Tag Archives: housing

Memo to City Council: It’s a start

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After years of creating procedural and other obstacles to the building of much-needed new housing, the City of Santa Monica is poised to do something significant to encourage housing development. Tuesday evening, if the City Council follows the recommendations of staff and a vote by the Planning Commission, the council will vote to streamline the approval process for all 100% affordable housing and most market-rate multi-unit housing developments.

If passed, the new rules will require only administrative approval for (i) 100% affordable projects of all sizes (under current rules, 100% affordable projects of more than 50 units outside of the downtown require Planning Commission review), and (ii) market-rate projects for which for all practical purposes the City’s review was already limited by state law (the “Housing Accountability Act”), but for which the City nevertheless required a Planning Commission hearing. Administrative review will not only shorten the duration of review by the City, but also add to the certainty of approval. This will facilitate financing, particularly for affordable projects that rely on tax-credits.

The hope is that by eliminating discretionary review, the City will rekindle interest from developers in what are called, under the City’s general plan, “Tier 2” projects. These are the mid-density, often mixed-use, projects that have been the mainstay of housing development in the city, to the extent there has been housing development, for about 30 years, for both affordable and market-rate developments. The City said it expected Tier 2 projects would be built under the supposedly “pro-housing” planning documents the City developed, after painfully slow processes, over the past 16 years, but few have been built under the new rules.

Perversely, the City’s housing laws make it more difficult to build Tier 2 projects, with more housing, than Tier 1 projects, which generate little housing and few benefits. Tier 1 projects already get administrative review. (As for Tier 3 projects, with even more housing and benefits, these are impossible. They are in the general plan only as window-dressing.) The City loaded Tier 2 projects with additional costs, including the state’s highest requirements for including affordable units, and required discretionary approvals. As a result, the few developers willing to work under the City’s new rules have primarily built smaller, Tier 1, projects that deliver much less housing, including drastically fewer affordable units.

If the council does the right thing Tuesday night, the discretionary review will be gone for most Tier 2 projects, but the restrictive development standards and added-on costs will remain. Nonetheless, the recommendation from staff to remove discretionary review comes in the context that the City expects its annual allocation under the “Regional Housing Needs Assessment” (RHNA) to be greatly increased to about 1,100 units for 2021 to 2029 period. Satisfying RHNA will require the City to demonstrate land availability and zoning capacity to achieve the RHNA numbers. Eliminating discretionary review does nothing for RHNA.

Satisfying RHNA will require a rethinking of the City’s zoning. The City will need to extend to commercial districts throughout the city the kind of zoning first adopted downtown in the 1990s that encouraged the building of housing instead of commercial development. The most important factor was allowing twice the amount of residential development as commercial. Of course, as those who followed the fiasco of the Downtown Community Plan (DCP), know, the DCP ruined the zoning that had over 20 years turned much of downtown into a vibrant neighborhood. One hopes that in the context of responding to RHNA, the City will fix the DCP, too. By concentrating housing development in commercial zones, the City can limit displacement of current tenants.

Tuesday night expect to hear pseudo-housers argue that the City should do nothing to encourage market-rate development, and only provide incentives for 100% affordable projects. In their view, it’s evil to make money from building housing, and only “greedy developers” do so (notwithstanding that everyone in Santa Monica lives in a development that was built by, or land that was subdivided by, a developer). To pseudo-housers, market-rate (or what they like to call “luxury”) development only raises rents for everyone else. As if they want to bring back redlining, they don’t like investment in cities. (I discussed pseudo-housers in more detail back in November.)

I won’t again discuss the silliness of these arguments, but it is worth taking a moment to examine the economics of housing development to try to understand why it is so hard in California to build housing for working-class and even middle-class households.

We talk about a “housing affordability” crisis but when we look at the numbers, we realize that it’s not that rents are too high, but that incomes are too low to pay for the real cost of building housing. It now costs, in southern California, on the order of $500 per square foot to build apartments. (For this analysis I’ll ignore whether this includes the cost of land.) That means that assuming a developer can find land and get zoning approval, an 800-square foot, two-bedroom apartment, our era’s equivalent to a 1950s or ’60s tract house, costs $400,000 to build. To cover amortization of costs, financing, operating costs, and to make some profit, the developer has to recoup at least 10% annually — $40,000 per year, meaning a monthly rent of about $3300, or about $4 per square foot. To afford $40,000 a year in rent, a household needs an income of at least $100,000, far beyond the average household income in L.A. of about $60,000.

These costs show why it is useless to criticize developers for building apartments that only “rich people” can afford. If there weren’t at least some households making $100,000 per year, there wouldn’t be a market for even 800-square foot new apartments, let alone the larger units (including condos) that young families aspire to. To the extent new housing isn’t built for people with above-average incomes, those people will move into the housing of lower-income workers—displacement. Keep on doing that, and what do you know, but 50,000 people in L.A. County don’t have homes at all.  

Fifty years ago, workers made “middle-class” wages working union manufacturing jobs. Fifty years of Republican attacks on unions and the resulting shift of wealth from workers to capital, have created the fiction that it’s housing that has become too expensive, while it’s wages that have fallen too low to justify the development of market-rate housing for workers. Government is called upon to provide or subsidize affordable housing for workers who should be able to afford market-rate housing, and would be able to do so, if they received a reasonable share of the benefits of an expanded economy. And then liberals are criticized for giving away “free stuff.”

Rather than make it more difficult to invest money in housing, the way to solve the housing affordability crisis is to raise incomes starting at the lowest levels of wages.

Thanks for reading.

Where to build housing and where not

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I ended my blog last week about Santa Monica’s housing policies with some good news, namely that a lot of housing was either under construction in the city or had approvals to proceed to construction. As of the end of March, 759 units were under construction and another 1,384 had received planning approvals. Most of this housing received approval under laws that are no longer in force, but it was at least good to see that the one good thing about the high rents that result from the region’s housing crisis is that they do attract investment to build apartments that will house people for 50 or 60 years.

But then depressing news came to light when the City released its annual report on housing production. The numbers showed why the state is trying to take control of land use policy. The City reported that in fiscal year 2017-18 only 46 multi-family housing units (apartments or condos) were built in Santa Monica, of which only two were affordable.

This low level of construction continued and exacerbated a trend from fiscal year 2014-15, when housing production fell drastically. While in the 2013 and 2014 fiscal years total multi-family production was 941 units in Santa Monica (of which 503 were affordable!), in the four years since then, only 478 housing units, an average of 119 per year, have been built. This number is fewer than half of the 250 units expected to be built annually under the LUCE, and less even than the average of 217 units built in Santa Monica annually over the past 24 years. (In fact, housing production wasn’t even that good: the report’s construction numbers don’t take into account demolitions. According to the City’s housing reports, from June 2014 to June 2018, the net increase in housing units, after deducting demolitions (and including data for single-family houses), was 422, an average annual increase of only 105.)

Again, the good news is that a fair amount of housing is now in the works, either under construction or approved, in Santa Monica. However, the anemic production of the past four years, and, as I discussed in last week’s blog, the apparent debacle of the Downtown Community Plan, illustrate why Sacramento is not likely to leave housing policy to local governments. Not when Governor Newson wants his legacy to include 3.5 million new homes.

I write this even as the most ambitious proposal to limit local control, Scott Wiener’s SB50, is dead for the year. Sen. Anthony Portantino, of La Cañada/Flintridge, responding to pleas from residents of single-family, suburban areas (such as La Cañada/Flintridge), used his power as Chair of the Appropriations Committee to prevent Wiener’s bill from reaching the Senate floor. The bill drew the ire of single-family zone residents because somewhere along the way a bill that encouraged in-fill urban development had become a bill that would have drastically up-zoned nearly all single-family zones in the state.

This up-zoning of suburbia not only added a poison pill to SB50, but also it was bad urban policy. Why densify sprawl? It doesn’t make sense: if you build more housing off the urban grid, isolated from decent transit, jobs, shopping and entertainment, you magnify the disaster that sprawl is. Wiener needs to bring back a bill that privileges investment in urban housing, and there is plenty of urban land that is zoned for commercial and industrial purposes where this can be done without driving residents crazy. Santa Monica showed how to do this in the ’90s by allowing double the amount of residential development over commercial development in formerly commercial zones in its downtown. A boom in housing resulted.

Downtown Santa Monica development

But cities don’t like to turn commercial and industrial real estate into housing. While no-growth politics coming from affluent homeowners has had a lot to do with California’s failure to build enough housing, a factor that has drawn national attention, another factor has been that cities prefer commercial development that generates taxes over residential development that requires the delivery of services. Cities are loath to convert commercial real estate to housing.

In the interest of promoting economic development cities don’t take into account how many more jobs per square foot of development are now created in office and retail buildings over what existed on old industrial properties, and how many more square feet can now be built in multi-story office buildings than existed in the old one-story factories. Every 1,000 square feet of office development now generates at least three or four jobs, and for those jobs, at least two housing units need to be built. But cities rarely consider that math when rezoning commercial or industrial properties.

Unfortunately, Santa Monica has been a leader in this regard as well, given how it has converted originally industrial areas to offices without sufficient housing for the many more people who work there. In a future version of his bill, Wiener would do well to require more housing to be built whenever cities entitle more commercial development.

As for the suburbs, instead of attacking single-family zoning where we don’t want denser development anyway, what the legislature needs to do is to require local governments to allow (and encourage) the repurposing of malls with added housing and offices (local jobs for suburbanites), and as nodes for transit. Leave the housing subdivisions alone.

Wiener will bring the bill back next year, and I suspect that next time a version of it will get further along in the process. Wiener learned from his mistakes with the first version of his housing bill last year, and I suspect he’ll learn from his mistakes this year. And presumably by then the governor will want to see more progress. This story isn’t over.

Thanks for reading.

The character of Vicente Terrace

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As it turns out, not all politics are local, and what with one thing or another going on in the world, I’m one local news obsessive who has had a difficult time lately obsessing on local news. Thus, no posts here since October, meaning I’ve left uncommented upon elections in Santa Monica and a lawsuit that would upend Santa Monica politics completely. Matters about which previously I would have written much.

But this weekend I’ve put the Mueller report aside to write about a hyper local Santa Monica issue, namely the future of two apartment projects near the beach. I wrote about them in my last column, back in October, and I feel compelled to follow the story.

The owners of the Shutters and Casa del Mar hotels are developing two apartment buildings (with retail on the ground floors) on vacant lots near the hotels. The Planning Commission approved both projects last year, but those approvals have been appealed to the City Council. The council will consider the appeals at its meeting Tuesday evening.

The developer submitted plans for the apartments in September 2015. Even assuming the council denies the appeals and approves the projects, that means it will have taken almost four years to make a decision over two small buildings with a combined 105 apartments, including 16 affordable units. No wonder the legislature in Sacramento is frustrated by how difficult it is to get housing built in California. (Incidentally, based on the development potential of one of the sites, the hotel owners paid $13 million for one of the properties, money that went into the City’s affordable housing fund.)

Of the two projects, the larger one would replace the parking lot between Ocean Avenue and Shutters. The northern edge of the property is Vicente Terrace, a street that runs from Ocean Avenue down to the beach. Residents who live on the north side of the street have appealed the approval of the project, primarily on the grounds that having an apartment building across from their houses would be contrary to “neighborhood character.”

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Vicente Terrace

Before I explain why I disagree with the neighbors’ appeal, it’s only fair to mention that they are not taking the stance of so many opponents of change in Santa Monica, meaning that they are not opposing the whole project. They seem to recognize that buildings across the street housing new neighbors would be an improvement over the parking lot that they face now. What these neighbors say they want is for the developers to make the building look like it’s a row of townhouses rather than an apartment building.

They also acknowledge that the Planning Commission approved a plan that the developer modified to respond to their concerns. The buildings on Vicente Terrace will now be stepped back considerably from the curb (from 15 to 22 feet, even though the zoning ordinance only requires a five-foot setback) and the floors above 36 feet (the height limit the neighbors say they would accept) are stepped back at least another 20 feet, meaning these upper floors will likely not be perceptible from the street below.

There is now only small difference in terms of size and massing between the approved plans and what the neighbors say they want, except that the neighbors want the façades to mimic townhouses rather than apartments. (Related to this, they also contend that apartments across the street will lower their property values.)

I say, “small difference,” but let’s not forget Freud’s concept of the “narcissism of small differences”: small disagreements can fuel passionate arguments. In this case, the neighbors in their houses fervently desire to face façades that are or at least appear to be single-family homes, not apartments.  Instead of the narcissism of small differences, what we seem to have here is plain narcissism. They want the other side of the street to mirror themselves.

As I said, these neighbors don’t seem to be hard-line NIMBYs, and judging by an opinion piece one of them wrote in the Daily Press, some at least assume a liberal political mantle (“Wall Street vs. Main Street”). (I often wonder if Santa Monicans who decry the profit motives of real estate developers don’t go to movies because they’re made by movie producers and studios obsessed with the box office.)

The neighbors, however, seem unaware of how arguments based on “neighborhood character” have historically been used to exclude apartments from neighborhoods because of fears of allowing into neighborhoods the lower economic classes.

Nor do they seem to be aware that in places where the population is generally left-wing, left-wingers have been adept at finding new rhetoric to justify the same old suburban sanctification and glorification of single-family homes vs. the vilification of apartments. (This is of course creates cognitive dissonance here in Santa Monica, where left-wing arguments against building market rate apartments are also based on phony (when coming from generally affluent people) quasi-Marxist arguments based on the expected high incomes of  future tenants who surely will be class-enemies if they can afford to rent new apartments in Santa Monica.)

In the context of the housing crisis created by NIMBYism and the environmental crisis created by sprawl, left-wing arguments against infill development, however, are now being challenged as anti-city and pro-sprawl. As Benjamin Ross puts it in his 2014 book, Dead End: Suburban Sprawl and the Rebirth of American Urbanism, a history of how restrictive land use policies aimed against apartments and the people who would live in them destroyed cities and gave us sprawl, “the rise of the antisprawl movement has put resistance to change in conflict with left-of-center social and environmental goals…. [Although] [o]pponents of urban infill are fewer in number . . . they have not abandoned the fight. The rhetoric of the environmentalist Left remains on their lips, but the substance of their agenda has begun to converge with the familiar exclusion of old-line suburbs.” (Emphasis added.) Ross calls this “left nimbyism.”

I live in Ocean Park, a once single-family neighborhood that thankfully became a mixed neighborhood of houses and apartments before the City adopted mono-culture zoning. I don’t know anyone who doesn’t like the “character” of Ocean Park. On a per square foot basis, Ocean Park has some of the highest priced real estate in California. The Vicente Terrace neighbors’ argument that apartments will lower their property values is laughable.

I want to distinguish these phony leftist arguments from the genuine left-wing concerns of UNITE HERE Local 11, the union that represents hotel workers in Santa Monica, which has appealed the approvals of both buildings. The grounds for the union’s appeal are that the union doesn’t believe that the approvals include enough protections against the renting of the apartments as short-term rentals (either as Airbnb-type lodgings or as corporate housing).

UNITE HERE is right to be concerned about short-term rentals of unoccupied apartments, as they have become a scourge of the housing market. It appears to me, however, based on the staff report, that the City has included sufficient enforcement mechanisms in the conditions of approval and in existing law. (And the City has had some success recently with enforcement.) However, if it’s possible to approve the projects with more effective enforcement mechanisms, there wouldn’t be anything wrong with that.

Thanks for reading.

Tales of two more projects

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Earlier this year I wrote a post about two development projects that were staggering through the approvals process in Santa Monica. One was an apartment building on Lincoln Boulevard, replacing worn-out automobile repair shops, and the other was a hotel project, the one Frank Gehry has designed for the prominent corner of Ocean Avenue and Santa Monica Boulevard.

Two similar projects are now plodding towards their respective destinies. One consists of two apartment buildings that are being developed together and which are considered as one project for environmental review. The other is the redevelopment of the Miramar Hotel, for which new plans were publicly released earlier this year.

The two apartment buildings will be built near the beach on land adjacent to the Shutters and Casa del Mar hotels. They will replace two vacant lots—the parking lot behind Shutters with frontages on Ocean Avenue, Pico, and Vicente Terrace, and the space just south of Casa del Mar on Ocean Front Walk.

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Vacant lot on Ocean Front Walk, just south of Casa del Mar Hotel.

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Vacant lot on Ocean Avenue, behind Shutters, between Pico and Vicente Terrace.

The format and programming of the apartments, designed by local architects Koning Eizenberg, conform to that of apartments that both for-profit and affordable housing developers in Santa Monica have been building for about 20 years in commercial zones. Meaning that three or four stories of apartments sit above underground parking and (in most but not all cases) ground floor retail. This model has served Santa Monica well since new zoning that encouraged housing in commercial zones was first adopted in the 1990s for downtown.

Ocean Vicente Terrace Corner

Architect’s rending of proposed apartments between Shutters and Ocean Avenue.

Given that these new apartments on vacant lots won’t displace anyone, given that they are in a busy part of town that has been intensively developed (with many buildings much larger than these) for about a century, and given that they aren’t taller than the hotels next to them (and step back to respect the shorter buildings they will face on Vicente Terrace), one would think that getting approval for these buildings would be easy. Further, the developers have tried to make the process easy on themselves, by asking for no variances from the applicable zoning other than some minor technical adjustments to take into the account the significant slope on the Ocean Avenue lot.

However, the developers are building a “Tier 2” project, which means they have to through a development review rather than an administrative approval. This entails, among other things, an expensive and time consuming environmental review which at the end of the day, for infill projects like these apartments, doesn’t tell you anything you didn’t know already. It’s perverse to make it harder to build Tier 2 at this scale, because the public gets more from a Tier 2 project than it does from a Tier 1. Face it, we only make approval harder and more expensive and less predictable for Tier 2 because it’s expected (but not necessarily true) that a developer will make more money from a bigger building. It’s more envy than anything else.

As for public benefits, a Tier 2 project must provide affordable units at a 50% higher rate than Tier 1, and of course, a bigger project produces more affordable units than a smaller project even without the bonus. If you want to house people, you have to build housing. (Also worth noting if you like affordable housing: the City owned the property next to Casa del Mar and sold it to the developers for more than $13 million, money that the City has put into its affordable housing fund. That amount of money was only paid because the property could be developed.)

As it happens, applications for these two apartment buildings were filed in September 2015, three years ago, and they are only now (Wednesday night, in fact) coming before the Planning Commission.

No surprise, but the apartments face neighborhood opposition. A new neighborhood group, South Avenue Residents (SOAR), which represents at least some neighbors on Vicente Terrace, filed a comment letter to the draft EIR with 67 comments. I have read many EIR comment letters, but I recommend this one in particular as a definitive catalog of first-world complaints. My favorite comment in the letter is number 42: “There are multiple dogs and cats living with their owners on Vicente Terrace. How will the developers compensate owners for special care of their animals during construction?”

This attitude of the beach dwellers is nothing new. Twenty years ago when I was on the Planning Commission there was an issue about hours of operation for Pacific Park. A woman, who later became prominent in Santa Monica’s no-growth community, testified that she had recently moved to an apartment near the Pier and she was shocked at how much noise and activity there was on Ocean Front Walk. She said that when she was moving here to the beach, she thought it was going to be like Mendocino.

Disclosure: longtime readers of mine know that when I wrote for the Santa Monica Lookout News nearby neighbors on Seaview Terrace provided plenty of grist for my mill. I’ll confess that I was in part drawn to writing about these new apartments for the opportunity to check in on what was going on in the neighborhood. It was like old times to see that once-serial project opponent Stephanie Barbanell had submitted two comment letters to the EIR. Ms. Barbanell once told neighbors that she considered her opposition to development projects (in particular, any licenses to sell alcoholic beverages) a form of conceptual art, but in recent years she’s been quiet. Good for her that she’s expressing herself again!

Ultimately, building apartments and some ground floor retail on these sites makes sense because the zoning prohibits nearly everything else. The area is under the control of Measure S, passed in 1990 to stop hotel and large restaurant development. What better to be built on these vacant lots than housing? (There may be up to three small restaurants as well.) Would the neighbors prefer an office building? (I’m sure there are tech billionaires who would love to be able to take a break and surf whenever the waves are good.) Anti-development residents in Santa Monica like to go on about how much quieter Santa Monica used to be, as a “sleepy beach town,” but what if someone wanted to bring back Pacific Ocean Park? Or even just put an amusement arcade on these lots? I’m sure the neighbors would love that.

* * *

The revised plans to remake the Miramar Hotel and add condominiums that were released last April were the third major iteration of the plans. The plans are the product of nearly 10 years of controversy. The Miramar and the proposed office and housing project at the Paper Mate factory were the major catalysts for the revival of the development wars in Santa Monica after the approval of the LUCE in 2010.

The revival of the development wars climaxed with the defeat of the Paper Mate plans in 2016. Since then, however, after the defeat of Measure LV in November 2016 and the approval of the Downtown Community Plan (DCP) in the summer of 2017, there has been less heated rhetoric and fewer political battles about development. In the meantime, the Miramar brought in a new team of developers and new architects, the internationally famous firm of Cesar and Rafael Pelli.

The new team appears, with their new plans, to be committed to not igniting another conflagration. They have been more communicative with nearby residents and other locals than the earlier development team. Most important, the new plans fit inside the envelope for the site that the DCP provides. Previous plans required substantial changes to the existing land use parameters.

While the plan includes 60 condominiums, which are controversial in Santa Monica because residents who live in houses worth millions of dollars don’t like to think of their sleepy beach town as a place where rich people live, it also provides for 30 units of affordable housing. Again, as with the beach apartments, while it’s true that rich people, including dreaded Russian oligarchs and Arab sheiks looking for new pieds-à-terre, will now have new housing options near the beach, so will more poor and working-class people.

If the plan were going through the approval process now, during the lull in the development wars and not too long after City Council adopted the DCP, I suspect that it would fare well. Unfortunately for the plan, however, it’s now in environmental review jail—an EIR is being written (and yes, for a project this big an EIR is appropriate), and that typically takes more than a year. Then the plan will run a gauntlet of approvals: Landmarks Commission, Architectural Review Board, Planning Commission, City Council and Coastal Commission. It will be at least a couple more years before the plan might win final approval.

Time is the enemy of all plans because time is the enemy of certainty. The Miramar’s developers crafted their first plan (one I didn’t think was very good) in consultation with the City’s planning staff. At a City Council hearing, the plan was shot down because it blocked too many views. The council advised the developers to come back with a tall skinny building, to preserve more views. Which the developers did (with another not-very-good plan), but by then the council had forgotten what it had said about a tall tower, and that plan went nowhere.

It was after that debacle that the Miramar brought in its new team. They waited out the DCP process to see what it would allow them to build. Now they have given us the new plan, which is, by the way, quite good.

But in two years, who knows that the City will be telling them they can build.

Thanks for reading.

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

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

So much for deliberative representative democracy.

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

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

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

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

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

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

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

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

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

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

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

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

Thanks for reading.

Downtown Santa Monica: where it doesn’t take a village (with lots of pictures!)

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It’s back! The latest (and promised final!) version of Santa Monica’s Downtown Community Plan (DCP), is being dragged through the Planning Commission, with an ultimate destination of the Promised Land, namely approval by the City Council. The DCP is the current installment of Santa Monica’s quasi-permanent, general plan-level, planning process, now approaching the middle of its second decade.

Late last year I wrote three articles about the previous, 2016 version of the DCP, and I’ll probably write at least three about this iteration, too. In some respects the 2016 version has been improved, and some others it’s been made worse, but my overall reaction to the plan has not changed: the plan is more a political document than a planning document.

By “political” I mean that more of the plan’s 290 pages are explaining than are planning. The DCP is the product of staff and consultants who’ve been yelled at a lot, and who are trying to anticipate the path of least political resistance so that they can get enacted something that at least rhetorically they can be proud of.

As a result, much of the plan is not planning but flattery — not only soothing words to make Santa Monicans feel special and fawned upon, but also flattery for the plan itself. Never are Santa Monicans told the truth, which is that much of downtown has been and is a dump, needs new investment, and dammit it could be made a lot better.

Instead, we get a lot of how the DCP will preserve “character and history,” and carefully integrate “the new with the best of the old,” and “carefully nurture Downtown’s character and sense of the past,” not only with “enhanced historic preservation,” but also with “context sensitive infill.” There’s a lot about “sustainability” and “wellbeing.”

We’re constantly being told about downtown’s character, as if it’s the hero or heroine of a romance novel, as if the “scale” of downtown has anything to do with its success. We all know that but for locating new movie theaters downtown and getting a good designer (Boris Dramov) to fix up what was then the Third Street Mall, Downtown Santa Monica would still be the scary ghost town it was in 1981 when, as a member of the Odyssey Theatre’s board, I tried to persuade Third Street property owners to subsidize a theater for the Odyssey to bring some life to the decrepit pit. (Thankfully Denny Zane, whom I first met at the time, ultimately had a more realistic vision.)

When the planners aren’t patting us on the back for being so brilliant because we happen to have a vibrant downtown (I guess we should take credit for the ocean, too), we get reassurances about the plan itself like these:

The community’s expectation for the Downtown area to expand as an energetic, equitable and sustainable urban neighborhood is addressed [by the DCP] through physical land-use planning integrated with circulation policies, and a well-rounded emphasis on community services and amenities. Many of the policies and actions throughout this document aspire to nurture neighborhood and economic prosperity . . . .

Good to know! I’d hate to have a plan that aspires to destroy neighborhood and economic prosperity.

Last year I wrote about how the euphemisms in the plan annoyed me, and my bête noire was calling a crucial core piece of downtown, seven and a half mostly underdeveloped blocks straddling two major transit boulevards, the “Neighborhood Village.”

Here’s a map of the “Neighborhood Village” (NV) (in yellow):

NV District map

You know these blocks: It’s not like there are dirt roads and thatched roofs there, or cows and chickens. This is where the Main Library and the YMCA are. The new hotel at 710 Wilshire, incorporating a large landmarked structure, is under construction. Some of the other large buildings in Downtown are there, too. Here’s a picture of Sixth Street north of Arizona, showing Santa Monica Towers.

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And don’t forget the former telephone company building that now houses the restaurant Cassia.

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Not only that, but much development of mixed-use buildings, with typically four stories of apartments over a ground floor of retail or small offices, has already occurred in the district, like this one.

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The DCP doesn’t note how much better these new developments have made the area from what it was before. For all the charm and character the DCP assures us downtown has, the older buildings on the NV blocks are mostly an incongruous collection of bad modernism and worse kitsch, all punctuated by parking lots and “cars behind bars” curb cuts and black holes. Here are some of my favorites.

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Kitschy office building trying to look like apartments.

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Two really friendly modern buildings, side-by-side.

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Your classic Mission Revival mini-mall. Don’t tell me, someone wants to landmark this.

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Slanted roofs! How village-like. Note the cars-behind-bars-black-hole motif.

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My absolute favorite. Undefinable Olde English kitsch on top of cars-behind-bars black hole. Let’s create an Olde English village in DTSM! We can have wassail parties (whatever wassail is).

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And of course a dental office surrounded by parking. The suburban vista that so warms the hearts of some.

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Yes, there once was a village. Let’s bring back the Long Wharf, too.

Sure, there are a few vestigial wood-framed throwbacks to when, more than a century ago, downtown was at least village-like, but there is no village there now. Instead, on their own, with largely private investment, these blocks have, since the City liberalized the zoning for housing 20 years ago, been making an excellent transition to a mixed, post-sprawl neighborhood of five-story apartments, shops, offices, hotels and public-serving uses. It’s the past 20 years of development, not some false nostalgia, that the DCP should be celebrating and building upon.

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Real people live here.

So one has to ask, why do intelligent planners and consultants call an area like this a village? The answer is political. The more distinctions the planners can make in the amount of development allowed from one area to another, the more they can demonstrate (truthfully in fact) that they’re listening to those residents who are angry about any and all development.

Let me step back for a moment from my criticism to say that I don’t believe that the amount of development the DCP allows is, in most instances, too little for downtown. The problems with getting housing built, that many people are complaining about and about which I’ll write in a future column, have more to do with the approval process than with the amount of development allowed.

But look at the difference between the amount of development (which is expressed by the permitted “floor-area ratio,” or FAR) that the DCP allows in the NV area and the amount allowed in the “Transit Adjacent” (TA) area immediately to the south. Here’s a map of the Transit Adjacent area (in turquoise):

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In TA, for Tier 2 projects with housing, the DCP allows for an FAR of 3.5 while the NV only allows 3.25. (A quarter point of FAR is financially significant, especially considering the costs that the City lays on housing development.) When it comes to larger developments, TA allows for Tier 3 projects with potentially an FAR of 4.0 (which is about what apartment buildings got under the 1990s zoning that allowed a double FAR for housing, so it’s not too much), while the NV doesn’t allow Tier 3 projects at all.

Not only that, the TA area is already more built-out than the NV area, or occupied by uses like the City’s bus yards. So the NV area is a more promising area for continued residential growth.

There is no reason to make a distinction between the NV blocks, which are either between or straddle Santa Monica and Wilshire Boulevards, and the TA blocks between Santa Monica and Colorado. The former are a little further from the Expo station, but both Wilshire and Santa Monica Boulevard are routes for Metro Rapid buses that will, within the lifetime of the DCP, connect with the Purple Line subway, as well as major Big Blue Bus routes to UCLA and elsewhere.

When there is no real reason to make a distinction, look for a political one.

Call it a village.

Thanks for reading.

Housing is Complicated — Post #1

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I attended a fascinating meeting of the Housing Commission Thursday afternoon. The only item on the agenda was the question, which the City Council will likely take up this summer, whether the City should readjust the parameters for production of affordable housing. These parameters include the limits on income that households can make to qualify for affordable housing, and the amount of rents that affordable housing providers can charge. (The commission heard from a panel of experts, asked a lot of good questions, asked staff to come back with more information, and postponed making their recommendations until their meeting in May.)

Anyone who has paid attention to City Council hearings lately, on matters such as the Village Trailer Park, or what developments should receive expedited planning review, has heard a lot about the different categories of affordable housing. These include extremely low, very low, low, and moderate. These terms all have definitions, but those definitions vary depending upon various factors, such as where the financing comes from to build the housing or what governmental entity is making the rules and for what purpose.

Santa Monica has a definition of its own, which it uses for one purpose. (It uses other definitions for other purposes, too.) This definition was included in Proposition R, which the voters passed in 1990, and which requires that 30% of all multifamily housing built in Santa Monica be affordable to “low and moderate income households.” Prop. R defines those terms with reference to the Los Angeles County median income as determined by the federal Department of Housing and Urban Development: “low income” under Prop. R means a household with income not exceeding 60% of the county median, and “moderate income” means a household with an income not exceeding 100% of it. Under Prop. R at least half of the 30% (i.e., at least 15% of all housing production) must be affordable to and occupied by low-income households.

Santa Monicans support the building of affordable housing – in 1999 voters here passed an authorization for the City to build more of it, an authorization that is generally difficult to get passed, and in opinion surveys the cost of housing regularly appears as one of the primary concerns of residents.

One of the many interesting aspects of Prop. R is that while its stated purpose is to make sure that Santa Monica as it evolves maintains its historic economic diversity, with housing affordable to both low and middle-income families, Prop. R also has the potential to limit all housing development. Under Prop. R the amount of market-rate housing development is limited by the amount of affordable housing: the number of market-rate units built under the “70%” is limited by the number of affordable units built under the “30%.” For instance, if only 60 affordable units are built, only 140 market-rate units can be built.

At the same time, the City has always relied on market-rate housing developers to provide at least some of the affordable 30% — particularly moderate income housing that can be financed from private markets without subsidy. With the end of redevelopment, which provided much of the funding for low-income housing, the City will be looking even more to market-rate developers to provide affordable housing by “subsidizing” it with profits from market-rate rents. (The City is also now going to seek housing funds from commercial development.) The equation works the other way, too – if you want a big number of units in the 30%, you need a big number in the 70%.

It should be no surprise then that the politics of affordable housing have always been entangled with the politics of development. Affordable housing advocates, including non-profit providers that have had to deal with anti-development groups the same as for-profit developers do, have often made common cause with the latter to fight restrictive zoning policies. Meanwhile, the largest for-profit developers of housing in Santa Monica have typically built affordable housing to satisfy their affordable housing obligations rather than pay an in-lieu fee because they know that if the 30% figure is low, they ultimately will not be able to build as much market-rate housing.

On the other side of the political equation, anti-development interests have used affordable housing requirements as a means of making development less financially feasible and otherwise more difficult.

Personally, this attention to affordable housing has given me an opportunity to learn about the effects of different parameters on how and what affordable housing gets developed, and about how affordable housing can be financed in the post-redevelopment world. In posts over the next couple of weeks I expect to share what I learn and my thinking on the subject.

Thanks for reading.