By Lookout Staff

October 1, 2026 – Two Santa Monica property owners who failed to show deed-restricted affordable housing units were occupied by income-qualified tenants reached settlement agreements with the City, the City Attorney's office announced Wednesday.

Under the agreements with the owners of the apartment buildings at 1047 4th Street and 1537 15th Street the bargained-for affordability protections for five rental units will be extended for a combined total of six years, according to the City Attorney's office.

Quest Properties, LP, which owns the building on 4th Street will also pay the City $20,000 that will be used to support affordable housing, officials said.

The allegations set forth in the settlement agreements included failure to "demonstrate affordable units were occupied by income-qualified tenant households of the required size" and to "adequately verify tenant income eligibility."

The allegations also included the landlords' failure "to submit complete and accurate annual reports to the City," officials said, noting that the Housing Division and City Attorney’s Office "actively audit and enforce the affordability requirements of the City’s Below Market Housing Program."

The program is "one of the primary sources of affordable housing in the City, especially for newer apartments which state law exempts from rent control," officials said.

In addition to agreeing to pay $20,000, Quest Properties agreed to a five-year extension of the duration of the affordable housing requirements, including rent limits and to give mandatory notice to tenants regarding those requirements.

Quest Properties also agreed to a management probationary period "during which the City can require the owner to hire a City-approved third-party property manager if the owner violates affordable housing requirements."

LA Urban Townhomes II, LLC, which owns the 15th Street property, has agreed to a one-year extension of the duration of the affordable housing requirements, including rent limits, City officials said.

The property owners did not admit liability in reaching final settlements with the City, officials said.

“The City appreciates property owners’ contribution to our efforts to fight homelessness and provide housing for all," City Attorney Heidi von Tongeln said in a statement.

"But where bargained-for affordable housing benefits are not provided, our office will take enforcement action,” von Tongeln said.