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Santa Monica Hoping Election Cleared Way for Affordable Housing
Santa Monica Real Estate Company, Roque and Mark
Roque & Mark Real Estate
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Santa Monica, CA 90404
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Harding, Larmore
Kutcher & Kozal, LLP

Convention and Visitors Bureau Santa Monica

By Niki Cervantes
Staff Writer

November 9, 2016 -- After failing to follow its own law for years, Santa Monica City officials are banking on a sales-tax infusion from two successful measures on the November 8 ballot meant to, in part, provide more affordable housing.

Santa Monica voters Tuesday approved a half-cent sales tax (bringing it to 10.5 percent) via Measure GSH, which breezed to victory with 63 percent of the “yes” vote.

Voters also passed Measure GS, which advises splitting the $16 million a year raised by GSH equally between local schools and affordable housing, although GS is non binding. It won 70 percent of the vote.

Santa Monica Council Member Sue Himmelrich -- one of the most outspoken supporters of the two measures -- has high hopes for the future.

The success of the measures by such “wide margins represents the voters’ resounding confirmation of their continuing commitment to Santa Monica’s core values of maintaining an economically diverse community, making a first-class public education available to all of our children, and lending a helping hand to our less fortunate neighbors,” she said.

“On a day that so many Americans expressed distrust of their governmental institutions, Santa Monicans affirmed their faith in our City and School District to make our community a better place for all its members,” she said.

The question now is how much the funding will help in a city accustomed to receiving $15 million each year from the state alone for affordable housing.

California’s 2012 decision to abolish redevelopment agencies cost local governments like Santa Monica the biggest revenue source they had for building affordable units.

Since then, cities have scrambled to find replacement funding.

Santa Monica has been especially hard hit because the City’s own law requires that 30 percent of new housing be affordable, and that half of that be reserved for the lowest income earners.

But even before redevelopment funds dried up, Santa Monica’s record on affordable housing was uneven.

A recent year-end report found the city had failed, for the second consecutive year, to meet its legal obligations under 1990 Proposition R, with affordable housing only accounting for 19 percent of all multi-family units built ("Santa Monica Again Fails to Meet Affordable Housing Mandate," October 27, 2016).

A total of 1,070 affordable units in 133 properties throughout Santa Monica have been built since the proposition’s passage.

But in the last 22 years, almost two-thirds of the affordable units built relied on City housing “trust fund” loans to nonprofit organizations for subsidies, a City housing report noted. The City met the law only 12 times -– eight of them because of the City’s housing funds.

No punishment is attached for violating the law.

Market-rate rents in Santa Monica are sky high – and soaring.

Under the City’s affordable housing program this fiscal year, a household of one could earn a maximum of $48,650 annually to qualify as low income, rising to a maximum of $54,450 to qualify as moderate income earners.

For those earners, studio apartments would rent for $680 a month for the poorest to $1,247 for moderate income earners.

Opponents of both measures feared the affordable housing would usher in too much development, the issue that sparked the fierce fight over slow-growth Measure LV, which sought to give city voters –- not the City Council or Planning Commission -– final approval of proposed developments higher than 32 feet, or two stories.

It lost by about 12 percentage points on Tuesday.

One of Measure LV’s targets were the multitudes of “mixed-use” apartment buildings proposed or soon to be constructed in Santa Monica’s downtown or on major boulevards near public transit.

The apartments -- which are typically between four and eight stories -- replace mostly one- and two-story buildings.

One trade-off is the complexes are required by the City’s law to include affordable units onsite or offsite, although developers can pay an in-lieu fee instead that goes to affordable housing elsewhere.

Determining how best to spend the new bounty is the Santa Monica’s goal, said Himmelrich, who spent more than $50,000 in support the campaign.

“It is now up to those of us in government to assure that the GSH monies are spent fairly, efficiently and effectively,” she said.

For the City, the funding will also “help extremely low income seniors remain in their rent controlled homes, to provide additional affordable housing for displaced residents and low income families,” she said.

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