Santa Monica Housing by the Numbers

Housing by the Numbers

There’s been an incessant discussion about Santa Monica’s work/housing imbalance. We hear constant buzz about our urgent need for affordable housing in our city which is already the densest packed beachside city in California. Can our city really satisfy this seemingly insatiable need? Here are a few ways to approximate how much housing we should provide:

  • What is Santa Monica’s “fair share” of the growth of the Los Angeles metropolitan area?  Since Los Angeles has been growing at about 1/2% per year for the last decade, you can extrapolate that our 93,000 person city would increase 465 residents per year.
  • The Southern Counties Association of Governments (SCAG) predicts Santa Monica’s population will grow will grow 8,000 people over the next 20 years for a total of 400 persons a year.

These two numbers might be averaged to 433 persons per year and if we take a ratio 1.7 persons per unit (close to Santa Monica’s current ratio) this means that Santa Monica should be building about 255 new units a year. This number is very close to SCAG’s 2014 desired target of 239 new units per year.

Its very hard to know exactly at any given time how many units are under consideration for approval, permitting and construction. However currently there are about 3000 units under consideration and it would not be unusual for those units to unfold over the next 4 years for an annual production of about 750 units per year. Therefore Santa Monica is producing housing at about three times its expected and fair share rate! We can quibble about the assumptions but it doesn’t change the fact that producing abundant housing is not a problem in Santa Monica.

Even without the new zoning code there is plenty of surplus housing capacity in the boulevards and downtown for this housing tidal wave. For example 57% of the downtown is either vacant, 1, or 2 stories. If all those lots were developed with 3 floors of residential above one floor of commercial uses it would generate about 7,000,000 square feet of housing or about 9000 units. Likewise 88% of the 896 parcels on the boulevards are vacant, 1, or 2 stories and if those properties were all developed with one floor of commercial and two floors of residential it would generate about 6,000,000 square feet or about 8,000 units. If we choose an arbitrary 2/3 of those lots actually being developed, we have the capacity for 11,400 new units (about 20,000 people). This corresponds to about a 46 year supply of housing at the desired rate of 250 units/year. In conclusion we are producing more than adequate amount of housing and we have the lot space for this housing for the foreseeable future. Another way of saying this is that we do not need to incentivize construction of housing with density bonuses, height increases or other code inducements. We have the space without resorting to “mega projects”. In fact height limits downtown could be kept to 4 stories and 3 stories on the boulevards and not have a large negative impact on the ability to produce housing.

So what’s the problem? There are essentially two areas of concern. The first is that the housing being produced is simply not affordable for our residents whose median household income is about $67,000. Affordability is typically defined as 30% of income in our case about $1675/mo. With new one bedrooms averaging about $2200/mo, the marketplace favors people making $88,000 a year. This excludes most of the entry-level participants in the major industries of Santa Monica: tourism (hotel waiters), education (college teachers), healthcare (nurses), and silicone beach (lab techs) to name just a few. These hard working residents have limited rental choices: live outside of Santa Monica, double up on room mates or family members, monetize their residences with Air BnB, or become housing slaves by paying a larger (40 or 50%) share of their income for housing. All are socially undesirable solutions. This affordability gap does not just effect the mobile young, such as students, but crushes families staying in apartments that are too small for their numbers and actively discriminates against limited income seniors. So, at every age, there are negative impacts from the lack of affordable housing. This is not news to anyone who has tried to find a place to live in Santa Monica. Likewise, when buyers try to buy homes in Santa Monica, lenders will typically lend 4 times your annual income or in our case about $268,000. Try finding anything for that price in Santa Monica or the Los Angeles area. In spite of the best efforts of rent control and affordable housing code incentives over the last 35 years we have become a City whose housing only engineers, lawyers and doctors can afford. We have become Bel Air by the Sea. Normally, increased supply of housing will reduce its price, but in a desirable marketplace like Santa Monica, the infinite supply of nearby wealthy buyers, including off shore buyers, means there is no effective way to build our way to affordability.  Today, we are producing about one deed restricted affordable unit for every ten market rate units. The financing of affordable housing is a complicated problem that has bedeviled cities all over the world and will be treated in depth in another article, suffice it to say that it is probably the greatest challenge facing our City.

The second problem is sustainability. We can produce the housing and have the lot space for it but we don’t have sufficient sustainable infrastructure.  All those displaced Santa Monica commuting workers, even if they drive hybrids or take mass transit, are polluting the air, adding to global and local warming and occupying gridlocked transit capacity. Our local water wells have limited capacity, and barring a breakthrough in affordable desalinization, will lose capacity as more cities tap into our shrinking aquifer. The city’s goal of water self-sufficiency is a mirage if the population keeps expanding. Finally Santa Monica wants to achieve net zero sustainability. Our buildings would not generate more resources as they consume. Solar access is the key to net zero, but when buildings grow to over 3-4 stories on typical lots and streets they start to shade each other and prevent their neighbors from reaching energy sustainability. We must mention that the same limits apply to our other common resources: open space, impacted schools, transit capacity etc. etc. All this frenetic urban growth initially reduces the quality of life of its residents and eventually, like a cancer, kills its host.

The good news is that Santa Monica is planning for abundant housing. The bad news is the new housing won’t be affordable and will eventually exceed our ecological limits to growth.  The solution will reside in our ability to add housing at a sustainable rate – within the bounds of our existing resources and infrastructure. To do otherwise could result in the degradation of the same city that everyone is coming to share.  In that scenario, nobody wins.

Mario Fonda-Bonardi AIA for SMa.r.t. (Santa Monica Architects for a Responsible Tomorrow)