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# In lieu of better ideas? City needs some brainstorming
- URL: https://www.smdp.com/in-lieu-of-better-ideas-city-needs-some-brainstorming/
- Published: 2005-10-14T15:00:00.000Z
- Updated: 2026-10-23T07:57:29.000Z
- Author: Guest Author
- Tags: Real Estate & Housing, Santa Monica, #archive-import

The Santa Monica City Council has decided that it’s the developers who should foot the bill for providing the city with more affordable housing. A majority of councilmembers voted this week to quadruple the fees on individuals who develop properties within the city, no matter how big or small the project.

However, Council doesn’t know how much money it’ll generate by charging apartment building developers up to $26.08 per square foot and condo developers $22.23 per square foot. That’s because there hasn’t been an economic analysis performed to see how much the increase will bring in, or how it will impact the housing market. Three City Councilmen — Bob Holbrook, Bobby Shriver and Herb Katz — pushed for an analysis, which would have taken about 60 days. But the majority — the remaining four councilmembers — voted against it, saying more affordable housing is needed now and an analysis would cause further delay.

What’s more, developer “in lieu” fees are just a small portion of what the city spends on its affordable housing program — about $500,000 of $12 million went to the fund in 2004\. The rest comes from redevelopment taxes distributed by Los Angeles County, over which City Hall has no direct control. It doesn’t take an in-depth economic analysis to know that developers will likely pass the costs down to the buyer, and subsequently the renter. That is the likely scenario for a property owner who just wants to build a five-unit condominium project to get a return on his or her investment. Now, with the fee increase, that property owner will have to pay $200,000 — $40,000 for each unit — into an affordable housing fund. The little guy loses once again.

If City Hall wants to adequately pay for a successful and equitable affordable housing program, it’s going to have to create more revenue streams. Perhaps city officials should look to other affluent cities to see how they provide for their residents. After all, some of the best ideas are ones that are taken and applied elsewhere.

In Aspen, Colo., where the average single-family home price is about $3 million, the city and county governments have created thousands of rental and homeownership units — all under their control and exclusively set aside for residents. Waiting lists are long for rental units, but well worth it if a person plans on staying in the community. Ownership units, which are capped at a 3-percent appreciation rate, are available through a lottery system where residents’ applications are literally drawn out of a hat each week for condos up for sale in the affordable housing inventory.

The program, funded by a half-cent sales tax, developer “in lieu” fees and local government funding, is categorized by income brackets so individuals making under $30,000 can afford a place to live, while at the same time, a person who makes more than $60,000 can also be a homeowner.

The local government has complete control of the housing stock — residents are required to live in the county for at least nine months a year and are not allowed to own any other property anywhere else. And with a handful of new developments, a few units are set aside and given priority to emergency response workers, like paramedics, cops and firefighters.

One of the biggest flaws in Santa Monica’s affordable housing program is that it allows people who live in rent-controlled units to own property elsewhere. Another flaw is that there is no income cap on people who live in rent-controlled apartments. Santa Monica also collects about $9 million in state and federal funding, so City Hall can’t discriminate and only allow Santa Monica residents to live in affordable housing.

If the goal is to create a community where people can actually live and work in the same city, the priority has to be given to Santa Monica residents. The program should be controlled by the local government and paid for by what drives the economy — tourism and commerce.

Elected officials last year didn’t have a problem passing a tax increase on hotel room stays so they could beef up the city’s tourism and marketing budget. Now it’s time to increase the sales tax so the residents don’t go broke trying to live here and then realize two years later that they have to move.

What makes a community strong is that those who actually run it — the workers — feel connected to it and are invested in it. Santa Monica should be a place where its firefighters, city employees and general office managers can live without throwing more than 50 percent of their pay-checks toward rent. The current system needs to be overhauled. And if City Hall can’t come up with anything better than quadrupling developer fees, it should look somewhere else for realistic and effective models.

*Originally published in the Santa Monica Daily Press print edition on October 14, 2005.* [Read the original PDF.](https://s3.us-east-1.amazonaws.com/smdp%5Fbackissues/101405.pdf?ref=smdp.com)