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.

Sic transit transit center

Well, the other shoe dropped on the Paper Mate site. Hines sold the property and now the old factory’s 200,000 square feet will become offices, with another level of parking being excavated under the existing parking lots.

Turns out that the paranoia of City Council Members Terry O’Day and Gleam Davis was warranted. During the signature gathering on the Residocracy petition they warned, in an op-ed for the Daily Press, that the alternative to the plan the City Council passed was not a better version of the plan, but a repurposing of the existing building as offices, which would mean thousands of car trips, no traffic mitigations, and none of the $32 million in community benefits that were included in the Hines plan.

I’m waiting to see how long it will take for someone to accuse the developers of being greedy because they aren’t building, across from the Bergamot Expo station, plazas, streets, sidewalks, etc., accessible to the public.

Not to mention the nearly 500 units of housing we’re not getting—housing that a lot of people who work in Santa Monica could use, housing that would keep them off the streets, so to speak, during commuting hours. But housing was not a plus for many people who opposed the project, and that explains why they’re happy with the new plan.

If the paranoia of O’Day and Davis turned out to be prescient, Council Member, now Mayor, Kevin McKeown turned out to be not so good in the prediction department. In an op-ed he wrote for the Daily Press, headlined “Calling for more housing from Hines,” he said that fears that Hines would “walk away” from the deal were unfounded; that “[s]uch a walk away hasn’t happened in decades in Santa Monica.” Give McKeown his due; he’s not backing down now that Hines did walk away. Last week he told Santa Monica Next that, “[t]his project [the new one], even as adaptive reuse, will disappoint many of us, but the original Hines proposal failed in even more massive (and likely more permanent) ways to make appropriate use of a challenging site.”

I hope Mayor McKeown is right about the new plan being less permanent, but I doubt it. The “Pen Factory,” as the development is being marketed, will be around for a long time. Not only because it will take a while to amortize the considerable investment in the remodel (notably for underground parking), but also because once the offices are up and running and paying some of the highest rents in the region, the likelihood that an owner would shut the place down for the several years it would take to build a new project is slim. Expect that the Pen Factory will be there for 20 or 30 years at a minimum.

But McKeown was right that the Hines plan should have had more housing and less offices. I’ve been saying that since before the City Council approved the LUCE, which enabled the Hines plan, in 2010. The plan was flawed, and it may sound like blaming the victim, but I blame Hines as much as I blame anyone else for the plan crashing and burning. The Residocracy folks can’t help themselves, they’re going to oppose development no matter what, but Hines had a choice. Hines was warned as far back as 2010, by its friends, that if it added more commercial space and commuter traffic to the corner of 26th and Olympic, it was going to be in trouble.

Hines could have pulled its own chestnuts out of the fire. During the Planning Commission debate over the plan, Commissioner Richard McKinnon, with then-commissioner Sue Himmelrich’s support, proposed a reasonable alternative with less office and more housing. At City Council, Ted Winterer proposed much the same thing, and Tony Vazquez agreed with him. If Hines, at the commission or even at the council, had jumped up and grabbed this offer, the plan could have been approved at the City Council on a 6-1, rather than 4-3, vote.

That could have had a huge impact, because I doubt that Santa Monicans for Renters Rights (SMRR) would have joined Residocracy to oppose a plan that had had that much support among the SMRR-endorsed council members. Residocracy without SMRR might have been able to gather the signatures, but they wouldn’t have had much credibility looking ahead to November.

But then . . . maybe Hines didn’t care. The local Hines people put their heads, hearts and souls into the project, for six years, but headquarters back in Dallas probably figured they could find a willing buyer at a good price if the whole thing became just too complicated. Investors can’t wait forever. And Hines did follow the LUCE development standards, and they reduced their original project by 20 percent, so they legitimately thought they were playing fair. After the referendum, they had the right to feel that they’d never get a fair chance.

So, just how bad is the new project for Santa Monica? Pretty bad. But I’ll discuss how bad in a future post.

Thanks for reading.

Housing the next generation: whose side are you on?

Let’s see, a few days ago I was complaining about how the leadership of Santa Monicans for Renters Rights (SMRR) is, by allying SMRR with anti-development groups like Residocracy and the Santa Monica Coalition for a Livable City, turning the organization into something closer to a typical homeowner protection association than a cutting edge progressive organization. In that connection there was something else that struck me when, as reported in the Lookout, SMRR Co-Chair Patricia Hoffman told the Santa Monica Democratic Club that “‘[w]e have a lot more work to do . . . . If we can work together and spend the next few years selecting candidates, that, I think, can make our City Council even better.’”

Note that Co-Chair Hoffman says selecting candidates. Not electing them, but selecting them. It reminded me of the (in)famous Boss Tweed line, “I don’t care who does the electing, as long as I get to do the nominating.” Well, the people who got to do the nominating in the 2014 election were Hoffman and a handful of her co-generationalists on the Steering Committee.

So what did Hoffman mean? Make the council “even better” by replacing progressives like Terry O’Day and Gleam Davis with candidates, like Susan Himmelrich, co-endorsed by anti-development groups? The Steering Committee’s endorsement of Himmelrich meant that for the first time SMRR endorsed a slate of candidates who were all running on anti-development platforms.

Maybe I shouldn’t be surprised that Hoffman and her colleagues have allied SMRR with anti-development organizations. They were all on the barricades in the ’60s, but we all get older. Should we expect them to care about housing or jobs for anyone who has the misfortune of being young in an era when government cares much more about the old? (From all of this calumny I exclude one Steering Committee member, former mayor Judy Abdo, who still believes in the future and stays forever young in part by living with a rotating cast of under-30 housemates. It probably doesn’t hurt that she spent a career in early childhood development.)

Let’s be clear: to be anti-development today in Santa Monica (assuming you’re not delusional) is to be anti-housing because hardly anything new but housing, and only a modicum of that, has been built in Santa Monica for 20 years, and nearly all the developments in the planning pipeline are residential (and not in existing neighborhoods). For two decades there’s been little commercial development, and a lot of what there has been is ground-floor retail in apartment projects. The idea that Santa Monica has seen a lot of recent development is, as Mayor Kevin McKeown himself has recently written, rhetoric. The facts, as McKeown has been reminding people, show a city that for more than two decades has controlled development quite effectively. (Which means, by the way, that if you believe traffic has got worse and you want to do something about it, you’d better look elsewhere than controlling development, because that doesn’t work.)

This isn’t about affordable housing. The Steering Committee members are for affordable housing, I know that. Hoffman herself is a long time board member of Community Corporation of Santa Monica, and they all supported H and HH. There are, however, people in Santa Monica who advocate for increased affordable housing requirements only to thwart the building of market-rate housing (which ultimately means less affordable housing, too). This is not a unique phenomenon: there are also people, many of the same people in fact, who support living wages for hotel workers only to thwart hotel development, and people who support historic preservation only to thwart the building of anything new.

SMRR is allying itself with people who are never in favor of building housing. It’s remarkable how eclectic they can be. Equally bad are single units for young tech workers and SMC students, spacious condominiums that hotels want to build for rich people, or family apartments that CCSM wants to build for poor people; biggish projects like 500 Broadway or small projects like 802 Ashland; or any other kind of housing you can think of. For the anti-housers, it’s not that the perfect is the enemy of the good, but that when it comes to building something for people to live in, whatever it is is never good enough.

The regional housing crisis, the worst in decades, one that includes skyrocketing rents in Santa Monica that put pressure on tenants in rent-controlled apartments, is only partially a crisis about affordability. Fundamentally it’s a crisis of supply at all price levels. The huge Millennial generation coming up doesn’t primarily need affordable housing—they need alternatives to moving to the Inland Empire.

Another commendable thing that Mayor McKeown has been doing for a while is to remind people that we need to provide housing for those who graduate each year from Samohi if we expect any of them to live here. But not many of those graduates will qualify for affordable housing, in part because they are graduating from a good school, with the vast majority of them going on to college, and because there are so many good jobs in Santa Monica that they can come back to. It is, by the way, good news that they won’t qualify for affordable housing, but it means that we’re going to have to rely on the market, i.e., developers, to build homes for them and their future families. And those homes won’t be single-family, detached houses, because there’s no land for that.

So—whose side will SMRR be on?

Thanks for reading.