Tale of Two Projects

It’s been a while since I’ve written about a specific development project in Santa Monica. About a year ago I was busy writing articles about the Downtown Community Plan (DCP), and after that I had my fill of F.A.R.’s and levels of review, etc. I’ve mostly been writing travelogues since then. In the past week, however, two projects, of quite different scale, and located in different parts of the city, caught my eye.

One is a small, apartment complex, only 47 units, with ground-floor retail, on a typically skinny Lincoln Boulevard parcel at Ashland Avenue. The project survived development review last week when City Council members, claiming (accurately) that state law limited their power to block the project, rejected an appeal by neighbors of a Planning Commission approval of the project back in January. (Neighbors Lose Bid to Stop Apartment Complex on Santa Monica’s Lincoln Boulevard).

I live not far from the site and I either drive or walk past it often. It’s a location of classic crudscape, an ugly lot with several decrepit garages that look like they were built with stucco and tin foil.

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The current site at Ashland and Lincoln

It’s incredible to me that neighbors would fight a new apartment building, with attractive ground-floor retail, on that stretch of Lincoln, but then I know it shouldn’t be incredible to me that a few neighbors will do anything to prevent people from moving into their neighborhood.

I remember when City Council, during the hearings on the LUCE, was debating standards for the boulevards. Council members were succumbing to anti-development arguments about “character” (that vague quality that has historically been used to keep apartments and apartment-dwellers out of insular communities). I remember, though, Bobby Shriver, who was sympathetic to the anti’s on other boulevards, admitting that Lincoln Boulevard was pretty ugly and needed new development. Almost ten years later, after another whole planning process for Lincoln Boulevard, a developer is finally building something—an improvement.

For the appeal staff had to prepare a 29-page staff report, which on top of myriad other documents, including a 50-page staff report for the Planning Commission, means that hundreds of pages of reports were created for . . . a 47-unit project that fits within Tier 2 of the applicable zoning. Months and years go by even with a state-law required “project streamlining” and an exemption from environmental review: the application for this little project was filed in March 2016 and “deemed complete” in May 2016. Already two years ago.

I’m shocked that the developers proposed a Tier 2 building. If they had made it a little smaller (a 1.5 F.A.R. instead of the 1.81 it has), it would have qualified under Tier 1, and they could have avoided this review. I’m glad they were brave—if they can make it to the finish line, the site will have another 10 or 15 apartments. (By the way, the development standards still require an insane about of parking—the project will have 151 expensive underground parking spaces for 47 apartments and about 17,000 square feet of retail. On a transit corridor. Crazy.)

Need I mention that the project replaces commercial zoning with residential development? Isn’t that what we want in jobs rich, housing poor, Santa Monica?

Naturally, the process is not over. The developers still need to take the project back to the Architectural Review Board for a formal review and no doubt another appeal to the Planning Commission. After informal ARB review, and comments from the Planning Commission, the developers and their architects must now deal with the usual litany of vague nostrums about “variation” and “visual breaks” and “modulation” and “granularity.” It’s like the ARB members and Planning Commissioners are wine connoisseurs. Here’s a rendering of the current design.

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As seen in this elevation, the building presents a bold statement on an ugly street. While the ARB and Planning Commissioners (and the anti’s) often complain about bland architecture in Santa Monica, their practice is to screw around with any architects who try to use formal structure and rhythm. They make the same amorphous demands on every project, and then complain that buildings are indistinguishable.

The second project that caught my eye—this one was hard to miss—was the return to the planning process of the Frank Gehry designed hotel project at the corner of Ocean Avenue and Santa Monica Boulevard.

I’m not going to write much about this now—surely there are still years to go on this one and I’ll have more opportunities to write about it later. But as the political class settles down to patting itself on the back about how this project now “fits” the new standards in the DCP, and since the developers have made their peace with the DCP, I’ll be perhaps the one person to talk about what we’ve lost.

Which are 60 condominiums. The new plans are pretty close, in terms of programming, to the old plans, except that 60 condos were sacrificed to make the project fit the new zoning and political standards.

Okay, no one is going to shed a tear for the condos, but let me ask—what was bad about them? In a city of 50,000 housing units, they weren’t going to add to traffic in any measurable way, and they weren’t going to destroy the “character” of anyone’s neighborhood. Yes, rich people were going to buy them, but then we already live in a city where many of the critics of the condos live in houses that are now worth $1,000 per square foot as teardowns.

What the condos would have done is turn thin air into millions of dollars each year of taxes for schools, healthcare, public safety, housing and services for the homeless, etc. Yes, the proverbial bogeymen of Russian oligarchs and Arab sheiks or—Heaven forbid—young Silicon Beach entrepreneurs, might buy some of the condos and only use them a few weeks a year, but others might be bought by elderly Santa Monica homeowners wishing to downsize but stay put.

What was bad about the condos is that they disturbed the false halo of radicalism that the political class in Santa Monica believes crowns their heads. Santa Monicans are mostly on the Left, and so the rhetoric that comes from the most conservative voices in town must use the language of revolution. Oh, those greedy developers! The neighborhood activists and their politicians use words like “community character” and act as if they’re about to storm the barricades of their own privilege, but it’s all about pleasing people who, in the opposite of a progressive agenda, fear change.

Thanks for reading.

A Tale of Three Motions

I was busy (i.e., sleeping) in the wee hours Wednesday morning, and it wasn’t until the weekend that I got around to watching the City Council’s deliberations over the Bergamot Area Plan (BAP). It surprised many residents who spoke at the meeting, but the main issue for the council members was not traffic, density, or parks, but rather how to increase the affordability of housing.

This gulf between what some residents believe are the issues and what in fact were the issues arises because the council members, even those elected with the support of, for instance, residents who rank traffic congestion as Santa Monica’s worst problem, are aware that they have to deal with the inevitable more than they have to deal with the wishful.

It is inevitable that the old industrial areas of Santa Monica will be redeveloped, and it is inevitable that the number of Santa Monicans who live in apartments and condos, already a massive majority, will continue to increase. Santa Monica is both a post-sprawl and a post-industrial city, and people charged with managing that transition, that evolution, cannot wish away the inevitable.

And so the council members did not discuss traffic much, because they know that the BAP deals with traffic as best as any realistic plan for the area could, and they didn’t discuss density much, because they know that the densities to be allowed under the plan, even if you don’t count new streets in the FAR calculation, are moderate and realistic for a place that a metropolis surrounds and which in turn surrounds a train station on a billion-dollar light rail line. It was telling that there was no controversy among the council members about increasing the density for the two privately own parcels on Michigan Avenue adjacent to the Bergamot galleries.

Nor did the council members argue much about parks, since they know that given the legal and fiscal constraints, they couldn’t do any more Wednesday morning to create parks than the plan did, and that the real work of creating usable public open space will come in the negotiation of development agreements.

So what did the council members argue about, or given that they didn’t really argue, what did they spend a couple of hours discussing? Well, it was housing, specifically how to get more housing that would be available to people who work in the area. The discussion revolved around three motions.

Council Member Gleam Davis made the first motion, and it reflected the consensus of a lot of progressives in the city, including the leadership of Santa Monicans for Renters Rights, that the plan needed more affordability. Davis’ motion was to expand density bonuses for building affordable housing, and to target the bonuses reward developers who build units for households earning less than what staff had recommended.

This motion passed unanimously.

The next motion came from Council Member Ted Winterer, and it had to do with the ratio between commercial and residential development in the area under the plan. If you were reading my Lookout columns three years ago about the updates to the land use and circulation elements of the general plan (the LUCE) (and you’re obsessed enough with local politics to remember them), you will know my heart went all fluttery when Winterer made the motion, because he wanted to clarify that the ratios called for in the plan would include in the calculation of the ratio existing square footage (which is all commercial), and existing square footage that is removed in the building of new development, thereby increasing the percentage of residential development because the percentage would be based upon the whole amount of development, not only the new development.

Winterer’s motion passed on a 4-3 vote; voting for it were Winterer, Davis and Council Members Tony Vazquez and Kevin McKeown. Council Member Terry O’Day said that he was voting against it because he believed that it would put the BAP in conflict with the LUCE, and presumably Mayor Pam O’Connor and Council Member Robert Holbrook agreed with him because they didn’t say anything and also voted no.

Council Member McKeown made the third motion, and it was to increase by 50% the amount of affordable housing that would be required under the plan in large projects. This motion lost on a 4-3 vote; Davis, who was the key vote all night, voted no because she was concerned that an across-the-board increase in the requirement might reduce the overall amount of housing that would be built, defeating the purpose of, as McKeown had emphasized, getting housing built near the jobs in the area to house working families and reduce commuter traffic.

Instead, Davis and the rest of the council directed staff to analyze the economics of increasing the affordable housing requirement; this data can then be used in negotiations over development agreements, which is where the data, on a project-by-project basis, would be most relevant.

In the end, the council members voted 6-1 to pass the BAP. The no vote came from McKeown; he made a protest vote on the affordability issue, but otherwise did not express significant disagreements with the plan. It was significant that O’Day, Holbrook and O’Connor voted for the plan even though they had lost the vote on the commercial/residential ratio, and that Vazquez and Winterer voted in favor of the plan even though they had lost the vote on McKeown’s motion to increase affordability.

It’s worth remembering that the Planning Commission approved the plan on a 5-1 vote, and the one no vote then was also a kind of protest vote, that time on the parks issue.

Some Santa Monicans are mystified about how the commissioners and the council members could so overwhelmingly endorse a plan that plan opponents say the public overwhelmingly rejects. Leaving aside the question whether the general public is in fact upset about the plan, the fact remains that the job of the commissioners and the council members is to plan for the future not sanctify the past.

Thanks for reading.

Money Isn’t Everything

On Saturday I co-hosted with former Santa Monica Mayor Mike Feinstein a forum to discuss whether Santa Monica should relax the limitations on building height that it enacted in the ’80s. Because of limited seating at the venue (the restaurant Bizou Grill on Colorado Avenue, which deserves great praise) we couldn’t publicize the event widely, but about 70 interested community members turned out.

The discussion was good – serious talk about the pros and cons of building up. Frankly, it was hard to separate the issue of height from other issues relating to development and the future of downtown Santa Monica (at the moment, of course, there are three controversial tall hotel/condo developments pending), but as one participant told me later, there are benefits to isolating and focusing on one aspect of a complex problem.

I had many thoughts during the forum on what the issue of height is about, but also many on what height is not about, and in this post I’m going to write about some of the latter.

For one thing, height is not about density. As architect and urbanist Stefanos Polyzoides (who journeyed from Pasadena to give an outside-of-Santa-Monica perspective) pointed out, two of the densest cities in the world, Paris and Barcelona, have few buildings higher than six stories. More allowable height enables the shifting of development into different shapes (for good or ill), but how much development to allow is a separate decision.

Height is also not about money, and this works both ways.

Misti Kerns, the head of Santa Monica’s Convention and Visitors Bureau, reminded the group that more hotel development indisputably will aid our local economy and help the city balance its budget. It’s not indisputable, however, that hotel development depends on allowing taller buildings. More than a few hotels have been built here since the height restrictions were enacted 30 years ago, and the City Council has already voted to give priority in the planning process to hotel developments.

It’s true that the City faces deficits over the next few years, but none of the hotels now in the development pipeline could be opened in time to help with the current situation. Even if they could, does anyone believe that fundamental long-term planning decisions should be made one way or the other to solve an immediate budget issue?

But “money” arguments that the opponents of height make are also irrelevant. These take various forms, including (i) “the only reason to build is so that greedy developers can make money,” or (ii) “the only reason to build is so that rich people can live in luxury condos.”

As for developers’ profits, we live in a capitalistic society characterized by the profit motive and the importance of investment in assets, including real estate. If you want to see a city where developers stopped investing, take a look at Detroit, and unless you live in a building built by a nonprofit affordable housing developer, you either live on property that a developer subdivided and developed or in a building that one built.

Sure developers are out to make a buck, but then so are film producers and doctors and artists, but I don’t see anyone calling them greedy when they make a successful movie or build a good practice or sell a painting. Nor have I heard homeowners calling themselves greedy for feeling good when home values increase, or future retirees complaining when the investments in their 401k or pension plan increase in value.

As for the luxury condo argument, 31% of the land in Santa Monica is zoned single-family residential, and this being the Westside, we can assume that nearly every one of those houses is affordable to only the 10% (and a lot of it to only the 1%). We may not need social policies to get housing for rich people built, but don’t kid yourself that it isn’t part of what Santa Monica is. Besides that, it’s a good thing when rich people want to live in your downtown. It shows you’ve done something right.

And look: do you believe the opponents of the pending tall hotel/condo projects would like them any better if they had a mix of work-force and affordable family-oriented housing that perfectly meshed with Santa Monica’s needs? Or, heaven help us, what if someone wanted to build 120 affordable units at the Miramar instead of 120 condos? Would the Huntley Hotel accept 22 stories of that?

When we’re talking about height, let’s talk about height. I’m sure the aesthetic, communitarian, urbanism, and other real issues about it will give us plenty to argue over all by themselves.

Thanks for reading.

Housing is Complicated, Post #2

In my last blog post I wrote about how affordable housing policy has interacted with the politics and economics of development in Santa Monica. In this post I’d like to look beyond that to some of the forces that shape the market for housing.

Housing attracts contradictions. Start with price. People generally complain when housing prices are too high: it’s not good when people have to spend too much of their income on decent housing (or even worse when they spend too much of their income on substandard housing).

But then bad things also happen when prices are too low. Think about the crash in housing prices in the Inland Empire — housing was suddenly much less expensive, but the rapid decline in prices caused a lot of heartache.

Affordable prices for real estate are not themselves a solution to poverty. Think generally about the most disadvantaged areas in Los Angeles County — property values are low, but because of low incomes, housing is still unaffordable to many, and many pay a lot (relatively) for poor quality housing. (Like any commodity, when it comes to housing price and value are related — think of those people paying $500 to rent a room in an illegally subdivided house.)

It costs real money to build good housing. High property values also translate into better public services — it may be an anomaly from our agrarian past, but governments rely on real property taxes. Many ordinary folks rely on the investments they make in real property.

Perhaps when we say that housing prices are too high, what we’re really saying is that incomes are too low.

Housing prices also make a joke out of the classic economics of supply and demand. You’d think that increasing the supply of housing would automatically lower prices, and certainly if there isn’t enough housing rents and prices will tend to increase. But if you believe the solution to high housing prices is simply to build more housing, I’ve got an apartment to rent you in Manhattan.

Many people want, need or like to live where many other people live, and so typically the most dense cities or the most dense neighborhoods in cities, where the number of units of housing is the greatest per acre, have, other things being equal, the highest rents and property values (at least on a per square foot basis).

That’s because these dense neighborhoods are typically convenient to “amenities” that people need or want, from jobs (most important) to shopping to entertainment. Supply is also not, as the economists say, “elastic”: there are always physical or legal restrictions on how much can be built in any given area.

I say that many people want or need to live near other people, because it’s not true for everyone. One mistake that people commonly make about housing is to generalize about housing needs and wants, usually based on their own. The housing policy of the whole country was misguided for decades, generations even, because of a generalization that all Americans wanted to live in single-family suburban houses.

The only good housing policy is a non-dogmatic housing policy. Beware anyone who says that everyone wants to live a single-family home in the suburbs or that everyone wants to live in an apartment in town.

Having said that, one always has to look at the realities of any given situation. In Santa Monica nearly 32% of all land in the city is zoned for single-family homes, but there are few empty single-family lots, and no matter what, virtually all new housing is going to be in some kind of multi-unit development.

It’s also not surprising that housing is expensive in Santa Monica. Many people want to live here, and it’s not only the beach or the weather that attracts them. Santa Monica was always a jobs center, but over the past 30 years Santa Monica added more than 9 million square feet of offices. We also built hotels and invested in our downtown, and employment increased in the hospitality industry and in retail. At the same time the enrollment at Santa Monica College increased significantly.

Little housing was built for these workers and students. Some say that our housing resources should go only to house current Santa Monica residents, but they ignore the reality that economic development in Santa Monica has contributed to a regional need for housing (and a local crisis in commuter traffic).

The demand for apartments in Santa Monica also reflects broad demographic trends affecting housing markets nationwide. The two largest generations in U.S. history, the Baby Boomers and the Millennials (roughly defined as those born between 1980 and 2000) are both increasing demand for apartments (and condos): the former because as they age they are moving out of now empty, single-family nests, and the latter because only the oldest of them have started to form families and look for nests to fill (and for cultural and economic reasons it appears that fewer of them than in prior generations want to live in the suburbs).

These demographic changes have resulted in changes to the form that households take. Some recent research indicates that over the next 20 years, 87% of growth in households will be households without children, and 53% of all growth will be single-person households. I see this in my own family — my 92-year-old father has lived alone since my mother died six years ago, and my 23-year-old son, when he starts graduate school at UCLA in the fall will be looking for his own apartment (on the other hand, he may not find one, which could mean that he’s won’t be living alone and that his parents won’t be empty-nesters).

The challenge for Santa Monica is to respond to the need to house people who work, study, and retire here, while at the same time providing housing for a full range of incomes, including housing for people who essentially have no incomes and would be homeless without assistance. As I said, it’s a challenge.

Thanks for reading.