ITEM 6-J
Council Meeting: June 13, 1995 Santa Monica, California
TO: Mayor and City Council
FROM: City staff
SUBJECT: Recommendation to Authorize the City Manager to
Negotiate and Execute Separate Contracts with the Firms
of Cotton/Beland/Associates, Inc. and Hamilton
Rabinovitz and Alschuler, Inc. to Prepare the 1996-2000
Housing Element Update and Environmental Impact Report
INTRODUCTION
This report recommends that the City Council authorize the City
Manager to negotiate and execute two separate contracts with the
firms of Cotton/Beland/Associates, Inc. (CBA) and Hamilton
Rabinovitz and Alschuler, Inc. (HR&A) to prepare the 1996-2000
Housing Element Update and Environmental Impact Report (EIR).
BACKGROUND
California Housing Element law (Section 65588) normally requires
that local jurisdictions update their housing elements every five
years. Consistent with State law, the City's current adopted
housing element was originally prepared for the 1989-1994
planning period. However, as a result of the failure of the
State legislature to authorize funding for the State's
associations of governments to prepare future regional housing
needs estimates for the period beyond 1994, the 1989-1994
planning period has been formally extended through 1996.
Therefore, the City's existing Housing Element is valid through
June 30, 1996. Staff is initiating an update of the City's
Housing Element for the planning period of 1996 - 2000.
CONSULTANT SELECTION
Requests for Proposals for the Housing Element update and EIR
were issued to 20 firms on April 27, 1995. Proposals from four
consulting teams were received on May 17, 1995. The three top-
rated consulting teams were interviewed by an inter-departmental
committee including staff from the Housing and Redevelopment
Division, Rent Control, City Attorney's Office and Planning and
Community Development Department. These teams included Cotton/
Beland/Associates, Inc. and David Paul Rosen & Associates;
Envicom Corporation and The Natelson Company, Inc.; and, The
Planning Center and The Natelson Company, Inc. While a fourth
team headed by David Evans and Associates was not among the three
finalists, the subconsultant to this team, Hamilton Rabinovitz
and Alschuler (HR&A), submitted a scope of work which staff felt
warranted an independent interview. Stemming in part from their
recent work on the 1995 Rent Stabilization study for the City of
Los Angeles, HR&A demonstrated extensive familiarity with the
regional housing market along with a keen understanding of the
economic and regulatory factors that affect housing in Santa
Monica.
After careful deliberations based upon consultant proposals,
interviews, and references, as well as a detailed review of the
qualifications and experience of each firm, staff determined that
the best mix of skills for this project would be obtained through
a combination of the efforts of Cotton/Beland/Associates (CBA)
and HR&A. Although these firms were not originally part of the
same team, their combined credentials will provide the City with
the expertise and detailed knowledge of the City's housing market
that is needed. CBA has prepared over 60 Housing Elements in the
State of California and most recently prepared the City's HUD-
mandated Consolidated Plan. This firm is extremely knowledgeable
and experienced with State legal requirements for housing
elements and the review process through the State Department of
Housing and Community Development.
For its part, HR&A brings a long history of experience examining
the housing market in Los Angeles generally and on the westside--
including Santa Monica--in particular. HR&A prepared Rent
Stabilization studies for the City of Los Angeles in 1983, 1987,
and most recently in 1995, and is uniquely qualified to examine
some of the key issues required for the City's Housing Element
update, including a study of the potential ramifications of
vacancy de-control as well as an analysis of the potential
effects of the City's regulations as recommended by City staff.
Staff is recommending separate contracts for each firm due to the
distinct nature of their respective responsibilities. In
particular, CBA will focus upon preparing the main document,
including the needs analysis and policy and program development,
while HR&A will focus its efforts on the specialized analyses
required, such as the analyses of the impact of the proposed
vacancy de-control legislation pending before the State
legislature and the effects of the City's regulatory housing
program.
SCOPE OF WORK
The scope of work for this housing element update has been
developed based upon: applicable State law; public comments
submitted during the April 24, 1995 scoping meeting on the
Housing Element update; and, consideration of a variety of
changing conditions in the City. Among the main issues to be
addressed are the following:
Updated demographic data, including data on housing
costs, overcrowding, income, and employment;
An analysis of the potential effects of vacancy de-
control upon housing affordability;
An analysis of the impacts of the Northridge earthquake
upon the City's housing stock;
An analysis of sites suitable for new residential
development, as required by State law;
An analysis of potential governmental constraints to
housing development as required by State law, including: a
comparative analysis of an all on-site versus in lieu fee
inclusionary requirement; an analysis of the impact of rent
control regulations upon new development; and, an analysis
of the impact of the City's discretionary review (CUP)
process upon new development;
An analysis of the City's past record in achieving both
its fair share of the region's housing needs and its housing
objectives, as required by State law.
An analysis of the impact should the Tenant Ownership
Rights Charter Amendment (TORCA) sunset in June, 1996.
The scope of work for this Housing Element update is considerably
more involved than originally anticipated when the issue was
discussed with Council. A major factor is the potential passage
of the vacancy de-control bill (SB 1257) by the State
legislature, which could have a significant effect upon housing
costs, household formation, and overcrowding in the City. The
effects of vacancy de-control should be considered as part of the
Housing Element update, therefore, staff is recommending that
this issue be carefully analyzed as part of the consultant
services.
In order to accurately analyze the impacts of vacancy decontrol
and develop policies to address the issue, staff is recommending
HR&A perform a telephone survey of 1,000 renter households in the
City. The telephone survey will serve to update obsolete 1990
Census information related primarily to household characteristics
such as household size, income, vacancy, and turnover rates.
Obtaining current data on household characteristics will be
critical to predicting the future impacts of vacancy de-control
housing upon household formation, mobility, and affordability.
The survey, which will include statistically valid samples from
four geographic subareas within the City, will cost approximately
$47,000, including survey design, implementation, and analysis.
In addition, consistent with State law, the City will be
establishing an estimate of its regional housing needs. In the
past, this estimate has been prepared by SCAG. However, as
mentioned in the background section of the staff report, SCAG has
not prepared estimates due to budget constraints. Therefore, the
City has entered into a separate agreement with Hamilton,
Rabinovitz & Alschuler (HR&A) in the amount of $47,500 to prepare
the City's future housing needs estimate for the 1996 - 2000
period. It is anticipated that these estimates will be prepared
by mid-July. Once they have been developed, staff will return to
Council for its concurrence with the estimates.
PROJECT SCHEDULE
City staff has established the following completion schedule for
this project:
June 30, 1995 Retain consultants to assist
in preparation of Housing
Element;
June/July 1995 Focus Group/Scoping Meetings
to identify areas of public
concern and interest related
to Housing Element and obtain
information related to
potential governmental
constraints, lender/investor
perspectives, and other
issues.
December 1, 1995 Complete initial draft of
Housing Element.
December 1995 Begin Public Workshops with
Planning Commission, Housing
Commission, Rent Board, and/or
City Council on Draft Housing
Element.
April 1, 1996 Complete public comment and
discussion period, including
Housing Commission, Planning
Commission and City Council
conceptual review and approval
of draft Housing Element.
April, 1996 Transmit Draft Housing Element
to State Department of Housing
and Community Development
(HCD). Conduct EIR Scoping
Meeting.
September 1996 Complete documentation for
environmental review;
Planning Commission Hearing on
Housing Element and EIR.
October 1996 City Council Hearing(s) for
Housing Element Adoption, EIR
Certification.
December 1, 1996 Adopt Housing Element.
BUDGETARY/FISCAL IMPACT
This staff report recommends that the City Manager negotiate and
execute a contract with Cotton/Beland/Associates, Inc. for an
amount not to exceed $79,847 and a contract with Hamilton
Rabinovitz & Alschuler for an amount not to exceed $167,090 for
the preparation of special analyses to support the Housing
Element update and EIR. At mid-year the Council appropriated
$120,000 for the Housing Element Update. The $120,000
appropriation did not anticipate the need for the City to develop
its own estimated share of the regional housing need, for which
$47,500 has already been encumbered. The remaining balance is
insufficient to cover the level of analysis that staff is
recommending to conduct a thorough analysis of the potential
impacts of vacancy de-control, including the rental housing
survey, as well as to prepare the other analyses described
above. Therefore, additional appropriation in the amount of
$174,437 is required for preparation of the Housing Element and
EIR. The existing funds for the Housing Element Update and EIR
are included in the 1994/95 budget in account #01-210-267-00000-
5506-00000.
RECOMMENDATION
It is recommended that the City Council:
1. Authorize the City Manager to negotiate and execute a contract
with Cotton/Beland/Associates for an amount not to exceed $79,847
for preparation of the 1996-2000 Housing Element Update and EIR.
2. Authorize the City Manager to negotiate and execute a contract
with Hamilton Rabinovitz and Alschuler for an amount not to
exceed $167,090 for preparation of specialized analyses to
support preparation of the 1996-2000 Housing Element Update and
EIR.
3. Appropriate $174,437 from General Fund reserves to Account
Number 01-210-267-00000-5506-00000 for FY 94/95 for the Housing
Element Update and EIR.
Prepared by: Suzanne Frick, PCD Director
Karen Ginsberg, Planning Manager
Tad Read, Associate Planner