SM families share in lieu trepidations
CITY HALL — Some developer fees have been quadrupled in order to provide buyers and renters alike with more affordable housing, but not without a fight from some elected officials concerned about the economic impact on the city.
The Santa Monica City Council approved an amendment (4-3) on Tuesday which significantly raises developer “in lieu” fees.
Tuesday’s debate, which lasted an hour, follows a July meeting in which the six councilmembers present couldn’t come to a consensus on what the economic impact might be for the fee increase. As a result of that stalemate, there was neither a financial analysis of the impact to developers, as requested by some councilmembers, nor an immediate decision to raise the fees, as desired by others.
The new fees will likely affect those projects which have just begun the application process with the city’s planning department, staff said.
Those in support of further financial analysis of the amendment back in July were Councilmen Bob Holbrook, Herb Katz and Bobby Shriver, while Councilmen Richard Bloom and Ken Genser, and Mayor Pam O’Connor favored putting the new fee structure in place immediately. City Councilman Kevin McKeown, not present at the July meeting, spilled the vote for the majority on Tuesday, supporting the increases.
Both sides made their points. Holbrook said he wanted the financial study done because he feared the added fees would ultimately be passed down to the renter or buyer.
“This might not make housing for my children cheaper, but more expensive,” Holbrook said.
Keeping the discussion good-humored, Bloom said the fees weren’t driving the cost of housing, but an unfettered market place.
“The Bloom family shares the Holbrook family’s pain,” Bloom said. “But the fees aren’t going to change the marketplace. Competition is what’s driving rental prices today.
“It’s our responsibility to do what we can to build affordable housing.”
In May, a presentation indicated City Hall hasn’t kept promises made to voters that it would be consistent in the number of affordable housing units it produces over a 10-year stretch.
While Santa Monica, overall, has produced 2,208 units of affordable housing in the last seven and a half years — exceeding the surrounding region by 126 percent — City Hall has failed to be consistent in production, as promised to voters in Proposition R, according to information provided by Hamilton, Rabinovitz and Alschuler, the firm hired to help Santa Monica manage its affordable housing portfolio.
Proposition R — a measure approved in 1998 by Santa Monica voters requiring 30 percent of housing units constructed in the city each year to be affordable — has been met or exceeded five out of the last 10 years, according to HR&A. However, that rate of production has been declining steadily in the past few years, prompting elected officials to take action.
The City Council agreed in May that city staff should draft a resolution which would increase the in-lieu fee for apartment developments from $6.14 per square foot, a rate established in 1998, to $26.08 per square foot citywide, an increase of 300 percent. Condominium development fees, which were $11.01 per square foot in 2000, would be doubled to $22.33 per square foot citywide.
Jim Kemper, acting housing administrator at City Hall, said developer “in lieu” fees comprised approximately $500,000 of the $12 million that went toward the affordable housing fund in Santa Monica last year. The vast majority of the affordable housing fund — $9.2 million — came from re-development taxes accrued and distributed throughout Los Angeles County, which City Hall has no direct control of, Kemper said.
Kemper said it was difficult to speculate what effect increases to in-lieu fees might have on development in Santa Monica and the affordable housing fund since the two factors are inter-related. He said the fees could contribute significantly to the affordable housing fund if development continues at the same pace or increases, but he said an adverse effect of slowing development was also a possible result.
Originally published in the Santa Monica Daily Press print edition on October 13, 2005. Read the original PDF.