If voters had approved state proposition 90 in the election last fall, California cities’ ability to control their own growth and development would have been diminished.

Several weeks before the election, in an effort to blunt the potential negative impacts of Prop 90 locally, the Santa Monica City Council imposed more stringent limits on development in most residential and some commercial zones, but excluded “preferred projects,” including affordable housing.

According to an October 4, 2006 Surf Santa Monica story, “While…[the staff] said the measure is not technically a ‘down-zoning,’ City officials contend the move will give them more control over development…

“Council member Herb Katz, an architect who cast the lone dissenting vote, said he believed the council’s action was not fully thought through.

“The move, he said, rushed the process to update Santa Monica’s Land Use and Circulation Element, or LUCE, which has been gathering community input for two years…”

Prop 90 failed, but it now appears that the City closed the wrong loopholes,
as, according to City staff, there has been a sudden and unanticipated surge in proposed SRO affordable housing projects.

The most noteworthy entry is developer Neil Shehkter’s proposal
for five such projects. The largest is a four-story, 623-unit complex that would be built on the site of Drerscherville at 3025 Olympic Boulevard. Two of the smaller complexes would be located on Olympic near 20th Street and the other two on Broadway near Lincoln Boulevard.

The mega-project, which was designed by Santa Monica architects, Killefer, Flamming Partners, has a total of 1,150 one-room units, renting for $1,000-$1,200 a month, on the five sites.

The City describes the typical SRO unit as being about the size of a two-car garage. Each unit has a kitchen and a bathroom and no more than
two people can live in one unit.

While the proposals meet the existing criteria for “affordable housing,” the SRO surge caused red flags to go up in City Hall.

City officials alleged that the proposed projects do not satisfy the objectives of the City’s affordable housing policies and conflict with contemplated revisions of the land use and circulation elements of the General Plan.

Under existing rules, affordable housing projects are not subject to public permit or development or environmental impact reviews, and may have more mass and height than other projects.

At the April 10 Council meeting, Katz and Council member Bob Holbrook, who voted for the original ordinance on its first reading, but abstained on the second reading, asked the staff to prepare an emergency interim ordinance that would effectively close the loopholes.

At the Council meeting, Tuesday, April 24, following a report from planning director Eileen Fogarty, statements from Shehkter, Killefer and two of their lawyers, and an extended discussion, the Council adopted an emergency interim ordinance that modifies development review thresholds and requires a development review permit for any project that exceeds 50 units.

Staff Report

According to Planning and Community Development Director Eileen Fogarty’s report, the ordinance will “1. Establish a Development Review permit for single room occupancy projects with 40 or more units or more than 15,000 square feet of actual floor area throughout the City; and, 2. Extend the Development Review permit requirement to all projects over 7,500 square feet in areas located in the Light Manufacturing and Studio District.”

Fogarty also noted that “…at Council’s direction, staff analysis included all development activity in the Light Manufacturing and Studio District (LMSD) to ensure current and planned development proposals do not conflict with or preclude City policy direction forthcoming in the General Plan and zoning ordinance update….

“The City continues to maintain a long standing commitment to the production of housing generally and affordable housing specifically as an important policy objective…. In addition, affordable housing projects throughout the City will continue to be eligible for…development incentives…

“Single room occupancy (SRO) housing is one component of the City’s approach to address local and regional housing needs. This form of housing limits the size of units to 375 square feet and benefits from reduced parking standards, elimination of open space requirements and exemption from discretionary review, except for design-related matters, which are evaluated by the City’s Architectural Review Board. Traditionally, SROs have been viewed and provided as a form of very affordable, transitional housing for those in need. However, recent development activity suggests there may be a shift to this paradigm.

“Developers are beginning to propose projects that capitalize on code incentives related to SROs. It is anticipated that these units will be marketed as a form of workforce housing for young professionals, students and other individuals. Most of these units will be deed restricted and available for households earning 80% of the Los Angeles County median income or less, which currently equates to $1,036 in rent each month. SROs may be occupied by no more than two persons. In Santa Monica, over 750 SRO units are currently proposed on over 3.8 acres of land; an additional 145 SRO units are expected to be filed in the near future at or near the corner of Lincoln Boulevard and Broadway. There are many more opportunities for this form of housing throughout the City.

“While there are clear benefits for providing workforce housing in the City, using SROs to accomplish that form of housing requires careful review. The largest SRO units are comparable in size to a standard two car garage. While the Zoning Ordinance limits the number of occupants that can live in each unit to two persons, the small size of the units significantly increases density because more units can be accommodated on-site. Other multi-family projects typically contain bedrooms and have larger floor plans. Comparatively, this reduces overall density and serves to advance public policy objectives that support more family-sized housing opportunities. Given the size, scope, and location of recent SRO projects, there is concern that these developments will conflict with and/or preclude the City from advancing policy objectives being articulated by the public through the ongoing LUCE project. This requires re-evaluation of certain policies related to SROs and development in the LMSD…

“The significant increase in planned SRO units in the City compared to prior years suggests an urgent need to reassess policies related to SROs and evaluate potential impacts caused by large, high density, SRO developments. to street connections, open space and other public benefits and infrastructure…large single room occupancy projects receiving significant City incentives also require a process in which to evaluate neighborhood compatibility, building mass and scale, parking, open space and potential environmental impacts….

“The most recent SRO projects approved by the City include 502 Colorado Court (44 deed-restricted units), Step Up On Second (34 deed-restricted units), 1423 2nd Street (44 deed-restricted units), 609 Broadway (56 market rate units), 1548 5th Street (46 deed-restricted units), 2029 Olympic Boulevard (65 market rate units), 1671 20th Street (100 deed restricted units). Over the decade, this represents a total of 389 SRO units.

“Recent development activity, however, suggests significantly larger SRO projects may be in demand. As stated earlier, 758 of the 1526 housing units pending City approval are SROs, which represent nearly half of all proposed units. There are another 145 SRO units anticipated in the near future. This is a significant increase in this type of housing and a unit density increase that greatly exceeds historic development patterns.

“Larger projects support greater density and can take advantage of building height incentives and benefit from an administrative approval process when the units are deed restricted for affordable housing. The impacts of a large SRO project, given current standards, cannot be significantly evaluated for potential impacts to neighborhood character, traffic impacts or other quality of life or environmental impacts because they are administratively reviewed. Establishing a public review process would provide project neighbors, the public, and the City an opportunity to evaluate the impacts associated with a project and require changes or modifications to address those impacts. Depending on the size and scope of the development, an environmental impact report may be required.

“The City’s current Development Review (DR) permit is the most appropriate application type to apply to these projects. If the DR threshold is met, a public hearing is required. Findings must also be approved that relate to: building scale and mass; placement of the structure on the site;· compatibility with surrounding sites and the neighborhood; compliance with the General Plan; ability of City infrastructure to accommodate the development; and, implementation of reasonable mitigation measures identified in the environmental review process.

“Significantly, even if the proposed ordinance is adopted, SRO projects, including affordable SRO housing, will continue to be allowed throughout the City and will be eligible for many existing incentives, including height bonuses and reduction in parking and open space requirements, as applicable. The DR process ensures that SRO projects will receive adequate evaluation.

“Accordingly, it is recommended that the threshold for SRO projects throughout the City be established based on the number of units and the size of the project. Specifically, an SRO project, regardless of its household income affordability, should require a DR permit if it contains 40 or more units or more than 15,000 square feet of actual floor area, inclusive of any floor area incentives offered by the Municipal Code to encourage housing. This threshold is appropriate given the densities that can be achieved in this type of project and the potential impacts related to the mass and scale. This review would be subject to the constraints imposed by State law. Depending on the project size, it may also allow for consideration of potential environmental impacts associated with a project.

“Similarly, because of the important and continuing effort to establish a future vision in the City generally and the LMSD specifically, it is recommended that all development projects that exceed 7,500 square feet of actual floor area in the LMSD area, inclusive of any floor area incentives offered by the Municipal Code, require a DR permit. Most projects in LMSD are already subject to this standard. Extending this provision would require a few discrete projects that are currently exempt from the standard to obtain discretionary approval. Establishing a DR threshold to all projects over 7,500 square feet in LMSD will provide the public and the City an opportunity to evaluate projects for consistency with applicable policy documents, including policies that support family-sized housing, sustainable practices, improved architectural quality, neighborhood compatibility, and opportunities for a more pedestrian environment. It also seeks to protect the community effort and progress made with the City’s Land Use and Circulation Element (LUCE) update project and ensures that development proposals of considerable size provide adequate process for public review and consideration of possible adverse impacts to the environment.

“Both SRO housing projects throughout the City and new development in the LMSD will continue to be eligible for all density and height incentives afforded by State Law and the City regulations. As recommended in the attached emergency ordinance, these projects will not be eligible for the DR permit exemption set forth in Santa Monica Municipal Code section 9.04.10.14.050 (Exceptions from development review thresholds). This section allows certain housing projects to be exempt from DR threshold if a specified percentage of floor area is devoted to affordable housing….

A Footnote

Owned by the late philanthropist, John Drescher, Drescherville was unique – a patchwork village of artists’ studios, architects’ offices and top flight galleries. SCI ARC (the prestigious Southern California Institute of Architecture was located there for years. Drescher kept the rents low and the atmosphere encouraging, and extraordinary
work was done there.

Some years ago, Drescher offered to deed it to the City. Since Santa Monica enjoys calling itself “Art City,” it was reasonable to assume that it would not simply accept Drescher’s offer, but cherish and preserve this extraordinary aesthetic resource. But the City rejected the offer – without any public discussion.

Angry and hurt, according to a friend, Drescher deeded the land to Pepperdine University, which held it for a couple of years and then sold it for an estimated $15 million to Santa Monica Studios. Rents went up, artists were squeezed out of Drescherville and, in most cases, out of town.

In March, Shehkter reportedly bought what’s left of Drescherbille for $27 million.