Law could bring thousands of apartments to Santa Monica

Earlier this fall, a developer submitted plans for 4,500 apartments in Santa Monica — more new housing than the pricey beachfront city built in the previous decade.

And due to a little-used provision in state law that kicks in when cities fail to produce a housing plan to accommodate projected population growth, Santa Monica officials may be powerless to stop building.

The tactic could now be deployed by developers in more than 100 Southern California cities that do not comply with state requirements. According to experts, it is more likely to be used in wealthier areas with low housing production and high potential profits.

The growth spurt comes as Governor Gavin Newsom and state lawmakers have passed laws in recent years eroding local controls on home building, arguing that local resistance is a key reason for the housing shortage. unprecedented and the high cost of living in California.

In response, developers are increasingly willing to challenge city officials.

In Redondo Beach, a power plant owner submitted plans for more than 2,200 homes using the new tactic.

Dave Rand, an attorney advising Scott Walter, the developer of the Santa Monica projects, said he has investigated the tactic in places like Beverly Hills, West Hollywood and Coronado.

“I have never received so many calls on the same subject in such a short time,” Rand said. “It shows how broken the system is in California, that people are so desperate to find an alternative path.”

Walter’s 4,500 apartments would be spread across 14 buildings, including a 15-story skyscraper with 2,000 units that would be the tallest in Santa Monica outside of downtown.

The plans have stunned local elected officials, with some fearing the community will lose its distinctive character.

Santa Monica Councilman Phil Brock called the 15-story skyscraper “beyond pale” and “an unacceptable bar for the rest of the city.”

“Some of that growth is going to destroy the idea that Santa Monica somewhere along the line was meant to be a beach town,” Brock said. “As we blend into LA, we will lose that character.”

He expects him and his colleagues to try to block at least some of the projects.

Despite the huge demand for living in Santa Monica, the population is only slightly larger than it was in 1970 – it has become expensive and housing construction has slowed.

(Carolyn Cole/Los Angeles Times)

It’s a 30-year-old section of state law, colloquially known as the “builder’s remedy.”

If the requirement to produce a housing plan every eight years is not met, developers can essentially offer to build whatever they want, as long as some of the housing is reserved for low- and middle-income families. .

The builder’s remedy has long gone unused, said Chris Elmendorf, a UC Davis law professor who researched the provision.

In recent years, however, state lawmakers have strengthened laws to make builder recourse more viable by increasing penalties for cities that reject development and blocking attempts to reduce density. State officials, including Newsom and Atty. General Rob Bonta has also enforced stricter housing rules, creating a friendlier environment for those hoping to use them.

State Sen. Nancy Skinner (D-Berkeley), who drafted some of the builder remedy laws, said there should be consequences when cities don’t provide enough growth.

“We didn’t remove local control,” Skinner said. “The localities themselves gave up their local control when they chose to ignore state law.”

The state’s more aggressive stance has led to a cultural shift among frustrated developers. They’re starting to rely less on promoting the goodwill of local officials and more on what the law allows them to build, Elmendorf said.

“Some developers are like, ‘Well, I don’t need to be friends with the city council anymore. I just need to know my rights,” he said. “So they can do things that would otherwise have been a death wish for their business.”

Beverly Hills, Huntington Beach, Malibu, Palm Springs, Pasadena and West Hollywood are among 124 jurisdictions in Los Angeles, Orange, Riverside, San Bernardino and Imperial counties where the builder’s lawsuit could be in play because their latest housing plan n has not been approved, confirmed the state Department of Housing and Community Development.

Coronado, Del Mar and Solana Beach are among the 11 cities in San Diego County under the same circumstances. Housing plans from Bay Area cities are due in January.

At its October 11 meeting, the Santa Monica City Council approved a revised housing plan, which was later certified by state housing officials, bringing the city into compliance.

But state officials said proposals such as the 14 that Walter previously submitted would still be within the builder’s recourse. Two other developers also filed projects in Santa Monica before the deadline.

The 16 developments – Walter’s plus the other two – would create 4,562 new apartments, including 941 reserved for low-income residents.

Walter’s business, WS Communities, is one of the largest developers in Santa Monica, with 20 apartment buildings completed or under construction.

His 15-story skyscraper project would be built on 3.3 acres that now house parking and low-rise commercial businesses along Olympic Boulevard.

Walter had already obtained city approval to build a 183-unit apartment complex on the site. But due to rising interest rates and construction costs, he had to significantly increase the size of the project.

“We’ve witnessed for a decade as the city has already gone through zoning updates, how long and arduous the process can be,” Walter said. “We just didn’t want to wait.”

Over the past 50 years, housing policy has often been on the agenda in Santa Monica, a city of 92,000 with an iconic pier and Ferris wheel.

During the 1970s, the city passed what was then one of the strictest rent control laws in the country. It was also one of the first cities to require developers to provide affordable housing as an additional condition for getting their projects approved.

In the decades that followed, regular disputes erupted over proposals for major real estate and commercial developments. More recently, debates have centered on the demolition of a downtown parking lot and its replacement with public housing, as well as the construction of a 521-unit building on what is now a shopping center anchored by a grocery store. . This last project was the largest in the city’s development pipeline until Walter’s plans came along.

Despite the huge demand for living in Santa Monica, the population is only slightly larger than it was in 1970, largely because it has become so expensive and housing construction has slowed.

The median home value in Santa Monica is nearly $1.9 million, nearly $1 million more than the Los Angeles-area average, according to Zillow.

A newly rented two-bedroom apartment in the city rents for a median of $2,605 per month, 13% above the regional figure, according to data from Apartment List.

The builder’s repair projects are set to become the next hot spot in town.

A slow-growing group, Santa Monica Coalition for a Livable City, is urging the city council to consider litigation to stop the projects.

“To say that residents and council members are deeply concerned about this developer ambush and have questions that need to be answered is an understatement,” the group said in a statement last week.

Leonora Camner, a Santa Monica resident and executive director of pro-growth organization Abundant Housing LA, said she would have preferred the city to initially submit a state-approved housing plan.

Failing that, a remedy that allows housing construction is preferable to the city’s control of its land-use planning policies, she said.

“I don’t want to see a situation where builders can circumvent local planning,” Camner said. “But if cities cannot, for political or other reasons, adopt housing plans, people suffer. I’m glad there are those consequences.

A sticking point for builder remediation projects could be California’s Environmental Quality Act, which, especially for larger-scale efforts, could necessitate a lengthy review of environmental effects and open the door to disputes.

Also, because the automaker’s remedy has not been tested in court, legal questions remain about what developments are permissible, said Elmendorf, a UC Davis law professor.

Because developers must dedicate at least 20% of units to low-income families or 100% to middle-income families, projects might be impractical in cheaper areas with lower profit margins, he said.

Because of these uncertainties, Elmendorf does not expect the builder’s remedy to lead to a massive increase in housing construction statewide.

“The only places where it poses a real threat are where development is very expensive,” Elmendorf said.