Community Benefits. Inclusionary Zoning. Impact Fees. Discretionary Approvals. Transfer Taxes. More Input. More Analysis. More Procedure.
For a generation, Santa Monica and many California municipalities have treated new development as a cash cow for a wide variety of pet projects and as a means to fill city budgets strangled by Proposition 13. Amidst a slow growth movement typified by the 1988 downzoning of the city a consensus emerged that new housing is a bad thing. This consensus concluded that if housing were to be built, it should only be allowed in order to deliver a laundry list of benefits, such as the 30% requirement for inclusionary zoning implemented in 1990. Together, downzoning and inclusionary zoning were so successful in stopping housing that barely 100 new homes were built in the 1990s.
The August 12th meeting of the Santa Monica City Council showed that this culture of extraction is still in force. Facing a proposal wherein developers would pay for hundreds of below market rate units in exchange for permission to build new homes, all the nominally pro-housing electeds besides Jesse Zwick and Natalya Zernitskaya voted to reject the staff proposal in favor of a more limited pilot. Through questions and their votes they said loud and clear: is new housing paying enough? And can we extract even more?
The combination of slow growth philosophies and the culture of extraction has led to our current housing crisis. Rents in Santa Monica average over $3,000 per month because in the 30 year period leading up to 2020 fewer than 200 new homes were constructed per year. Meanwhile, job growth roared ahead. A 2017 state analysis found that over 4 times as many jobs were created as housing units in the prior 35 years – an imbalance that fuels our crisis.
Councilmember Natalya Zernitskaya called out the harms of this culture of extraction, and the hypocrisy of supporting housing on paper while delaying measures that would allow it to be built. In this week’s meeting she said “we can’t just pay lip service to our commitment to allowing new homes to be built in our city…the alternative to approving this now would be to continue to delay these homes.” Zernitskaya continued, referencing the 2014 rejection of the Hines project, which resulted in the loss of 427 new homes and 100 affordable units, “it’s important to honor the mistakes of the past by learning from them. This pilot program…is a way to show that we have learned from past mistakes. That we understand housing delayed is housing denied.”
Zernitskaya’s recognition of the mistakes of the past stood in stark contrast to the statements of the few opponents, primarily the leadership of Santa Monicans for Renters Rights (SMRR), who opposed the August 12 item known as the Off-site Affordable Housing Ordinance. SMRR leaders argued that the council should pump the brakes on getting the market rate and affordable units built, consider limiting the eligible units to 500, and restrict development to downtown Santa Monica despite the fact that relevant projects are approved throughout the city. This opposition continues despite the reality that similar extractive opposition led to the 100 affordable units in the Hines project not being built and that slow growth overall has caused today’s housing shortage.
It’s time to break from the culture of extraction and the slow growth movement that stymies housing affordability and puts people on the street. There is a path forward for Santa Monica to make the city more affordable for residents across the income spectrum. This path applies both for middle income residents who rent the market rate portion of our housing supply as well as low income residents who need subsidies and below market rate homes.
The solution starts with building thousands of new homes to not just slow but reverse rent increases. Resultingly, those new homes and residents will grow the city’s revenues through property and sales taxes. With a larger and growing tax base, the city would now be able to make investments in below market rate housing on sites like Bergamot Station (700+ below market units) and 4th & Arizona (350+ units) or fully fund programs like flexible financial assistance for renters at risk of eviction.
Still, a complete removal of the taxes that stymie new housing, such as our Affordable Housing Production Program, the application of Measure GS Transfer Taxes on new multifamily homes, and impact fees will be too much too quickly for some leaders.They can strike a balance by making off-site affordable housing a permanent program with feasible terms and lowering the Affordable Housing In-Lieu fee to make new homes possible to build while generating funds for below market rate housing.
Santa Monica can’t wait for our housing crisis to grow worse. The city has already watched its production of new housing evaporate. It’s time to undo our culture of extraction and delay, because housing delayed is housing denied.
