Santa Monica Enters into Settlement Agreement with WS Communities, LLC and its Affiliates

May 11, 2023 1:29 PM
by Susan Cola

On May 9, 2023, the Santa Monica City Council approved a Settlement Agreement with certain property owners (collectively, “WS”) who filed applications to develop housing under the Builder's Remedy statute of the Housing Accountability Act (Government Code Section 65589.5(d)) at the following locations:

The Builder’s Remedy statute allows developers to bypass a city’s zoning laws when a city’s housing element, which is a state-required planning document to address a city’s housing needs, does not comply with state requirements. The City of Santa Monica's 6th Cycle Housing Element was approved by the California Department of Housing and Community Development (HCD) on October 14, 2022.

WS filed their Builder’s Remedy applications before HCD approved the City’s Housing Element. The City and WS disagree on the applicability of the Builder’s Remedy statute and have elected to settle their dispute through a Settlement Agreement. The Settlement Agreement contemplates WS’s suspension of the 13 Builder’s Remedy applications. While these applications are suspended, WS may refile 13 new applications for projects with heights and floor area ratios (FARs) that comply with the City’s Zoning Code, which would allow them to be reviewed administratively by the City’s Planning staff to ensure code compliance. The City has the option to adopt an ordinance granting additional local incentives that would allow the following:

    1. a 15% inclusionary requirement for the development of off-site affordable housing units, giving the owners more flexibility to pool off-site affordable housing units into one 100% affordable housing project to satisfy off-site inclusionary requirements for multiple market-rate projects,
    2. the grant of state density bonus waivers and concessions for the market rate projects as if the off-site units were provided on-site, and
    3. an increase in the Downtown Community Plan maximum parking requirement from 0.5 to 1.0 spaces per unit.

If adopted, these incentives would further facilitate WS’s development of housing that complies with the City’s Zoning Code instead of the Builder’s Remedy. The City has also agreed to expedited processing timelines for administrative review.

The 13 Builder’s Remedy applications would be deemed as permanently withdrawn if these administrative approvals are granted. The three Builder’s Remedy applications located in residentially zoned districts (1038 10th St., 1238-42 10th St., and 1007 Lincoln Blvd.) would remain suspended and ultimately be withdrawn without refiling new development applications.

The parties have also agreed to dismiss pending litigation against each other pertaining to the City’s leasing ordinance (requiring leasing periods of no less than one year) and alleged violations of consumer and tenant protection laws. Additionally, three tenants will have the right to return to their units with financial compensation.

For more information and to see answers to frequently asked questions, visit the Santa Monica Settlement Agreement web page, which contains a summary of the Settlement Agreement along with the PowerPoint that was presented at the May 9 City council meeting.

Authored By

Susan Cola
Assistant City Attorney


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