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City Council Report City Council Meeting: March 26, 2019 Agenda Item: 7.A To: Mayor and City Council From: David Martin, Director, City Planning Subject: Introduction and Adoption of an Urgency Interim Zoning Ordinance Regarding Single-Room Occupancy Uses Recommended Action Staff recommends Council introduce and adopt an urgency interim zoning ordinance to prohibit Single-Room Occupancy (SRO) uses citywide on an interim basis in order to prevent the proliferation and over-concentration of SRO uses that are not 100% Affordable Housing Projects or certain specialized housing uses such as emergency shelters, transitional housing, and supportive housing. This urgency interim zoning ordinance would allow for study of revised development standards, land use regulations, use classifications, and additional requirements related to physical design or amenity plans, for SRO uses in order to protect the public health, safety and welfare. Executive Summary Over the years, City staff, decisionmakers, and community members have had numerous discussions regarding housing development in the City and how to create effective housing policies, programs, and regulatory tools to address the need for more development of a variety of types and sizes of housing options. In particular, a need has been identified for development of new affordable housing and supportive housing, and market-rate multi-family projects near transit, in order to offer attractive and feasible opportunities for a range of individuals and families to live in Santa Monica. The Downtown Community Plan was adopted by Council on July 25, 2017. Framed as a “housing first” approach, it envisioned a robust mix of housing types serving a wide range of household sizes and income levels. However, since July 2018, there have been six Tier 1 Administrative Approval applications filed for mixed-use housing projects in the plan area that propose 100% Single-Room Occupancy Housing. All units proposed in the six projects range from 219-373 SF in size; include sleeping, bathroom, and cooking facilities; and provide 5% of the total units deed-restricted for Extremely- 1 of 8 Low Income occupants pursuant to AHPP requirements. As discussed more fully in this report, five of these six market-rate SRO projects supersede previously-approved or pending project applications, including two 100% Affordable Housing Projects, that proposed various mixtures of studio, one-, two-, and three-bedroom units. While these projects are technically compliant with the current code as drafted, the absence of market demand for classic market-rate single room occupancy dwellings has left what amounts to a loophole for a new kind of housing that might be described as market-rate “micro units.” SROs previously served a role in providing relatively affordable housing in urban centers for service workers, low-income singles and the retired. Addressing the regional housing crisis with a proliferation and concentration of these new SRO projects in the Downtown District would not provide the necessary variety of housing types nor encourage a neighborhood setting that promotes social connectedness and community wellbeing. Adoption of this urgency interim zoning ordinance would provide a temporary prohibition on SRO uses unless proposed as 100% Affordable Housing Projects, or certain specialized housing uses such as emergency shelters, transitional housing, and supportive housing, as set forth in Article 9 of the Santa Monica Municipal Code. For the purposes of this staff report, Single- Room Occupancy uses includes SRO Housing and Structures as defined by the Zoning Ordinance and residential units that may, but are not required, to have kitchen or bathroom facilities and are no more than 375 SF in size. This Council action would provide an opportunity for further study and for potential Council adoption of revised development standards, land use regulations, residential use classifications, or definitions, to ensure that appropriate characteristics are required for projects with residential units 375 SF or less in size. Staff may also evaluate whether a mandatory mix of unit types and/or sizes developed as part of Tier 1 housing projects Citywide is desired, with consideration given to changing regional housing trends, and consistent with housing-related goals and 2 of 8 policies set forth in the 2010 Land Use and Circulation Element (LUCE) and 2017 Downtown Community Plan. With Council adoption, the proposed SRO urgency interim zoning ordinance would be effective immediately, apply to all projects that have not yet been issued a building permit or are identified as exempt, and expire on May 10, 2019. Background Housing Policy and the Need to Develop a Range of Housing Types Through a variety of discussions with community input at the Council, Planning Commission, and Housing Commission, concern has been consistently expressed about projects that exclusively propose small or micro-units in new housing projects, not including projects that are entitled under defined residential use categories such as for Supportive Housing and Transitional Housing. Discussion points have been raised about the need for family housing and the desire for two- and three-bedroom units in the Downtown and citywide – along with the recognition that some smaller units are appropriate to accommodate residents of all incomes, family situations, and stages of life. In particular, a need has been identified for development of new affordable housing and supportive housing, and market-rate multi-family projects near transit in Santa Monica. These discussions have occurred at Council, Planning Commission, and Housing Commission most recently in the context of the 2017 Downtown Community Plan, the 2015 Zoning Ordinance update, various amendments to the City’s Affordable Housing Production Program (AHPP), and preparation of the City’s Housing Element. Concerns have also been expressed related to the potential unintended consequences of development that provides only SRO-sized units (i.e., units less than 375 SF in size), such as the potential impact such units might have on the future population because of an assumption that small units cater to single person households – and that an over- concentration of market-rate SRO units will not create a neighborhood setting that includes a variety of housing options and promotes social connectedness and community wellbeing. Furthermore, in response to changing housing trends, additional scrutiny should be given to how livability is addressed through the physical design and shared amenities plan for market-rate Single-Room Occupancy uses. 3 of 8 It is important to note that this urgency interim zoning ordinance would not apply to Single-Room Occupancy uses proposed as 100% Affordable Housing Projects. or as certain specialized housing uses such as emergency shelters, transitional housing, and supportive housing. This exemption is provided in recognition of the need to continue to promote affordable housing and certain specialized housing uses and to remove barriers for projects by non-profit affordable housing providers in the City. Discussion Single-Room Occupancy Uses Defined Generally, Single-Room Occupancy uses include buildings or structures with residential units that may, but are not required, to have kitchen or bathroom facilities are no more than 375 SF is size. The definition of Single-Room Occupancy Housing is provided in SMMC Section 9.51.020(A)(1)(d)(ii) (Attachment C) and is further defined by standards for specific uses set forth in SMMC Section 9.31.330 (Attachment D) applicable to Single-Room Occupancy Structures. Note that a code-defined Dwelling Unit must be greater than 375 SF in size and contain full cooking, sleeping, and bathroom facilities pursuant to SMMC 9.52.020.0730 (Attachment E). Single-Room Occupancy Housing is a Multiple-Unit Dwelling sub-type and is a permitted use in most Zoning Districts in the City. Where permitted, SRO Housing proposed in compliance with Tier 1 development standards is subject to a non- discretionary Administrative Approval application and is subject to the Affordable Production Program set forth in SMMC Chapter 9.64. This urgency interim ordinance represents a temporary measure to prohibit Single- Room Occupancy uses citywide, including Single-Room Occupancy Housing and residential units that may, but are not required, to have kitchen or bathroom facilities and are no more than 375 SF in size, unless proposed as a 100% Affordable Housing Project as defined by SMMC Section 9.52.0050 (Attachment B) or certain specialized housing uses such as emergency shelters, transitional housing, and supportive housing as defined in the SMMC Section 9.51.020 (Attachment F). 4 of 8 Current Development Applications Since the Downtown Community Plan was adopted by Council on July 25, 2017, there have been six Tier 1 Administrative Approval applications filed for mixed-use housing projects in the plan area that propose 100% Single-Room Occupancy market-rate housing with 5% of the total units deed-restricted for Extremely-Low Income occupants per AHPP requirements. These six applications propose a total 363 SRO units in the Downtown, of which 345 units would be market-rate and 18 would be deed-restricted affordable for Extremely- Low Income occupants. The SRO units in these projects range in size from 219-373 SF. Four applications were submitted in January 2019 and the remaining two were filed last year in July and September, respectively. Five of these six market-rate SRO projects supersede previously-approved or pending projects applications, including two 100% Affordable Housing Projects, that all proposed various mixtures of studio, one-, two-, and three-bedroom units. SRO Housing SRO Manager’s Studio 1- 2- 3- Affordable Units – Total Projects Units Units BD BD BD (as a subset of Units total units) Pending 362 1 0 0 0 0 18 363 Projects (6) Previously- 0 0 37 32 31 7 57 107 Approved Projects (2) Superseded 0 0 2 85 30 20 46 137 Pending Projects (3) Proposed Interim Zoning Ordinance Amendment In summary, the proposed urgency interim zoning ordinance would specify that Single- Room Occupancy uses shall be prohibited in all Zoning Districts unless the proposed project is: 1.
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