tolerant people consider themselves today, the demographic and economic make-up of the R1 zones reflects a legacy of excluding working-class people in general and people of color in particular. It’s hard to “affirmatively further fair housing” without doing something about the land tied up in R1.

At the same time there are issues about what kind of housing should be built anywhere and who should live in that housing: questions about “affordability” and “density.” Then there’s “gentrification”—the idea, current among many activists, that investment in low-income neighborhoods, even if it’s in new housing that doesn’t directly displace current residents, displaces residents indirectly by leading to increased rents and home prices.

As it happens, extending zoning into R1 districts that would allow multi-unit developments, affordable or not, is not going to survive in the housing element. The planning commissioners voted 6-1 to remove the Affordable Housing Overlay proposal and the proposal to up-zone any of R1 (beyond the up-zoning of parking lots adjacent to commercial zones). The commission was mindful of the exclusionary history, but, taking note of the political difficulties, found reasons to focus on other means of achieving a more equitable mix of housing around the city.

Those reasons included that given the cost of land in R1 districts, and the difficulty of assembling contiguous lots, it is unlikely that meaningful amounts of affordable housing would be built. The commissioners also pointed out that the state, with its laws requiring cities to allow accessory dwelling units (ADUs) in single-family zones, had already turned R1 into something like R1.5. They thought that to bring affordable housing to R1 areas it made more sense to better enable multi-unit housing along the commercial streets that border or run through the R1 districts than to expect affordable housing to be built on single-family lots.

Staff has informed City Council that it agrees with the Planning Commission and instead wants to facilitate construction of ADUs to bring more affordability to R1 districts. As seen in this map, nearly all ADUs are being built in R1 districts.

A map showing where ADUs have been built in Santa Monica since the state required liberalization of ADU requirements. Contrary to the legend, green denotes R1 zoning (not only yellow).

Although ADUs are not deed-restricted affordable, staff considers them “affordable by design” since they are smaller than the typical home in R1.

As for me, I agree that it doesn’t make sense to include major changes to R1 in the housing element because they won’t achieve the goals state law requires of the housing element. Best now to limit the housing element to pragmatic solutions. In the meantime, there is legislation in Sacramento, SB9, that’s passed the State Senate and has a good chance of becoming law that would alter R1 by allowing lot splits.

As for one pragmatic solution, staff, with agreement from the Planning Commission, is suggesting a return to previous policies to encourage developments entirely consisting of apartments deed-restricted to up to moderate income households. Ddevelopers had since the ’90s constructed 100% moderate buildings in Santa Monica without subsidy and these apartments have provided a lot of Section 8 housing. A few years ago, however, the City effectively killed production of 100% moderate projects by requiring inclusion of low-income units, which made them unfeasible without subsidy.

What I don’t understand is why, if the City is trying to disperse affordability, staff suggests limiting this policy to downtown, the Bergamot area, and the area near the 17th Street E line stop. Moderate income housing serves an important demographic (household income for a family of four of up to $96,000) that is otherwise priced out of Santa Monica. Why shouldn’t moderate income apartments be encouraged in all multi-unit zones? Particularly on boulevards adjacent to R1 neighborhoods? I don’t get it.

Which brings up the “who should live in the 8,895 units” issue.

At the March 30 City Council meeting on the housing element, Councilmember Phil Brock said something that was quite simple, but that really got me thinking. Brock, who was elected with strong support from the anti-development faction in local politics, said that he was in favor of building housing for people “who can’t afford to live here.” I don’t know if he meant that that would be the only kind of housing he favored, but nonetheless it got me thinking about the question, “who can’t afford to live here?”

We have a lot of laws and policies, federal, state, and local, about building housing for people with limited means, in categories from no income up to 120% of median income. These policies try to address the issue that is, when joined with the inextricably related issue of homelessness, the most pressing social issue in Los Angeles County. That is housing our working class. The number of working people priced out of the housing market; the number of people doubling and tripling up in worn-out houses and apartments; the number of people who run out of that last couch to surf on and end up in the streets; however you describe the problem, the data is overwhelming.

Perhaps Councilmember Brock was thinking of them and only them, and that would make sense, since so much of housing element law is justifiably directed towards creating housing for those populations. That’s why 6,168 units of Santa Monica’s RHNA obligation of 8,895 are meant to be “affordable.”

But there is another population that also “can’t afford to live here.” Let’s call them the “next generation.” Meaning young people who are now forming families. Young people who went to college and are making good money, who have paired up with spouses and partners who are also making good money, and who as a result do not qualify even for “moderate income” housing. (Remember – a limit of $96,000 for a four-person household. Two or often even one college-degree income will quickly take you over that.)

Many of these young people are literally the “next generation,” in that they are the children of the millions of immigrants who came to California starting around 1970. Or they are the “first generation” of African-American families who were able to get decent educations and possibilities for decent careers based on the achievements of the Civil Rights Movement. These are young people who did just what we’ve been telling our schools to do: they closed the achievement gap. They’ve gone to college. They’ve made their parents proud. They’ve made anyone who has paid school taxes and voted for school bonds proud.

But now there is no place for them to raise families. Honestly, this goes for young people from affluent families, too. My son graduated from Samohi in 2008 and his cohort, now turned 30, are pairing up and starting families. They all seem to be doing well, but the only ones whom I can see being able to get a place anywhere on the Westside are those who have families from whom they might expect major help. (Sure, if their parents have sat on a house in Santa Monica for 30 years, reaping the benefits of a constrained housing market, they may well have the money. But then they’d have to move!)

This is not only a Santa Monica problem. It’s happening all over the world. It is one reason why birthrates have fallen below sustainable rates everywhere from here to Italy to China. It’s not only that housing is expensive in cities, where most people live today, but that the housing that is being built is not big enough or configured to make family life comfortable.

Councilmember Christine Parra, who was also elected last year with support from the anti-development faction, had perhaps the most eloquent speech at the March 30 council meeting. Parra is the daughter of immigrants. She recounted how she and her husband managed to find a house to buy in Santa Monica some years ago, but she wondered how anyone like them would be able to do so today.

The fact is that the single-family house can no longer be the solution for middle-class housing, at least not in urbanized California. For both economic and environmental reasons there’s not going to be more sprawl, and you can’t manufacture an infinite number of single-family lots. This means that we need to focus not only on the number of units being built, but their size and shape. Townhouses, rowhouses, courtyard housing, apartments with decks and terraces. Room somewhere for a Thanksgiving dinner. This is an architectural problem as much as a planning problem. Also, the next generation wants to own their homes, just like previous generations did, to build nest eggs. We need condominiums and lot splits to allow for ownership.

This housing doesn’t need subsidy, but it does need to be allowed and planned for, at sufficient volume so that demand might someday meet supply at a reasonable place. If this housing is not allowed to be built in affluent areas like Santa Monica then these young families will buy in less advantaged communities, making housing less affordable for current residents and their children.

Let me reiterate: the housing crises are the crises affecting poor and working people who can’t find any housing they can afford, including unhoused people who need permanent housing with supportive services. State housing law properly prioritizes their needs.

But we need to think beyond that, too. No one can live in a home that hasn’t been built.

Thanks for reading.

Will Santa Monica’s housing element comply?

As I posted June 1, in late May Santa Monica planning staff released the first draft of the City’s general plan 2021-29 housing element. The Planning Commission conducted a hearing on the document June 2 and 3 and sent comments City Council. The council will hold a hearing on the plan next week. The goal is for the council to give staff directions for preparing this draft for submission to the California Department of Housing and Community Development (HCD) for a preliminary 60-day review by July 1. The final version is due by October.  

At its March 30 meeting, City Council instructed staff to prepare a “compliant” housing element—one that would satisfy the requirements of state law. These requirements involve not only allowing and planning for Santa Monica’s “regional housing needs allocation” (RHNA) of 8,895 units (of which 6,168 are to be “affordable”), but also showing that Santa Monica was “affirmatively furthering fair housing” by allowing development to “overcome identified patterns of segregation.” (The “AFFH” requirement.)

Whether staff has drafted a compliant housing element, and whether the now six-member City Council votes to give staff a mandate to do so, are interlocking questions. Rhetorically, staff’s draft is compliant, but vague. I’d say the devil is in the details, but there are too few details. Much is left to later actions, such as changes to the City’s Land Use and Circulation Element (LUCE) and zoning laws, to implement wishful housing element “programs.” The council might approve a document that is purportedly compliant, but which HCD rejects.

For instance, and this is just one example, one program (Program 1.F.) is to revise the Downtown Community Plan (DCP) to support inclusionary affordable housing. The DCP was adopted in 2017 with rhetoric, backed up by questionable data analysis, that it would produce thousands of new apartments downtown of all sizes and levels of affordability. So far, however, the only projects that have been built or even permitted under the DCP standards are small, “Tier 1” projects with small units of which very few are affordable.

That the DCP would not produce much development was predicted, because of the high levels of affordable housing the DCP required in larger (“Tier 2”) developments and other costs housing developer had to assume. It may seem paradoxical, but to fix the problem and get more affordable units built, the DCP would need to be amended either to reduce the affordability load on market-rate developments (without increasing the size of the development), or to allow bigger projects with more market-rate development to offset the affordability requirement.

At the time council passed the DCP, council and staff said they would revisit the DCP if it failed to produce housing. Nothing has happened since 2017, however, except that the council tightened affordability requirements even further to make it even harder to build. Skeptics about the City’s intentions will look at the housing element’s “programs” as more dodges unless the document includes specific parameters for rezoning downtown.

Those skeptics surely exist. The Santa Monica Housing Council (SMHC), the organization that successfully sued Santa Monica in the early ’90s over inadequacies in the City’s housing element, has had its lawyers (the same firm whose fees of nearly $700,000 the City was required to pay) send letters—“shots across the bow”—to the Planning Commission detailing the many ways they see the City heading towards noncompliance. The SMHC’s critique focuses not only on the vagueness of the housing element, but also on what the lawyers see as overly optimistic projections of what might actually be built on the “suitable sites” the housing element must identify for housing growth.

To its credit the Planning Commission recognized vagueness as a problem. The unanimous comments of the commissioners emphasized how the housing element should specify more clearly how the City would not only make building housing (both affordable and market-rate) more feasible, but also make the approval process easier, such as by facilitating the use of the state’s density bonus program.

As for my views of the draft housing element, I’m mixed. I share the skepticism of the SMHC lawyers, especially because, as their letters reminded me, we now have a super-majority requirement of five votes in the City Council to approve any changes to the LUCE or the DCP that increase height or density. The nightmare scenario is that the council passes a feel-good, purportedly compliant housing element, but won’t or can’t because of the super-majority requirement enact the zoning changes that would implement it. Litigation and/or enforcement actions from HCD might then stretch out for years. (It is true, however, that the City could significantly increase the potential for housing development simply by returning to the standards in the LUCE, such as for “activity centers” and other Tier 3 developments. After passing the LUCE, subsequent city councils passed zoning and local plans, such as the DCP, that reduced what the LUCE allowed.)

So yes, I’m skeptical, even cynical, but when I look at the data assembled in the draft document and its supporting documents, including the inventory of “suitable sites” (Appendix F to the draft), I’m optimistic for the future of the city as a whole. That’s because the sites the planners have identified, filtering as they must do (and as the SMHC doesn’t think they have done realistically enough) are so few. They don’t include many commercially-zoned sites that have the potential for development of housing, once patterns of development are set. (Here’s the housing element’s “suitable sites” map; it leaves out a lot of commercial properties, particularly along the boulevards.)

These sites are commercial lots primarily found along the boulevards, although this housing element finally would open considerable old industrial land to housing development. (I give staff credit for that.) There is plenty of commercially-zoned land in Santa Monica on which housing could be built, even if perhaps now the land doesn’t meeting housing element standards for availability. Over the years, the City has been hesitant to allow conversion of formerly industrial land to housing, because jobs are important, too. Frankly, however, there was nostalgia for the old factory jobs that defined Santa Monica 50 years ago. Jobs today require much less square footage than the industrial jobs of the past. Converting commercially-zoned land to residential typically means fewer car trips associated with the property, and often less consumption of resources like water. Perhaps most important, you get more housing without displacing anyone.

I live in Ocean Park, a few blocks from Lincoln Boulevard. There is now beginning to be housing development on Lincoln. The new buildings under construction include a four-story Community Corporation project and a 47-unit project that’s mostly market rate. (I wrote about the latter development when it was approved in 2018.) Here are pictures of these projects under construction.

Once property owners see what can be done, more will develop their now underdeveloped land. Already other properties have been vacated and fenced off, as this photo shows, I assume for development.

Housing development along Lincoln will one day convert an “auto sewer” into a habitable boulevard.

This is what happened in downtown Santa Monica after the City passed game-changing zoning in the ’90s that encouraged residential development over commercial by allowing twice as much of the former. The changed zoning came in response to the City’s defeat in the first SMHC lawsuit. It took time for developers (and the City’s planners) to realize how to make mixed-use projects work, but ultimately a pattern emerged. A lot of housing, including a lot of affordable housing, was built downtown, turning the then desolate (other than the Promenade) core of the city into a vibrant neighborhood.

I’m not necessarily optimistic about the housing element and what will happen to it, but I am optimistic that with the right policies Santa Monica can easily find room for housing and become a better place to live at the same time.

Thanks for reading.

(This post only considered issues relating to compliance with the RHNA requirement. In a part 2 I will look at the AFFH requirement and similar issues.)

Approving a compliant housing element, post-Kevin?

Planning staff has released the first draft of Santa Monica’s Housing Element for 2021-2029, and tomorrow night the Planning Commission will have a hearing on the draft. The draft reflects input staff received from the Planning and Housing Commissions and the Rent Control Board, but primarily direction staff received from City Council at the council’s March 30 meeting. Even though the draft follows what the council said to do, people are speculating whether the council will ultimately approve the Housing Element in something like its current form.

That is because council’s direction to staff was approved on a 4-3 vote, and one of the 4 yes votes came from Kevin McKeown. Last week McKeown announced that he was quitting the council. He will be gone long before October 15, the date by which the council needs to approve a housing element and send it to the California Department of Housing and Community Development (HCD) for HCD’s review and, one hopes, its acceptance. If, as it looks now, we are headed to a special election to fill McKeown’s vacancy, the council will likely have only six members at that time. Even if the council appoints a replacement, it is, of course, unclear how the new council member would vote.  

Regarding the council’s direction to staff, the primary directive was to draft a “compliant” housing element. “Compliant” meaning a document that complies with, among other things, the City’s “Regional Housing Needs Allocation” (RHNA). The RHNA number is how many new housing units Santa Monica must find room for and allow to be built. For this housing element, the number is 8,895 residences of which 6,168 are to be affordable. As I discussed in a previous post, achieving this increase in housing units would entail an approximately 2% increase each year in the city’s housing stock. While the RHNA numbers have alarmed those in Santa Monica politics opposed to development, the draft Housing Element shows that this level of housing growth is something Santa Monica could handle easily. Financing the housing, particularly the affordable housing, is more problematic.

The RHNA numbers themselves, however, were not the reason that three council members voted against the motion directing staff to prepare a compliant housing element. Those three members, Phil Brock, Oscar de la Torre, and Christine Parra, seemed to be ready to vote for the motion (indeed de la Torre had already voted in favor of a slightly different prior motion that had failed), but they changed their minds at the last minute. That was when they realized that one part of the motion, an “affordable housing overlay,” would have allowed the construction of four-story deed-restricted affordable housing apartment buildings in single-family, “R1” zones.

The opposition of the three to the affordable housing overlay could ultimately be a problem for approval of a compliant housing element. The overlay is part of a strategy to comply with a new requirement for housing elements. As of this year, housing elements must specify actions a city will take for “affirmatively furthering fair housing” (AFFH). In the context of Santa Monica, this means allowing for housing development, particularly affordable housing development, in districts where there are few people of color, which include the R1 districts. Thirty-five percent of Santa Monica’s area is zoned R1. That’s a lot of the city, and HCD is not likely to approve the housing element if it directs housing growth, especially affordable housing, everywhere but the R1.

Language from HCD’s checklist for preparation of housing elements relating to requirement for AFFH requirements, including providing “new housing choices” in “high opportunity areas” to “overcome identified patterns of segregation.”

After Mayor Sue Himmelrich made a motion with direction to staff that failed, Council Member McKeown made the motion, seconded by Himmelrich, that was ultimately successful. The motion included the overlay. Although McKeown said that he expected, because of the high cost of land in single-family zones, that it would be unlikely that affordable housing developers would build in the R1, when it came to the final vote on the motion, Council Members Brock, de la Torre, and Parra voted no. In the end it seemed that the image of a four-story affordable apartment next to a single-family house was something they could not stomach.

I will not try to predict how the Housing Element will ultimately deal with the AFFH issue and R1 zoning. However, and maybe this is surprising, I am optimistic that even a shorthanded council will approve something like the current overall proposal. Brock, de la Torre and Parra were elected last November on the “Change” slate. Although the slate did not run primarily on the issue of development, the slate’s candidates had (and still have) support from the most stringent anti-development factions in Santa Monica politics. Many in this faction still want to scrap the whole thing, RHNA numbers and all, and fight HCD. Nonetheless, based on what the three council members said March 30, they do not appear to want to challenge HCD with a noncompliant housing element. I hope not. Santa Monica passed an inadequate Housing Element in the early ’90s that was challenged in court. The City lost and ended up having to pay about $700,000 in the plaintiffs’ legal fees. No one should want to repeat that experience.

* * *

If someone had told me ten years ago that I would be unhappy if Kevin McKeown quit the council, I would have laughed. Now, however, I am sorry to see him go. As most liberals and people of good will who are elected to the Santa Monica City Council as no-growthers sooner or later do, McKeown ultimately found that his progressive values were inconsistent with the demands of increasingly shrill supporters who fear every change that might befall Santa Monica (other than the increases in their home values that come with limiting the housing supply). While McKeown never supported pro-housing zoning as much as I would have liked, in the last five or ten years he has opposed the worst of what the no-growthers proposed. Somewhat valiantly, against their opposition, he has supported efforts to expand the housing supply for the needs of today and the future. For this they have vilified him.

Still, I cannot resist a bit of schadenfreude. For his first 15 or 20 years in Santa Monica politics McKeown was among the crowd that besmirched anyone who believed in building more housing—people like me—as being “in the pocket of developers.” What should have been serious discussions about housing policy devolved into dime-store leftist tirades against “greedy developers.” Yet today McKeown is under attack from those same Santa Monicans Fearful of Change for whom he has carried so much water. And sorry, but I have to smile now to see the leadership of Santa Monicans for Renters Rights (SMRR), whose darling he was, whose Steering Committee he dominated, turn against McKeown. Who knows, but the last straw leading to McKeown’s resignation from the council might have been his motion to apply the affordable housing overlay to R1 districts. Apparently, at a meeting of the SMRR Housing Committee last Monday, the night before McKeown announced he was quitting the council, SMRR leadership rejected upzoning R1 to build affordable apartments.

Still, the last adjective I ever thought would apply to Kevin McKeown was “quitter,” and I’m unhappy he’s quit. Kevin McKeown as a council member was nothing if not conscientious. He showed up. The City Council, in dealing not only with the Housing Element but also with everything else post-pandemic and post-May 31, 2020, needs all the seriousness it can get. So does the city.

Thanks for reading.

Whither Malibu (schools)?

As a Santa Monican, the origins of the saga of parents and others in Malibu wanting to separate from the Santa Monica Malibu Unified School District (SMMUSD) and form their own school district seem to me to be lost in the mists of time, but that’s not the case for Malibuans. Their grievances only seem to multiply. Based on letters SMMUSD school board member Craig Foster has recently sent to local media, grievances now include the outlandish claim that the District caused many Malibuans to lose their possessions and homes in the Woolsey fire, and that the District did not open Malibu schools in the pandemic. Even though the District spends more per student in Malibu than in Santa Monica, Foster has accused the District of cutting teachers, staff and programs in Malibu, causing a decline in enrollment there. Emotions are high. (For the District’s response to Foster, go here.)

Back in 2015 the City of Malibu passed a motion to start the process to form a new district. The SMMUSD school board voted not oppose the separation, provided that separation could be accomplished without having a negative impact on the finances of the surviving Santa Monica district. The board appointed a task force consisting of three volunteers from each city. The task force came back with a proposal, whereby the new Malibu district would pay money to the Santa Monica district for 10 years.

The board rejected the task force’s proposal because when the money ended after 10 years Santa Monica students would “fall off a cliff.” Malibuans contend that this rejection of the recommendation was in bad faith, but the board’s fiduciary responsibility is to the students. The board members voting against the recommendation argued that they could not agree to anything that would result a reduction of money per student in Santa Monica.

Since then, off and on, Malibu and SMMUSD had been negotiating a deal (more on those negotiations later), but last fall Malibu broke off negotiations and reactivated a petition for separating that Malibu had filed with the Los Angeles County Office of Education (LACOE) in 2017. SMMUSD opposes the formula in that petition as well. The matter will now go before the Los Angeles County Committee on School District Organization (the “County Committee”) for a hearing April 17. The County Committee can deny the petition, which would kill it without leave to appeal, or “tentatively approve” it. Tentative approval would mean that the matter would proceed to more in-depth hearings, leading to the committee’s final approval or disapproval. That decision could be appealed to the state Board of Education. Ultimately any final decision would need voter approval.

Malibu and Santa Monica are separated by many linear miles of Pacific Coast Highway and many square miles of Pacific Palisades. The fact that they comprise the same school district reflects 19th century historical conditions (namely emptiness). Nonetheless, establishing a new school district for only about 1,200 students, the current number of students in Malibu’s schools including out-of-district permit students, seems ridiculous. Twelve hundred students are about the same number of students at one K-12 private school, Crossroads, here in Santa Monica; imagine Crossroads comprising a school district. What would have happened decades ago in a rational world (meaning not the world of education in California) is for Malibu to have become part of the adjacent Las Virgenes Unified School District.

The City of Santa Monica contributes tens of millions of dollars a year to the District, both under a facility sharing agreement and pursuant to sales taxes voters approved with the understanding that half the money would go to the District. Nonetheless, counter-balancing Santa Monica’s contributions, Malibu’s assessed property values on a per-student basis are significantly higher than Santa Monica’s, and thus more money per student is available to the District from Malibu than from Santa Monica. That funding is the root of the dispute over separation.

Because of Malibu’s high property values and relatively few children, if Malibu leaves the district the amount of money per student in Santa Monica would drop. Strangely, but for the fact that both Malibu and Santa Monica are flush with property taxes compared to the rest of California, this would not make much difference. If the two cities did not generate enough property taxes per student to reach the minimum state level for financing, the state would top off their taxes to bring them up to the minimum.

Malibu, however, has such high property values per child that it would automatically qualify for a status called “basic aid,” which allows a district to self-fund and retain use of local property taxes beyond the state minimum level. There are projections predicting that within five years on its own a Malibu district would have more than $37,000 per student to spend.

(Relevant digression: $37,000 per student would approach the level of private school tuition. If you hear Betsy DeVos-type politicians say that throwing money at education doesn’t make for good schools, ask them why presumably rational and intelligent rich people will pay tuition equal to three or four times as much as public schools get to spend on their students, and why our tax code allows contributions to those schools to be tax-deductible.)

Meanwhile, as per-student funding in Malibu would increase drastically, the remaining students in Santa Monica would take a hit by losing the Malibu property taxes, because, or even though, Santa Monica schools would likely move into the basic aid category in a few years. Proponents of the Malibu split such as Craig Foster argue that once Santa Monica reaches basic aid status, the surviving district would have more money per student than nearly all districts in the state. What happens in those other districts, however, is irrelevant to the decisions the SMMUSD School Board has to make.

After the board rejected the task force’s proposal, direct negotiations ensued. The District’s consultants proposed that at the time of the break-up, Malibu’s tax money would be divided proportionately based on the ratio of the number of students in the two cities. This would mean that upon break-up, the financing would be the same as it was, and Santa Monica students would not have their funding reduced. That base amount of tax would remain divided as such in perpetuity, but any increases in assessed values would go to the city where the increases occur. Property values will likely increase faster in Malibu, and Malibu would gradually accrue more money per student, but Santa Monica values would also increase and there would be no cliff to fall from.

Based on four letters spanning 2019 and the spring of 2020 between Malibu’s lawyers and the District’s consultants, this proposal looked to be forming the basis for an agreement. Malibu made five comments to the proposal, dealing with issues such as how the City of Santa Monica’s contributions would be treated, whether the new district would get help with initial administrative costs, and whether the deal would be reevaluated after 50 years. With some caveats and counter-proposals the District accepted Malibu’s comments, and Malibu seemed to accept the District’s counter although details and contract drafting still had to happen. Based on an April 2020 letter from Malibu, it looked like a deal could be made.

However, there was one issue that did not seem significant, but which turned sticky. The disagreement was over strategy, not substance. It concerned the revenue the District collects each year from a parcel tax approved by voters years ago. The District was fine if Malibu would collect the money from properties in the new district. Malibu, however, was nervous that there was not a valid legal structure for the tax to continue to be collected in Malibu, since the voters of the new district would not have approved the tax. (Under Prop. 13, voters need to approve parcel taxes on a 2/3 vote.) Malibu and the District agreed to ask our local legislators to seek to resolve the issue with legislation in Sacramento, but they disagreed over the timing. Malibu wanted the District to seek the legislation now, while the District wanted to wait until the rest of the deal was agreed on.

In the meantime, the pandemic hit. The District had bigger fish to fry, and the negotiations seem to have stopped. I don’t know; it seems like the question of when to go to the legislature would be more or less a detail if the rest of the deal was coming together. Maybe Malibu simply got frustrated when this issue did not get resolved over the summer. In any case, Malibu refiled its petition with the County’s Office of Education in the fall, and the hearing before the County Committee is next week.

What I do not understand is why Malibu refiled when filing with the County is risky. There are many reasons for the County Committee to reject the petition. For one, Malibu’s position that its property tax revenues are its alone for only Malibu children is not consistent with California law going back to the landmark Serrano v. Priest cases and the refinancing of schools that took place after Prop. 13. Malibu complains that over 50 years $4 billion of its tax revenues would be “redistributed” to Santa Monica students, but property tax revenues are already pooled and shared according to formulas going back to implementation of the Serrano decisions and Prop. 13. Under the District’s proposal, which Malibu had accepted in principle, Malibu would get to keep revenues from future increases in assessed values.

Moreover, the new Malibu district will be much less diverse ethnically than the current combined district and the future Santa Monica district. Currently, Malibu students are about 75% Anglo, and that percentage includes the impact of out-of-district students in Malibu schools, students who tend to be more from non-Anglo backgrounds. As a whole the current SMMUSD is a little over 50% Anglo, and after separation it would be a little under 50% Anglo. The ACLU Foundation has written a strong letter to the County Committee decrying the proposed split as “impermissibly increas[ing] segregation.” Combined with the increased funding, the County Committee could easily determine that separation would not serve public purposes as expressed in the California Education Code. The code requires that district splits be equitable and not further discrimination or segregation.

Meaning that the County Committee will have many reasons to reject the petition. (There are other provisions in the Ed. Code that might also prove problematic for Malibu.) Under the rules, a rejection at this stage would kill Malibu’s petition. The parties could then return to negotiations, but it Malibu’s position would be weakened. If the County Committee gives a tentative approval, it only starts a multi-step process that entails many uncertainties. There are impatient people in Malibu, but the prudent thing would be for Malibu to withdraw its petition and for the parties to get back to the negotiating table, once the District has dealt with reopening schools after the pandemic.

But that won’t happen.

Thanks for reading.

Housing production in Santa Monica, by the numbers

Tonight, the Santa Monica City Council will hold its first hearing to discuss specific and substantive proposals from planning staff for what to include in the next iteration of the state-mandated Housing Element of the City’s General Plan. This is the document you may have heard of in which the City must tell the state how during the period from 2021 to 2029 it will be possible, really and truly, to build 8,895 housing units, of which 6,168 must be affordable. (The numbers are Santa Monica’s “RHNA numbers,” from “Regional Housing Needs Allocation.”)

Cities need to file housing elements every eight years, and the deadline for filing this one is October. Between now and final approval of the Housing Element I will likely write more than a few posts about it. The purpose of this initial post is to give some context for the numbers involved.

The number to begin with is 52,983. That is the total number of housing units in the city as of June 30, 2019, as set forth in the City’s 2020 Affordable Housing Progress Report, the latest calculation I could find. As of that date, the City also had about 1,000 units, give or take, either under construction or approved, and these units presumably won’t be countable against the new RHNA number. That means that going into the 2021-29 period Santa Monica has about 54,000 units either extant or in the works.

The RHNA number, 8,895, is 16.5% of 54,000. Over eight years, that means that Santa Monica must plan for increasing its housing stock by two percent per year. While a two percent annual increase should not be anything to panic over, it would be a marked increase over the rate of housing production in Santa Monica for the past 40 years.

In 1994 I was appointed to the Housing Commission. A year later I was appointed to the Planning Commission. On both commissions I worked on a housing element. With regard to housing policy, I recall many similarities to the situation today.

The context then was that the City had just lost a lawsuit brought by housing developers who contended that the City had adopted a housing element that did not take into account measures the City had enacted that discouraged the building of housing. The developers won the case, and the City had to change its policies to allow more housing to be built. As now, there was a lot of gnashing of teeth.

You may ask, what did the City do in the 80s that was so anti-housing that it lost this case?

It’s complicated. For most of the 80s Santa Monicans for Renters Rights (SMRR) controlled City Council. SMRR leadership was committed to what it called a “human scaled community,” in opposition, say, to the towers previous city leadership had enabled to be built on the beachfront in Ocean Park or along Ocean Avenue. This led SMRR to oppose higher densities, even for affordable housing. While today people don’t see a disconnect between density and “human scale,” in fairness to Santa Monica’s leadership 40 years ago, the renter neighborhoods in Santa Monica, such as those along Wilshire, Ocean Park, and the Pico Neighborhood, were already among the denser neighborhoods in California and they probably didn’t think they needed to make them denser.  

From what I understand, the primary motivations for SMRR’s anti-housing policies in the 80s were not meant to be anti-housing, but rather to preserve rental housing in residential districts from being destroyed to build condominiums. This was a big problem; conversions were a reaction to rent control, which had been enacted in 1979. While some warned that limitations on new development in residential areas would ultimately mean fewer low-income households in the city, City Council enacted limitations to make conversions less profitable.

Another at least putatively well-meant motivation was to get more affordable housing built. In 1990 City voters approved Measure R, which required that 30% of housing built in Santa Monica be deed-restricted affordable. That goal was not by itself unattainable, and Measure R by itself need not have stopped development of housing. (Since 1990 about 38% of the housing built in Santa Monica has been deed-restricted affordable.) The City Council followed up Measure R, however, with an enforcement ordinance that included draconian on-site requirements for projects with as few as five units.

The results of these policies were that virtually no housing was built, as shown in the following charts, which I scanned from City documents.  

Based on the data in this chart, in 1990 the City had 47,753 housing units. Of them, you’ll see that roughly 9,000 were built before 1940, 7,500 in the 40s, 9,000 in the 50s, more than 10,000 in the 60s and nearly 8,000 in the 70s. (Note that these numbers represent only the units that survived to 1990; considering how many units were destroyed by the freeway and other public works, and normal attrition and replacement, many more units were built in those decades.)

Then note that only 3,617 units were built in the 80s, and there is reason to believe that nearly all of them were constructed early in the decade.

The second chart picks up the story in 1990. You’ll see that the 90s were a catastrophe for housing development. The net number of units in the city increased only 110, from 47,753 to 47,863 in 2000, the lowest rate of increase of the cities listed (none of which did very well, by the way). During the 90s the region was bursting with new immigrants as the population of Los Angeles County increased from 8.86 to 9.5 million (more than seven percent). Working-class poverty and homelessness were becoming crises, but Santa Monica only added, on a net basis, 110 units of housing. Santa Monica’s population, by the way, decreased during the 90s from 86,911 to 84,073, a decline of 3.3%. (This chart shows clearly how the housing crisis we have today in Southern California has its roots in the 90s when housing production failed miserably to keep up with population growth.)

After losing the court case in the early 90s, what did City Council do?

Actually, some good stuff. Before I joined the Housing and Planning Commissions, so I get no credit for this, the City passed landmark new zoning for downtown. The council, which for the most part was still controlled by SMRR, still wanted to discourage building in existing neighborhoods, to preserve rental units. In the meantime, however, the City had opened the Third Street Promenade, and the focus was on downtown. There was little housing there, and so new housing would not cause much displacement. The City decided to focus housing development downtown. 

Downtown was zoned for commercial development, but the council did something simple to encourage residential development: it not only allowed residential development in commercial zones but also allowed twice as much development on downtown properties if the development were residential instead of commercial. The City also passed a new, much more flexible, ordinance implementing Measure R.

Not much happened immediately as we know from the housing production numbers for the 90s. It took a while for developers to figure out what they could do.

By 2000 the reforms began to take effect. In the first decade of the new century, as shown in the second chart, Santa Monica had a net increase of 3,049 units, to a total of 50,912, an increase of 6.4% over the decade. This was in fact a better rate of increase than the County as a whole. While I don’t have data for the next decade all the way through 2020, as of June 30, 2019, as I wrote above, the total number of units was 52,983, an increase of a little over 2,000 in the nine years after 2010.

While slower than the previous decade, growth was steady. An average of about 200 units per year was close to the rate of 250 units per year forecast in the 2010 Land Use and Circulation Element, a growth rate of half of one percent. I’ve previously written that a good, sustainable rate of increase for Santa Monica would be one percent per year, or about 500 units. As discussed above, the RHNA requirement over eight years is about double this number, a return to the housing production number of the decades before the 80s.

In future posts I’ll discuss why this number should not frighten anyone. The lesson of the 90s is that the City can respond creatively to the need to build more housing. And the lesson of the 2000s is that dense housing can create a vibrant neighborhood, as has happened downtown.

One last point: I hope someone tonight asks staff why the land the City owns at the Civic Auditorium isn’t included in the inventory of City-owned properties available for housing.

Thanks for reading.