SANTA MONICA—The city of Santa Monica has temporarily banned mini apartments in the region after the Santa Monica City Council passed an emergency ordinance on March 26 banning apartments smaller than 375 square feet.
The ban is not expected to be lifted until May 10, giving city leaders over a month to issue a permanent measure to address the over saturation of market-rate micro-apartments being built in downtown Santa Monica.
Previous attempts to create affordable small apartments included the city offering incentives for developers to build housing that accommodates no more than two people, designated as “single room occupancy” or SROs in the zoning code. If developers could keep them affordable, they would have been given 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.
A planning staffer predicted in 2007 that 80 percent of SROs in Santa Monica would be restricted for low-income tenants because developers were proposing projects that capitalized on code incentives. The city of Santa Monica anticipated occupants of those properties to consist of young professionals and students.
“That we have demand for small apartments like this shows just how dire our housing crisis is,” wrote attorney Matthew Stevens in a letter on March 25 to the Santa Monica City Council opposing the ban. Stevens criticized the city ordinance and suggested alternative solutions such as re-zoning more land in the city and allowing duplexes or fourplexes to be built
Attorneys representing WS Communities sent a letter calling the ordinance improper and unsupported by violating state laws. A government code requires a finding of “current and immediate threat to the public health, safety, or welfare,” but WS disputes that no such threat justifies an urgency ordinance. WS Communities indicated that the city of Santa Monica has not deemed mixed income SRO units as a threat and have never brought up prohibiting mixed income SRO units before. According to WS Communities, the city council lacks evidence required to issue the ordinance and bears the burden of proof.
Attorneys for WS warned that Santa Monica is liable for more than $100,000,000 in damages from the effective loss of the six pending WS SRO Projects. The ban is not expected to affect affordable projects or others that have building permits already in the city of Santa Monica.
Since July 2018, WS planned to build 363 SRO units across six apartment buildings along Fifth, Sixth, and Seventh Streets, with only 5 percent of these units set aside for renters with extremely low incomes at the market rate. According to rental listings, similar-sized WS apartments downtown have rents starting at around $3,000 per month.
WS decided against developing SROs because the projects became financially unsustainable in a three years delay for the City to approve the projects and SROs provided a higher unit count making the projects more profitable according to WS attorney, Neill Brower.
“It would be irresponsible of us not to take some action given what this could say for the housing balance downtown,” said Santa Monica City Councilmember Kevin McKeown to Curbed Los Angeles. “I actually believe that SROs are a valid part of the mix of housing for the city of Santa Monica, but all of the sudden we’ll have all of these SROs, and it will take us forever for us to catch up on building two and three bedrooms.”
The ban comes as Santa Monica continues to impose more regulations on apartments, including AirBnB and HomeAway who lost in court to the city on March 9. That ruling allows the city of Santa Monica to continue to enforce their Home-Sharing Ordinance.