Santa Monica Moves to Toughen Housing Rules : Development: Council acts to require that 30% of units at new multifamily dwellings be for lower-income residents. It is expected to curb new building.

In a decision that developers said would stifle multifamily housing construction, the Santa Monica City Council voted this week to draft an ordinance requiring that 30% of the apartment or condominium units on every development site be set aside for low- and moderate-income residents.

The effect of the temporary measure, developers and city officials agree, will be at least a temporary halt in apartment and condo construction, because developers have an aversion to building low-income units on the same site as luxury housing. “No residential building permit applications will be initiated,” predicted former Planning Commissioner Mehrdad Farivar.

The six-month ordinance will implement Proposition R, a measure approved by voters in November that requires that 30% of all new multifamily housing in the city be reserved for lower-income residents. After six months, the temporary measure would be replaced by a more comprehensive permanent ordinance for the proposition’s implementation.

The temporary ordinance modifies existing rules that require developers to build units for low- and-moderate income residents or pay the city an “in lieu fee” to build them.

Developers say they would rather have the option of paying the city to build the low-income apartments or building the units themselves on another site. City officials, however, contend that Proposition R requirements are too strict for the delays and bureaucracy that surround in lieu fees. The council approved the temporary ordinance Tuesday night in a 6-0 vote, with Councilman Robert T. Holbrook absent.

City officials said implementation of the housing ordinance would effectively shut down most new construction activity in the city for at least six months. A moratorium on large-scale commercial development, already in effect for 18 months, was extended by the council last week for another year.

“There will probably be a period of adjustment where people who want to develop their property will wait to see how this all turns out,” said Mayor Judy Abdo.

Developers contend that the measure will hurt the city’s economy and limit its stock of new, affordable apartments. “If you are putting the burden on the people who produce market-rate housing, you may not get affordable housing,” said one speaker at the meeting Tuesday.

Developers want the city to tap public funds and commercial developers to build the lower-income apartments, instead of placing the responsibility on apartment builders.

Although the council showed no sign of lifting the responsibility from apartment builders, it directed city staff to see if public funds--possibly from a bond issue--could be used to finance low-income housing.