“One of the things that makes Santa Monica so spectacular is… our economic and social diversity in this town and affordable housing is the only way to preserve it.” – Councilmember Gleam Davis
[/pullquote]With Santa Monica facing an affordable housing funding crisis, the City Council Tuesday voted 5-to-1 to place a measure on the ballot that, if approved by voters in November, could bring in as much as $10 million a year for low-cost housing.
The measure comes at a time when Santa Monica is struggling to maintain its commitment to economic diversity within its borders after the City saw its once-robust affordable housing funding dwindle from an average of $15 million a year to almost nothing in 2012 when Sacramento axed California’s 400 redevelopment agencies.
“One of the things that makes Santa Monica so spectacular is… our economic and social diversity in this town and affordable housing is the only way to preserve it,” said Councilmember Gleam Davis.
Davis pointed out that affordable housing stock helps take cars off the road if people who work in Santa Monica can also afford to live nearby, rather than commute long distance. She also pointed out that having low-cost housing available benefits young people who may be working their way through school or just starting a career.
Councilmember Ted Winterer agreed with Davis, saying that shoring up the affordable housing funding “is the most critical thing we can do this fall.”
Relying on private developers to build affordable housing, which the City requires as part of its Affordable Housing Production Program, would not create the depth and breadth of low-cost housing stock that is needed for meaningful diversity in town, staff said.
And, unlike private developers who build low-cost units as part of market-rate developments, nonprofit developers like Community Corporation of Santa Monica and Step Up on Second provide services and programs to help their residents, staff said.
Staff pointed out that without a new revenue stream, the City’s budget for funding affordable housing production would drop to about $300,000 a year and would require decades before the City could pool enough to finance even one project.
That is not enough, according to officials, considering the rate at which market rents are rising and the impact of the Costa-Hawkins vacancy decontrol law on rent controlled units.
There are currently more than 3,000 people who live and work in Santa Monica on the City’s list, waiting for affordable housing and 80 percent of them are “low income” earners, staff said.
While there will be about $100 million statewide available for affordable housing from cap-and-trade funds soon – and that number is expected to go up to about $500 million in the future – it is still a fraction of the more than a $1 billion in RDA money that was available before 2012.
And, staff noted, that having a dedicated, local funding source would make Santa Monica’s nonprofit housing developers more likely to qualify for federal and state money for affordable housing.
Councilmember Bob Holbrook was the lone no vote Tuesday night because he thought the measure was discriminatory, requiring property owners to finance affordable housing through the fee. Still, Davis pointed out that it is a small fraction of the final cost of any property sale and that it would only impact properties worth more than $1 million.
Winterer added, it would be negotiable as to how much the buyer of the property paid of the tax and how much the seller paid.
Mayor Pro Tempore Terry O’Day was not present for the vote.