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New Taxes, Fees Could Fund More Affordable Housing

Selling Mountain View Mobile Home Park is also on the table.

With commercial development on the rise, the Expo light rail coming in 2016 and the loss of redevelopment money, the city is starting to explore a few new ways to ensure working families can afford to live in Santa Monica.

Housing director Andy Agle floated this week a few ways the City Council could choose to fund the construction of affordable housing, including a real estate tax, sale of the city-owned Mountain View Mobile Home Park to a non-profit housing corporation and developer fees.

See also: Santa Monica to Consider Slowing Down Development

There are currently more than 2,000 households on the city's waitlist for affordable housing, Agle said, and the demand is only projected to grow. The non-residential developments—such as hotels, hospitals, retail outlets and entertainment offices—anticipated in the next 20 years could generate 1,280 new jobs in Santa Monica, which would mean the need for 1,132 new housing units, according to Rosenow Spevacek Group, Inc., a city-hired consultant.

"The impact of this new workforce would stretch the capacity for affordable housing even further if their needs are not addressed," said city Housing Administrator James Kemper.

A majority of the units would need to be affordable—from $854 to $1,708 for a one-bedroom—to workers earning between $29,550 and $59,100, according to RSG’s study.

Santa Monica lost its main source of funding for affordable housing when the state killed redevelopment agencies last year. In Santa Monica, the agency—which generated revenue by revamping blighted areas and then collecting a share of the increased property tax revenues—helped pay for the construction of nearly 1,700 units.

It provided 75 percent of the affordable-housing trust fund in Santa Monica, and in total, over more than five decades, spent more than $195 million on housing projects.

"With the absence of redevelopment, we don't have a reliable, steady funding source" for income-restricted housing, Councilwoman Gleam Davis said in February.

Kemper said coming up with a tax to support affordable housing "could be a successful strategy in a community like Santa Monica." In a report to the council, he pointed to a proposal from the mayor of San Francisco to increase the city's real estate transfer tax on property sales above a certain dollar amount.

The city's housing division also suggested selling a number of city-owned rent-controlled properties that it manages, including Mountain View Mobile Home Park. The proceeds from some of the properties could be used, Kemper said, to fund future housing development. "Selling properties would also eliminate property management costs and indirect staff oversight costs," he wrote in the report.

See also: New Council Cans Approval of Trailer Park Development

And, under a proposal councilman Kevin McKeown called "obvious," the housing division has asked the City Council to consider assessing fees to commercial developers to help pay for the housing their workers will need. City officials are trying to build more workforce housing to alleviate traffic congestion caused by commuters.

See also: Developer Fee Proposal Would Generate $60 Million

"The full cost to address the affordable housing needs of new worker households varies widely based on the type of commercial development, the targeted affordability of the housing, and affordable housing funding mechanisms," Kemper said. 

"The preliminary results of the RSG study identify a full cost ranging from $12 per square foot to $140 per square foot," he continued.

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Dan Charney December 14, 2012 at 09:11 PM
What a great idea- let's bulldoze all the rent controlled units that the really needy live in- throw them out- ( who cares really ?) and build more Community Core ones that the people thrown out of the rent controlled units will not qualify for or be able to afford most likely- what a genius idea- let's just work over every single needy low income person out there- build more and more and more- get rid of this council now before this whole town is a mess and they create hundreds of homeless low income seniors-
Dan Charney December 14, 2012 at 09:14 PM
Cutting half the useless employees of this city would be a good start to help low income seniors- oh wait- I forgot- we don't care about them- only about building more and more for others- this city has way too many people working in it- top and bottom that do very little - time to trim the real fat- and is Gould ever in his office working?
Brenda Barnes January 06, 2013 at 04:08 AM
When they had redevelopment money, they adopted a housing element saying they were hundreds ahead on their low-income housing quota. Now that they want to come up with a bigger cut of the profits to take, suddenly they claim to be building workforce housing. Nothing they say is ever truthful. Like claiming the projects they will approve in 20 YEARS will increase jobs by 1,280. They increased jobs almost twice that much in the ONE PROJECT they approved at 2834 Colorado. But whatever number of jobs they allow to be put in new buildings, housing they allow to be built will not be for those workers. The housing being approved requires incomes of over $100,000 a year, but the jobs pay an average of $54,000. That is why the workers all commute. And the more they approve, the worse it gets. Guess they'll have to make it up in the volume, huh?
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Equis Staffing April 13, 2013 at 10:21 AM
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