Santa Monica City Council Begins Tackling Affordable Housing After Loss of Funding

December 13, 2012 -- With the loss of Santa Monica's Redevelopment Agency (RDA), the City Council directed Staff Tuesday to look to alternative means of funding affordable housing throughout the city, including a possible fee levied on all commercial developments.

Staff also recommended lobbying Los Angeles County -- where most of the former redevelopment money will end up -- to secure a portion of the money now flowing into the County coffers for affordable housing, though several Council members were skeptical such efforts would yield results.

The City may also sell off some of the affordable housing properties it manages, including Mountain View Trailer Park, to help cut back on the costs to the City of managing those properties.

“In the last decade, redevelopment provided about 75 percent of our funds for affordable housing. In the last few years, it's been close to 90 percent,” Director of Housing and Economic Development Andy Agle told the Council Tuesday.

And even though the major source of money for affordable housing has dried up, the demand has not.

Agle told the Council that there are currently more than 2,000 households on the wait-list for affordable housing in the City.

Council member Ted Winterer put forward a motion for staff to start drafting an ordinance that would require commercial developers to pay a fee that would be dedicated to affordable housing, which passed unanimously.

McKeown called such a fee an “obvious way for us to help provide housing for the workers that commercial development is going to bring to our town.”

According to McKeown, the Bergamot Area Plan predicts that 75 percent of the units in that area would have to rent for $1,000 to $1,500 a month to accommodate workers, which he said is “subsidized affordable housing in this town.”

“It's pretty clear that such a linkage fee is necessary and will help us a great deal,” he said.

Council member Gleam Davis underscored the importance of having money for affordable housing in Santa Monica.

“We're about to undergo some significant changes with the arrival of the Expo Line here in Santa Monica,” she said. “When fixed-rail transit, whether it be light rail or heavy rail, come into an area, land prices and housing prices in particular sky-rocket.”

McKeown was keen on the possibility of a new, local tax that would target sales of property over a certain value. The tax, which would be based on a similar one passed in San Francisco, would “ensure that moderate-income households purchasing homes or condominiums would not be affected by the tax increase,” according to staff.

Davis was skeptical, however, adding that the amount of money generated by a real-estate transfer tax wouldn't be significant enough.

The Council also directed staff to consider adjusting the formula it uses to determine maximum rents for low-income households, allowing for a general decrease in rents of affordable units in Santa Monica.