In Santa Monica, affordable-housing rental agreements are often not enforced

The city is now vowing to crack down after complaints of violations by developers, who have been allowed to exceed zoning restrictions in exchange for offering low- and moderate-income rentals.
By: Martha Groves: latimes.com
For decades, Santa Monica has allowed developers to add floors to their buildings or exceed other zoning restrictions in exchange for providing affordable housing to poor and moderate-income tenants.

Such was the case with Dorchester House, a luxury condominium low-rise just blocks from the Pacific Ocean. Almost three decades ago, the city approved a development plan in which 15 first-floor units were earmarked as affordable housing.

But as real estate attorney Stanley Epstein learned recently, the city has done little to enforce these agreements.

Epstein said he made this discovery when he went to look at a Dorchester House condo earlier this year. He found condo owners living in the income-restricted units instead of renting them to low- and moderate-income tenants.

In one instance, Epstein said, one rental was advertised as $2,000 per month, although the rent-control price would have been about $1,200.

In response to complaints and threats of litigation, the city is vowing to crack down on violators.

City Manager Rod Gould acknowledged that Santa Monica needs "to tighten it up" when it comes to ensuring that developers live up to their requirements to provide affordable housing. Officials are devising a plan "to monitor and ensure compliance," he said.

The city has negotiated 11 such development agreements, and several others are in the works. Currently, 861 deed-restricted residences are on the books, but more are anticipated as the city prepares to adopt a long-range plan that emphasizes development of affordable housing as part of mixed-use and transit-oriented projects.

City officials have declined to say how they plan to respond to allegations regarding the Dorchester House, but in February, the city filed suit against the owners of the Plaza at the Arboretum, a 350-unit complex near Santa Monica's creative office district.

The suit alleges that owners were not complying with a 1998 agreement to provide 97 units for low- and moderate-income tenants. After receiving complaints from tenants, the city conducted an audit and found many violations, including failure to verify tenants' eligibility for affordable housing and to rent to qualified residents.

"This is the first time this kind of case has been brought," said Adam Radinsky, head of the city attorney's office's consumer protection unit. Asked whether the city might seek to evict ineligible tenants, he said: "The initial policy being discussed is a policy to enforce agreements with developers who get the benefit of the bargain."

The owners and managers of the Arboretum named in the lawsuit were BlackRock Realty Advisors Inc., CSHV Arboretum LLC and Riverstone Residential Group.

Epstein has vowed to challenge the city in court if it does not begin to aggressively investigate and enforce the agreements. "If they're going to be too cowardly to do what they're supposed to do, we're looking at litigation," he said. "They have an obligation on behalf of prospective tenants."