Item 8-B

Council Mtg: June 29, 1999

Santa Monica, California

TO: Mayor and City Council

FROM: City Staff

SUBJECT: Extension of Interim Emergency Ordinance No. 1944 of the City Council of the City of Santa Monica Enacting a Moratorium on Multi-Family Residential Development in the City’s Multi-Family Residential Districts.

This report recommends that the City Council extend Interim Emergency Ordinance No. 1944 enacting a moratorium on multi-family residential development in multi-family zones for a period of nine months. This extension is necessary to provide sufficient time to further evaluate the effects of substantial increases in the rate of development in multi-family zones and develop appropriate requirements and programs to protect the City’s multi-family neighborhoods and preserve its affordable housing.

During the last six months, residents appeared before the Council on several occasions expressing concern about rapid change in the community adversely impacting the City’s diversity, charm and quality of life. The council directed staff to evaluate the residents’ concerns and propose interim legislative solutions. On May 25, 1999, the City Council adopted Interim Emergency Ordinance No. 1944, which established a 45-day moratorium on multi-family development in the City’s multi-family residential districts with specific exceptions. The purpose of the temporary moratorium was to allow time for the City to evaluate and develop requirements and programs to preserve the City’s character, diversity, and quality of life as they relate to multi-family neighborhoods and affordable housing. An extension of the moratorium is necessary to properly evaluate these issues and develop appropriate requirements and programs.

The loss of affordable housing described in the May 25^th staff report continues. According to the most recent Rent Control Board analysis of the impact of Costa-Hawkins (Exhibit B), a total of 855 affordable housing units have been lost between January 1 and May 15, 1999. Moreover, the analysis "supports the projection that 2,359 units that had been affordable at 80% of median income will be lost by the end of 1999." The loss of affordable housing results, in part, from a significant increase in demolition and construction activities within the multi-family residential districts in the City. Between 1994 and May 24, 1999, demolition permits for 256 housing units in multi-family zones were approved or pending approval. More importantly, these demolition permits represent significant numbers of affordable housing units in Santa Monica. Between January 1997 and May 1999, applications have been submitted to demolish approximately 157 housing units in multi-family zones, replacing them with 236 housing units. While this trend provides a net gain in housing units, it continues to erode the City’s stock of affordable housing. The City experienced a net loss of approximately 109 affordable housing units during the January 1997 to May 1999 period, for example.

As discussed in the staff report of May 25, which recommended adoption of an emergency ordinance, there has been a significant increase in multi-unit construction over the last five years. This accelerated construction brings with it increases in noise impacts, traffic congestion, dust, loss of neighborhood character, loss of pedestrian scale, degradation of neighborhood aesthetics and other adverse effects. Consequently, it has exacerbated neighborhood disruption and further limited the quiet enjoyment of residents’ homes and neighborhoods. Resident complaints and public testimony at the May 11 and May 25 City Council meetings illustrate the breadth and scope of these impacts.

The preliminary data evaluated by staff indicate that the substantial growth of construction in multi-family zones not only undermines the character and quality of these neighborhoods, it leads to a further erosion in the City’s stock of affordable housing. These data warrant further and more detailed analysis so that requirements and programs to address the problems associated with the growth in construction, neighborhood impacts and the loss of affordable housing can be developed. To address these issues, staff proposes to focus on four primary areas of concern and study including construction rate, housing preservation incentives, affordable housing fees, and evaluation of housing policies. Staff proposes to: (1) evaluate the growth in the rate of construction within these multi-family neighborhoods, including establishment of a construction rate limit, or cap; (2) assess the possibilities for providing incentives to encourage preservation of existing affordable housing stock; (3) further analyze housing economics in relation to the City’s affordable housing fee; and, (4) evaluate housing policies in the context of SCAG’s recent Regional Housing Needs Assessment (RHNA) projections and related State legislation that allows cities, under certain circumstances, to count rehabilitated units toward their fair share (RHNA) allocation. This further analysis and policy development is necessary to understand the underlying problems and develop strategies that address them. This work effort will take approximately six to nine months to complete.

Extension of the interim emergency ordinance is necessary to provide sufficient time to analyze the issues outlined in this report. The recommended term of the extension is nine months, or until March 28, 2000. The substance of the interim emergency ordinance that is recommended in this report (Attachment A) is identical to the ordinance adopted on May 25, 1999, with one exception. The current ordinance provides an additional exemption for uninhabitable units that cannot be rendered habitable in an economically feasible manner.

Extension of the moratorium and the subsequent analysis outlined above will require re-evaluation of housing policies, which may also require an environmental review pursuant to the California Environmental Quality Act (CEQA). The housing and CEQA analysis will cost approximately $125,000. Provision has been made for this expenditure in the proposed FY 99/00 budget.

Staff recommends that the Council adopt the proposed interim emergency ordinance extending the moratorium for nine months.

Prepared by:
Suzanne Frick, Director
Jay Trevino, AICP, Planning Manager
Art Bashmakian, Contract Planner
Planning and Community Development Department

Attachment:

1. Proposed Interim Ordinance

2. Rent Control Board Memorandum Regarding Impact of Market Rate Vacancies From January 1 to May 15, 1999

3. Public Notice