> ## Content Index > Fetch the complete content index at: https://www.smdp.com/llms.txt > Use this file to discover other available public pages before exploring further. # Council split on fees for builders - URL: https://www.smdp.com/council-split-on-fees-for-builders/ - Published: 2005-07-29T15:00:00.000Z - Updated: 2026-10-23T07:31:57.000Z - Author: Ryan Hyatt - Tags: Government & Politics, Santa Monica, #archive-import *City bests affordable housing standard* CITY HALL — Elected officials this week passed up an opportunity to adjust fees that may have increased the number of affordable housing units in Santa Monica, unconvinced the decision to do so would be effective. Six members of the Santa Monica City Council on Tuesday couldn’t come to a consensus on what the impact might be for approving an amendment that would raise developer “in-lieu” fees intended to increase the amount of affordable housing in Santa Monica. As a result of the stalemate, there will neither be 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. Those supporting further financial analysis included Councilmen Bob Holbrook, Herb Katz and Bobby Shriver. Those hoping to put the new fee structure in place immediately included Council-men Richard Bloom and Ken Genser, and Mayor Pam O’Connor. Councilman Kevin McKeown was not present at the meeting. The council’s consideration comes on the heels of a presentation that indicated that City Hall hasn’t kept promises made to voters that it would be consistent in the number of affordable housing units it produces for the past 10 years. While Santa Monica, overall, has produced 2,208 units of affordable housing in the last seven and a half years — exceeding the 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. The council will re-address the issue in September when all seven members of the council can vote. If the new fees go into effect, they will be retroactive from any developments proposed beginning in May. Shriver, who also made the same point at the May meeting, wanted staff to perform a financial analysis to determine what such a dramatic increase would have for development. “I don’t feel we’re being accountable without a financial analysis of the matter, and I hoped staff would be back with something that gives us some sense of how this might play out in the real world,” he said. Attorneys Chris Harding and Ken Kutcher, who represent Santa Monica developers, said the increases could be effective for City Hall. However, they echoed Shriver’s thoughts that the City Council needed to “look before it leaps.” “Doing more financial analysis is a plain, sensible approach to the issue,” Kutcher said. However, there was gridlock among other councilmembers who opposed Shriver’s suggestion. “Further study often means putting it off,” Genser said, indicating that the strength of the market was a good opportunity for City Hall to accrue the fees. Allen Freeman, a developer with JSM Construction, Inc., a local development company, said the increases would likely not affect his firm, since it already takes the general approach of building affordable housing on site as opposed to paying the “in-lieu” fees. “I understand why the city is doing it,” Freeman said. “They are trying to increase the level of affordable housing, and I think it will work.” However, Freeman noted other developers, who typically pay the “in-lieu” fees, may not happy with City Hall’s approach. 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. Katz opted to put off increasing the fees for a similar reason. “Right now, the market is good, but we all know it will dip again, and when it does, I want to know what impact this change will have,” Katz said. *Originally published in the Santa Monica Daily Press print edition on July 29, 2005.* [Read the original PDF.](https://s3.us-east-1.amazonaws.com/smdp%5Fbackissues/072905.pdf?ref=smdp.com)