What is this indicator?
This indicator measures new housing units produced in Santa Monica affordable to extremely-low, very-low, low, and moderate income households.
The City defines extremely low-income households as those whose gross income does not exceed 30% of the area median income (“AMI”) for the Los Angeles-Long Beach Primary Metropolitan Statistical Area as published and periodically updated by the U.S. Department of Housing and Urban Development (“HUD”).
Very low-income households are defined as those whose gross earnings do not exceed 50% of the AMI. Low-income households are defined as having gross earnings that do not exceed 80% of the AMI. Moderate-income households are defined as having gross earnings that exceed 80% of the AMI but do not exceed the lesser of 120% of the AMI or twice the income limit for very low-income households. LA County Household Income between 2000 to 2010 ranged from $51,300 to $64,800 annually. The Rent Control Board assesses how many rent controlled units are affordable at given income levels, assuming that 30% of annual income is applied to rent.
Proposition R was adopted by the voters of the City of Santa Monica on November 6, 1990, and was added as Section 630 to the City Charter. It was then implemented as the Affordable Housing Production Program (AHPP) under Section 9.64 of the Municipal Code. It consists of two requirements regarding affordable housing: First, it requires that 30% of all multifamily housing completed in each fiscal year be affordable to low-and moderate-income households; Second, Proposition R requires that at least one-half of the total affordable housing completed be affordable for low-income households.
Why is it important?
The City strives to produce housing for low- and very low-income households to the greatest extent possible through Affordable Housing Production Program (AHPP) restrictions on the development of real property, loans to nonprofit developers available through City housing trust funds, and the pursuit of new resources to replace lost redevelopment housing funds.
Sustained upward pressure on real estate prices and a loss of redevelopment funds have severely reduced the availability of affordable housing. Historically, the funding for subsidizing nonprofit developments, which have produced the majority of affordable housing, came from a Housing Trust Fund created by the Redevelopment Program. The dissolution of the Redevelopment Agency in February 2012 has meant the subsequent loss of funding for affordable housing. Without a new source of funding dedicated to subsidize nonprofit affordable housing, staff anticipates significantly fewer affordable apartments being built in the future.
However, the City’s legal protections for renters, including just-cause eviction protections, and the requirements of Proposition R have contributed to preserving affordable housing for low and very-low income tenants. In addition to preserving the existing stock of affordable rental units, the City continues to invest in the development of new affordable housing.
[Note: The City’s previous success in producing housing units that are deed-restricted to be affordable for low-, very low- and extremely low-income households was dependent on Redevelopment funds. These funds were eliminated at the state level as part of the 2011 Budget Act in order to protect funding for core local services. ]